✨ Financial Statements Notes
4 AUGUST 2009 NEW ZEALAND GAZETTE, No. 112 2559
Notes to the financial statements
18 Financial instruments (continued)
Foreign currency risk
The Group is exposed to foreign currency risk as a result of investment transactions entered into by fund managers in a currency other than the Parent’s functional currency, New Zealand dollars ($), which is the presentation currency of the Group. Fund managers typically hedge investments denominated in a foreign currency where appropriate with foreign exchange contracts.
Interest rate risk
The Group has bank call and deposit accounts, government and local authority securities and other investment held by the Group’s fund managers that are exposed to interest rate risk. Interest rate risk is mitigated by the use of swaps where appropriate, to achieve an appropriate mix of fixed and floating rate exposure within the Group’s policy.
Other market price risk
The entity is not exposed to substantial other market price risk arising from financial instruments.
Quantitative disclosure
Credit risk
The carrying amount of financial assets represents the Group’s maximum credit exposure.
The Group’s maximum exposure to credit risk for investments by geographic regions and investment type is as follows:
| Carrying amount | Group |
|---|---|
| 2009 | |
| New Zealand Community Loans | 3,480 |
| New Zealand Cash | 89,140 |
| New Zealand fixed interest | 189,159 |
| New Zealand Equities | 19,306 |
| New Zealand Property | 13,637 |
| Australian Equities | 22,912 |
| Private Equity | 11,641 |
| Global Bonds | 32,524 |
| Global Equities | 46,592 |
| Emerging Market Debt | 18,296 |
| Emerging Market Equities | 3,648 |
| Alternative Assets | 5,774 |
| Total Financial Assets | 456,109 |
Global bonds and equities and emerging markets debt and equity are in investments denominated in Australian Dollars, US Dollars and Euros.
The fair value of alternative assets is determined by valuation techniques based on assumptions that are not supported by prices from observable current market transactions. The reduction in the fair value of these instruments during the year was $12,858,000.
The Trust has outstanding commitments to private equity funds totalling $2,262,000 (2008: $14,940,000).
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NZ Gazette 2009, No 112
✨ LLM interpretation of page content
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Notes to the financial statements of The Canterbury Community Trust
(continued from previous page)
🏢 State Enterprises & Insurance6 July 2009
Trust Funds, Capital Base Reserve, Accumulated Income Reserve, Financial Instruments, Credit Risk, Liquidity Risk, Market Risk