✨ Financial Statements
THE WAIKATO COMMUNITY TRUST INCORPORATED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2013
Summary of Sensitivity of Financial Assets and Liabilities to Market Risk
| Volatility Factor 2013 | Volatility Impact 2013 | Volatility Factor 2012 | Volatility Impact 2012 | |
|---|---|---|---|---|
| NZ$'000 | NZ$'000 | |||
| Interest Rate Risk | 0.7% | 776 | 0.8% | 822 |
| Currency Risk (including DFI *) | 12% | 2,214 | 14% | 2,329 |
| Price Risk: | ||||
| Australasian Equities | 19% | 9,177 | 18% | 6,211 |
| Global Equities | 22% | 16,162 | 23% | 16,919 |
| Direct Property | 11% | 3,013 | 12% | 3,149 |
| Infrastructure | 10% | 2,237 | 10% | 2,042 |
| Private Equity | 25% | 84 | -- | -- |
| Total Risk | 33,663 | 31,472 |
- Derivative Financial Instruments
15.3 Credit Risk Management
Credit risk is the risk that a third party will default on its obligation to the Trust, causing the Trust to incur a loss.
The maximum credit exposure for each class of financial instrument is represented by the total carrying amount of cash equivalents (Note 10), accounts receivable (Note 11), the Sport Waikato loan (Note 12), and investments (Note 13).
The Trust arrangements with fund managers limit the amount of credit exposure to any one institution. The Trust has processes in place to review the credit exposure and credit quality of funds prior to the funds being deposited with financial institutions.
Due to the timing of its cash inflows and outflows, the Trust invests surplus cash with registered banks. The Trust policy for term deposits requires that deposits are placed with financial institutions registered under the Reserve Bank of New Zealand Act 1989 that have an investment grade credit rating of AA- or higher from Standard and Poor's.
The Trust manages credit concentration risks through:
- a diversified and non-correlated basket of investments across traditional and alternative classes;
- selecting diverse fund managers;
- ensuring compliance with the individual mandate requirements of each fund manager, where applicable.
The Trust investment advisors and management review the portfolio for compliance against each investment mandate on a regular basis and report findings to the Board of Trustees.
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NZ Gazette 2013, No 109
✨ LLM interpretation of page content
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Financial Statements of The Waikato Community Trust Incorporated
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🏢 State Enterprises & InsuranceFinancial statements, Community Trusts, Waikato, Currency Risk, Price Risk, Investments, Financial Assets, Fair Value