TSB Community Trust Income and Expenditure Account and Retained Funds Statement for the Year Ended 31 March 1998 Notes 1998$ 1997$ Income Dividend from TSB Bank Limited2 1,200,000 1,100,000 Interest received 62,306 57,072 Donations 4,153 1,266,459 1,157,072 Less expenses Audit fees 1,572 1,536 Solicitors fees 2,794 Professional services 1,700 Trustees' honoraria 34,782 27,738 Trustees' expenses 3,326 3,355 Secretary/treasurer fees 16,511 15,015 Secretary/treasurer mileage 500 673 Stationery and postage 3,869 1,203 Advertising 2,201 2,183 Promotional expenses 2,454 5,175 Sundry expenses 1,094 193 Telephone and P.O. Box 766 665 Depreciation 2,267 3,097 69,342 65,327 Funds available for distribution 1,197,117 1,091,745 Donations during the year 1,188,350 1,026,350 Excess income over expenditure 8,767 65,395 Plus retained funds at beginning of year 586,894 521,499 $595,661 $586,894 Balance Sheet as at 31 March 1998 Notes 1998$ 1997$ Accumulated funds Capital 100 100 Initial gift1 10,000,000 10,000,000 10,000,100 10,000,100 Retained funds 595,661 586,894 Total funds $10,595,761 $10,586,994 Represented by: Current assets Petty cash 43 18 TSB Bank Limited 47,539 7911 Accrued interest 8,477 12,195 56,059 20,124 Less current liabilities Accrued charges 10,298 10,397 Working capital 45,761 9,727 Fixed assets5 2,267 Investments Shares in TSB Bank Limited1 10,000,000 10,000,000 TSB Bank Limited Investments 550,000 575,000 $10,595,761 $10,586,994 For and on behalf of the trustees: D. E. WALTER, Chairperson. Statement of Cash Flows for the Year Ended 31 March 1998 Notes 1998$ 1997$ Cash flow from operating activities Cash was provided from: Donations 4,153 Dividends from TSB Bank 1,200,000 1,100,000 Interest received 66,024 50,059 $1,270,177 $1,150,059 Cash was applied to: Donations 1,188,350 1,026,350 Payments to suppliers and trustees 67,174 57,956 1,255,524 1,084,306 Net cash flows from operating activities7 14,653 65,753 Cash flows from investing activities Cash was provided from: Principal from investments 775,000 225,000 Cash was applied to: Investments 750,000 350,000 Net cash flows from investing activities 25,000 (125,000[teh]) Net increase/(decrease) in cash held 39,653 (59,247[teh]) Plus opening cash 1 April 1997 7,929 67,176 Closing balance 31 March 19988 $47,582 $7,929 Statement of Movements in Equity for the Year Ended 31 March 1998 1998 1997 $ $ Equity at 1 April 199710,586,994 10,521,599 Retained surplus for the year8,767 63,395 Total recognised revenues and expenses8,767 63,395 Equity at 31 March 1998$10,595,761 $10,586,994 Notes to Financial Statements 1. Statement of Accounting Policies Reporting Entity TSB Community Trust is a charitable trust formed by a trust deed dated 30 May 1988. The financial statements are a general purpose report which has been prepared in accordance with generally accepted accounting practice as required by clause 17 of the trust deed. Measurement Base The measurement base is that of historical cost. Specific Accounting Policies The following specific accounting policies which materially affect the measurement of financial performance and financial position have been applied. Investments The TSB Bank Limited shares are stated at par value when gifted: 20 000 000 fully paid shares at 50 cents $10,000,000 The net asset backing at 31 March 1998 was $3.20 per share. Fixed Assets Fixed assets are recorded at cost, office equipment will be depreciated on a straight line basis over 4 years. Income Tax Income tax will include the current years provision and the tax effect of timing differences using the liability method. Timing differences will be accounted for applying the comprehensive basis. Differential Reporting The trust qualifies for differential reporting as it is not large as defined in the framework for differential reporting. The trust has taken advantage of all differential reporting exemptions except those in respect of FRS.10: statement of cash flows. Goods and Services Tax The financial statements have been prepared on a G.S.T. inclusive basis. Changes in Accounting Policies There have been no changes in accounting policies. All policies have been applied on bases consistent with those used in the previous years. 2. Dividend The dividend includes $800,000 relating to the final instalment received from the bank for year ended 31 March 1997 and $400,000 interim dividend for the year ended 31 March 1998. 3. Commitments and Contingent Liabilities At balance date $8,900 has been approved for donations in the 1998/1999 financial year (1997: $26,000). In addition the trust has pledged a further $10,000 contingent upon the applicant completing certain requirements set by the trust. 4. Publishing Requirements A comprehensive list, itemising all recipients was published in the Taranaki Daily News on the following dates: First round12/8/97 Second round6/12/97 Third round23/4/98 A copy of the list of grants is available to anyone upon request (P.O. Box 31, Oakura, Taranaki). 5. Fixed Assets 1998$ 1997$ Office equipment at cost12,389.00 12,389.00 Accumulated depreciation12,389.00 10,122.00 $2,267.00 6. Income Tax There are taxation losses amounting to $120,688 (1997: $119,918) available to carry forward and set off against future assessable income. 7. Reconciliation of Net Surplus With Net Cash Flows From Operating Activities: 1998$ 1997$ Net surplus8,767 65,395 Add/(less) depreciation2,267 3,097 Movements in working capital items (Increase)/decrease in receivables3,718 (7,013[teh]) Increase/(decrease) in payables(99[teh]) 4,274 Net cash flows from operating activities$14,653 $65,753 8. Cash Balances in the Statement of Financial Position 1998$ 1997$ Petty cash43 18 TSB Bank Limited47,539 7,911 $47,582 $7,929 Auditors' Report to the Trustees of TSB Community Trust 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 1998. This information is stated in accordance with the accounting policies set out. Trustees' Responsibilities As trustees you are responsible for the preparation of financial statements which comply with generally accepted accounting practice and present a true and fair view of the financial position of the trust as at 31 March 1998 and its financial performance and cash flows for the year ended on that date. Auditor's 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 trusts 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 auditor we have no relationship with, or interest in, the trust. Unqualified Opinion We have obtained all the information and explanations we have required. In our opinion, the financial statements: comply with generally accepted practice; and present a true and fair view of the financial position of the trust as at 31 March 1998 and its financial performance and cash flows for the year ended on that date. Our audit was completed on 23 April 1998 and our unqualified opinion is expressed as at that date. ERNST & YOUNG, New Plymouth.