✨ Financial Statements Notes
21 JULY 2010 NEW ZEALAND GAZETTE, No. 87 2345
EASTERN AND CENTRAL COMMUNITY TRUST INC
Committed but unpaid donations at 31 March 2009 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 |
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 SIP. The Trust’s investments are diversified across a range of assets including New Zealand 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 strategic investment policy requires full hedging of currency risk for overseas bonds, when held, and 50% hedging, on average, of currency risk for overseas equities. When exchange rates are at extreme levels the percentage of hedging is varied as determined by the Trust’s currency policy. Currency hedging on overseas equities has been increased throughout the year as the NZD was historically low and was trending higher. 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:
| 2010 $ | 2009 $ | |
|---|---|---|
| Foreign Currency denominated assets | 74,041,605 | 48,102,519 |
| Less foreign currency contracts | 47,400,000 | 16,500,000 |
| Unhedged currency exposure at 31 March | 26,641,605 | 31,602,519 |
Geographic location of Investments:
| USA/Canada | 13,359,656 | 12,885,793 |
| UK/Europe | 13,298,964 | 11,299,322 |
| Japan/Asia | 17,614,771 | 13,083,202 |
| Australia | 29,768,214 | 10,834,202 |
| | 74,041,605 | 48,102,519 |
The Australian Listed Property Index Trust and the Off Shore Bond Securities Index Fund are reported in AUD. The remaining offshore equity investments are:
- Managed by State Street Global Advisors (Boston, USA).
- Invested in 24 individual country common trust funds.
- Reported in the fund’s base currency of USD.
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NZ Gazette 2010, No 87
✨ LLM interpretation of page content
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Notes to the Financial Statements of Eastern and Central Community Trust Incorporated
(continued from previous page)
💰 Finance & Revenue21 July 2010
Financial statements, Community Trusts Act 1999, Eastern and Central Community Trust, NZ GAAP, NZ IFRS, Operating leases, Contingencies, Related party transactions, Financial instruments, Market risk, Currency risk, Investment strategy