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Annual Report 2023-24
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Noosa Council Noosa Council
Financial Performance
Notes to the Financial Statements Notes to the Financial Statements
for the year ended 30 June 2024 for the year ended 30 June 2024
Note 29. Financial Instruments and Financial Risk Management (continued) Note 29. Financial Instruments and Financial Risk Management (continued)
§Note/Subtotal§
In other cases, the Council assesses the credit risk before providing goods or services and applies normal business credit Market risk
protection procedures to minimise the risk.
Market risk is the risk that changes in market indices, such as interest rates, will affect the Council's income or the value of
By the nature of the Councils operations, there is a geographical concentration of risk in the Council's area. its holdings of financial instruments.
The Council does not require collateral in respect of trade and other receivables. The Council does not have trade receivables
Interest rate risk
§Subnote§
for which no loss allowance is recognised because of collateral.
Noosa Shire Council is exposed to interest rate risk through investments and borrowings with Queensland Treasury and other
financial institutions.
At 30 June, the exposure to credit risk for trade receivables by type of counterparty was as follows:
It also has access to a mix of variable and fixed rate funding options through QTC so that interest rate risk exposure can
$ '000 2024 2023 be minimised.
Community Organisations – 125 Sensitivity
Property Charges 5,497 5,018 Sensitivity to interest rate movements is shown for variable financial assets and liabilities based on the carrying amount at
Fees and Charges 7,212 2,690 reporting date.
GST Recoverable 1,736 680
The following interest rate sensitivity analysis depicts what effect a reasonably possible change in interest rates (assumed to
Associates 49,218 49,218 be 1%) would have on the profit and equity, based on the carrying values at the end of the reporting period. The calculation
Other 76 33 assumes that the change in interest rates would be held constant over the period.
Total 63,739 57,764
Net carrying Net result Equity
Liquidity risk $ '000 amount 1% increase 1% decrease 1% increase 1% decrease
§Subnote§
Liquidity risk refers to the situation where the Council may encounter difficulty in meeting obligations associated with financial 2024
liabilities that are settled by delivering cash or another financial asset. Noosa Shire Council is exposed to liquidity risk through QTC Cash Fund 71,001 710 (710) 710 (710)
its trading in the normal course of business and borrowings from the Queensland Treasury Corporation for capital works. Other Investments 34,680 347 (347) 347 (347)
254 255
Loans - QTC (24,855) – – – –
The Council's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its Net 80,826 1,057 (1,057) 1,057 (1,057)
liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risk-
ing damage to the Council's reputation. 2023
QTC Cash Fund 52,051 521 (521) 521 (521)
Other Investments 64,180 642 (642) 642 (642)
Exposure to Liquidity risk
Council is exposed to liquidity risk through its normal course of business and through its borrowings with QTC and other Loans - QTC (24,345) – – – –
financial institutions. Net 91,886 1,163 (1,163) 1,163 (1,163)
The Council manages its exposure to liquidity risk by maintaining sufficient cash deposits and undrawn facilities, both short
In relation to the QTC loans held by the Council, the following has been applied:
and long term, to cater for unexpected volatility in cash flows. These facilities are disclosed in Note 10.
QTC generic debt pool - the generic debt pool products approximate a fixed rate loan. There is a negligible impact on interest
sensitivity from changes in interest rates for generic debt pool borrowings.
The following facilities had been utilised at the end of the reporting period to manage liquidity risk:
Fair value
§Subnote§
§Subnote§
Total
0 to 1 1 to 5 Over 5 contractual Carrying
$ '000 year years years cash flows amount The fair value of trade and other receivables and payables is assumed to approximate the value of the original transaction,
less any allowance for impairment.
2024 The fair value of borrowings with QTC is based on the market value of debt outstanding. The market value of a debt obligation
Payables 24,824 – – 24,824 24,824 is the discounted value of future cash flows based on prevailing market rates and represents the amount required to be repaid
if this was to occur at balance date. The market value of debt is provided by QTC and disclosed in Note 20.
Noosa Council Annual Report 23/24
Loans - QTC 1,882 7,626 21,861 31,369 24,855
26,706 7,626 21,861 56,193 49,679 QTC applies a book rate approach in the management of debt and interest rate risk, to limit the impact of market value
movements to clients' cost of funding. The book value represents the carrying value based on amortised cost using the effective
2023 interest method.
Payables 10,248 – – 10,248 10,248
Loans - QTC 1,709 6,837 22,583 31,129 24,345
11,957 6,837 22,583 41,377 34,593
The outflows in the above table are not expected to occur significantly earlier and are not expected to be for significantly
different amounts than indicated in the table.
continued on next page ... Page 44 of 60 Page 45 of 60
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