2016-11-08 S&O Agenda - Item 3, Attachment 1 - Local Economic Plan

                                                                                             Financial Statements 2016 .



Noosa Shire Council

Notes to the f inancial Statements
for the year ended 30 June 2016

Note 26. Financial Instruments (continued)



Market Risk

Market risk is the risk that changes in market prices, such as interest rates, will affect the Council's income or the
value of its holdings of financial instruments.

Interest Rate Risk

Noosa Shire Council is exposed to interest rate risk through investments and borrowings with Queensland Treasury
and/or other financial institutions.

It also has access to a mix of variable and fixed rate funding options through QTC so that interest rate
risk exposure can be minimised.

Sensitivity
Sensitivity to interest rate movements is shown for variable financial assets and liabilities based on the carrying
amount at reporting date.

The following interest rate sensitivity analysis depicts what effect a reasonably possible change in interest rates
(assumed to be 1%) would have on the profit and equity, based on the carrying values at the end of the reporting
period. The calculation assumes that the change tn interest rates would be held constant over the period.

                                         Net Car r1•ing                 Net Result                               Equ ity
                                           Amount           1% increase      1% ciecrease    1°/o ~ r: e;t ~<:t:;<! 'i% ~ e c•t! <: s"
                                             $'000              $'0CO            $'COO            $'000                  $'000


2016
QTC Cas h fund                                28,165                 282             (282)              282                    (282)
Other investm ents                            10,303                 100             (100)              100                    (1 00)
Loans- QTC                                   (38!.1 H~)             (381)             381              (3.~ .~ )                381
Net T otal                                       349                     1             (1)                  1                     (1)

2015
QTC Cash Fund                                 27,742                277              (277)              277                    (277)
Other Investm ents                             6,974                  70              (70)               70                     (70)
Loans - QTC                                  (3~.~~1 )              (394)             394              (39~)                    394
Ne· Total                                    (4,6~5)                {47)              47                (47)                     47

In relation to the OTC loans hetd by the Counc1l , the following has been apphed:

QTC Genenc Debt Pool- the generic debt pool products approxim ate a fixed rate !oan. There is a negligible impact
on interest sensitivity from changes in interest rates fo; generic debt pool borrowings




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