Notice Type
General Notices
Trustee Banks Restructuring Act 1988 Trust Particulars The Trust Bank Bay of Plenty Community Trust was incorporated on 5 August 1988 as a charitable trust in accordance with the provisions of the Trustee Banks Restructuring Act 1988. The purpose of the community trust is to provide charitable, cultural, philanthropic and recreational benefits to the community. Trustees: Mr R. B. Tait (Chairman), Mr J. M. Black, Mr T. A. Currie, Mr S. J. Edward, Mr P. J. Howard, Ms H. P. Jones, Mr E. E. Ogier, Mrs M. E. Rex Benner, Mr B. J. Scantlebury, Mrs G. P. Searancke, Mr T. Te Heuheu, Mr L. Thurston and Mrs M. B. Townshend. Secretary: Mr A. T. Short. Bankers: Trust Bank Bay of Plenty, Tauranga. Auditor: Ingham Mora Malcolm & Rassell, Tauranga. Chairman's Report for the Year Ended 31 March 1996 Objectives of the Trust: To receive income and allocate such income for charitable, cultural, philanthropic, recreational and other purposes, being purposes beneficial to the community principally in the Bay of Plenty area. Policies and Structure of the Trust: A charitable trust designed to administer capital and distribute income for charitable purposes in the Bay of Plenty area. Activities of the Trust: The 199596 financial year of the trust has seen record dividends being received from the trust's key investment in Trust Bank New Zealand Limited (TBNZ). Dividends received totalled $3,210,000, which is an increase on the previous year of $1,312,143. The increased net funds available after operating costs and investments has permitted the trust to donate a total of $1,188,636 and to exercise some new initiatives in the donation process. Over and above the normal donations round, the trust has donated to employment related projects in the Bay of Plenty region under the umbrella of Business Grow and Task Force Green. The trust's annual Dillon Memorial Scholarship to assist disabled persons to attain tertiary education continues to be well supported with very worth-while results being achieved. Late in the 199596 year, the board of trustees, along with other community trust trustees throughout New Zealand, was extensively involved in considering share purchase offers for its TBNZ shares. A decision has been made ``post balance date'', to accept a specific share purchase offer and my statement later in these annual accounts gives background to that decision. Review of Results and Financial Position of the Trust: The trust's net income for the year ended 31 March 1996 reflects the higher dividend earnings coming from TBNZ operations and the increased shareholding stemming from the TBNZ 1994 bonus share issue. Net income after operating costs and donations totals $2,041,082. This is a record for the trust and has been achieved after increased operating costs brought about by TBNZ share investment matters and the setting up of a trust office in Tauranga. The latter decision has proved to be a wise one as the increased business of the trust in the new financial year and subsequent years will accelerate considerably due to additional investment capital coming to hand. Thanks and Appreciation I take this opportunity of recording my grateful thanks to my fellow trustees and to the trust secretary for the considerable time and effort expended during a busy and eventful year. ROB TAIT, Chairman. Income and Expenditure Account for the Year Ended 31 March 1996 Note 1996$ 1995$ Income Dividends2 3,210,000 1,897,857 Interest 207,551 86,956 Donations refunded 10,000 Other 21,408 3,417,551 2,016,221 Less expenditure Advertising 16,408 9,535 Audit fees 2,931 1,687 Office administration 35,120 27,114 Trustees' honararia and meeting fees 39,957 33,775 Trustees travel and other costs 28,124 16,299 Other administration costs 64,139 22,409 186,679 110,819 Depreciation 1,154 Total operating costs before donations 187,833 110,819 Donations Donations Round 1,044,470 654,660 Business Grow 33,750 Task Force Green 99,916 Dillon Scholarship 10,500 10,500 Total expenditure including donations 1,376,469 775,979 Net surplus transferred to the trust fund $2,041,082 $1,240,242 Statement of Movements in Equity for the Year Ended 31 March 1996 1996$ 1995$ Equity at the start of the year59,378,674 18,058,957 Net surplus for the year2,041,082 1,240,241 Increase in revaluation reserves18,296,205 40,079,476 Total recognised revenues/expenses for year20,337,287 41,319,717 Equity at the end of the year$79,715,961 $59,378,674 Balance Sheet as at 31 March 1996 Note 1996$ 1995$ Trust Funds: General funds4 21,340,280 19,299,198 Investment revaluation reserve5 58,375,681 40,079,476 Total trust funds $79,715,961 $59,378,674 Represented by: Current assets Trust Bank Bay of Plenty Current account 54,843 17,265 Call account 101,504 100,217 Deposit account 11,054 156,347 128,536 Accounts receivable 48,965 35,416 205,312 163,952 Current liabilities Accounts payable 72,968 1,942 Working capital 132,344 162,010 Fixed assets Office furniture and equipment 23,103 Less depreciation 1,154 21,949 Investments Deposit accounts TBNZ 1,784,077 New Zealand stocks3 1,654,733 1,436,664 Shares TBNZ Limited3 76,122,858 57,780,000 79,561,668 59,216,664 Total net assets $79,715,961 $59,378,674 Signed on behalf of the board of trustees: R. B. TAIT, Chairman. B. J. SCANTLEBURY, Trustee. Dated this 19th day of June 1996. (The accompanying notes form part of these financial statements.) Statement of Cash Flows for the Year Ended 31 March 1996 1996 1995 $ $ Cash flows from operating activities Cash was provided from: Dividend from Trust Bank New Zealand Limited3,210,000 1,897,857 Interest on investments198,585 73,240 Other 31,672 3,408,585 2,002,769 Cash was disbursed to: Suppliers of goods and services66,494 83,235 Trustees49,159 49,685 Donations to the community1,178,136 654,660 Dillon Memorial Scholarships10,500 10,500 1,304,289 798,080 Net cash flows from operating activities2,104,296 1,204,689 Cash flows from investing activities Cash was applied to: Repayment of bridging finance 370,000 Purchase of fixed assets23,103 Increase in investments (net)2,053,382 749,387 Net cash flows from investing activities(2,076,485) (1,119,387) Increase (decrease) in cash held27,811 85,302 Add cash at 1 April128,536 43,234 Cash at 31 March$156,347 $128,536 Reconciliation of Net Surplus Transferred to Trust Fund and Net Cash Flows from Operating Activities 1996 1995 $ $ Net surplus transferred to trust fund2,041,082 1,240,242 Add (less) non-cash items: Depreciation fixed assets1,154 Amortisation of stocks13,660 9,068 Add (less) items classified as investing activities: Repayment of short-term loan 370,000 Movement in working capital: Increase in accounts receivable(22,625) (29,645) Decrease in short-term loan (370,000) Increase (decrease) in accounts payable71,026 (14,976) Net cash flows from operating activities$2,104,296 $1,204,689 (The accompanying notes form part of these financial statements.) Notes to the Financial Statements for the Year Ended 31 March 1996 1. Statement of Accounting Policies Reporting Entity The Trust Bank Bay of Plenty Community Trust Incorporated is a charitable trust registered under section 14 (i) of the Trustee Banks Restructuring Act 1988. The financial statements have been prepared as required by the Trustee Banks Restructuring Act 1988 and the trust deed dated 30 May 1988, and in accordance with generally accepted accounting practice. Measurement Base The accounting principles recognised as appropriate for the measurement and reporting of earnings and financial position on a historical cost basis are followed by the trust, with the exception that investments have been revalued. Specific Accounting Policies The following specific accounting policies which materially affect the measurement of financial performance and the financial position have applied: (a) Donations: Donations made are included in the income and expenditure account when paid. (b) Investments: Shares held in Trust Bank New Zealand Limited are stated at market value. New Zealand stocks are stated at assessed market value. (c) Fixed Assets: Fixed assets are stated at cost. (d) Depreciation: Depreciation is charged to write off the cost of fixed assets over their expected economic lives using the straight line method at 5 percent per annum. (e) Accounts Receivable: Accounts receivable are recorded at their estimated realisable value. (f) Financial Instruments: The trust includes all financial instrument arrangements in the balance sheet using the concept of accural accounting. Financial instruments are valued as per note 1, measurement base. These instruments arise as a result of everyday operations and include bank, accounts receivable, accounts payable and investments. Revenues and expenses in relation to all financial instruments are recognised in the Income and Expenditure Account. Financial instruments are shown at their fair values. Changes in Accounting Policies There have been no changes in accounting policies. All policies have been applied on bases consistent with those used in previous years. 2. Dividends 1996 1995 $ $ Dividends received from Trust Bank New Zealand Limited Final dividend for year ended 31 March 1995 received 11 August 19951,987,143 675,000 Interim dividend for year ended 31 March 1996 received 20 December 19951,222,857 1,222,857 $3,210,000 $1,897,857 3. Investments 1996 1995 $ $ Shares in Trust Bank New Zealand Limited: Direct 2000 ordinary shares of 50c each, fully paid at market value of $2.49 each4,980 3,780 Through Community Trusts Nominees Limited, 30 569 429 ordinary shares of 50c each, fully paid at marked value $2.49 each76,117,878 57,776,220 Total shares76,122,858 57,780,000 New Zealand stocks are shown at assessed market value1,654,733 1,436,664 New Zealand stocks at cost price adjusted by amortised discount/premium to date1,675,910 1,411,188 4. General Fund 1996 1995 $ $ Opening balance19,299,198 18,058,957 Net surplus for year2,041,082 1,240,241 Closing balance$21,340,280 $19,299,198 5. Investment Revaluation Reserve During the year investments were revalued, increasing the investment revaluation reserve to $58,375,681, viz.: 1996 1995 $ $ Opening balance40,079,476 Revaluation for the year18,296,205 40,079,476 Closing balance$58,375,681 $40,079,476 6. Events Subsequent to Balance Date Trust Bank Bay of Plenty Community Trust has agreed to accept a Westpac offer for the purchase of TBNZ shares, such offer including a bonus issue of 3 shares for every 11 held plus a special interim dividend. The gross amount received after early sales, totalled $89,197,442. 7. Financial Instruments Credit Risk Financial instruments which potentially subject the trust to credit risk principally consist of bank balances, bank term deposits and accounts receivable. Maximum exposure to credit risk as at balance date is: 1996 1995 $ $ Bank balances156,347 128,536 Bank term deposits1,784,077 Accounts receivable58,042 35,416 Concentrations of Credit Risk The bank balances are held with Trust Bank Bay of Plenty Limited. There are no other material concentrations of credit risk. Market Risk The value of investment, which are held in shares and New Zealand stocks are subject to market fluctuations. No provision has been made for potential gains or losses that could occur due to market fluctuations. Fair Value The carrying value is considered to be the fair value for all financial instruments. 8. Taxation The trust is a charitable organisation in terms of tax legislation. Its income is not subject to taxation. 9. Goods and Services Tax The trust is not registered for goods and services tax purposes. Accordingly, these financial statements are stated on a G.S.T. inclusive basis. 10. Subsidiary Charitable Company The trust has set up a registered charitable subsidiary named Bay of Plenty Community Trust Charities Limited. No assets have been transferred to this company as at 31 March 1996 and it has not traded during the year. 11. Segment Information The trusts only activity is to receive income to allocate for charitable, cultural, philanthropic, recreational and other purposes beneficial to the community. Schedule of Distributions of Income by Way of Donations for the Year Ended 31 March 1996 Donations made by the trust may be summarised as follows: $ 199596 Donation Rounds1,044,470 Employment initiatives Business Grow33,750 Task Force Green99,916 Dillon Memorial Scholarships10,500 $1,188,636 (A full list covers a number of pages and is attached to the original of this document. A copy is available on request.) Statement From the Chairman, Mr Rob Tait, on Behalf of the Trust Bank Bay of Plenty Community Trustees The Trust Bank Bay of Plenty Community Trust recently voted in support of a Westpac offer to buy its shares in trust bank. The trust will invest the sale proceeds of approximately 90 million dollars and expects to increase the level of donations to the Bay of Plenty communities. Since the formation of the trust in 1988, the assets have comprised almost entirely its holding of shares in Trust Bank New Zealand Limited. The income of the trust has been the dividends received on the shares. Donations will now be made from the income received from the diversified investments planned by the trust. The trust owned approximately 7 percent of TBNZ which it held on behalf of the Bay of Plenty community who built and supported Trust Bank Bay of Plenty (formerly Bay of Plenty Savings Bank Limited) since its formation in 1964. Why Sell? As a result of inquiries from other banks, a number of the regional trust bank community trusts considered a sales of their TBNZ shares and wished to diversify their asset base. This effectively, for all shareholders, placed the bank on the market. Our trust was obliged to analyse any proposal, and if a sale was to proceed, ensure that the Bay of Plenty community receive maximum value. Considerations The trust placed emphasis on the historical roots of trust bank and gave great weight to such factors as community links, the regional focus and New Zealand ownership of the bank. We regarded it as imperative to ensure that in any sale, a premium in value was extracted for those unique features. Steps Taken Our trustees sought advice from 2 sets of economic and investment analysts. We also sought specialist legal advices and in particular as to our obligations as trustees to act prudently and to spread investment risk. The advice necessitated that the sale process be a contestable one to ensure that maximum value was obtained for our investment. This was done and the offer is reflective of one of the highest prices paid for an Australasian bank. When the Westpac offer was finalised, the advice given to our trustees was unequivocal and recommended that we should accept. The Future 1. Trust Bank: The founders of trust bank have provided an extraordinary legacy for the communities of New Zealand. The trust bank name will continue and will be part of a vibrant robust banking organisation serving the banking needs of our community. The trust is satisfied that the founders desire for the community to have sound banking services and an asset for the benefit of the community are now being respected to an extent they might never have envisaged. 2. The Trust: The trust will receive approximately $90,000,000.00. This capital fund will be invested in a wide range of local, regional and national assets. The income flow from those investments will continue to be available for donations and scholarships to assist the people of the Bay of Plenty. In 1995 the trust returned $1.1 million to the Bay of Plenty, and that is likely to be substantially increased. This sale will see the Bay of Plenty Trust set on a sound financial base with a diversified portfolio of investments which will ensure the continuation of support to communities in this region for the future. 3. The Community: The Bay of Plenty community can be proud of trust bank which has provided a wonderful legacy for future generations of the Bay. The trustees live and work in the Bay of Plenty and are anxious to ensure a significant donation flow to the wide range of community organisations. Signed by All the Trustees Robert Tait, J. Murray Black, Terrence A. Currie, Stewart J. Edward, Peter T. Howard, H. P. Jones, Egan E. Ogier, Margaret E. Rex-Benner, Brian J. Scantlebury, Glenys P. Searancke, Tim Te Heuheu, Lyall Thurston and Margaret B. Townshend. Audit Report to the Members of the Trust Bank Bay of Plenty Community Trust Incorporated We have audited the financial statements. The financial statements provide information about the past financial performance of the trust and its financial position as at 31 March 1996. This information is stated in accordance with the accounting policies set out. Trustees' Responsibilities The trustees are responsible for the preparation of financial statements which present 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 on that date. Auditors' Responsibilities It is our responsibility to express an independent opinion on the financial statements presented by the 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 statements. It also includes assessing: the significant estimates and judgments made by the trustees in the preparation of the financial statements, and whether the accounting policies are appropriate to the trust's 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 statements are 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 statements. Other than in our capacity as auditors, we have no relationship with, or interest in the trust. Unqualified Opinion In our opinion, the financial statements present 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 19 June 1996 and our unqualified opinion is expressed as at that date. INGHAM MORA MALCOLM & RASSELL, Chartered Accountants. Tauranga.
Publication Date
18 Jul 1996

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