Annual Report 2015-16

Financial Statements 2016

 Noosa Shire Council

 Notes to the Financial 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 in interest rates would be held constant over the period.
So '"Net Carrying =——S~*~*«“(et sult’ =———~=<C~*‘=™S*CQIty:S*~‘*‘*#
                                        Amount          1% increase   1%decrease     ‘1% increase 1% decrease
 enn Og I                                                             ee Ne NO                        OO
 2016
 QTC Cash Fund                             28,165              282           (282)          282           (282)
 Other Investments                         10,303               100          (100)          100           (100)
 Loans - QTC                         ___  (38,119)     (381) 881 (881) 881
 Net Total                                   a a                               OL
 2015
 QTC Cash Fund                             27,742              277           (277)          277           (277)
 Other Investments                          6,974                70           (70)           70            (70)
 Loans - QTC                         ___ (39,381)      (394) 894 (394) 894
 Net Total                                 4,665       (47) Assi)

 In relation to the QTC loans held by the Council, the following has been applied:

 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.

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