✨ Financial Risk Analysis
14 JUNE 2013 NEW ZEALAND GAZETTE, No. 76 2023
EASTERN AND CENTRAL COMMUNITY TRUST INC
Sensitivity Analysis for Currency:
A 10 per cent movement of the NZD against the following currencies at 31 March would have increased (decreased) profit or loss by the amounts shown below. The analysis includes the mitigating effects of hedging policies. This analysis assumes that all other variables, in particular interest rates, remain constant. The comparisons for 2012 have been modified to account for the effects of hedging policy.
Effect in NZD:
| Effect of Movements in NZD | Profit or (Loss) 31 March 2013 $ | Profit or (Loss) 31 March 2012 $ |
|---|---|---|
| 10% fall in NZD/AUD | 363,908 | 260,068 |
| 10% rise in NZD/AUD | (297,746) | (212,765) |
| 10% fall in NZD/USD | 3,370,480 | 3,480,869 |
| 10% rise in NZD/USD | (2,757,665) | (2,847,983) |
b) Interest Rate Risk
The Trust’s investments in fixed rate securities are subject to interest rate risk. The Trust’s SIPO requires a fixed rate security to have a minimum of a BBB+ rating or equivalent grade. The maximum exposure to each fixed security is controlled by the credit rating so that the higher the credit rating, the higher the allowable exposure. Short term deposits are invested for periods up to 365 days taking into account current interest rates.
The Trust’s cheque and call accounts are interest bearing. Any movement in interest rates on these accounts is minimal and not considered to be material.
At the reporting date the interest rate profile of the Trust’s interest bearing financial instruments was:
| Carrying Amount 2013 $ | Carrying Amount 2012 $ | |
|---|---|---|
| Fixed Rate Instruments | 58,574,005 | 56,909,115 |
| Variable Rate Instruments | 11,486,539 | 4,736,397 |
| Total | 70,060,543 | 61,645,512 |
Sensitivity Analysis for Fixed Rate Instruments:
A change of 100 basis points (1%) in interest rates for the entire period reported would have increased or (decreased) profit or loss by the amounts shown. The analysis is performed on the same basis for 2012.
| Fixed Rate Instruments | Cash Flow Sensitivity 31 March 2013 $ | Cash Flow Sensitivity 31 March 2012 $ |
|---|---|---|
| 100 basis points increase | 548,078 | 583,257 |
| 100 basis points decrease | (548,078) | (583,257) |
Sensitivity Analysis for Variable Rate Instruments:
A change of 100 basis points (1%) in interest rates for the entire period reported would have increased (decreased) profit or loss by the amounts shown below. The analysis is performed on the same basis for 2012.
| Variable Rate Instruments | Cash Flow Sensitivity 31 March 2013 $ | Cash Flow Sensitivity 31 March 2012 $ |
|---|---|---|
| 100 basis points increase | 102,183 | 61,563 |
| 100 basis points decrease | (102,183) | (61,563) |
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NZ Gazette 2013, No 76
✨ LLM interpretation of page content
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Eastern and Central Community Trust Financial Risk Analysis
(continued from previous page)
💰 Finance & Revenue24 May 2013
Financial Risk Analysis, Currency Sensitivity, Interest Rate Risk, Fixed Rate Instruments, Variable Rate Instruments, NZD/AUD, NZD/USD, Hedging Policies, Credit Rating, Investment Portfolio, Profit and Loss Impact