Notes to the consolidated financial statements 30 June 2022 (continued) 22 Financial risk management (continued) (a) Market risk (continued) (ii) Commodity price risk (continued) Impact on post-tax profit Impact on other components of equity Sensitivity of financial instruments to nickel price movements 2022 $M 2021 $M 2022 $M 2021 $M Increase/decrease in nickel price Increase (13.4) 5.5 (2.7) - Decrease 13.3 (5.5) 2.7 - The following table summarises the sensitivity of financial instruments held at 30 June 2022 to movements in the copper price, with all other variables held constant. Trade receivables valuation uses a sensitivity analysis of 5.0% (2021: 5.0%). Impact on post-tax profit Sensitivity of financial instruments to copper price movements 2022 $M 2021 $M Increase/decrease in copper price Increase 0.6 1.3 Decrease (0.6) (1.3) The following table summarises the sensitivity of financial instruments held at 30 June 2022 to a 20% (2021: 20%) movement in the price of Singapore gasoil 10ppm, with all other variables held constant. Impact on other components of equity Sensitivity of financial instruments to Singapore gasoil price movements 2022 $M 2021 $M Increase/decrease in Singapore gasoil price Increase - 1.1 Decrease - (1.1) (iii) Equity price risk The Group's exposure to equity securities price risk arises from investments held by the Group and classified in the balance sheet either as at fair value through other comprehensive income or at fair value through profit or loss. The majority of the Group's investments are publicly traded on the Australian Securities Exchange. The following table summaries the sensitivity analysis of on the exposure to equity price risks as the reporting date. Each equity instrument is assessed on its individual price movements with the sensitivity rate based on a reasonably possible change of 20% (2021: 20%). Impact on post-tax profit Impact on other components of equity Sensitivity of equity investments to equity price movements 2022 $M 2021 $M 2022 $M 2021 $M Increase/decrease in equity prices Increase 17.7 15.5 11.4 - Decrease (17.7) (15.5) (11.4) - Notes to the consolidated financial statements 30 June 2022 (continued) 22 Financial risk management (continued) (a) Market risk (continued) (iv) Cash flow and fair value interest rate risk The Group’s exposure to interest rate risk is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates. At the reporting date, the Group had the following exposure to interest rate risk on financial instruments: 30 June 2022 30 June 2021 Weighted average interest rate % Balance $M Weighted average interest rate % Balance $M Financial assets Cash and cash equivalents 0.2% 367.1 0.4% 528.5 0.2% 367.1 0.4% 528.5 Financial liabilities Bank loans 2.9% 900.0 -% - 2.9% 900.0 -% - The sensitivity analysis below has been determined based on the exposure to interest rates at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. Impact on post-tax profit Sensitivity of interest revenue and expense to interest rate movements 2022 $M 2021 $M Interest revenue Increase 1.0% (2021: 1.0%) 1.3 2.9 Decrease 1.0% (2021: 1.0%) (1.3) (1.2) Interest expense Increase 1.0% (2021: 1.0%) (6.3) - Decrease 1.0% (2021: 1.0%) 6.3 - (b) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has a strict code of credit, including only transacting with high quality financial institutions with a minimum long-term S&P (or Moody's or Fitch equivalent) credit rating of 'A-' or better, and customers with an appropriate credit history. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the balance sheet and notes to the financial statements. The Group does not hold any collateral. Notes to the consolidated financial statements 30 June 2022 Notes to the consolidated financial statements 30 June 2022 130 — IGO ANNUAL REPORT 2022 IGO ANNUAL REPORT 2022 — 131
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