31dfa1d2-3224-4dd7-a957-281a51cc7802

NOOSA SHIRE COUNCIL

Notes to the financial statements
For the six months ending 30 June 2614

 33   Financial instruments
           Noosa Shire Council has exposure to the following risks arising from financial instniments:
           - credit risk
           + liquidity risk
           - market risk

           This note provides information (both qualitative and quantitative) to assist statement users evaluate the significance of financial
            instruments on the Council's financial position and financial performance, including the nature and extent of risks and how
            the Council manages these exposures.

            Financial risk management
                 Noosa Shire Council is responsible for the establishment and oversight of the risk management framework, together
                 with developing and monitoring risk management policies,

                 Council's management approves policies for overall risk management, as well as specifically for managing credit,
                 liquidity and market risk,
                 The Council's risk management policies are established to identify and analyse the risks faced, to set appropriate limits
                 and controls and to monitor these risks and adherence against limits. The Council aims to manage volatility to minimise
                 potential adverse effects on the financial performance of the Council. Noosa Shire Council does not enter into derivatives.

            Credit Risk
                 Credit risk is the risk of financial toss if a counterparty to a financial instrament fails to meet its contractual obligations.
                 These obligations arise principally from the Council's investments and receivables from customers,
                  Exposure to credit risk is managed through regular analysis of credit counterparty ability to meet payment obligations.
                 The carrying amount of financial assets represents the maximum credit exposure.

                  Investnents in financial instrments are required to be made with Queensland Treasury Corporation {QTC) or similar state/
                 commonwealth bodies or financial institutions in Australia, in line with the requirements of the Statutory Bodies Financial
                 Arrangements Act 1982.
                  No collateral is held as security relating to the financial assets heid by Noosa Shire Council.

                  The following table represents the maximum exposure to credit risk based on the carrying amounts of financial assets at
                  the end of the reporting period:
                                                                       Note                                              2014
                  Financial Assets                                                                                         $
                       Cash and cash equivalents - Bank                   14                                                  77,994
                       Cash investments held with - QTC                   14                                             25,118,325
                       Cash investments held with other
                       approved deposit taking institutions               14                                               5,926,935
                       Equity investments                                 17                                              60,978,225
                       Receivables - rates                                15                                               4,159,585
                       Receivables - other                                 15                                             63,452,309
                  Other credit exposure
                       Guarantee                                          28                                                 290.070
                       Total                                                                                             160,003,243

                  Cash and cash equivalents
                  The Council may be exposed to credit risk through its investments in the QTC Cash Fund and QTC Working Capital Facility.
                  The QTC Cash Fund is an asset management portfolio that invests with a wide range of high credit rated counterparties.
                  Deposits with the QTC Cash Fund are capital guaranteed. Working Capital Facility deposits have a duration of onc day and
                  all investments are required to have a minimum credit rating of "A-”, therefore the likelihood of the counterparty having capacity
                  to meet its financial commitments is strong.

                  Other financial assets
                  Other investments are held with financial institutions. which are railed AAA to AA- based on rating Standard and Poor's
                  agency ratings, and whilst not capital guaranteed, the likelihood of a credit failure is assessed as remote.

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