Cellmid 2017 Annual Report 57
(a) Credit risk
Credit risk is managed on a Group basis. The Group has no significant concentration of credit risk.
The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period is equivalent to
the carrying value and classification of those financial assets (net of any provisions) as presented in the table above.
Trade and other receivables that are neither past due nor impaired are considered to be of high credit quality.
Credit risk related to balances with banks and other financial institutions is managed by management in accordance with
approved board policy. Such policy requires that surplus funds are only invested with counterparties with a Standard & Poor’s
rating of at least AA .
(b) Liquidity risk
The Group manages this risk through the following mechanisms:
preparing forward looking cash flow analysis in relation to its operational, investing and financing activities;
managing credit risk related to financial assets; and
only investing surplus cash with major financial institutions.
The Group is not exposed to any material liquidity risk.
Financial liabilities consist of two items, trade and other payables for which the contractual maturity dates are within 6 months
of the reporting date and loans and borrowings.
Loans and borrowings at reporting date have contractual maturity dates as follows:
(c) Market risk
Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating due to
movement in foreign exchange rates of currencies in which the Group holds financial instruments which are other than the
functional currency of the Group, being Australian dollars.
The maximum exposure to foreign exchange risk is the fluctuation in exchange rates on the USD and JPY denominated bank
accounts and also the profit and net assets of the Japanese and US subsidiary, Advangen INC and Advangen LLC.
The Group has performed a sensitivity analysis relating to its exposure to foreign currency risk at the end of the financial year.
The sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in this risk.
At the end of the financial year, the effect on profit and equity as a result of changes in the foreign exchange rate with all other
variables remaining constant would be as follows:
2017 2016
$ $
Within one year 1,840,533 802,177
One to five years 314,572 196,807
Profit Equity
$ $
Year ended 30 June 2017
+/- 1% in foreign exchange rates +/-3,366 -/+1,249
Year ended 30 June 2016
+/- 1% in foreign exchange rates +/-1,249 -/+ 2,153