Notes to the Financial Statements
Note 11: Financial Instruments
The estimated fair value of the University's financial instruments are equivalent to their carrying amounts in the financial statements.
Financial instruments which potentially subject the University to credit risk principally consist of bank balances and accounts receivable. Credit risk in respect of Bank and Short Term Deposits is reduced by spreading deposits over major trading banks. Receivables are unsecured, but are subject to credit control. No collateral is held.
The University holds cash in foreign currencies. Fluctuations in foreign currency exchange rates give rise to currency risk.
Interest Rate Risk
There was a finance lease recognised in 2006 with an effective interest rate of 12.07% (2005-Nil).
There were no term loans for 2006 (2005-6.02% to 8.40%). The effective interest rates on Investments range from 7.25% to 7.67% (2005-6.72% to 7.59%).