✨ Financial Statements and Analysis
NEW ZEALAND GAZETTE, No. 127
14 AUGUST 2008
Management of the interest rate risk is performed by the fund managers by use of interest rate swaps. The average interest rate is determined inclusive of interest rate swaps that are embedded with the funds.
Liquidity Risk
The following table sets out the contractual cash flows for all financial assets, liabilities and for derivatives that are settled on a gross cash flow basis:
| Trust 2008 | Balance Sheet | Contractual Cash Flows | 6 months or less | 6–12 months | 1–2 years | 2–5 years | More than 5 years |
|---|---|---|---|---|---|---|---|
| Trade and other payables | 320 | 320 | 320 | – | – | – | – |
| Total non-derivative liabilities | 320 | 320 | 320 | – | – | – | – |
| Investments | 131,471 | – | – | – | – | – | – |
| Loans | 234 | 234 | 38 | 38 | 65 | 93 | – |
| Total non-derivative assets |
| Trust 2007 | | | | | | | |
| Trade and other payables | 281 | 281 | 281 | – | – | – | – |
| Total non-derivative liabilities | 281 | 281 | 281 | – | – | – | – |
| Investments | 142,717 | – | – | – | – | – | – |
| Loans | 524 | 524 | 352 | 27 | 55 | 90 | – |
| Total non-derivative assets | | | | | | | |
Global bonds, equities and property are investments denominated in foreign currencies. These are hedged to New Zealand dollars within the fund by way of foreign exchange contracts.
Capital Management
The trust’s capital includes trust capital, Income fluctuation reserve and inflation and population growth reserve.
The trust’s policy is to maintain a strong capital base so as to maintain investor confidence and to sustain future development of the trust.
The trust is not subject to any externally imposed capital requirements.
The trust’s policies in respect of capital management and allocation are reviewed regularly by the board of trustees.
There have been no material changes in the trust’s management of capital during the period.
Sensitivity Analysis
Table 1 shows the asset allocation for the trust’s portfolio as at 31 March 2008 as well as the long term expected return for each asset class. The return one standard deviation above and below the expected return is also shown.
Table 1: Sensitivity Analysis for the Trusts Portfolio 31 March 2008
| Asset Class | Asset Allocation (31 March 2008) | Long Term Expected Return p.a. | –1 Std Deviation Return p.a. | +1 Std Deviation Return p.a. |
|---|---|---|---|---|
| NZ Equities | 5.2% | 9.2% | –7.8% | 26.2% |
| Global Equities | 33.5% | 8.7% | –6.2% | 23.6% |
| Global Bonds | 45.1% | 6.3% | 3.0% | 9.6% |
| NZ Cash | 6.4% | 5.7% | 4.2% | 7.2% |
| Global Property | 4.6% | 8.1% | –3.9% | 20.1% |
| CCF’s | 0.0% | 7.8% | –10.2% | 25.8% |
| Hedge Funds | 5.2% | 8.3% | 0.3% | 16.3% |
| Total | 100.00% | 7.4% | 1.2% | 13.6% |
From Table 1, the long term expected return for the trust’s portfolio is 7.4% per annum and there is approximately a 68% probability that the return in any one year will be within the range of 1.2% and 13.6%.
As at 31 March 2008, the trust’s portfolio had NZ$131.5m under management. Assuming the long-term return distribution approximates the short-term return distribution, then for the year 31 March 2008 to 31 March 2009 there is approximately a 68% probability that the trust’s revenue profit from investment activities will lie in the range of $1.6m to $17.9m, with an expected value of $9.7m.
Table 2: Sensitivity Analysis for the Trusts Portfolio 31 March 2007
| Asset Class | Asset Allocation (31 March 2008) | Long Term Expected Return p.a. | –1 Std Deviation Return p.a. | +1 Std Deviation Return p.a. |
|---|---|---|---|---|
| NZ Equities | 5.2% | 8.9% | –8.1% | 25.9% |
| Global Equities | 33.5% | 8.4% | –6.5% | 23.3% |
| Global Bonds | 39.5% | 6.0% | 2.7% | 9.3% |
| NZ Cash | 2.3% | 5.4% | 3.9% | 6.9% |
| Global Property | 6.4% | 7.8% | –4.2% | 19.8% |
| CCF’s | 5.2% | 7.5% | –10.5% | 25.5% |
| Hedge Funds | 5.1% | 8.0% | 0.0% | 16.0% |
| Total | 100.00% | 7.3% | 0.5% | 14.1% |
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NZ Gazette 2008, No 127
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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, Capital Management, Sensitivity Analysis, Asset Allocation, Expected Return, Standard Deviation