✨ Financial Risk Management Report
1 JULY 2009 NEW ZEALAND GAZETTE, No. 96 2149
These committed and unpaid donations had the following profile:
| Financial Year Approved | Number of Grants Outstanding | Value $ |
|---|---|---|
| 2007 | 4 | 71,500 |
| 2008 | 8 | 126,000 |
| 2009 | 106 | 1,423,250 |
| Total | 118 | 1,620,750 |
Committed but unpaid donations at 31 March 2008 had the following profile:
| Financial Year Approved | Number of Grants Outstanding | Value $ |
|---|---|---|
| 2006 | 1 | 6,000 |
| 2007 | 11 | 151,000 |
| 2008 | 120 | 1,888,500 |
| Total | 132 | 2,045,500 |
Market Risk
Market risk embodies the potential for both loss and gains and includes currency risk, interest risk and price risk.
The Trust’s investment strategy and the management of the investment risk are detailed in the SIPO. The Trust’s investments are diversified across a range of assets including New Zealand and Overseas equities, New Zealand bonds, New Zealand and Australian property and cash. Within each asset class there are defined policies and mandates to ensure diversification, to minimise investment risk and to limit exposure to any one investment. Each asset class has a defined target allocation and is managed within a defined allocation range.
In addition, the Trust has a Risk Management Policy which includes a Tactical Asset Allocation Policy. This policy is to identify times when the Trustees should instigate a process to review the short term investment strategy of the Trust.
a) Currency Risk
Currency risk is the risk that the fair value of, or future cash flows from financial assets will fluctuate due to changes in foreign exchange rates. The Trust has exposure to currency risk through its investments in offshore equities. The investment policy requires full hedging of currency risk for overseas bonds, when held, and 50% hedging of currency risk for overseas equities. There was no currency hedging on overseas equities for the first half of the year. From October 2008 hedging was introduced to reduce the risks of the exposure to overseas currencies. Hedging decisions have been constantly reviewed. Currency risk is self managed with the Bank of New Zealand with a range of tolerance.
At balance date the Trust’s exposure to currency risk was as follows:
| 2009 $ | 2008 $ | |
|---|---|---|
| Foreign Currency denominated assets | 48,102,519 | 63,334,393 |
| Less foreign currency contracts | 16,500,000 | - |
| Unhedged currency exposure at 31 March | 31,602,519 | 63,334,393 |
| 2009 $ | 2008 $ | |
|---|---|---|
| USA/Canada | 12,885,793 | 13,385,523 |
| UK/Europe | 11,299,322 | 21,838,583 |
| Japan/Asia | 13,083,202 | 16,225,079 |
| Australia | 10,834,202 | 11,885,208 |
| 48,102,519 | 63,334,393 |
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NZ Gazette 2009, No 96
✨ LLM interpretation of page content
💰 Donations Commitments and Market Risk Report
💰 Finance & RevenueDonations, Grants, Financial risk, Currency risk, Investment strategy