The following table details the company’s exposure to interest rate risk as at 31 December 2007:
Revenue
Average
Interest
rate % Variable
Interest rate $ $ $
6.31% 14,104,293 - Receivables and other
current assets - - - Investment in
Managed Funds -
2007
Fixed Interest Rate Maturity
Less than 1
1 to 5 Years More than 5
Year
Years
Non-interest
Bearing Total
$ $ $
- - - 14,104,293
- - 4,211,264 4,211,264
7,951,665 7,951,665
Financial Assets
Cash
Financial Liabilities
Payables
14,104,293 - - - 12,162,929 26,267,222
- - - - - 14,362,048 14,362,048
- - - - - 14,362,048 14,362,048
(f) Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to
the company. The company has adopted the policy of only dealing with creditworthy counterparties. The company
does not have any significant credit risk exposure to any single counterparty or any group of counterparties having
similar characteristics. The carrying amount of financial assets recorded in the financial statements, net of any
provisions for losses, represents the company’s maximum exposure to credit risk.
(g) Fair Value of Financial Instruments
The directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial
statements approximates their respective net fair values, determined in accordance with the accounting policies
disclosed in note 2 to the financial statements.
(h) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors.
The company manages liquidity risk by maintaining adequate cash reserves and by continuously monitoring
forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
(i) Market Risk
The Company’s exposure to market risk is in relation to the effect of changes in interest rates which would affect
interest received, and in relation to its available for sale financial assets which are units in an equity trust. The
exposure arising from the units in the equity trust is to movements in the equity markets in which the trust holds
investments and in relation to the market for trading in the units themselves the exposure is to movements in the
fair value of the investment and in relation to distributions arising from the investment.
23. Information & Declarations to be Furnished Under the Charitable Fundraising Act 1991
Under this act, KU Children’s Services holds a single authority to fundraise for KU centres. The authority does not
extend to services which KU manages on behalf of another organisation. Preparation of the following information
reflects the level of disclosure existing in management systems in use by the organisation.
Continues...
113th Annual Report 2008
37