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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Annual Report 2015 121
Notes to the consolidated financial statements
30 June 2015
4 Financial risk management (continued)
(b) Credit risk (continued)
Copper and zinc concentrate sales
Credit risk arising from sales to customers is managed by contracts that stipulate a provisional payment of at least 90%
of the estimated value of each sale. This is generally paid promptly after vessel loading. Title to the concentrate does
not pass to the buyer until this provisional payment is received by the Group.
Due to the large size of concentrate shipments, there are a relatively small number of transactions each month and
therefore each transaction and receivable balance is actively managed on an ongoing basis, with attention to timing of
customer payments and imposed credit limits. The resulting exposure to bad debts is not considered significant.
Gold bullion sales
Credit risk arising from the sale of gold bullion to the Company's customer is low as the payment by the customer (being
The Perth Mint Australia) is guaranteed under statute by the Western Australian State Government.
The Group has policies in place to ensure that sales of products are made to customers with an appropriate credit
history.
Other
In respect of financial assets and derivative financial instruments, the Group's exposure to credit risk arises from
potential default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.
Exposure at the reporting date is addressed below. The Group does not hold any credit derivatives to offset its credit
exposure.
Derivative counterparties and cash transactions are restricted to high credit quality financial institutions.
The maximum exposure to credit risk at the reporting date was as follows:
2015
$'000
2014
$'000
Financial assets
Cash and cash equivalents
121,296
56,972
Trade and other receivables
13,481
24,828
Other receivables
5,384
2,456
Financial assets
15,574
858
Derivative financial instruments
4,981
3,177
160,716
88,291
On analysis of trade and other receivables, none are past due or impaired for either 30 June 2015 or 30 June 2014.
(c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial liabilities as they fall due. The Group’s
approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation. Management and the Board monitors liquidity levels on an ongoing basis.
Maturities of financial liabilities
The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities. The
tables are based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group
can be required to pay.
Independence Group NL
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