Notes To The Financial Statements
30 June 2015
11.1
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in the market interest rates. The organisation has a borrowing that is subject to a fixed
interest rate. Details of the organisation's borrowings are described in Note 15. The Board of Trustees is dedicated to reviewing the loan exposures and repayment plans for the organisation's external borrowings. The
Board of Trustees reviews the loan exposures, meets on regular basis and uses various models to project
the organisation's risk exposures and proposes methods to deal with the risk arising in an appropriate manner. The Board of Trustees also approves the term sheets for such borrowing, and ensures that the interest
rate exposure of the organisation is appropriately managed.
11.2
Credit risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The organisation is exposed to credit risk from its operating activities
(primarily for trade receivables) and from its financing activities, including deposits with banks and financial
institution and other financial instruments.
Financial assets, which potentially subject the organisation to concentration of credit risk, consist of accounts receivable and cash. The organisation’s cash equivalents are placed with high credit quality financial
institutions.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date was:
Carrying amount
2015
US$
2014
US$
Other receivables
Cash and cash equivalents
2 772
59 178
112 107
196 202
Balance at 30 June 2015
61 950
308 309
Legal Resources Foundation Annual Report 2015
57
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