ALLUP SILICA LIMITED NOTES TO THE FINANCIAL STATEMENTS 56 FINANCIAL REPORT ALLUP SILICA Year Ending 30 June 2023 Note 21: Financial Risk Management The Company’s financial instruments consist mainly of deposits with banks; accounts receivable and payable; and loans made to related parties and investment loans. The totals for each category of financial instruments measured in accordance with AASB 9: Financial Instruments as detailed in the accounting policies, are as follows: 2023 $ 2022 $ FINANCIAL ASSETS Cash and cash equivalents 3,179,588 4,913,074 Trade and other receivables 63,150 80,791 3,242,738 4,993,865 FINANCIAL LIABILITIES Trade and other payables 150,368 79,640 Lease liabilities 160,167 - 310,535 79,640 Financial assets and financial liabilities are at amortised cost. Financial Risk Management Policies The Board’s overall risk management strategy seeks to assist the Company in meeting its financial targets, while minimising potential adverse effects on financial performance. Risk management policies are approved and reviewed by the Board on a regular basis. These include the credit risk policies and future cash flow requirements. Senior executives meet on a regular basis to analyse financial risk exposure in the context of the most recent economic conditions and forecasts. Specific Financial Risk Exposures and Management The main risks the Company is exposed to through its financial instruments are credit risk, liquidity risk, and market risk relating to interest rate risk and other price risk. There have been no substantive changes in the types of risks the Company is exposed to, how these risks arise, or the Board’s objectives, policies and processes for managing or measuring the risks from the previous period. (a) Credit risk Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Company. The Company’s objective in managing credit risk is to minimise the credit losses incurred, mainly on trade and other receivables. Credit risk is managed through maintaining procedures that ensure, to the extent possible, that clients and counterparties to transactions are of sound credit worthiness and their financial stability is monitored and assessed on a regular basis. Such monitoring is used in assessing receivables for impairment. Credit terms for normal fee income are generally 30 days from the date of invoice. For fees with longer settlements, terms are specified in the individual client contracts. In the case of loans advanced, the terms are specific to each loan. Credit Risk Exposures The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period is equivalent to the carrying amount and classification of those financial assets as presented in the statement of financial position.
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