McConnell Dowell 2019 Annual Review

84 McConnell Dowell Group Notes to the annual financial statements (continued) for the year ended 30 June 2019 Liquidity risk Liquidity risk is the risk that the Group and parent is unable to meet its financial obligations as they fall due. The Group’s objective is to maintain a balance between operational cash flow and the use of external funding through bank overdrafts and available lines of credit. The Group’s policy is to minimise the use of available lines of credit, keep interest costs to a minimum, whilst still maintaining an adequate cash balance to meet working capital requirements. Contracts in progress and contract receivables, are carried at cost, plus profit recognised, less billings and recognised losses at balance sheet date. Progress billings not received are included in contract debtors due to the contractual right associated with the amounts. Where progress billings exceed the aggregate of costs, plus profit, less losses, the net amounts are shown as an increase in trade and other payables. The cash flow of the Group is exposed to execution risks on construction projects. Cash flows can also be adversely affected by clients being unwilling to resolve variations to contracts in a timely manner. The Group attempts to manage these issues in order that adequate liquidity exists. The following table reflects all contractual fixed payments for settlement, resulting from recognised financial liabilities as of 30 June 2019. Cash flows from financial liabilities without fixed amounts or timing are based on conditions existing at 30 June 2019. Financial Statements 2019 Trade receivables All figures are in A$ 000’s Contract Assets Current <30 days 30-60 days 61 -90 days > 91 days Total 30 June 2019 Estimated total gross carrying amount at default 98,709 110,712 - 5,826 636 9,418 225,301 Expected credit loss - - - - - - - 30 June 2018 Estimated total gross carrying amount at default 135,988 120,247 - 5,877 1,057 5,461 268,630 Expected credit loss - - - - - - - 22. Financial risk management objectives and policies (continued)