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## 30 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) 

## (b) Risk exposures and responses (continued) 

## Liquidity Risk (continued) 

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Liquidity is managed daily through the use of available cash flow and committed facilities. Refer to Note 6(c) for details of available financing facilities, which shows that there were undrawn finance facility amounts of $197.5 million as at 30 June 2014 (2013: $148.6 million). 

## (c) Terms, conditions and accounting policies 

The Group’s accounting policies, including the terms and conditions of each class of financial asset, financial liability and equity instrument are as follows: 

## Recognised Financial Instruments 

## (i) Financial assets 

## Receivables – trade debtors: 

Trade debtors are non-interest bearing and are carried at nominal amounts due less any allowance for doubtful debts. An allowance for doubtful debts is recognised when there is objective evidence that the Group will not be able to collect the debt. Credit sales are normally settled on 30-90 day terms. 

## Receivables – associates and other advances: 

Amounts (other than trade debts) receivable from associated entities and for other advances are carried at either the nominal amounts due or the amounts initially recorded as recoverable. Interest, when charged, is recognised in profit or loss on an accrual basis, and provided against when not probable of recovery. There are no fixed settlement terms for loans to associated and other entities. 

## Unsecured advances: 

Unsecured advances are shown at cost. Interest, when charged, is recognised in profit or loss on an accrual basis. There are no fixed settlement terms. 

## Available for sale investments: 

Available for sale investments are shown at cost. 

## (ii) Financial liabilities 

## Trade and sundry creditors: 

Creditors are recognised at amounts to be paid in the future for goods and services already received, whether or not billed to the Group. They are non-interest bearing and are normally settled on 30-90 day terms. 

## Accounts payable – associated and other entities: 

Amounts owing to associated and other entities are carried at the principal amount. Interest, when charged, is recognised in profit or loss on an accruals basis. There are no fixed settlement terms. 

## Secured and unsecured borrowings: 

All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are de-recognised. Interest is recognised in profit or loss on an accrual basis. Bank loans are repayable either monthly or at other intervals, which in some cases are dependant on relevant financial ratios, or at expiry, with terms ranging from less than one year to greater than five years. While interest is charged either at the bank’s floating rate or at a contracted rate above the Australian dollar BBSY rate, certain borrowings are subject to interest rate swaps or collars (refer below). 

Details of security over bank loans is set out in Note 16. 

## Finance lease liabilities: 

Finance lease liabilities are accounted for in accordance with AASB 117: Leases . As at reporting date, the Group had no finance leases. 

## Interest rate swaps: 

At reporting date, the Group had a number of interest rate swap agreements in place. Such agreements are being used to hedge the cash flow interest rate risk of various debt obligations with a floating interest rate. 

## Interest rate collars: 

At reporting date, the Group had no remaining interest rate collar (floor and cap) agreements in place. These derivatives were being used to assist in hedging the cash flow interest rate risk of various debt obligations with a floating interest rate. 

The interest rate swaps have the same critical terms as the underlying debt obligations. The interest rate collars have been based on the underlying debt obligations, and closely matched the terms of those obligations. 

