✨ Financial Statements Notes
TSB Community Trust
Notes to the Financial Statements
For the year ended 31 March 2009
11. Financial Instruments continued
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 Ltd. The Trust’s policy is to keep investments with the TSB Bank Ltd 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.
Fair Value
The estimated fair values of financial instruments that differ from carrying values are as follows:
| Carrying Amount 2009 | Fair Value 2009 | Carrying Amount 2008 | Fair Value 2008 | |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| NZ Government Bonds | 2,101,445 | 2,100,000 | 1,999,811 | 2,023,000 |
The fair value has been determined as the amount receivable on maturity.
The carrying values for cash and cash equivalents and loans and receivables are their fair values.
It is not practicable to estimate the fair value of the shares in the TSB Bank Limited. Their fair value cannot be reliably measured as the market for such shares is unknown. The Trust intends to hold the shares for the long term.
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NZ Gazette 2009, No 107
✨ LLM interpretation of page content
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TSB Community Trust Financial Statements Notes
(continued from previous page)
🏢 State Enterprises & InsuranceFinancial Instruments, Credit Risk, Fair Value, NZ Government Bonds, TSB Bank Ltd