✨ Financial Statements Notes
27 AUGUST 2014 NEW ZEALAND GAZETTE, No. 101 2795
THE WAIKATO COMMUNITY TRUST INCORPORATED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2014
Summary of Sensitivity of Financial Assets and Liabilities to Market Risk
| Volatility Factor 2014 | Volatility Impact 2014 NZ$'000 | Volatility Factor 2013 | Volatility Impact 2013 NZ$'000 | |
|---|---|---|---|---|
| Interest Rate Risk | 0.71% | 523 | 0.7% | 776 |
| Currency Risk (including DFI *) | 11% | 3,791 | 12% | 2,214 |
| Price Risk: | ||||
| Australasian Equities | 20% | 9,366 | 19% | 9,177 |
| Global Equities | 20% | 16,749 | 22% | 16,162 |
| Unlisted Property | 11% | 5,112 | 11% | 3,013 |
| Infrastructure | 9% | 1,978 | 10% | 2,237 |
| Private Equity | 25% | 624 | 25% | 84 |
| Global Credit | 13% | 3,450 | - | - |
| Total Risk | 41,593 | 33,663 |
*Derivative Financial Instruments
12.3 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, accounts receivable (Note 8), and investments (Note 10).
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:
- maintaining a diversified and non-correlated basket of investments across traditional and alternative
- 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.
Full NZ IFRS Financial Statements for the year ended 31 March 2014
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NZ Gazette 2014, No 101
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Notes to the Financial Statements of The Waikato Community Trust Incorporated
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💰 Finance & Revenue24 July 2014
Financial Statements, Investments, Risk Management, Market Risk, Interest Rate Risk, Currency Risk, Price Risk, Credit Risk