Icon Energy Annual Report 2019

Notes to the Consolidated Financial Statements for the year ended 30 June 2019 ICON ENERGY LIMITED AND ITS CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2019 30 June 2019 30 June 2018 Financial instruments comprise of the following: NOTE $ $ Financial Assets Cash and cash equivalents 5 8,834,705 12,266,962 Amortised cost - Trade and other receivables 16,855 42,068 Financial Liabilities Held at amortised cost - Trade and other payables 140,791 151,510 Significant Accounting Policies Capital Risk Management Financial Risk Management (a) Market Risk Interest rate risk Risk management is carried out by the board of directors, the audit and risk management committee, and key management personnel. The capital structure of the Consolidated Entity consists of cash and cash equivalents and equity comprising issued capital, net of reserves and accumulated losses as disclosed in notes 5 and 10 respectively. The Consolidated Entity's overall strategy remains unchanged from 2018. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The main purpose of non-derivative financial instruments is to raise finance for the Consolidated Entity's operations. NOTE 19 - FINANCIAL INSTRUMENTS CONSOLIDATED ENTITY Details of significant accounting policies and methods adopted, including the criteria for recognition, the basis for measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 24 to the financial statements. The board of directors review the capital structure on a regular basis. As a part of the review the board considers the cost of capital and the risks associated with each class of capital. The Consolidated Entity does not use long-term debt to finance its exploration activities.The Consolidated Entity has a policy that when production operations commence in Australia, the interest rate risk will be managed with a mixture of fixed and floating rate debt. The Consolidated Entity manages its capital to ensure that it will be able to continue as a going concern and provide optimal return to shareholders through the optimisation of the debt and equity balance. The Consolidated Entity’s financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable and payable. No financial assets are pledged as collateral for liabilities. The main risks the Consolidated Entity is exposed through its financial assets and liabilities are credit risk, liquidity risk and market risk. The Consolidated Entity does not have any derivative instruments at 30 June 2019 (30 June 2018: Nil). The carrying values of financial assets and financial liabilities held at amortised cost approximate their fair value. The Consolidated Entity’s risk management program focuses on the unpredictability of the financial markets and seeks to minimise the potential adverse effects of the financial performance of the Consolidated Entity, by way of various measures detailed below. The Group does not carry any significant currency or price risk. The Consolidated Entity's interest rate risk arises mainly from the term deposits and cash and cash equivalents.The Consolidated Entity does not have any borrowing facilities. 57 53 Icon Energy Annual Report 2019