✨ Financial Statements
15 AUGUST 2012 NEW ZEALAND GAZETTE, No. 96 2631
Notes to the financial statements (continued)
In New Zealand Dollars (000’s)
13 Trust equity
| Trust capital | Retained earnings / (deficit) | Grants maintenance reserve | Inflation & population growth reserve | Total | |
|---|---|---|---|---|---|
| Balance at 1 April 2010 | 89,308 | - | 9,113 | 38,797 | 137,218 |
| Surplus for the year | - | - | 6,789 | - | 6,789 |
| Reserves transfers | - | - | (6,789) | 4,484 | 2,305 |
| Balance at 31 March 2011 | 89,308 | - | 13,597 | 41,102 | 144,007 |
| Balance at 1 April 2011 | 89,308 | - | 13,597 | 41,102 | 144,007 |
| Surplus for the year | - | 2,887 | - | - | 2,887 |
| Reserves transfers | - | (2,887) | (4,025) | 6,912 | - |
| Balance at 31 March 2012 | 89,308 | - | 9,572 | 48,014 | 146,894 |
Grants maintenance reserve
The grants maintenance reserve relates to a capital maintenance reserve established and maintained at the trustees' discretion.
Inflation & population growth reserve
As an “enduring” (everlasting) Trust, BayTrust has a responsibility to ensure it treats all classes of beneficiaries equitably and this includes future potential beneficiaries. For this reason, the Trust maintains its “real” (inflation-adjusted) capital by reserving annually sufficient funds to cover inflation as measured by the Consumers' Price Index. These measurements have traditionally been taken for the 12 months to June of the preceding year and in this case the CPI increase to June 2011 was 5.3%, requiring an addition of $6,912m to the Reserve.
The Trust also has a policy of reserving, when conditions permit, for some population growth in its territory. Trustees have determined that conditions have not permitted such reserving for the years March 2011 and 2012.
14 Financial instruments
Exposure to credit, interest rate, foreign currency, equity price, and liquidity risks arises in the normal course of the Trust’s business. The Trust’s risk management policies and procedures for financial instruments are formally documented and approved by the Trustees in the Trust’s Statement of Investment Policies and Objectives (“SIPO”)
Credit risk
The Trust’s SIPO stipulates value ranges that may be held in New Zealand equities, overseas equities, overseas fixed interest, New Zealand cash, hedge funds, global property, and collateralised commodity futures. Within each of these investment sub-trusts there are maximum limits that can be invested within one investment group and with one investment manager. This diversified investment strategy reduces the credit risk exposure of the Trust.
The Trust makes loans only to entities that are well established and have demonstrated a robust ability to make regular repayments.
The SIPO states minimum credit ratings of investment bonds.
The Trust manages credit concentration risks through:
-
a diversified and non-correlated basket of investments across traditional and alternative classes
-
through the use of a multi-fund manager approach to investments in its portfolio
-
and by ensuring compliance with the individual mandate requirements of each investment.
The Trust reviews the portfolio for compliance against each investment mandate on a regular basis.
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NZ Gazette 2012, No 96
✨ LLM interpretation of page content
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Statement of financial position for BayTrust
(continued from previous page)
💰 Finance & RevenueFinancial Statements, Loans, Cash Equivalents, BayTrust