Annual Report 2014

NOOSA SHIRE COUNCIL

Notes to the financial statements
For the six months ending 30 June 2014

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

           This note provides infonnation (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 inanages these cxposures.

            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 inanagement approves policies for overall risk management, as well as specifically for managing eredit,
                 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 instrument fails 10 meet i1s 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 counterpany ability to meet payment obligations.
                 The carrying amount of financial assets represents the maximum credit exposure.

                  Invesnnents in financial instruments 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 Stotutory Bodies Financial
                 Arrangements Act 1982.
                  No collateral is held as security relating to the financial assets hcid by Noosa Shire Council.

                  The following table represents the maximuin exposure to credit risk based on the carrying amounts of financial assets at
                  the end of the reporting period:
                                                                       Note                                              2014
                  Financial Assets                                                                                         $s
                       Cash and cash equivalents - Bank                   14                                                  77,994
                       Cash investments held with - QTC                   14                                             25,118,425
                       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                                             $3,452,309
                  Other credit exposure
                      Guarantee                                           28                                                 290.070
                       Totat                                                                                             160,003,243

                  Cash and cash equivalents
                  The Council may be exposed to credit risk through its investinents 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 counterpaniies.
                  Deposits with the QTC Cash Fund are capital guaranteed, Working Capital Facility deposits have a duration of one day and
                  all investinents are required to have a minimum credit rating of A-”,
5	1	1	1	47	13	1236	2967	101	22	95	therefore
5	1	1	1	47	14	1346	2967	31	22	95	the
5	1	1	1	47	15	1386	2967	111	22	49	likelihood
5	1	1	1	47	16	1506	2967	27	22	96	of
5	1	1	1	47	17	1539	2967	32	22	96	the
5	1	1	1	47	18	1580	2972	141	23	96	counterparty
5	1	1	1	47	19	1730	2967	75	28	96	having
5	1	1	1	47	20	1812	2968	92	27	96	capacity
4	1	1	1	48	0	447	3011	494	29	-1	
5	1	1	1	48	1	447	3017	20	15	96	to
5	1	1	1	48	2	475	3016	53	18	95	meet
5	1	1	1	48	3	538	3012	25	22	93	its
5	1	1	1	48	4	573	3011	95	23	95	financial
5	1	1	1	48	5	676	3012	155	22	89	commitments
5	1	1	1	48	6	840	3012	17	22	96	is
5	1	1	1	48	7	865	3017	76	23	95	strong.
4	1	1	1	49	0	447	3104	260	21	-1	
5	1	1	1	49	1	447	3104	72	20	96	Other
5	1	1	1	49	2	528	3104	102	21	96	financial
5	1	1	1	49	3	640	3107	67	18	96	assets
4	1	1	1	50	0	447	3149	1357	27	-1	
5	1	1	1	50	1	447	3149	65	21	96	Other
5	1	1	1	50	2	519	3149	134	21	96	investments
5	1	1	1	50	3	661	3155	34	15	96	are
5	1	1	1	50	4	703	3149	47	21	96	held
5	1	1	1	50	5	759	3149	50	21	96	with
5	1	1	1	50	6	819	3149	95	21	81	financial
5	1	1	1	50	7	922	3149	131	23	89	institutions,
5	1	1	1	50	8	1062	3149	68	21	96	which
5	1	1	1	50	9	1139	3157	34	15	96	are
5	1	1	1	50	10	1181	3151	55	21	37	rated
5	1	1	1	50	11	1245	3151	59	19	96	AAA
5	1	1	1	50	12	1311	3154	21	18	93	to
5	1	1	1	50	13	1340	3151	48	19	92	AA-
5	1	1	1	50	14	1397	3151	64	21	96	based
5	1	1	1	50	15	1469	3157	27	15	96	on
5	1	1	1	50	16	1503	3151	67	25	96	rating
5	1	1	1	50	17	1578	3151	101	21	96	Standard
5	1	1	1	50	18	1688	3151	39	21	96	and
5	1	1	1	50	19	1736	3151	68	21	87	Poor's
4	1	1	1	51	0	447	3194	1174	27	-1	
5	1	1	1	51	1	447	3200	80	21	96	agency
5	1	1	1	51	2	534	3194	81	27	74	ratings.
5	1	1	1	51	3	624	3194	39	21	96	and
5	1	1	1	51	4	672	3194	69	21	93	whilst
5	1	1	1	51	5	750	3199	35	16	96	not
5	1	1	1	51	6	792	3194	74	27	79	capital
5	1	1	1	51	7	874	3196	130	25	95	guaranteed,
5	1	1	1	51	8	1014	3196	33	19	96	the
5	1	1	1	51	9	1056	3194	111	23	95	likelihood
5	1	1	1	51	10	1166	3190	22	36	96	of
5	1	1	1	51	11	1199	3196	18	21	96	a
5	1	1	1	51	12	1226	3194	63	23	81	credit
5	1	1	1	51	13	1298	3196	69	21	91	failure
5	1	1	1	51	14	1377	3196	17	21	96	is
5	1	1	1	51	15	1403	3196	94	21	95	assessed
5	1	1	1	51	16	1506	3202	22	15	95	as
5	1	1	1	51	17	1536	3200	85	17	37	remote.
4	1	1	1	52	0	2070	3320	98	39	-1	
5	1	1	1	52	1	2070	3320	98	39	91	QAO
4	1	1	1	53	0	1278	3428	86	24	-1	
5	1	1	1	53	1	1278	3428	51	24	95	Page
5	1	1	1	53	2	1337	3428	27	18	96	36