✨ Financial Statements Notes
WELLINGTON COMMUNITY TRUST
Notes to the Financial Statements
For the Twelve Months Ended 31 March 2012
Liquidity Risk
All financial assets at fair value through profit and loss can be realised within 12 months. There are no significant financial liabilities.
The Trust’s investments are managed to ensure that the Trust will have sufficient liquidity to meet expected cashflow requirements. Liquidity risk is managed through the Trust’s asset allocation strategy, which provides exposure to both growth and income assets, and the benchmark portfolio against which investment returns are monitored. The Trust’s benchmarks are maintained through rebalancing between investment managers to bring the weights to benchmark.
Credit Risk
Financial instruments which potentially expose the Trust to credit risk consist of cash and short term deposits, fixed interest securities and receivables and, indirectly, investments in unitised products which invest in cash and fixed interest investments. The maximum exposure to credit risk is the carrying value of these financial instruments:
| 2012 | 2011 | |
|---|---|---|
| Cash | 170,155 | 104,945 |
| Short Term Deposits | 4,932,046 | 2,422,001 |
| Fixed Interest - Offshore | 12,335,346 | 13,228,485 |
The significant counterparties of the Trust are its investment managers: OnePath (NZ) Ltd, Tower Asset Management Ltd, Mint Asset Management Ltd and Devon Fund Management Ltd which the Trustees consider to be financial institutions of high quality. The investments are held in trust by the investment managers for the benefit of the Trust. The managers operate within the policy approved by the Trustees.
The credit risk on cash and short term deposits is limited because the counterparties are banks; BNZ, ASB and Kiwibank Ltd, with high credit ratings assigned by international credit rating agencies.
Currency Risk
The Trust is indirectly exposed to currency risk in that future currency movements will affect the valuation of investments in unitised products which invest in foreign currency denominated investments. The Trust has no directly held investments denominated in a foreign currency.
Interest Rate Risk
The Trust is exposed to interest rate risk in that future interest rate movements will affect cash flows and net market values of fixed interest assets and, indirectly, the valuation of investments in unitised products which invest in cash and fixed interest investments.
Interest rate risk management activities are undertaken by the investment adviser in accordance with the investment mandate set by the Trustees.
Next Page →
NZ Gazette 2012, No 81
✨ LLM interpretation of page content
💰
Notes to the Financial Statements for Wellington Community Trust
(continued from previous page)
💰 Finance & RevenueLiquidity Risk, Credit Risk, Currency Risk, Interest Rate Risk, Financial Instruments, Investments, Loans, Accounting Policies