2015-11-16 GC Agenda - Item 3, Attach 1 - Annual Report 2014-15

                                                                                                                                                        QAO
                                                                                                                                               certified statements



NOOSA SHIRE COUNCil


Notes to the financial staterr:ents
For the year ended 30 June 2015


28 Financlallnstruments
          Noose Shire Council has exposure to the following risks arising from financial 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. induding 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 perfonnance of the Council. Noosa Shire Council does not enter into derivati •.••
                                                                                                                                         es.

         Credit Risk
               Credit risk is the risk of financial loss if a counterparty to a financial instrument fails to meet its contradual 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.


               Investments in financial instruments are required to be made with Queensland Treasury Corporation (OTC) or similar state
               lcommonwealth           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 held by Noosa Shire Council.

              The following table represents the maximum exposure to credit risk based on lhe carrying amounts of financial assets at
              the end of the reporting period:
                                                                                               Note             2015               2014
              Financial       Assets                                                                              $                  $

                      Cash and cash equivalents.           Bank                                  9                175,276             77.994
                      Cash investments held with - OTC                                           9             27,742,381         25,118,125
                      Cash investments held with other
                      appro •.••
                              ed deposit taking institutions                                    9              22.973,517          5,926,935
                      Equity investments                                                        11             65,211.946         60,978,225
                      Receivables.       rates                                                  10              4,165.668          4,159.585
                      Receivables.       other                                                  '0             50,48',484         61,074,924
              Other credit exposure
                      Guarantee                                                                 22                290,070            290,070
                      Total                                                                                  171.040.342        157.625.858


              Cash and cash equivalents
              The Council may be exposed to credit risk through its in•••.
                                                                       estments in the OTC Cash Fund and QTC Working Capital Facility.
             The OTC 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 one 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.