Urbanise.com Annual Report 2019

Annual Report 2019 Urbanise.com Limited 23. Financial risk management (continued) The Group holds the following financial instruments: 2019 $ 2018 $ Financial assets Cash and cash equivalents 3,702,341 3,072,206 Trade and other receivables (excl contract assets) 2,005,253 2,131,323 Deposits 714,452 691,971 6,422,046 5,895,500 Financial liabilities Trade and other payables 1,154,395 1,407,539 1,154,395 1,407,539 The management assessed that the fair values of cash and short-term deposits, trade and other receivables, trade and other payables approximate their carrying amounts largely due to the short-term maturities of these instruments. Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk). Market risk comprises three types of risk: interest rate risk, currency risk and price risk. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. Urbanise is not exposed to material price risk. Interest rate risk management Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate as a result of changes in market interest rates. The Group is not exposed to any significant interest rate risk as there are no external debts or borrowings. Interest rate risk sensitivity analysis At reporting date, there were no borrowings in relation to bank facilities. A 100-basis points change (a reasonably possible change) on the interest rates would result in an increase/decrease to the Group’s net profit by approximately $37,023 based on the cash held at the end of the year (2018: $30,722). Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or expense is denominated in a foreign currency) and the Group’s investments in foreign subsidiaries. The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. At the end of the year the Group was exposed to US Dollar (USD), Dirhams (AED), Euro (EUR) South African Rands (ZAR), and Singapore dollars (SGD), currency fluctuations. Exchange rate exposures are managed within approved internal policy parameters. The carrying amount of the Group’s foreign currency denominated monetary assets and liabilities at the reporting date were: Foreign currency sensitivity analysis Liabilities Assets 2019 $ 2018 $ 2019 $ 2018 $ USD (Australian dollars equivalent) – (7,225) 451,641 867,796 GBP (Australian dollars equivalent) – (29,853) – 78,740 EUR (Australian dollars equivalent) – – 123,750 118,072 SGD (Australian dollars equivalent) – – 6,988 – ZAR (Australian dollars equivalent) (764) – – – Notes to the Consolidated Financial Statements for the year ended 30 June 2019 (continued) 72