37(d) Liquidity riskSpire ensures that sufficient cash on demand is held to meet expected operational expenses for a period of 90 days, including the servicing of financial obligations. The business maintains financing lines of credit, including £55 million revolving facilities and £56 million acquisition/capital investment facilities. As referred to above, the bank loans contain various covenants, which are regularly monitored by management.(e) Interest rate riskSpire is exposed to interest rate risk arising from fluctuations in market rates. This affects the future cash flows from money market investments and the cost of floating rate borrowings. Spire has entered into interest rate swaps to fix interest payable on its bank loans, therefore minimising its exposure to interest-rate risk. Taking account of these swaps as at 31 December 2010, 89% of the business' borrowings were fixed rate loans.Group structure Two separate corporate groups, each held under the common ownership of Spire Healthcare Limited Partnership, operate hospitals under the Spire Healthcare brand. One group operates the original 25 hospitals acquired in August 2007 together with Spire Thames Valley Hospital and Spire Shawfair Park Hospital. The second group operates the 10 Classic Hospitals acquired in March 2008. Further details of Spire's group structure can be found on page 39. The two groups with Spire Healthcare Limited Partnership as their parent are referred to in this Annual Review as 'Spire', 'Spire Healthcare' or 'Group'.Principal risks and uncertaintiesIn addition to the risks (described on page 28), there are a number of risks of a financial nature, as follows:(a) Market riskSpire is reliant upon key commercial relationships with stakeholders; the relationships are subject to continual review based on financial and contractual criteria. The business has developed a flexible cost approach model that enables it to manage such risk.(b) Medical/regulatory riskSpire is subject to the risk of litigation as a result of medical malpractice suits. Spire has insurance policies in place to cover such instances and the directors are of the view that these policies adequately protect the business from this risk. Spire operates in the healthcare sector, one of the most closely monitored and regulated areas of business. Our services are subject to external inspection by regulators and other authorities, which are followed by publicly available reports. We also conduct our own internal inspections.(c) Credit riskCredit risk arises principally from receivables from customers and cash deposits. Exposure to credit risk from trade receivables is considered to be low because of the nature of Spire's customers. The credit risk relating to bank deposits is managed by only investing with major financial institutions, which under Spire policy must be rated at least AA by key rating agencies.

38Spire Healthcare Annual Review 2010Chief Financial Officer's statement continuedSummaryWe are delighted to have completed our third full year of this expanded business with substantial growth over 2009 at the same time as improving our stakeholder measures. Our focus continues to be on investing for growth in 2011 and beyond - both in existing facilities and future developments - and on improving margin growth.Rob Roger, Chief Financial Officer, April 2011 Essential arrangementsSpire has arrangements with all the major private medical insurers operating in the United Kingdom, as well as contracts with various NHS Trusts and Foundation Trusts, Primary Care Trusts in addition to contracts with the Secretary of State for Health. Certain contracts with the Secretary of State for Health will be replaced later in 2011 with contracts with local Primary Care Trusts. Many of these contracts can be considered essential to Spire's business. Spire also has material contracts with a range of suppliers.Approximately 6,600 consultants have practising privileges at Spire hospitals. These consultants are key stakeholders for Spire and such arrangements are essential to Spire's business.Properties Spire owns freehold or long leasehold interests in all its hospitals, with the exception of Spire Sussex, which is leased from an NHS Trust under a lease expiring in 2027. Where Spire is a tenant under third-party leases, a nominal rent is generally payable. Exceptions are three former Classics sites (Clare Park, Fylde Coast and Hull), which are leased from Matterhorn Capital under 35-year leases, and Spire Sussex, where material rent is payable.