Speciality Metals International Limited Annual Report 2020

56 Speciality Metals International Limited Annual Report 2020 Notes to the Consolidated Financial Statements continued NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Page | 57 25. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Company’s principal financial instruments comprise cash, short term deposits and available for sale investments. The main purpose of these financial instruments is to finance the Company’s operations. The Company has various other financial assets and liabilities such as trade receivable and trade payables, which arise directly from its operations. It is, and has been throughout the entire period under review, the Company’s policy that no trading in financial instruments shall be undertaken. The main risks arising from the Company’s financial instruments are cash flow interest rate risk and equity price risk. Other minor risks are summarised below. The Board reviews and agrees policies for managing each of these risks. (a) Price Risk The Group is not exposed to equity securities price risk. (b) Liquidity Risk The Company manages liquidity risk by maintaining sufficient cash reserves and marketable securities and through the continuous monitoring of budgeted and actual cash flows. Contracted maturities for payables year ended 30 June 2020 2020 $ 2019 $ Payable: - less than 6 months 797,892 780,155 - 6 to 12 months 139,433 - - 1 to 5 year 968,094 - - later than 5 year - - Total 1,905,419 780,155 (c) Fair Value of Financial Instruments The following tables detail the consolidated entity’s fair values of financial instruments categorised by the following levels: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs). Consolidated – 2020 Assets Level 1 Level 2 Level 3 Total Ordinary shares 2,113 - - 2,113 Total assets 2,113 - - 2,113 Liabilities Total liabilities - - - - Consolidated - 2019 Assets Level 1 Level 2 Level 3 Total Ordinary shares 1,289 - - 1,289 Total assets 1,289 - - 1,289 Liabilities Total liabilities - - - - There were no transfers between levels during the financial year . Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying amounts of trade receivables and trade payables are assumed to approximate their fair values due to their short-term nature.