✨ Financial Statements
13 JULY 2011 NEW ZEALAND GAZETTE, No. 104 2955
Notes to the financial statements (continued)
in New Zealand Dollars ($000’s)
13 Financial instruments (continued)
Interest rate risk
The Trust has bank call and deposit accounts, government and local authority securities and other investments held by the Trust’s fund managers that are exposed to interest rate risk. Interest rate swaps have been entered into to achieve an appropriate mix of fixed and floating rate exposure within the Trust’s policy.
Other market price risk
The entity is not exposed to substantial other market price risk arising from financial instruments.
Quantitative disclosure
Credit and interest rate risk
The carrying amount of financial assets represents the Trust’s maximum credit exposure.
| Carrying amount | 2011 | 2010 |
|---|---|---|
| Cash and cash equivalents | 271 | 217 |
| Short term deposits | 522 | - |
| Loans | 237 | 140 |
| New Zealand cash | 15,167 | 12,785 |
| Australasian equities | 7,605 | 5,033 |
| Global bonds | 69,987 | 71,345 |
| Global equities | 45,072 | 42,272 |
| Global property | 5,254 | 4,646 |
| Hedge fund of funds | - | 892 |
| Total financial assets | 144,115 | 137,330 |
Management of the interest rate risk is performed by the fund managers by use of interest rate swaps. The average interest rate is determined inclusive of interest rate swaps that are embedded with the funds.
The Trust continuously monitors the credit quality of major financial institutes that are counterparties to its financial instruments and does not anticipate non-performance by the counterparties. The Trust further minimises its credit exposure by limiting the amount of funds placed with any one financial institution at any one time.
The Trust makes a number of loans to eligible community groups and organisations over periods of up to five years. These are not grants and are fully expected to be repaid in full within the terms of the loan. The Trust requires evidence of the applicant’s ability to repay the loan and also considers a number of other factors before advancing the loan and deciding on whether or not to waive a security interest. At balance date, the Trust did not have any security interests in the loans.
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NZ Gazette 2011, No 104
✨ LLM interpretation of page content
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BayTrust Financial Statements
(continued from previous page)
🏢 State Enterprises & InsuranceFinancial Instruments, Interest Rate Risk, Credit Risk, Loans, Investments, Financial Assets