✨ Financial Statements Notes
Bay of Plenty Community Trust Incorporated
Notes to the financial statements (continued)
in New Zealand Dollars ($000's)
11 Loans (continued)
| Classified as: | 2014 | 2013 |
|---|---|---|
| Current | 95 | 88 |
| Non-current | 798 | 825 |
| Total | 894 | 913 |
For the purposes of calculating amortised cost and interest, the rate applying to the Reserve Bank swap rate at inception date of each advance is used.
The loan to Tauranga Squash Club is secured by way of first mortgage, had an interest free period of one year, and then has had interest at 3%pa applied since 1 October 2012.
12 Cash and cash equivalents & short term deposits
| 2014 | 2013 | |
|---|---|---|
| Bank balances | 198 | 180 |
| Call deposits | 73 | 95 |
| Cash and cash equivalents | 271 | 275 |
| Short term deposits | 215 | 279 |
| Short term deposits | 215 | 279 |
13 Grants maintenance reserve
The grants maintenance reserve relates to a capital maintenance reserve established and maintained at the Trustees' discretion.
Inflation reserve
As an “enduring” (everlasting) Trust, BayTrust has a responsibility to ensure it treats all classes of beneficiaries equitably and this includes future potential beneficiaries. For this reason the Trust maintains its “real” (inflation-adjusted) capital by reserving annually sufficient funds to cover inflation as measured by the Consumers' Price Index. These measurements have traditionally been taken for the 12 months to June of the preceding year and in this case the CPI increase to June 2013 was 1.0%, requiring an addition of $0.971m to the Reserve. (2013: $1.4m)
14 Financial instruments
Exposure to credit, interest rate, foreign currency, equity price and liquidity risks arises in the normal course of the Trust’s business. The Trust’s risk management policies and procedures for financial instruments are formally documented and approved by the Trustees in the Trust’s Statement of Investment Policies and Objectives (“SIPO”).
Credit risk
The Trust’s SIPO stipulates value ranges that may be held in Australasian and global equities, New Zealand and global fixed interest, New Zealand cash, global listed infrastructure and global listed property. Within each of these investment sub-trusts there are maximum limits that can be invested within one investment group and with one investment manager. This diversified investment strategy reduces the credit risk exposure of the Trust.
The Trust makes loans only to entities that are well established and have demonstrated a robust ability to make repayments.
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NZ Gazette 2014, No 93
✨ LLM interpretation of page content
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Bay of Plenty Community Trust Financial Statements Notes
(continued from previous page)
💰 Finance & Revenue26 June 2014
Financial Statements, Notes, Loans, Cash, Grants, Inflation Reserve, Financial Instruments, Credit Risk