✨ Financial Statements Notes
NEW ZEALAND GAZETTE, No. 105
29 AUGUST 2014
ASB COMMUNITY TRUST
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2014
Credit Risk
Credit risk represents the risk that a counterparty to a financial asset fails to discharge an obligation which will cause the Group to incur a financial loss.
The Group's credit risk arises from any default by a counterparty. The current exposure at risk balance date is the fair value of these assets as disclosed in the Statements of Financial Position.
Concentrations of risk arise when a number of financial instruments or contracts are entered into with the same counterparty or where a number of counterparties are engaged in similar business activities, geographic regions, or similar economic features that would influence their ability to meet their contractual obligations by reason of changes in economic, political or other conditions.
The Group manages credit concentration risks through:
- a diversified and non-correlated basket of investments across traditional and alternative classes
- the use of a multi-fund manager approach to investments in its portfolio, and
- compliance with the individual mandate requirements of each investment.
The Group's Custodian reviews the portfolio for compliance against each investment mandate on a regular basis and reports findings to the Group's Management and Board of Trustees. Fund of Fund Managers ensure that underlying product fund managers comply with Fund mandates.
The credit quality of the Group's Bond portfolio is managed by the Group using Standard & Poor's rating categories.
Credit Risk Ratings of Investments
Group and Trust
31 March 2014
| AAA to AA- | A+ to A- | BBB+ to B | CCC, NR Other | $'000 | |
|---|---|---|---|---|---|
| New Zealand Bonds | 90.7% | 8.3% | 1.0% | 0.0% | 135,857 |
| Global Bonds | 49.3% | 20.4% | 25.8% | 4.5% | 95,475 |
| Cash | 78.3% | 20.1% | 1.7% | 0.0% | 84,782 |
Group and Trust
31 March 2013
| AAA to AA- | A+ to A- | BBB+ to B | CCC, NR Other | $'000 | |
|---|---|---|---|---|---|
| New Zealand Bonds | 92.5% | 5.4% | 2.2% | 0.0% | 137,761 |
| Global Bonds | 67.6% | 14.1% | 14.3% | 4.0% | 93,664 |
| Cash | 71.8% | 27.6% | 0.6% | 0.0% | 65,335 |
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NZ Gazette 2014, No 105
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ASB Community Trust Financial Statements
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