✨ Financial Statements
14 JUNE 2013 NEW ZEALAND GAZETTE, No. 76 2021
EASTERN AND CENTRAL COMMUNITY TRUST INC
At balance date all trade and other payables were current, and are normally settled on the 20th of the month following invoice date.
Committed but unpaid donations are held as current liabilities pending the satisfaction of conditions under which the donations were made. At balance date committed but unpaid donations totalled $1,789,950 (2012: $1,477,190).
These committed and unpaid donations at 31st March 2013 had the following profile:
| Financial Year Approved | Number of Grants Outstanding | Value $ |
|---|---|---|
| 2012 | 10 | 343,500 |
| 2013 | 81 | 1,446,450 |
| Total | 91 | 1,789,950 |
Committed but unpaid donations at 31st March 2012 had the following profile:
| Financial Year Approved | Number of Grants Outstanding | Value $ |
|---|---|---|
| 2011 | 16 | 193,490 |
| 2012 | 97 | 1,283,700 |
| Total | 113 | 1,477,190 |
Market Risk
Market risk embodies the potential for both loss and gains and includes currency risk, interest risk and price risk.
The Trust’s investment strategy and the management of the investment risk are detailed in the SIPO. The Trust’s investments are diversified across a range of assets including New Zealand and Overseas equities, New Zealand and Overseas bonds, New Zealand and Australian property and cash. Within each asset class there are defined policies and mandates to ensure diversification, to minimise investment risk and to limit exposure to any one investment. Each asset class has a defined target allocation and is managed within a defined allocation range.
In addition, the Trust has a Risk Management Policy which includes a Tactical Asset Allocation Policy. This policy is to identify times when the Trustees should instigate a process to review the short term investment strategy of the Trust.
a) Currency Risk
Currency risk is the risk that the fair value of, or future cash flows from, financial assets will fluctuate due to changes in foreign exchange rates. The Trust has exposure to currency risk through its investments in offshore equities and bonds. The strategic investment policy requires full hedging of currency risk for overseas bonds, when held, and 50% hedging, on average, of currency risk for overseas equities. When exchange rates are at extreme levels (e.g. plus or minus more than 2 standard deviations from the long term average) the percentage of hedging is varied as determined by the Trust’s currency policy (e.g. raised up to 100% or decreased down to 0%). Currency hedging on overseas equities has been reduced marginally through the year. Hedging decisions have been constantly reviewed. Currency risk is self managed with the Bank of New Zealand with a range of tolerance.
The Trust manages its foreign exchange risk by using forward exchange contracts to cover varying amounts of foreign currency denominated balances into NZ dollars. Such forward exchange contracts have the economic effect of converting foreign currency denominated balances into NZ dollars. These forward exchange contracts are not treated as hedges for accounting purposes. All contracts are with the Bank of New Zealand which has a Standard and Poor’s Rating of AA.
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NZ Gazette 2013, No 76
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Eastern and Central Community Trust Financial Statement
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💰 Finance & Revenue24 May 2013
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