✨ Financial Statements Notes
THE WAIKATO COMMUNITY TRUST INCORPORATED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
For the year ended 31 March 2011
Fair Value of Financial Instruments
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Trust is the current bid price. These instruments are included in level 1.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to determine the fair value of the instrument are observable, the instrument is included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
There were no transfers between level 1 and 2 in the period.
| Assets | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| NZ$'000 | NZ$'000 | NZ$'000 | NZ$'000 | |
| Financial assets at fair value | ||||
| through profit or loss | 226,117 | - | 27,401 | 253,518 |
| Derivatives | - | (1,550) | - | (1,550) |
Level 3 Hierarchy
| Financial Assets at Fair Value Through Profit or Loss | 2011 | 2010 |
|---|---|---|
| NZ$'000 | NZ$'000 | |
| Balance at 1 April | - | - |
| Plus Additional Investments | 26,243 | - |
| Less Realisation of Investments | - | - |
| Gains/(Losses) Recognised in the Statement | ||
| of Comprehensive Income | 1,197 | - |
| Management Fees Recognised in the Statement | ||
| of Comprehensive Income | (39) | - |
| Balance at 31 March | 27,401 | - |
Capital Risk Management
The Trust objective when managing Trust capital is to safeguard its ability to continue as a going concern so that it can continue to provide returns for the community. The capital structure of the Trust consists of cash and cash equivalents and Trust funds. The Trust Investment Committee reviews the Trust funds and the risks associated with the Trust funds.
Following the sale of the Trust shares in Trust Bank New Zealand Limited in April 1996, the Trustees agreed that the value of the Trust at that time should be maintained for the benefit of current and future generations living in the Waikato region. For this purpose the Trustees agreed that $169,800,000 would be considered as the initial capital of the Trust and increased each year to reflect growth due to inflation and regional growth.
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NZ Gazette 2011, No 119
✨ LLM interpretation of page content
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Notes to Financial Statements of the Waikato Community Trust
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💰 Finance & RevenueFinancial Statements, Interest Rate Risk, Foreign Exchange Risk, Price Risk, Derivative Financial Instruments, Surplus, Equity