✨ Financial Statements
3442 NEW ZEALAND GAZETTE, No. 131 21 AUGUST 2008
Dividend income 8,800,000 7,800,000
Interest income 237,239 358,349
Short term deposits 790,321 1,550,000
The amounts outstanding at balance date were:
Dividends receivable 6,310,000 5,595,000
Interest receivable 2,657 14,951
Short term deposits 790,321 1,550,000
Donations to related interests 160,052 315,940
The trust paid donations throughout the year to community organisations of which the trustees are members. There were no amounts outstanding at 31 March 2008 relating to these transactions.
Key management compensation:
Short term employees benefits 142,649 129,542
Short term trustee benefits 93,964 80,307
There were no long term benefits associated with key employees or trustees.
11. Financial Instruments
Exposure to interest rate, credit, and liquidity risks arise in the normal course of the trust’s business.
Market Risk
Interest Rate Risk
Interest rate risk is the risk that the value of the trust’s assets and liabilities will fluctuate due to changes in market interest rates. The trust is exposed to interest rate risk primarily through its cash balances and investments.
Liquidity and Interest Rate Risk
Liquidity risk is the risk that the trust will encounter difficulty in raising funds at short notice to meet its financial commitments as they fall due.
The trust’s policy for management of liquidity and interest rate risk is to vary the amount and duration of its investments, taking into consideration the grant cycles and operational needs of the trust. The trust manages its risk by monitoring investments on an ongoing basis.
The following tables detail the remaining contractual maturity for the trust’s non derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the trust can be required to pay. The table includes both interest and principal cash flows.
| 2008 | Average Effective Interest Rate % | 0–6 Months $ | 6–12 Months $ | 1–2 Years $ | 2–5 Years $ | Over 5 Years $ | Total $ |
|---|---|---|---|---|---|---|---|
| Financial liabilities: | |||||||
| Payables | (631,073) | – | – | – | – | – | (631,073) |
| Total financial liabilities | (631,073) | – | – | – | – | – | (631,073) |
| 2007 | Average Effective Interest Rate % | 0–6 Months $ | 6–12 Months $ | 1–2 Years $ | 2–5 Years $ | Over 5 Years $ | Total $ |
|---|---|---|---|---|---|---|---|
| Financial liabilities: | |||||||
| Payables | (898,549) | – | – | – | – | – | (898,549) |
| Total financial liabilities | (898,549) | – | – | – | – | – | (898,549) |
Sensitivity Analysis
If interest rates on cash balances and investments moved by +/- 0.5%, the trust’s income from its cash balances and investments could be higher or lower by $17,623. This sensitivity is based on the average cash balances and investments held at month end throughout the year. There has been no change to the method of calculation from previous periods.
Credit Risk
Credit risk is the risk that the counterparty to a transaction with the trust will fail to discharge its obligations, causing the trust to incur a financial loss. Financial instruments which potentially subject the trust to credit risk principally consist of cash and cash equivalents, loans and receivables and investments.
The trust has a significant concentration of credit risk with the TSB Bank Limited. The trust’s policy is to keep investments with the TSB Bank Limited conditional upon the bank’s credit rating remaining at a predetermined level. The trust manages its credit risk by maintaining a reserve fund in order to maintain the level of grants paid in the event that income decreases.
Maximum exposures to credit risk at balance date are the carrying amounts of financial assets in the balance sheet.
No financial assets are past due or impaired.
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NZ Gazette 2008, No 131
✨ LLM interpretation of page content
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Notes to the Financial Statements for the Year Ended 31 March 2008
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🏢 State Enterprises & InsuranceProperty, Plant & Equipment, Trust Capital, Retained Earnings, Reconciliation of Net Surplus, Related Parties, Financial Instruments, Revenue Recognition, Financial Liabilities, Goods and Services Tax, Taxation, Property, Plant and Equipment