Icon Energy Annual Report 2024 35 ICON ENERGY LIMITED AND ITS CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2024 The Group holds the following financial instruments: NOTE 30 June 2024 30 June 2023 $ $ Financial Assets Cash and cash equivalents 5 448,747 1,480,933 Performance guarantee bonds 743,481 756,220 Amortised cost - Trade and other receivables 9,948 57,792 Financial Liabilities Non-interest bearing borrowings 445,389 393,458 Held at amortised cost - Trade and other payables 172,693 177,453 Capital Risk Management Financial Risk Management (a) Market Risk Interest rate risk The Consolidated Entity’s financial instruments consist mainly of deposits with banks, short-term investments, receivables, payables and borrowings. No financial assets are pledged as collateral for liabilities. The Consolidated Entity's interest rate risk arises mainly from the term deposits and cash and cash equivalents earning ineterst at variable rates.The Consolidated Entity does not have any interest bearing borrowing facilities. Therefore, it has not been exposed to the interest rate risk through borrowing funds. At the end of the reporting period, the Consolidated Entity’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates, and the effective weighted average interest rates on those financial assets and financial liabilities, are set out below: The Consolidated Entity manages interest rate risk by monitoring levels of exposure to interest rate. NOTE 17 - FINANCIAL INSTRUMENTS The carrying values of financial assets and financial liabilities held at amortised cost approximate their fair value. 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 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 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. Risk management is carried out by the board of directors. CONSOLIDATED ENTITY The board of directors reviews 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. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The Consolidated Entity's overall strategy remains unchanged from 2023. The Consolidated Entity does not have any derivative instruments at 30 June 2024 (30 June 2023: Nil). The main risks the Consolidated Entity is exposed to through its financial assets and liabilities are credit risk, liquidity risk and market risk - interest rates. The main purpose of non-derivative financial instruments is to raise finance for the Consolidated Entity's operations.
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