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Note 28 continued

Currency risk sensitivity analysis

— Tourism New Zealand is subject to volatility in financial performance associated with foreign

currency rates. As at 30 June 2017, if the NZ Dollar had increased/decreased by 5% against various foreign currencies used by Tourism

New Zealand with all other variables held constant, the deficit/surplus and equity would have changed as follows:

Surplus/(deficit) higher/(lower)

Equity higher/(lower)

2017

$000s

2016

$000s

2017

$000s

2016

$000s

Group

NZD to various currencies +5%

3,627

3,627

-

-

NZD to various currencies -5%

(21,394)

(22,620)

-

-

Parent

NZD to basket of currencies +5%

3,627

3,627

-

-

NZD to basket of currencies -5%

(21,394)

(22,620)

-

-

This movement is attributable to foreign exchange gains/losses on translation of forward foreign exchange contracts and other foreign

currency denominated assets and liabilities.

Credit risk

Credit risk is the risk that a third party will default on its obligations to Tourism New Zealand, causing Tourism New Zealand to incur a

loss.

Tourism New Zealand has no significant concentrations of credit risk, as it has a small number of credit customers and only places

funds with registered banks. With respect to foreign exchange instruments, Tourism New Zealand reduces its risk by limiting the

counter parties to major trading banks and does not expect to incur any significant losses as a result of non performance by these

counter parties.

Tourism New Zealand’s maximum credit exposure for each class of financial instrument is represented by the total carrying amount of

cash (note 8), net debtors (note 9) and derivative financial instruments (note 10). There is no collateral held as security against these

financial instruments, including those instruments that are overdue or impaired.

Liquidity risk

Liquidity risk is the risk that Tourism New Zealand will encounter difficulty raising liquid funds to meet commitments as they fall due.

Tourism New Zealand has no significant concentrations of liquidity risk. Tourism New Zealand annually agrees a funding schedule with

the Crown which matches the estimated timing of its commitments and close out of market positions.

The following liquidity risk disclosures reflect all contractually fixed pay-offs, repayments and interest resulting from recognised

financial and derivative financial instrument liabilities as of 30 June 2017. The timing of cash flows for liabilities is based on the

contractual terms of the underlying contract.

70