✨ Financial Statements Notes
3408
NEW ZEALAND GAZETTE, No. 123
4 SEPTEMBER 2013
The Canterbury Community Trust
Notes to the financial statements
For the year ended 31 March 2013
in New Zealand Dollars ($000's)
19 Financial instruments (continued)
Credit Risk Ratings of Investments
Group and Trust
31 March 2013
| AAA to AA- | A+ to A- | BBB+ - B | CCC, NR Other | $000 | |
|---|---|---|---|---|---|
| New Zealand Bonds | 63.7% | 36.2% | 0.1% | 141,180 | |
| Global Bonds | 100.0% | 136,059 | |||
| Cash | 86.9% | 0.1% | 12.8% | 0.2% | 41,118 |
Group and Trust
31 March 2012
| AAA to AA- | A+ to A- | BBB+ - B | CCC, NR Other | $000 | |
|---|---|---|---|---|---|
| New Zealand Bonds | 48.3% | 51.7% | 178,485 | ||
| Global Bonds | 100.0% | 123,715 | |||
| Cash | 43.6% | 22.0% | 33.3% | 1.1% | 10,422 |
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulties in meeting the obligations associated with its financial liabilities. This risk is managed through the Group's investment in a diversified portfolio of financial assets. The Group evaluates its liquidity measurements on an ongoing basis.
The Group's investment portfolio mainly consists of listed securities which under normal market conditions are readily convertible to cash. In addition the Trust maintains sufficient cash and cash equivalents to meet normal operating requirements.
The Group's financial liabilities comprise of Sundry Accounts Payable and Outstanding Donations Payable. At balance date, all Accounts Payable were current and are normally settled on the 20th of the month following invoice date. Outstanding Donations Payable are settled as the terms and conditions of payment for each donation are satisfied. The inter-group Current Accounts are between the Trust and its subsidiary companies who transact on a regular basis.
Market risk
Market risk is the risk that fair value of future cash flows from financial assets and liabilities will fluctuate due to changes in market variables such as interest rates, foreign exchange rates and market prices. Market risk is managed and monitored using sensitivity analysis and minimised by ensuring that all investment activities are undertaken in accordance with established mandate limits and the investment strategies set out in the Group's SIPO.
Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair value of financial assets. The Group's investment in global bonds is held in a pooled fund. As such movements in interest rates will be reflected in each pooled fund's fair value asset pricing. NZ Bonds are held in a pooled fund. The exposure to movement in the fair value of the Group's bond portfolios is discussed in the note on pricing risk.
Currency risk
The Group is exposed to foreign currency risk as a result of investment transactions entered into by fund managers in a currency other than the Parent's functional currency, New Zealand dollars ($), which is the presentation currency of the Group. Fund managers typically hedge investments denominated in a foreign currency where appropriate with foreign exchange contracts.
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NZ Gazette 2013, No 123
✨ LLM interpretation of page content
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Notes to the Financial Statements for The Canterbury Community Trust
(continued from previous page)
💰 Finance & Revenue3 July 2013
Financial instruments, Investment objectives, Risk management, Credit risk, Investment portfolio