content_image/165793.jpg content_image/165794.jpg
## 4. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) 

<img src='content_image/165793.jpg'>

## (b) Credit risk 

Credit risk arises from the financial assets of the Consolidated Entity, which comprises cash and cash equivalents, trade and other receivables, available-for-sale financial assets, other financial assets held as security and derivative instruments. Cash and cash equivalents are held with National Australia Bank which is an Australian Bank with an AA credit rating (Standard & Poor’s). The Consolidated Entity’s exposure to credit risk arises from potential default of the counter party, with the maximum exposure equal to the carrying amount of the financial assets (as outlined in each applicable note) as well as $3,320,730 (2010: $5,005,260) in relation to financial guarantees granted and security deposits (refer to note 16). 

The Consolidated Entity does not hold any credit derivatives to offset its credit exposure. 

The Consolidated Entity trades only with recognised, creditworthy third parties and as such collateral is not requested nor is it the Consolidated Entity’s policy to securitise its trade and other receivables. 

Receivable balances are monitored on an ongoing basis with the result that the Consolidated Entity does not have a significant exposure to bad debts. 

There are no significant concentrations of credit risk within the Consolidated Entity. 

## (c) Price risk 

## Commodity Price Risk 

The Consolidated Entity’s revenues are exposed to commodity price fluctuations, in particular tin prices. 

Periodically the Consolidated Entity enters into derivatives contracts to manage commodity price exposure. In the 2011 financial year the Consolidated utilised derivatives to manage commodity price exposure however, these contracts were minor and there were no contracts outstanding at the year end. 

A summary of the Consolidated Entity’s assets subject to commodity risk is set out below: 

<img src='content_image/165794.jpg'>

