Annual Report - Northern Health

Note 19: Financial Instruments (continued)Notes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012(e) Market RiskNorthern Health's exposures to market risk are primarily through interest rate risk with only insignificant exposure to foreign currency and other price risks. Objectives, policies and processes used tomanage each of these risks are disclosed in the paragraph below.Currency RiskNorthern Health is exposed to insignificant foreign currency risk through its payables relating to purchases of supplies and consumables from overseas. This is because of a limited amount ofpurchases denominated in foreign currencies and a short timeframe between commitment and settlement.Interest Rate RiskExposure to interest rate risk might arise primarily through Northern Health's interest bearing liabilities. Minimisation of risk is achieved by mainly undertaking fixed rate or non-interest bearingfinancial instruments. For financial liabilities, Northern Health mainly undertake financial liabilities with relatively even maturity profiles.Other Price RiskNorthern Health's exposure to 'Other Price Risk' arises from its current investment portfolio. The investment portfolio has experienced a reduction in value due to the volatility of the global financialmarkets and there is an increasing expectation that due to the nature of these investments that the original face value may not be realised on maturity.As a consequence of these events, Northern Health has taken all possible steps to strengthen its financial policies and internal controls relating to the investment of surplus funds.Interest Rate Exposure of Financial Assets and Liabilities as at 30 JuneWeighted CarryingAverage Amount Fixed Variable Non-Effective Interest Interest InterestInterest Rate Rate Bearing2012 Rate (%) $'000 $'000 $'000Financial AssetsCash and Cash Equivalents 4.52 10,760 - 10,732 28Receivables (i)- Trade debtors 0.00 1,439 - - 1,439- Other receivables 0.00 4,510 - - 4,510Other financial assets 0.00 1,500 - - 1,50018,209 - 10,732 7,477Financial LiabilitiesPayables (i) 0.00 25,086 - - 25,086Interest Bearing Liabilities 4.52 375 - 375 -Other financial liabilities 0.00 6 - - 625,467 - 375 25,0922011Financial AssetsCash and Cash Equivalents 4.31 5,430 - 5,401 29Receivables (i)- Trade debtors 0.00 1,697 - - 1,683- Other receivables 0.00 3,781 - - 3,451Other financial assets 0.00 1,500 - - 1,50012,408 - 5,401 6,663Financial LiabilitiesPayables (i) 0.00 15,731 - - 16,573Interest Bearing Liabilities 4.83 615 - 615 -Other financial liabilities 0.00 3 - - 316,349 - 615 16,576(i) The carrying amount excludes statutory financial assets and liabilities (i.e. GST input tax credit and GST payable)Interest Rate ExposureNorthern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 48 of 60