46 for the year ended 30 June 2024 Interest rate risk The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s cash and cash equivalents. Most of the interest bearing loans and borrowings (see Note 15) are at fixed rates. Given the nature of financial assets and liabilities exposed to interest rate risk, management does not consider interest rates to be a significant risk to the Group. The Group does not have any interest rate swaps in place, but does constantly analyse its interest rate exposure. Within this analysis consideration is given to existing positions, alternative financing and the mix of fixed and variable interest rates. Credit risk Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract. Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents (refer to Note 8: Statement of cash flows reconciliation) and trade and other receivables (refer to Note 7: Trade and other receivables and contract assets). The Group's exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. No collateral is held as security. There are no significant concentrations of credit risk. Loans receivable from associate companies and joint arrangements comprise a number of entities. The group also holds letters of credit with certain financial institutions. Exposure at balance date is addressed in each specific note. The Group trades only with recognised, creditworthy third parties. It is the Group's policy that all customers who wish to trade on credit terms are subject to credit verification procedures including an assessment of their independent credit rating and industry reputation. Risk limits are set and monitored for each individual customer in accordance with parameters set up by the board. Credit value represents the credit quality of the amounts. The Group has facilities under which various lenders/financiers provide guarantees and bonding facilities. The Group only obtains facilities from credit worthy third parties and does not consider there to be a concentration of credit risk among these parties. Receivable balances are monitored on an ongoing basis with the results being that the Group’s exposure to bad debts is not significant. The Group contracts with a number of third parties and does not consider that there is a concentration of credit risk with individual third parties. Sundry receivables are not impaired and are not past due. It is expected that these other balances will be recieved when due. Due to the short-term nature of these receivables, the carrying value is assumed to approximate their fair value. The maximum exposure to the credit risk is the fair value of the receivables. 20. Financial risk management objectives and policies (continued) Notes to the annual financial statements (continued)
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