KU Annual Report 2010 - Page 36

KU Financial Report Notes to the Financial Statements Continued... (c) Financial Risk Management Objectives The Board and Management manage the financial risks relating to operations of the company. These include credit risk, liquidity risk, interest rate risk and market risk. The company does not enter into, or trade financial instruments for speculative purposes. The company does not use derivative financial instruments. The company’s investments expose it primarily to the financial risks of changes in interest rate and market fair value adjustments. (d) Other price risks The company is exposed to equity price risks arising from equity investments. Equity investments are held for strategic rather than trading purposes. The company does not actively trade these investments. (e) Interest Rate Risk Management The company is exposed to interest rate risk as it invests its surplus funds in variable rate instruments. The risk is managed by regular review of its variable interest rate investments. The following table details the company’s exposure to interest rate risk at the balance date: Fixed Interest Rate Maturity 2010 Revenue Average Interest rate Variable Interest rate Less than 1 Year 1 to 5 Years More than 5 Years Non-interest Bearing Total % $ $ $ $ $ $ Financial Assets Cash 2.53% 16,627,388 - - - - 16,627,388 Receivables and other current assets - - - - - 2,406,073 2,406,073 Investment in Managed Funds - - - - - 7,621,477 7,621,477 16,627,388 - - - 10,027,550 26,654,938 Financial Liabilities Payables - - - - - 20,404,934 20,404,934 - - - - - 20,404,934 20,404,934 Cash includes $11,235,604 (2009: $22,022,809) which is held for disbursement in accordance with government funding agreements, including to organisations other than KU. Continues... 36 KU Children’s Services KU Financial Report Notes to the Financial Statements Continued... (c) Financial Risk Management Objectives The Board and Management manage the financial risks relating to operations of the company. These include credit risk, liquidity risk, interest rate risk and market risk. The company does not enter into, or trade financial instruments for speculative purposes. The company does not use derivative financial instruments. The company’s investments expose it primarily to the financial risks of changes in interest rate and market fair value adjustments. (d) Other price risks The company is exposed to equity price risks arising from equity investments. Equity investments are held for strategic rather than trading purposes. The company does not actively trade these investments. (e) Interest Rate Risk Management The company is exposed to interest rate risk as it invests its surplus funds in variable rate instruments. The risk is managed by regular review of its variable interest rate investments. The following table details the company’s exposure to interest rate risk at the balance date: Fixed Interest Rate Maturity 2010 Revenue Average Interest rate Variable Interest rate Less than 1 Year 1 to 5 Years More than 5 Years Non-interest Bearing Total % $ $ $ $ $ $ Financial Assets Cash 2.53% 16,627,388 - - - - 16,627,388 Receivables and other current assets - - - - - 2,406,073 2,406,073 Investment in Managed Funds - - - - - 7,6 İ܀ܰİ(ذܰܰذа(аЀа(аЀа)1ѥ)A光) ͠Ց̀İ԰Ѐ耐ȰȰ䤁ݡ́ȁ͉͕ЁɑݥѠٕɹ)չɕ̰ՑѼɝͅѥ́ѡȁѡ-T) ѥՕ̸()-T ɕéM٥