Page 76 - Sun Resources Annual Report 2013

22 Financial Risk Management (continued)
ii Price Risk
The Group is exposed to equity securities price risk. This arises from investments held by the Group and
classified on the Statement of Financial Position either as available-for-sale or at fair value through profit or loss.
The Group is also exposed to commodity price risk based on the prevailing price of oil and gas.
Available for sale investments
To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio where
possible.
The majority of the Group’s equity investments are publicly traded on the ASX Limited.
Currently (for 2013 and 2012) the price risk for listed securities is immaterial in terms of the possible impact on
profit and loss or total equity. No sensitivity analysis has therefore been included in the financial report.
iii Cash flow and fair value interest rate risk.
Group
To ensure that the Group has adequate liquidity, detailed cash flow analysis is completed on a monthly basis.
The Group’s main interest rate risk arises from cash and cash equivalents held, which were $3,550,749
(2012: $1,224,499). These funds are held at various financial institutions at different interest rates as detailed in
the tables under liquidity risk. Interest received on these balances were $69,050 (2012: $89,756).
Group sensitivity
Based on the cash and cash equivalent balances held at the 30 June 2013, and assuming that the allocation
between term deposits and other cash balances was maintained had the interest rates weakened/strengthened
by 10% and all other variables held constant, the Group’s post-tax loss for the year would have been $6,905
lower/higher (2012: $8,976 lower/higher). The Group has used 10% based on historical averages as reasonable.
b Credit risk
Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents, and deposits with
banks and institutions, as well as credit exposures to customers, including outstanding receivables and committed
transactions. For banks and financial institutions, only independently related parties with a minimum rating of “A” are
accepted. Customers are reviewed taking into account their financial position, past experience and other factors for
compliance with credit limits. Historically, the Group has not had any issues with credit quality and late payment.
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets summarised
below:
Consolidated
2013 2012
$ $
Other receivables 342,046 16,604
Exploration bonds - 305,400
c Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and, the availability of
funding through an adequate amount of committed credit facilities. The Group manages liquidity risk by continuously
monitoring forecast and actual cash flows.
SUN RESOURCES ANNUAL REPORT 2013 74
NOTES TO AND FORMING PART OF THE CONSOLIDATED
FINANCIAL STATEMENTS