✨ Financial Statements
1 AUGUST 2014 NEW ZEALAND GAZETTE, No. 85 2393
Otago Community Trust
| Total Financial Assets | 238,265 | 225,445 |
| Donations Payable | 957 | 1,231 |
| Trade Payables | 90 | 145 |
| Total Financial Liabilities | 1,047 | 1,376 |
Risks arising from the financial assets and liabilities are inherent in the nature of the Trust’s activities and are managed by means of an ongoing process of identification, measurement and monitoring. The Trust is exposed to credit risk, liquidity risk, and market risk. Market risk includes risks around foreign currency, interest rates and pricing.
The Trust generally manages these risks in accordance with its Statement of Investment Performance Objectives (SIPO). The principle investment objectives are:
- to maximise the total amount of donations which can be financed by the investment of the Fund over the long term;
- to preserve the real capital of the Fund;
- to maintain equity between present and future generations with respect to the amounts available for donations;
- to maintain the highest degree of stability of investment earnings that is possible consistent with the preceding objectives.
Trustees regard risk as the likelihood that the Trust fails to achieve these objectives and have adopted a series of strategies to mitigate all risks. The principle strategies include:
- ensuring the Fund is well diversified;
- maintaining an appropriate level of liquidity;
- avoiding purely speculative investments;
- retaining an investment consultant for investment advice;
- using only fund managers which are researched and recommended by the investment consultant;
- maintaining adequate reserves;
- regularly reviewing investment performance.
- Credit Risk
Credit risk represents the risk that a counter-party to a financial asset fails to discharge an obligation which will cause the Trust to incur a financial loss. The current exposure at balance date is the fair value of these assets as disclosed in the Statement 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 considerations.
The Trust manages credit concentration risks through:
- a diversified and non-correlated basket of investments across traditional and alternative asset classes;
- ensuring compliance with the mandate requirements of each fund manager
The credit quality of the Trust’s New Zealand and global fixed interest portfolios is managed using the Standard and Poors rating categories. In addition, exposure to global bonds is fully hedged against foreign currency movements.
The following is an analysis of the Trust’s fixed interest portfolios, based on information supplied by the Fixed Interest managers.
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NZ Gazette 2014, No 85
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Otago Community Trust Financial Statements
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💰 Finance & RevenueFinancial Statements, Community Trusts, Trade payables, Financial instruments, Investments, Credit Risk, Liquidity Risk, Market Risk