Aeris Annual Report 2022

Aeris Resources Limited
Notes to the consolidated financial statements
30 June 2022
22. Financial instruments (continued)
The significance and management of the risks to the consolidated entity are dependent on a number of factors including:
● Interest rates (current and forward) and the currencies that the investments and borrowings are denominated in;
● Level of cash, liquid investments and borrowings;
● Maturity dates of investments and borrowings; and
● Proportion of investments and borrowings that are fixed rate or floating rate.
The risk is measured using market and cash flow forecasting.
Sensitivity
At 30 June 2022, if interest rates had changed by -/+ 50 basis points from the weighted average year end rates with all
other variables held constant, the consolidated entity's profit for the year would have been $0.428 million higher/lower
(2021: loss would have been $0.289 million higher/lower), mainly as a result of higher/lower interest from loans, cash
and cash equivalents and restricted cash.
The exposure of the consolidated entity's interest bearing liabilities at balance sheet date to interest rate changes at the
contractual re-pricing dates are as follows:
2022 2021
$'000 $'000
0 - 12 months 6,214 6,140
1 - 5 years 9,618 29,522
15,832 35,662
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to
the consolidated entity. Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents,
favourable derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures
to trade customers, including outstanding receivables and committed transactions.
(i) Risk management
Credit risk is managed on a consolidated basis. The maximum exposure to credit risk, excluding the value of any collateral
or other security, at balance date to recognised financial assets, is the carrying amount, net of any provisions for
impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements.
The consolidated entity has policies in place to ensure that sales of products are made to customers with an appropriate
credit history and where necessary is effectively eliminated or substantially reduced by using bank and insurance
instruments to secure payment for materials supplied and sold. The consolidated entity has policies that limit the amount
of credit exposure to any one financial institution.
(ii) Trade receivables
The consolidated entity applies the AASB 9 Financial Instruments simplified approach to measuring expected credit losses
which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade
receivables and contract assets have been grouped based on shared credit risk characteristics and the days past due.
Payments from the consolidated entity’s two major customers are historically received within the contractual payment
terms.
31
ADVANCING AERIS
107