✨ Financial Statements
14 AUGUST 2008
NEW ZEALAND GAZETTE, No. 127
3321
| Reserves transfers | (8,076) | 3,091 | 4,985 | — |
| Balance at 31 March 2007 | 89,308 | 26,774 | 27,698 | 143,780 |
| Balance at 1 April 2007 | 89,308 | 26,774 | 27,698 | 143,780 |
| Total recognised income and expense | (7,082) | — | — | (7,082) |
| Distributions in the form of donations | (4,136) | — | — | (4,136) |
| Reserves transfers | 11,218 | (14,687) | 3,469 | — |
| Balance at 31 March 2008 | 89,308 | 12,087 | 31,167 | 132,562 |
| Balance at 1 April 2006 | 89,308 | 23,683 | 22,713 | 135,704 |
| Balance at 31 March 2007 | 89,308 | 26,774 | 27,698 | 143,780 |
| Balance at 1 April 2007 | 89,308 | 26,774 | 27,698 | 143,780 |
| Balance at 31 March 2008 | 89,308 | 12,087 | 31,167 | 132,562 |
Income Fluctuation Reserve
The income fluctuation reserve relates to a capital maintenance reserve established and maintained at the trustees’ discretion.
Inflation and Population Growth Reserve
The inflation and population growth reserve relates to a capital maintenance reserve based on an inflation factor (CPI) and 50% population growth in the region.
13 Financial instruments
Exposure to credit, interest rate, foreign currency, equity price and liquidity risks arises in the normal course of the trust’s business. The trust’s risk management policies and procedures for financial instruments are formally documented and approved by the trustees in the trust’s statement of investment policies and objectives (“SIPO”)
Credit risk
The trust’s SIPO stipulates value ranges that may be held in New Zealand equities, overseas equities, overseas fixed interest, New Zealand cash, hedge funds, global property and collateralised commodity futures. Within each of these investment sub-trusts, there are maximum limits that can be invested within one investment group and with one investment manager. This diversified investment strategy reduces the credit risk exposure of the trust.
The trust makes loans only to entities that are well established and have demonstrated a robust ability to make regular repayments.
The SIPO states minimum credit ratings of investment bonds.
Liquidity risk
Liquidity risk represents the trust’s ability to meet its contractual obligations. The trust evaluates its liquidity measurements on an ongoing basis. In general, the trust generates sufficient cash flows from its activities to meet its obligations arising from its financial liabilities.
Market risk
Market risk is the risk that changes in market prices, such as interest rates or equity prices, will affect the trust’s profit or valuation of net assets. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
The risk is mitigated by the policies and procedures outlined in the trust’s SIPO. These include diversification of the investment portfolio and prudent investment strategies.
Foreign currency risk
The trust is exposed to foreign currency risk as a result of investment transactions entered into by fund managers in a currency other than the trust’s functional currency, New Zealand dollars ($), which is the presentation currency of the trust. Fund managers typically hedge investments denominated in a foreign currency where appropriate with foreign exchange contracts.
Interest rate risk
The trust has bank call and deposit accounts, government and local authority securities and other investment held by the trust’s fund managers that are exposed to interest rate risk. Interest rate swaps have been entered into to achieve an appropriate mix of fixed and floating rate exposure within the trust’s policy.
Other market price risk
The entity is not exposed to substantial other market price risk arising from financial instruments.
Quantitative Disclosure
Credit and interest rate risk
The carrying amount of financial assets represents the trust’s maximum credit exposure.
The trust’s maximum exposure to credit risk for investments by geographic regions and investment type and information relating to the interest rate risk is as follows:
| 2008 | 2007 | |
|---|---|---|
| Carrying amount | $000 | $000 |
| New Zealand cash | 8,738 | 3,292 |
| New Zealand equities | 5,280 | 7,973 |
| Collateralised commodity futures | — | 7,406 |
| Global bonds | 59,272 | 56,373 |
| Global equities | 45,286 | 51,306 |
| Global property | 6,043 | 9,132 |
| Hedge fund of funds | 6,852 | 7,235 |
| Total financial assets | 131,471 | 142,717 |
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NZ Gazette 2008, No 127
✨ LLM interpretation of page content
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Bay of Plenty Community Trust Incorporated Financial Statements
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💰 Finance & RevenueAccounting Policies, Financial Instruments, Derivatives, Property Plant and Equipment, Depreciation, Impairment, Revenue Recognition, Reserves Transfers, Income Fluctuation, Inflation, Population Growth, Credit Risk, Liquidity Risk, Market Risk, Foreign Currency Risk, Interest Rate Risk