Trinidad and Tobago Unit Trust Corporation
Notes
to the Consolidated
Financial Statements
FOR THE YEAR ENDED
31 DECEMBER, 2012
Expressed in
Trinidad and Tobago dollars
A30
29) FINANCIAL RISK MANAGEMENT
The Group’s Collective Investment Schemes and proprietary
investment activities expose it to a variety of financial risks,
including security price risk, interest rate risk (fair value and cash
flow), foreign exchange rate risk, credit risk, concentration risk and
liquidity risk.
The Group’s overall riskmanagement programme seeks tominimize
the potentially adverse effects which the unpredictability of the
financial markets could have on the Group’s financial performance.
The Board of Directors of the Trinidad and Tobago Unit Trust
Corporation has overall responsibility for the management of the
financial, operational and business risks. The Board is critically
assisted in this regard by its Audit, Risk & Compliance Committee.
This Committee meets quarterly in order to ensure that the overall
risk profile and policy environment of the Corporation is consistent
with its strategic objectives. It also has oversight of the key internal
control systems affecting the Corporation’s significant operating
activities. The Committee also considers the specific risk issues
highlighted by the Management Risk Committee, which is a
management committee comprising the Corporation’s executive
leadership and chaired by the Executive Director.
The Management Risk Committee is supported in its deliberations
by the Risk Unit led by the Assistant Vice President - Risk. The Risk
Unit drives risk management policy setting, scenario and stress
testing and risk exposure monitoring across all business and
operating activities.
The Risk Unit, in consultation with relevant line management, may
also make recommendations for the management and mitigation of
financial and other risks. The Risk Unit reports to the General Counsel
and Vice President – Corporate Affairs and is directed in its activities
by the Management Risk Committee. In addition, the Investment
Committee of the Board approves each Collective Investment
Scheme’s investment policy statement which takes into account risk
management considerations for the investment portfolios.
The financial risk management disclosures that follow focus on the
investment activities of the Corporation’s Collective Investment
Scheme products (the Growth & Income Fund, the TT$ Income
Fund, the US$ Income Fund, the Universal Retirement Fund,
the UTC Energy Fund, the UTC European Fund, the UTC Asia-
Pacific Fund, the UTC Latin American Fund, the UTC Global Bond
Fund and the UTC North American Fund) as well as its corporate
investment activities.
Unit Trust Corporation
Annual Report 2012
