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Notes to the Consolidated Financial Statements<br />
FOR THE YEAR ENDED 31 DECEMBER, 2012<br />
Expressed in Trinidad and Tobago dollars<br />
Sensitivity analysis was conducted to determine the effect had<br />
US interest rates changed by 1%. With all other variables held<br />
constant, net assets attributable to unit holders and equity would<br />
have decreased or increased as at 31 December, 2012 and 31<br />
December, 2011 as follows:<br />
100 basis point increase 31 December,<br />
2012<br />
31 December,<br />
2011<br />
$’000 $’000<br />
UTC Energy Fund - -<br />
UTC European Fund (1) (7)<br />
UTC Asia Pacific Fund - -<br />
UTC Latin American Fund - -<br />
UTC Global Bond Fund (61) (62)<br />
UTC north American Fund (231) (1,685)<br />
100 basis point decrease $’000 $’000<br />
UTC Energy Fund - -<br />
UTC European Fund 1 7<br />
UTC Asia Pacific Fund - -<br />
UTC Latin American Fund - -<br />
UTC Global Bond Fund 65 66<br />
UTC north American Fund 243 1,806<br />
Proprietary Investments<br />
The Corporation’s proprietary interest bearing asset and liability<br />
positions are exposed to movements in market rates of interest.<br />
A surplus of interest bearing assets in relation to interest bearing<br />
liabilities exposes intermediation earnings to declines in market<br />
interest rates. Conversely, a deficit of interest bearing assets in<br />
relation to interest bearing liabilities exposes intermediation<br />
earnings to increases in market interest rates.<br />
In general, the Corporation focuses on controlling the rate repricing<br />
mis-match between assets and liabilities so as to maintain<br />
a stable, consistent spread over its cost of funds. This is achieved<br />
by maintaining a reasonably substantial variable rate asset<br />
portfolio, by active management of the maturity profile of funding<br />
instruments and by holding a minimum level of readily tradable<br />
assets.<br />
The interest rate re-pricing exposures of Corporation assets and<br />
liabilities are provided below as at 31 December, 2012 and 31<br />
December, 2011:<br />
A29<br />
Unit Trust Corporation Annual Report 2012<br />
A29