view - Western Desert Resources

WESTERN DESERT RESOURCES LIMITED ABN 48 122 301 848
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
for the year ended 30 June 2008
Consolidated
Company
2008 2007 2008 2007
$ $ $ $
19 COMMITMENTS FOR EXPENDITURE AND
CONTINGENT LIABILITIES
e) Operating Lease
Operating lease relates to the lease of office space with a
remaining lease term of 2 years. The operating lease contains
a market review clause in the event that the Group exercises
the option to renew. The Group does not have an option to
purchase the leased asset at the expiry of the lease period.
Non-cancellable operating lease commitments
Not longer than 1 year 72,960 - 72,960 -
Longer than 1 year and not longer than 5 years 72,960 - 72,960 -
Longer than 5 years 2 - - -
145,920 - 145,920 -
20 FINANCIAL INSTRUMENTS
a) Financial Risk Management Policies
The group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable, and loans to and
from subsidiaries.
The main purpose of non-derivative financial instruments is to raise finance for group operations.
i) Treasury Risk Management
The board meets on a regular basis and analyses financial risk exposure and evaluates treasury management strategies in the
context of the most recent economic conditions and forecasts. The board’s overall risk management strategy seeks to assist the
consolidated group in meeting its financial targets whilst minimising potential adverse effects on financial performance.
Risk management is reviewed by the board on a regular basis and includes review of the group’s cash flow requirements.
ii) Financial Risk Exposures and Management
The main risks the group is exposed to through its financial instruments are liquidity risk, credit risk and interest rate risk.
Liquidity risk
The group manages liquidity risk by monitoring forecast cash flows.
Credit risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balanced date to recognised
financial assets, is the carrying amount, net of any provisions for impairment of those assets as disclosed in the balance sheet
and notes to the accounts.
There are no material amounts of collateral held as security at 30 June 2008.
The consolidated group does not have any material credit risk exposure to any single receivable or group of receivables under
financial instruments entered into by the consolidated group.
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