2021 Annual Report

Notes to the consolidated financial statements 30 June 2021 (continued) 22 Financial risk management (continued) (a) Market risk (continued) (iii) Equity price risk sensitivity analysis The following sensitivity analysis has been determined based on the exposure to equity price risks at the reporting date. Each equity instrument is assessed on its individual price movements with the sensitivity rate based on a reasonably possible change of 20% (2020: 20%). At reporting date, if the equity prices had been higher or lower, net profit for the year would have increased or decreased by $15,532,000 (2020: $15,086,000). (iv) Cash flow and fair value interest rate risk The Group’s exposure to interest rate risk is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates. At the reporting date, the Group had the following exposure to interest rate risk on financial instruments: 30 June 2021 30 June 2020 Weighted average interest rate % Balance $'000 Weighted average interest rate % Balance $'000 Financial assets Cash and cash equivalents 0.4% 528,514 1.3% 510,312 0.4% 528,514 1.3% 510,312 Financial liabilities Bank loans -% - 2.6% 57,145 -% - 2.6% 57,145 The sensitivity analysis below has been determined based on the exposure to interest rates at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. Impact on post-tax profit Sensitivity of interest revenue and expense to interest rate movements 2021 $'000 2020 $'000 Interest revenue Increase 1.0% (2020: 1.0%) 2,896 3,520 Decrease 1.0% (2020: 1.0%) (1,240) (3,520) Interest expense Increase 1.0% (2020: 1.0%) - (400) Decrease 1.0% (2020: 1.0%) - 400 (b) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has a strict code of credit, including only transacting with high quality financial institutions and customers with an appropriate credit history. The maximum exposure to credit risk at the reporting 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 financial statements. The Group does not hold any collateral. Notes to The Consolidated Financial Statements 30 June 2021 114 — IGO ANNUAL REPORT 2021