Notes to the financial statements (cont’d) For the year ended 30 June 2012 (b) Credit risk (ii) Foreign exchange risk (iii) Cash flow and fair value interest rate risk Group sensitivity page 74 The Group was not exposed to significant foreign exchange risk in relation to financial instruments held at year  end (2011: nil). Credit risk refers to the risk that a counterparty will fail to  meet its contractual obligations resulting in financial loss to  the Group. Credit risk arises for the Group from cash and cash  equivalents, receivables, loans and other receivables. Interest rate risk is the risk to the group’s earnings and capital  arising from changes in market interest rates. The financial  instruments held that are impacted by interest rate risk consist  of cash and cash equivalents, loans, and borrowings. Short and long-term investment mixes and loans to related  entities are influenced by liquidity policy requirements. Interest  rates (both that charged and received) are based on market  rates, and are closely monitored by management. They are  primarily at variable rates of interest, and expose the Group to  cash flow interest rate risk. The Group mitigates its credit risk by ensuring cash deposits  are held with high credit quality financial institutions and other  highly liquid investments are held with trusts operated by the  Group. Where investments are held in units in a trust operated  by the Group, that trust is subject to the rules of the trust deed  and the investment in underlying assets is subject to asset  allocation guidelines. Management regularly assesses the appropriateness of the  investment of surplus funds with the objective of maximising  returns, within investment guidelines acceptable to the Board. There is limited exposure to fair value interest rate risk because  of the relatively short time frame of any fixed rate investments  and borrowings. The Parent has no exposure to interest rate risk. Receivables consist of management fees receivable, service  fees receivable and mandate receivables and other amounts  receivable from related parties. These counterparties generally  do not have an independent credit rating, and the Group  assesses the credit quality of the debtor taking into account its  financial position, past experience with the debtor, and other  available credit risk information. In relation to management  fees receivable, the Group is contractually entitled to deduct  such fees from investors’ account balances, in accordance  with the Product Disclosure Statements, and pass the fees to  the Responsible Entity or Trustee. Due to this pass-through  process the embedded credit risk is considered minimal. Other  receivables are regularly monitored by line management. At 30 June 2012, if interest rates had changed by +/- 100 basis  points (2011: +/- 100 basis points) from the year-end rates with  all other variables held constant, post tax profit for the year  would have been $819,000 higher/lower (2011: $1,550,000  higher/lower). Equity would have been higher/lower by the  same amount. The maximum exposure to credit risk at the reporting date is  the carrying value of the financial assets as summarised in the  table included in this note above. The Group does not hold  any significant collateral as security over its receivables and  loans, apart from its recourse to certain shares in subsidiaries in  relation to loans to executives. There are no significant concentrations of credit risk within the  Group. The Group does not hold any financial assets whose terms  have been renegotiated, but which would otherwise be past  due or impaired. The credit quality of the financial assets that are neither past  due nor impaired as at balance date was consistent with that  described above, and management assesses the credit risk  associated with these reported balances as being minimal.  Information in relation to impaired receivables and past due  but not impaired receivables is included below.