23. Financial Instruments The carrying amounts of each of the following categories of financial assets and financial liabilities at the end of the reporting period are as follows: 2022 $’000 2021 $’000 Financial Assets Cash and cash equivalents 9,214 9,650 Security deposits 2,376 1,928 Receivables 789 486 Derivative financial instruments 312 - Share investment (FVTPL) 4,578 3,995 Total financial assets 17,269 16,059 Financial Liabilities Trade payables 3,556 3,661 Borrowings 83,538 83,538 Deferred consideration 8,666 8,342 Derivative financial instruments - 3,909 Security deposits 2,376 1,928 Total financial liabilities 98,136 101,378 Financial risk management objectives and policies Financial instruments held by the Group are cash and cash equivalents, restricted cash and cash equivalents, borrowings, receivables, and payables. The Group has limited exposure to financial risks. The Group’s overall risk management program focuses on managing the risks identified below. Credit risk Credit risk arises from the Group’s receivables and through the Group’s cash balances held by banking institutions. The maximum exposure to credit risk at end of the reporting period in relation to each class of recognised financial assets is the gross carrying amount of those assets inclusive of any provisions for impairment. The Group trades only with recognised, creditworthy third parties. The Group’s cash balances are held by Australian banks with investment grade credit ratings. The Group has policies in place to ensure that leases are made to tenants with an appropriate credit history. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is minimal. At the reporting date, there are no significant concentrations of credit risk. All tenants with outstanding balances exceeding 7 days are notified of their outstanding debt. If this is not paid within 14 days, another letter is provided and a due date for payment advised. Where the due date is missed, the tenant is sent a default notice. The Group also has the capacity to charge interest on outstanding balances in accordance with the provisions of the lease. The allowance for impairment of financial assets is calculated based on objective evidence, such as past experience and current and expected observable data indicating changes in client credit ratings. At reporting date, no impairment of financial assets was required and no amounts were overdue. 44
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