Consolidated Statement of Financial Performance for the Year Ended 31 March 1996 Note 1996$ 1995$ Income Dividends2 3,654,000 2,175,000 Interest Government stock 206,947 107,504 Other investments 89,377 50,622 Total income 3,950,324 2,333,126 Less expenditure ACC levy 517 382 Advertising 33,379 15,905 Administration expenses 18,193 15,484 Audit 2,875 3,750 CTIL management fees 25,818 12,643 Depreciation 8,743 2,042 Loss on sale of photocopier 1,472 Rent 11,059 6,338 Trustees' expenses 16,456 12,599 Trustees' fees 44,201 34,627 Wages and salaries 39,957 28,020 Total expenditure 202,670 131,790 Net income before community payments 3,747,654 2,201,336 Less community payments General donations 854,500 494,500 Special donations 745,496 619,200 Bursaries 112,000 66,000 Total community payments3 1,711,996 1,179,700 Surplus transferred to equity $2,035,658 $1,021,636 (The notes to the financial statements form part of and are to be read in conjunction with the above accounts.) Consolidated Statement of Movements in Euity for the Year Ended 31 March 1996 1996$ 1995$ Equity at start of the period75,930,057 74,908,421 Net surplus (deficit) for the period2,035,658 1,021,636 Total recognised revenues and expenses for the period2,035,658 1,021,636 Equity at the end of period$77,965,715 $75,930,057 (The notes to the financial statements form part of and are to be read in conjunction with the above accounts.) Consolidated Statement of Financial Position as at 31 March 1996 Note 1996$ 1995$ Equity Accumulated funds 16,695,715 14,660,057 Revaluation reserve4 61,270,000 61,270,000 Total trust funds 77,965,715 75,930,057 Represented by: Current assets Cash and bank deposits5 1,833,350 586,577 Accruals and sundry debtors 5,179 9,999 Total current assets 1,838,529 596,576 Less current liabilities Sundry creditors 24,115 11,564 Total current liabilities 24,115 11,564 Net current assets 1,814,414 585,012 Fixed assets At cost 42,858 6,188 Less accumulated depreciation 12,827 4,084 30,031 2,104 Investments Shares in Trust Bank New Zealand Limited6 73,080,000 73,080,000 Government securities7 3,041,270 2,262,941 76,121,270 75,342,941 Total non current assets 76,151,301 75,345,045 Net assets $77,965,715 $75,930,057 (The notes to the financial statements form part of and are to be read in conjunction with the above accounts.) Signed on behalf of the board of trustees: G. A. GLASS, Chairperson. B. J. MARTIN, Trustee. Dated this 23rd day of May 1996. Consolidated Statement of Cash Flows for the Period Ended 31 March 1996 Note 1996$ 1995$ Cash flows from operating activities Cash was provided from: Dividends 3,654,000 2,175,000 Interest on investments 317,621 148,766 3,971,621 2,323,766 Cash was applied to: Community payments (1,709,966) (1,179,700) Trustees and employees (100,974) (74,684) Suppliers of other goods and services (81,655) (51,632) Net operating cash flows9 2,079,026 1,017,750 Cash flows from investing activities Cash was provided from: Sale of investments 231,638 466,928 Disaster Relief Fund 9,838 Cash was applied to: Investment in Government securities (1,025,747) (1,452,361) Purchase of fixed assets (38,144) Net investing cash flows (832,253) (975,595) Net increase (decrease) in cash held 1,246,773 42,155 Add cash at 1 April 586,577 544,422 Cash at 31 March5 $1,833,350 $586,577 (The notes to the financial statements form part of and are to be read in conjunction with the above accounts.) Notes to the Financial Statements for the Period Ended 31 March 1996 1. Statement of Accounting Policies Reporting Entity Trust Bank Eastern and Central Community Trust Incorporated is a charitable trust incorporated in accordance with the provisions of the Trustee Banks Restructuring Act 1988. The financial statements have been prepared in accordance with applicable financial reporting standards and other generally accepted accounting practices in New Zealand. Measurement Base Unless otherwise stated the measurement base applied is that of historical cost. Specific Accounting Policies The following are the particular accounting policies which have a material effect on the measurement of results and financial position: Dividend income from Trust Bank New Zealand Limited is included in the statement of financial performance when it is received. Donations made are included in the statement of financial performance when paid. Depreciation is charged to write off the cost of fixed assets over their expected economic lives using the straight line method Computer equipment 3 years Fixtures and fittings 9 years Furniture 10 years Office equipment 5 years Shares held in Trust Bank New Zealand Limited are stated at initial public offer value. Government securities are purchased primarily with the intention of holding them until maturity. They are valued on a yield to maturity basis. Income tax is not provided as the trust has charitable status for tax purposes therefore its income is not subject to taxation. G.S.T. inclusive accounting has been adopted as the trust is not registered for G.S.T. purposes. Consolidation of Eastern and Central Community Trust Charities Limited, a wholly owned subsidiary, has been achieved using the purchase method of consolidation. Changes in Accounting Policies There have been no changes in accounting policy. All policies have been consistently applied. 2. Dividends 1996$ 1995$ Dividends received from Trust Bank New Zealand Limited Final dividend for year ended 31 March 19952,262,000 783,000 Interim dividend for year ended 31 March 19961,392,000 1,392,000 $3,654,000 $2,175,000 3. Donation commitments Donations approved but not paid Unconditional55,000 60,000 Conditional172,000 146,000 $227,000 $206,000 5. Revaluation Reserve Revaluation of shares in Trust Bank NZ Limited61,270,000 61,270,000 $61,270,000 $61,270,000 5. Cash and Bank Deposits Trust bank current account3,162 27,589 Trust bank imprest account2,00 Trust bank call account446,129 156,000 Petty cash59 30 Short term deposit1,382,000 402,958 $1,833,350 $586,577 6. Shares in Trust Bank New Zealand Limited Shareholding in Trust Bank New Zealand Limited Shares held (ordinary shares of 50c each, fully paid) Number of shares 34 800 000 Recorded at initial public offer value of $2.10$73,080,000 $73,080,000 Market value Quoted share price2.47 1.89 The market value of shares at 31 March 1996$85,956,000 $65,772,000 Events Subsequent to Balance Date On 24 April 1996 the trustees entered into an agreement to sell the shareholding in Trust Bank New Zealand Limited to Westpac Holdings NZ Limited. The effective price for shares was $2.85 cps. This will realise a gain over book value of approxiamately $26,100,000. The effect of this transaction is not included in the financial statements to 31 March 1996. 7. Government Securities 1996$ 1995$ Securities analysis New Zealand Government stock2,809,270 2,262,941 Kiwi Bonds232,000 $3,041,270 $2,262,941 Maturity Face Value Yield 1996 $ 1995$ Maturity profile Within 1 year255,000 6.26% 263,687 25 years837,000 6.388.12% 833,034 1,107,341 Beyond 5 years1,878,000 7.978.07% 1,944,549 1,155,600 2,470,000 3,041,270 2,262,941 Market value Market value of Government securities at 31 March $3,048,648 $2,272,795 8. Financial Instruments The fair values of all financial instruments are disclosed within this report. No undisclosed credit risk exists. There are no undisclosed financial instruments. Approximately 98 percent of the trust's assets are represented by investments in or deposits with the Trust Bank New Zealand Group. The trustees consider the risk of non recovery of these investments to be minimal. 9. Reconciliation of Net Surplus With Operating Cash Flows 1996$ 1995$ Net surplus transferred to trust fund2,035,658 1,021,636 Adjust for non cash items Amortisation of premium/discount on investments15,782 (2,469) Depreciation and loss on disposal of assets10,215 2,042 Movements in net current assets Accruals and sundry debtors11,261 (6,898) Sundry creditors6,110 3,439 Net operating cash flows$2,079,026 $1,017,750 10. Segmental Reporting The trust operates as a charitable trust distributing funds to the community in the Central North Island region. 11. Contingent Liabilities There are no contingent liabilities at 31 March 1996. Audit Report To the readers of the financial report of Trust Bank Eastern and Central Community Trust Inc. We have audited the financial report. The financial report provides information about the past financial performance and financial position of the Trust Bank Eastern and Central Community Trust Inc. group (the trust) as at 31 March 1996. This information is stated in accordance with the accounting policies set out. Board of Trustees Responsibilities The board of trustees are responsible for the preparation of a financial report which gives a true and fair view of the financial position of the trust as at 31 March 1996 and of the results of operations and cash flows for the year ended 31 March 1996. Auditors' Responsibilities It is our responsibility to express an independent opinion on the financial report presented by the board of trustees and report our opinion to you. Basis of Opinion An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial report. It also includes assessing: the significant estimates and judgments made by the board of trustees in the preparation of the financial report, and whether the accounting policies are appropriate to the trust circumstances, consistently applied and adequately disclosed. We conducted our audit in accordance with generally accepted auditing standards in New Zealand. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial report is free from material misstatements, whether caused by fraud or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial report. Other than in our capacity as auditors we have no relationship with or interests in the trust. Unqualified Opinion We have obtained: proper accounting records have been kept by the trust as far as appears from our examination of those records; and the financial report: complies with generally accepted accounting practice; gives a true and fair view of the financial position of the trust as at 31 March 1996 and the results of its operations and cash flows for the year ended on that date. Our audit was completed on 24 May 1996 and our unqualified opinion is expressed as at that date. DENT ROBERTSON & PARTNERS, Chartered Accountants. Hastings, New Zealand. A full list of donations for this period is available from the Trust Office, P.O. Box 1058, Hastings.