content_image/146246.jpg content_image/146247.jpg
## Note 3. Financial Risk Management (continued) 

<img src='content_image/146246.jpg'>

## Interest Rate Sensitivity Analysis 

The following table details the Group’s sensitivity to a 1.0% p.a. increase or decrease in interest rates, with all other variables held constant. The sensitivity analysis is based on the balance of floating interest rate amounts held at the end of the financial year. 

The sensitivity analysis is not fully representative of the inherent interest rate risk, as the financial year end exposure does not necessarily reflect the exposure during the course of a financial year. These sensitivities should not be used to forecast the future effect of movements in interest rates on future cash flows. 

<img src='content_image/146247.jpg'>

## (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. Credit risk arises from cash and cash equivalents and security deposits held with banks, financial institutions and joint venture operators, as well as credit exposures to customers, including outstanding receivables. 

Credit risk is managed on a Group basis at the corporate level. Management monitors credit risk on an ongoing basis within the Group. 

To minimise credit risk, the Group has adopted a policy of only dealing with recognised and creditworthy third parties. The Group does not have any material credit risk exposure to any single debtor or group of debtors entered into by the Group. Receivable balances are monitored on an ongoing basis with the result being the Group’s exposure to bad debts is minimised. The Group does not hold collateral, nor does it securitise its receivables. 

The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. 

