Annual Report 2011 Australian Grand Prix Corporation

Notes to and Forming Part of the Financial Statementsfor the Financial Year Ended 30 June 20112010Weightedaverageeffectiveinterest rate %Carryingamount$’000Fixedinterest rate$’000Variableinterest rate$’000Non-interestBearing$’000Financial assetsCash at bank 2.72 3,065 - 3,065 -Cash on deposit 4.76 16,800 16,800 -Receivables 7,900 - - 7,900Derivatives 14,493 - 14,493Total financial assets 42,258 16,800 3,065 22,393Financial LiabilitiesPayables 6,785 - - 6,785Total financialliabilities6,785 - - 6,785(f) Sensitivity Disclosure AnalysisThe Corporation’s sensitivity to market risk is determined based on the observed range of actualhistorical data for the preceding five year period, with all variables other than the primary riskvariable held constant. Taking into account past performance, future expectations, economicforecasts, and management’s knowledge and experience of financial markets, the Corporationbelieves the following movements are reasonably possible over the next 12 months (base rates aresourced from Treasury Corporation of Victoria): a parallel shift of +1.0 per cent and -1.0 per cent inthe market interest rates from year-end rates.The impact on net operating result and equity for each category of financial instrument, other thanderivatives, held by the Corporation at year-end as presented to key management personnel, if theabove movements were to occur, is immaterial for the 2010 and 2011 years. For financial derivatives,the Corporation is exempt from disclosing gross values (refer note 16 (e)).(g) Net fair valuesValuation approachThe fair values and net fair values of financial instrument assets and liabilities are determined asfollows:• Level 1 – the fair value of financial instruments with standard terms and conditions and tradedin active liquid markets are determined with reference to quoted market prices;• Level 2 – the fair value is determined using inputs other than quoted prices that are observablefor the financial asset or liability, either directly or indirectly; and• Level 3 – the fair value is determined in accordance with generally accepted pricing modelsbased on discounted cash flow analysis using unobservable market inputs.The Corporation considers that the carrying amount of financial instrument assets and liabilitiesrecorded in the financial statements is a fair approximation of their fair values because of the shorttermnature of the financial instruments and the expectation that they will be paid in full.60Australian Grand Prix Corporation Annual Report 2011