✨ Financial Report Notes
18 AUGUST 2010 NEW ZEALAND GAZETTE, No. 104 2795
Notes to the financial statements (continued)
in New Zealand Dollars ($000’s)
13 Financial instruments (continued)
Capital management
The Trust’s capital includes Trust Capital, Income Fluctuation Reserve and Inflation & 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, and during the year a decision was taken not to rebalance the investment portfolio while its value was below “Real Capital”.
Sensitivity analysis
Table 1 shows the asset allocation for the Trust’s portfolio as at 31 March 2010 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 2010
| Asset Class | Asset Allocation
| (31 March 2010) | Long Term Expected
| Return p.a. | -1 Std Deviation
| Return p.a. | +1 Std Deviation
| Return p.a.
|-----------------|-------------------|-------------------|------------------------|----------------------|------------------------|
| NZ Equities | 3.7% | 8.3% | -9.2% | 25.8% |
| Global Equities | 30.9% | 8.9% | -6.6% | 24.4% |
| Global Bonds | 52.1% | 6.7% | 3.7% | 9.7% |
| NZ Cash | 9.3% | 5.3% | 3.3% | 7.3% |
| Global Property | 3.4% | 8.4% | -8.1% | 24.9% |
| Hedge Funds | 0.6% | 6.1% | -8.6% | 20.8% |
| Total | 100.00% | 7.4% | 1.0% | 13.7% |
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% and 13.7%.
As at 31 March 2010 the Trust’s Portfolio had NZ$137m under management. Assuming the short term return distribution approximates the long term return distribution there is approximately a 68% probability that the Trust’s revenue from investment activities will lie in the range of $1.4m to $18.7m, with an expected revenue of $10.5m for the year 1 April 2010 to 31 March 2011.
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NZ Gazette 2010, No 104
✨ LLM interpretation of page content
💰
BayTrust Annual Report for the year ended 31 March 2010
(continued from previous page)
💰 Finance & RevenueFinancial statements, Revenue, Expenses, Grants, Investments, Taxation, Cash, Trust Funds, Interest rate risk, Credit risk, Financial instruments, Capital management, Sensitivity analysis, Asset allocation, Expected return, Standard deviation