✨ Financial Statements Notes
Bay of Plenty Community Trust Incorporated
Notes to the financial statements (continued)
in New Zealand Dollars ($000's)
14 Financial instruments (continued)
Capital management
The Trust’s funds include trust capital, grants maintenance reserve, inflation reserve and retained earnings.
The Trust’s policy is to maintain a strong capital base to sustain future development of the Trust.
The Trust is not subject to any externally imposed capital requirements.
The Trust’s policies in respect of capital management and allocation are reviewed regularly by the Board of Trustees.
Sensitivity analysis
Table 1 shows the Trust’s portfolio as at 31 March 2014 as well as the long term expected return. The return one standard deviation above and below the expected return is also shown.
Table 1: Sensitivity analysis for the Trust’s portfolio 31 March 2014
| Asset allocation | Long term expected return | -1 Std deviation return | +1 Std deviation return |
|---|---|---|---|
| (31 March 2014) | p.a. | p.a. | p.a. |
| Investment Portfolio | 100.00% | 6.60% | -2.60% |
From table 1, it can be seen that the long term expected return for the Trust’s portfolio is currently 6.6% per annum and there is approximately a 66% probability that the return in any one year will be within the range of -2.6% and 15.8%.
As at 31 March 2014 the Trust’s portfolio had NZ$172.9m under management. Based on information provided by Russell, assuming the short term return distribution approximates the long term return distribution there is approximately a 66% probability that the Trust’s revenue from investment activities will lie in the range of -$4.5m to $27.3m, with expected revenue of $11.4m for the year 1 April 2014 to 31 March 2015.
Table 1 shows the Trust’s portfolio as at 31 March 2014 as well as the long term expected return. The return one standard deviation above and below the expected return is also shown.
Table 2: Sensitivity analysis for the Trust’s portfolio 31 March 2013
| Asset allocation | Long term expected return | -1 Std deviation return | +1 Std deviation return |
|---|---|---|---|
| (31 March 2013) | p.a. | p.a. | p.a. |
| Investment Portfolio | 100.00% | 6.00% | 2.10% |
From table 2, it can be seen that the long term expected return for the Trust’s portfolio is currently 6.0% per annum and there is approximately a 68% probability that the return in any one year will be within the range of -2.1% and 14.1%.
As at 31 March 2013 the Trust’s portfolio had NZ$159.7m under management. Based on information provided by Russells, assuming the short term return distribution approximates the long term return distribution there is approximately a 68% probability that the Trust’s revenue from investment activities will lie in the range of -$3.4m to $22.5m, with expected revenue of $9.6m for the year 1 April 2013 to 31 March 2014.
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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 Instruments, Capital Management, Sensitivity Analysis, Investment Portfolio, Expected Return, Standard Deviation, Revenue Projection