Consolidated Statement of Financial Performance for the Year Ended 31 March 2001
Notes 2001 2000
$ $
Income:
Investment income (net) 11 (2,595,068) 9,144,524
Interest received 20,584 2,285
Donations returned 1,000 -
Rental income 161,077 157,808
Total income (2,412,407) 9,304,617
Less expenses:
Auditors' fees 10,266 8,336
Depreciation 7,384 2,423
Devaluation of investment property in excess of reserve - 83,750
Donation expenses 12,380 14,142
Interest 55,284 58,492
Operating costs 285,870 216,812
Trustee expenses 14,589 9,951
Trustee fees 51,318 55,289
Total expenses 437,091 449,195
Net surplus/(deficit) before donations and taxation (2,849,498) 8,855,422
Less:
Donations 3,399,543 2,413,533
Net surplus/(deficit) before taxation (6,249,041) 6,441,889
Less:
Provision for taxation 6 (20,694) 20,694
Net surplus/(deficit) (6,228,347) 6,421,195
Consolidated Statement of Movements in Trust Funds for the Year Ended 31 March 2001
Notes 2001 2000
$ $
Trust funds at 1 April 2000 51,814,611 47,924,287
Plus:
Net surplus 6,421,195
51,814,611 54,345,482
Less:
Allocated to donation reserve from prior years' trust funds 182,195 2,530,871
Net deficit 6,228,347
Total trust funds at 31 March 2001 45,404,069 51,814,611

Donation reserve account-
Opening balance as at 1 April 2000 - -
Allocation from prior years' trust funds 182,195 2,530,871
Less:
Donations paid from prior years' trust funds 182,195 2,530,871
Closing balance as at 31 March 2001 - -
Consolidated Statement of Financial Position as at 31 March 2001
Notes 2001 2000
$ $
Current assets:
Bank accounts 58,341 130,809
Short term deposit - 2,000,000
Investment property 5 1,300,000 -
Accounts receivable - trading 21,583 12,807
Accounts receivable - investment 29,724 195,169
Prepayments 1,566 2,958
Taxation refund 2,446 2,420
Total current assets 1,413,660 2,344,163
Less current liabilities:
Accounts payable - trading 201,520 89,874
Accounts payable - investment 17,071 9,283
Bank of New Zealand loan - current portion 9 664,519 42,807
Provision for taxation 6 - 20,694
Goods and services tax 3,544 3,092
Total current liabilities 886,654 165,750
Net current assets 527,006 2,178,413
Non current assets:
Fixed assets 3 36,116 8,779
Investments 4 44,840,947 50,291,937
Total non current assets 44,877,063 50,300,716
Non current liabilities:
Bank of New Zealand loan - term portion 9 - 664,518
Total non current liabilities - 664,518
Net assets 45,404,069 51,814,611
Represented by:
Trust funds 45,404,069 51,814,611
Total trust funds 45,404,069 51,814,611
For and on behalf of the board of trustees:
PETER RICHARDSON, Chairperson.
PETER WILLIS, Trustee.
Date: 31 May 2001.
Consolidated Statement of Cash Flows for the Year Ended 31 March 2001
2001 2000
$ $
Cash flows from operating activities-
Cash was provided from:
Interest on investments 20,585 2,285
Rental income 138,375 138,375
OPEX recovered 21,772 8,312
G.S.T. received 38 -
Donations returned 1,000 -
181,770 148,972
Cash was applied to:
Payments to suppliers (309,317) (297,513)
Payments to fund managers (152,413) (176,486)
Payments to trustees (64,109) (48,594)
Donations to community (3,476,738) (4,944,404)
Tax paid (26) (3)
G.S.T. paid - (2,081)
(4,002,603) (5,469,081)
Net inflow (outflow) from operating activities (3,820,833) (5,320,109)
Cash flows from investing activities-
Cash was provided from:
Net realisation from investments 1,881,000 7,680,000
1,881,000 7,680,000
Cash was applied to:
Purchase of fixed assets (34,720) (6,991)
Karori Sanctuary Wildlife Trust loan - (188,000)
(34,720) (194,991)
Net inflow (outflow) from investing activities 1,846,280 7,485,009
Cash flows from financing activities-
Cash was provided to:
BNZ loan principal repayments (42,806) (39,522)
Interest expense (55,109) (58,289)
(97,915) (97,811)
Net inflow (outflow) from investing activities (97,915) (97,811)
Net increase (decrease) in cash held (2,072,468) 2,067,089
Opening cash brought forward 2,130,809 63,720
Closing cash carried forward 58,341 2,130,809
Shown in statement of financial position as
Cash at bank 58,341 2,130,809
Closing cash carried forward 58,341 2,130,809
Consolidated Notes to the Financial Statements for the Year Ended 31 March 2001
1. Statement of Accounting Policies
Reporting Entity
The financial statements presented here are for the reporting entity Trust Bank Wellington Community Trust and its wholly owned companies, Wellington Community Trust Charities Limited and Jarden Mile Investments Limited. The Trust Bank Wellington Community Trust is an incorporated charitable trust under the Charitable Trusts Act 1957.
Reporting Basis
The trustees have chosen to prepare general purpose financial reports which comply with generally accepted accounting practice.
Measurement Base
The measurement base adopted is historical cost with the exception of certain items for which specified accounting policies are identified.
Investment Income (Net)
Investment income (net) includes gross investment income less management fees payable to the fund managers.
Investment Property
The investment property held is valued at net current value. Depreciation is not charged on the investment property. The net change in the value of the investment property is recorded in the consolidated statement of financial performance.
Basis of Consolidation
The consolidated financial statements have been prepared using the purchase method of consolidation and include the financial statements of the parent and subsidiary companies.
All significant inter-entity profits and transactions have been eliminated in preparing the consolidated financial statements.
Accounts Receivable
Accounts receivable are stated at expected realisable value.
Donations
Donations made from current year's income are recorded in the statement of financial performance when paid. Donations from prior years' income are recorded in the donation reserve account when paid.
Fixed Assets
Fixed assets are stated at cost less accumulated depreciation.
Depreciation
Depreciation is charged at the maximum rates allowable by the Inland Revenue Department. The tax rates are as follows:
Computer equipment 24.0 - 48.0 %CP
Office furniture 9.0 - 60.0 %DV
Goods and Services Tax
The financial statements for The Community Trust of Wellington are prepared on a G.S.T. inclusive basis with the following exceptions:
? The Wellington Community Trust Charities Limited is registered for goods and services tax on the basis that taxable supplies are derived from rent received and the reimbursement of operating expenses from the sub-leasing of their premises. Income and expenditure relating to this are stated on a G.S.T. exclusive basis.
? Transactions relating to Jarden Mile Investments Limited are prepared on a G.S.T. exclusive basis as it is registered for goods and services tax.
Shares and Investments
Shares and other investments are stated at the market value. Changes in the market value of investments are taken to the statement of financial performance.
Financial Instruments
All financial instruments held by the trust are recorded in the statement of financial position. The financial instruments comprise equity securities, discounted securities, secured investments, borrowings, deposits and cash. Concentrations of credit risk arise as a result of holding equity securities as investments. These are subject to the normal market risk associated with investments of this nature. There are no significant differences between the fair value and book value of financial instruments.
Where possible, financial assets and liabilities are supported by collateral or other security. These arrangements are described in the individual policy statements associated with each item.
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. Nature of Business
The Trust Bank Wellington Community Trust was incorporated 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, principally in the trust region.
The nature of business of the wholly owned companies, Wellington Community Trust Charities Limited and Jarden Mile Investments Limited, is restricted by their constitution to providing charitable benefits to the community, principally in the region of The Community Trust of Wellington.
The Trust Bank Wellington Community Trust and its subsidiary companies operate under the trading name of "The Community Trust of Wellington".
3. Fixed Assets
2001
Cost Accumulated
Depreciation Book
Value
$ $ $
Computer equipment 14,094 10,686 3,408
Office furniture 38,422 5,714 32,708
52,516 16,400 36,116
2000
Cost Accumulated
Depreciation Book
Value
$ $ $
Computer equipment 13,783 7,647 6,135
Office furniture 4,013 1,369 2,644
17,796 9,016 8,779
4. Investments
2001 2000
$ $
Investments held by Tower Asset Management comprise:
Money market deposits 1,678,767 3,872,170
Fixed interest bonds 3,640,654 4,623,201
Equities 19,963,356 17,961,499
Other investments (667,105) 103,598
Total investments at 31 March 2001 24,615,672 26,560,468
2001 2000
$ $
Investments held by BT Funds Management (NZ) Limited comprise:
Currency (82,883) 106,302
Property 18,325 -
Fixed interest bonds 2,831,778 1,771,204
Equities 14,494,443 17,376,282
Short term investment 933,612 1,147,681
Total investments at 31 March 2001 18,195,275 20,401,469
2001 2000
$ $
Secured investments:
The Embassy Theatre Trust 530,000 530,000
Karori Wildlife Sanctuary Trust 1,500,000 1,500,000
Total secured investments at 31 March 2001 2,030,000 2,030,000
On 30 June 1998, The Embassy Theatre Trust entered into a mortgage agreement with Wellington Community Trust Charities Limited. The mortgage is repayable over 10 years and is secured over the property owned by The Embassy Theatre Trust. The first repayment will be on I July 2002.
On 19 February 1999, the Karori Wildlife Sanctuary Trust entered into a loan agreement with Wellington Community Trust Charities Limited. The loan is guaranteed by the Wellington City Council. The loan is to be repaid over 15 years with repayments commencing from 1 July 2004.
2001 2000
$ $
Investment property (non current):
At cost - 1,383,750
Revaluations brought forward - 1,250
Current year revaluation - (85,000)
Total investment property at 31 March 2001 - 1,300,000


Total investments at 31 March 2001 44,840,947 50,291,937
It is the intention of the trustees to hold the investments long term and, accordingly, they have been classified as non current assets.
5. Investment Property (Current)
A conditional contract for the sale of the investment property at 19 Jarden Mile, Ngauranga, was entered into on 30 March 2001 with expected net proceeds of $1,300,000.
The property has been valued at $1,300,000 as at 31 March 2001. The carrying value of the property includes allowances for potential disposal costs. The valuation was carried out on 4 April 2001 by an independent registered valuer, C. W. Nyberg F.N.Z.P.I., of Darroch Limited.
6. Taxation
Trust Bank Wellington Community Trust is not exempt from income tax as a charitable trust. A tax liability of $20,694 was recorded in the financial statements for the previous year. During that time the charitable status of the trust was being reviewed by Inland Revenue. The review has since resulted in a reversal of tax expense and no liability arises for tax to 31 March 2001.
For taxation purposes, Wellington Community Trust Charities Limited is deemed to be a charitable organisation and on this basis the income is not subject to taxation. The company's charitable status was confirmed on 27 August 1997 by the Inland Revenue Department.
For taxation purposes, Jarden Mile Investments Limited is deemed to be a charitable organisation and on this basis the income is not subject to taxation. The company's charitable status was confirmed on 29 September 1998 by the Inland Revenue Department.
7. Commitments
(a) Donations
As at 31 March 2001, The Community Trust of Wellington has conditionally committed funding to:
2001 2000
$ $
* The Wellington Regional Sports Education Trust (Sport Wellington Region) 1,500,000 1,000,000
* Wellington Museums Trust Inc. - 1,200,000
* Victoria University of Wellington Foundation - 50,000
* Wellington School of Medicine - Surgical Research Trust - 60,000
* Te Runanganui O Taranaki Whanui Ki Te Upoko O Te Ika A Maui Incorporated Tu Tangata) 60,000 120,000
* New Zealand Symphony Orchestra Limited 150,000 300,000
* WellTrust 2,400,000 3,000,000
* New Zealand International Festival of the Arts Trust 600,000 -
Total commitments at 31 March 2001 4,710,000 5,730,000
2001 2000
$ $
Payable no later than one year 1,460,000 2,620,000
Payable later than one year, not later than two years 1,250,000 1,310,000
Payable later than two years 2,000,000 1,800,000
4,710,000 5,730,000
As at 31 March 2001, donations approved by The Community Trust of Wellington and subject to the satisfaction of certain conditions were:
2001 2000
$ $
* Junior Cricket Upper Hutt (approved 1997) - 100,000
* Upper Hutt Bowling & Tennis Club - 15,000
* New Zealand Aids Foundation - 3,000
* Mauri Ora Newspaper Charitable Trust - 1,500
* Clean Up New Zealand Trust - 10,000
Total not uplifted at 31 March 2001 - 129,500
(b) Lease Commitments
Commitments existed for non-cancellable operating leases as follows:
2001 2000
$ $
* Not later than one year 132,036 4,641
* Later than one year 553,178 -
685,214 4,641
During the year, The Community Trust of Wellington shifted premises to 28 Grey Street and entered into a 6-year
non-cancellable operating lease. The trust has sub-leased a major portion of the premises on similar terms.
(c) Capital Commitments
The group has no capital commitments as at 31 March 2001 (2000 $Nil).
8. Contingent Liabilities
The trust has no contingent liabilities as at 31 March 2001 (2000 $Nil).
9. Term Loan
2001 2000
$ $
Bank of New Zealand
Current 664,519 42,807
Non current - 664,518
Total liability 664,519 707,325

Security 19 Jarden Mile, Ngauranga
Interest Rate 8.01%PA
Repayments The loan will be full repaid upon settlement of the investment property.
10. Financial Instruments
Investments are stated at estimated market value at balance date. Accounts payable, secured investments and accounts receivable are stated at the amount expected to be received or paid.
Accordingly, the trustees consider that the fair value of each class of financial asset and financial liabilities is the same as the carrying value in the statement of financial position.
Concentration of Credit Risk
The concentrations of credit risk incurred by the trust are managed by Tower Asset Management and BT Funds Management (NZ) Limited. Credit risk also exists with the loan agreements entered into during the year.
Trustees consider the risk of non-recovery of these investments to be within satisfactory guidelines.
Maximum exposures to credit risk as at balance date are:
2001 2000
$ $
Bank accounts 58,341 2,130,809
Accounts receivable 51,307 207,976
Investments 46,140,947 50,376,937
Currency Risk
The Community Trust of Wellington incurs currency risk as a result of investment transactions managed by Tower Asset Management and BT Funds Management (NZ) Limited.
Interest Rate Risk
The investments of the Community Trust of Wellington which are sensitive to changes in interest rates are managed by Tower Asset Management and BT Funds Management (NZ) Limited. The Community Trust of Wellington is also exposed to interest rate fluctuation on loans, as the debt is on a floating rate.
11. Investment Income (Net)
2001 2000
$ $
Portfolio income-realised and unrealised revenue (2,352,943) 9,321,011
Less fund management fees and expenses (242,125) (176,486)
Total investment income (net) (2,595,068) 9,144,525
12. Reconciliation of Net Surplus (Deficit) with Net Cash Flow From Operating Activities
2001 2000
$ $
Net surplus/(deficit) (6,228,347) 6,421,195
Add/(deduct) financing items:
Interest expense 55,108 58,289
Add/(deduct) non cash items:
Depreciation 7,384 2,423
Devaluation of investment property - 83,750
Portfolio investment income reinvested 2,280,863 (9,251,669)
(3,884,992) (2,686,012)
Add/(deduct) movements in other working capital items:
Increase)/decrease in accounts receivable 156,669 (56,837)
(Increase)/decrease in prepayments 1,392 (97)
Increase/(decrease) in accounts payable 119,437 (132,293)
Increase/(decrease) in G.S.T. 452 (1,109)
Increase/(decrease) in taxation paid (26) (3)
Increase/(decrease) in tax provision (20,694) 20,694
257,230 (169,645)
Add(deduct) items classified as an investing activity:
Movement-BT Funds Management (NZ) Limited (6,352) 86,223
Movement-Tower Asset Management (4,524) (19,804)
(10,876) 66,419
Add(deduct) movements in trust funds:
Donations paid from prior years' trust fund (182,195) (2,530,871)
Net cash flow from operating activities (3,820,833) (5,320,109)
13. Subsequent Events After Balance Date
After balance date, the sale of the property at 19 Jarden Mile, Ngauranga, for $1,360,000 became unconditional. The settlement for the property is 25 May 2001.
Audit Report
To the readers of the financial report of Trust Bank Wellington Community Trust and its subsidiary companies (trading as) The Community Trust of Wellington ("the Group").
We have audited the financial report. The financial report provides information about the past financial performance and its financial position of the Group as at 31 March 2001. This information is stated in accordance with the accounting policies.
Board of Trustees' Responsibilities
The board of trustees is responsible for the preparation of a financial report which gives a true and fair view of the financial position of the Group as at 31 March 2001 and of the results of operations and cash flows for the year ended 31 March 2001.
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 judgements made by the board of trustees in the preparation of the financial report; and
? whether the accounting policies are appropriate to the Group's circumstances, consistently applied and adequately disclosed.
We conducted our audit in accordance with New Zealand auditing standards in. 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 obtain 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 Group.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion:
? proper records have been kept by the Group 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 group as at 31 March 2001 and the results of its operations and cash flows for the year ended on 31 March 2001.
Our audit was completed on 31 May 2001 and our unqualified opinion is expressed as at that date.
GRANT THORNTON, Wellington.