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The Group's principal financial instruments comprise receivables, payables, bank loans, cash short-term deposits, investments in unquoted securities and convertible debt.

The Group manages its exposure to key financial risks, including interest rate risk in accordance with the Group's financial risk management policy. The objective of the policy is to support the delivery of the Group's financial targets whilst protecting future financial security.

The main risks arising from the Group's financial instruments are interest rate risk, credit risk and liquidity risk. The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate risk. Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk. Liquidity risk is monitored through the development of future rolling cash flow forecasts.

The Board reviews and agrees policies for managing each of these risks as summarised below. The Board reviews and agrees policies for managing interest rate risk, credit allowances, and future cash flow forecast projections.

Risk exposures and responses Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprise three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits and available-for-sale investments.

Foreign Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or expense is denominated in a different currency from the Group’s presentation currency) and the Group’s net investments in foreign subsidiaries.

2. FINANCIAL RISK MANAGEMENT AND OBJECTIVES (continued)

Equity Price risk

The Group’s unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group manages the equity price risk through diversification. The Group’s Board of Directors reviews and approves all equity investment decisions.

Interest rate risk

The Group's exposure to market interest rates relates primarily to the Group's cash deposits and debt obligations. The level of debt is disclosed in note 17.

At balance date, the Group had the following mix of financial assets and liabilities exposed to Australian variable interest rate risk.

2014 2013

$000’s $000’s

Financial assets

Cash and cash equivalents 2,425 76

Other financial assets 926 59

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3,351 135

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Financial liabilities

Receivables financing facility 1,656 1,815

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1,656 1,815

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The Group's policy is to manage its finance costs using a mix of fixed and variable rate debt.

The Group constantly analyses its interest rate exposure. Within this analysis consideration is given to potential renewals of existing positions, alternative financing and the mix of fixed and variable interest rates.

The following sensitivity analysis is based on the interest rate risk exposures in existence at the balance sheet date. At 30 June 2014, if interest rates had moved, as illustrated in the table below, with all other variables held constant, post-tax profit and equity would have been affected as follows:

Judgement of reasonably possible movements:

Post tax profit – Higher/(lower) Equity – Higher/(lower)

2014 2013 2014 2013

$000’s $000’s $000’s $000’s

+1 % (100 basis points) 17 (17) - -

-.5 % (50 basis points) (8) 8 - -

The movements are due to higher/lower interest costs from variable rate debt and cash balances.

Credit risk

Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and trade and other receivables. 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. Exposure at balance date is addressed in each applicable note.

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, financial position, past experience and industry reputation.

2. FINANCIAL RISK MANAGEMENT AND OBJECTIVES (continued) Liquidity risk

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans and committed available credit lines.

The table below reflects all contractually fixed payments, repayments and interest resulting from recognised financial liabilities as at 30 June 2014. For other obligations the respective undiscounted cash flows for the respective upcoming fiscal years are presented. Cash flows for financial liabilities without fixed amounts or timing are based on the conditions existing at 30 June 2014.

The remaining undiscounted contractual maturities of the Group’s financial liabilities are:

2014 < 6 Mths 6-12 Mths 1-5 Years >5 Years Total

Trade and other payables 7,587 - - - 7,587

Interest bearing borrowings 1,912 360 6,525 - 8,797

9,499 360 6,525 - 16,384

2013

Trade and other payables 4,534 - - - 4,534

Interest bearing borrowings 2,162 638 1,036 - 3,836

6,696 638 1,036 - 8,370

For further information on liquidity risk, refer to note 1 (going concern). Fair Value Measurement

The following table provides the fair value measurement hierarchy of the Company’s financial assets and liabilities: Quantitative disclosures fair value measurement hierarchy for assets and liabilities as at 30 June 14:

Fair vale measurement using Quoted prices in

active markets observable Significant inputs Significant unobservable inputs Valuation date Total $000 Level 1 $000 Level 2 $000 Level 3 $000

Assets measured at fair value:

Available-for-sale investments (Note 14):

Unquoted equity shares 30 June 14 2,851 - 2,851 -

Liabilities measured at amortised cost:

Convertible debt (Note 17) 30 June 14 5,500 - - 5,500