Statement of Income and Expenditure for the Year Ended 31 March 2001
Note 2001 2000
$000 $000
Income:
Dividends 20,350 6,050
Profit on sale of shares 2 353,769 0
Investments 2 (13,265) 237
360,854 6,287
Direct expenditure:
Fund management, custodian and advisory fees 111 0
360,743 6,287
Expenditure 8 682 480
360,061 5,807
Investment revaluations 3 0 26,525
Surplus before tax 360,061 32,332
Taxation 4 0 0
Net surplus 360,061 32,332
The net surplus has been allocated as follows:
Trust capital 7 283,000 0
Investment reserve 6 (128,300) 24,051
Charitable purposes reserve fund 6 (18,131) 2,650
General reserve 6 99,000 0
Uncommitted surplus available for distribution 124,492 5,631
360,061 32,332
Statement of Movement in Trust Funds for the Year Ended 31 March 2001
Total trust funds at beginning of year 192,904 166,400
Net surplus 360,061 32,332
Committed donations 5 (10,886) (5,828)
ASB Charitable Trust donation 6 (54,543) 0
Total trust funds at end of year 487,536 192,904
The notes to these financial statements form part of and should be read in conjunction with this statement of income and expenditure and statement of movement in trust funds.
Balance Sheet as at 31 March 2001
Note 2001 2000
$000 $000
Source of funds-
Trust funds:
Capital 7 327,320 44,320
Investment reserve 6 0 128,300
Charitable purposes reserve fund 6 0 18,131
General reserve 6 100,000 1,000
Retained surplus 60,216 1,153
487,536 192,904


Liabilities:
ASB Charitable Trust 76 51
Creditors 150 13
Committed donations 5 7,516 3,481
7,742 3,545
495,278 196,449
Employment of funds-
Investments:
Shares 3 0 190,375
Managed funds 463,458 0
Other investments 3 31,672 6,067
495,130 196,442
Current assets:
Cash 8 7
Debtors 140 0
148 7
495,278 196,449
Approved on behalf of the board:
JUDITH BASSETT, R. J. FINLAYSON,
Chairperson. Deputy Chairman.
Date: 28 May 2001. Date: 28 May 2001.
The notes to these financial statements form part of and should be read in conjunction with this balance sheet.
Statement of Cash Flows for the Year Ended 31 March 2001
2001 2000
$000 $000
Cash flows from operating activities-
Cash was provided from:
Dividends received 20,350 6,050
Interest received on investments 8,170 322
28,520 6,372
Cash was disbursed on:
Payment to suppliers, trustees and staff (143) (38)
Refunds to ASB Charitable Trust for the services of suppliers, trustees and staff (518) (460)
(661) (498)
Net cash inflow from operating activities 27,859 5,874
Cash flows from investing activities-
Cash was provided from:
Net proceeds on sale of shares 544,144 0
Decrease in term deposits 3,589 0
Decrease in net charitable purposes reserve fund deposits 1,084 0
548,817 0
Cash was disbursed on:
Increase in term deposits 0 (322)
Transfers to fund managers (485,000) 0
Increase in net charitable purposes reserve fund deposits 0 (252)
Net cash (inflow)/outflow from investing activities 63,817 (574)
Cash flows from funding activities-
Cash was disbursed on:
Donations to community organisations (61,394) (5,780)
Net cashflows from funding activities (61,394) (5,780)
Net cash inflow/(outflow) from activities 30,282 (480)
Add opening cash carried forward 24 504
Ending cash carried forward 30,306 24
Cash comprises:
Cash at bank 8 7
Call deposits 30,298 17
30,306 24
The notes to these financial statements form part of and should be read in conjunction with this statement of cash flows.
Reconciliation of Reported Surplus to Net Cash Flow from Operating Activities for the Year Ended 31 March 2001
2001 2000
$000 $000
Reported surplus 360,061 32,332
Items classified as investing activities:
Profit on sale of shares (353,769) 0
(353,769) 0
Add non-cash items:
Unrealised investments revaluations 0 (26,525)
Unrealised movement on bonds 3 85
3 (26,440)
Movements in working capital items:
Increase/(decrease) in creditors 137 (17)
Increase in debtors (140) 0
Increase/(decrease) in ASB Charitable Trust 25 (1)
22 (18)
Fund managers' losses 21,542 0
Net cash inflow from operating activities 27,859 5,874
Notes to the Financial Statements for the Year Ended 31 March 2001
1. Statement of Accounting Policies
The ASB Bank Community Trust ("the trust") is the reporting entity. The trust was formed on 30 May 1988 through the creation of a trust deed in compliance with the Trustee Banks Restructuring Act 1988. Under the terms of the trust deed, the trust was settled with 60 million $1 fully paid ordinary shares in ASB Bank Limited representing 100% of the issued capital. As at 31 March 1988, the net tangible asset backing of those 60 million shares was $147,655,000. In 1989, 45 million shares were sold to the Commonwealth Bank of Australia for $252,000,000 which was then donated to the ASB Charitable Trust.
In October 2000, the remaining 15 million shares were sold to the Commonwealth Bank of Australia for $545,000,000.
The measurement basis adopted is that of historical cost adjusted for the revaluation of certain assets. Reliance is placed on the fact that the trust is a going concern. The financial statements have been prepared in accordance with the requirements of the Financial Reporting Act 1993.
Basis of Preparing Consolidated Financial Statements
The financial statements comprise the trust and its subsidiaries. Subsidiaries are those entities controlled by the trust. The financial statements of subsidiaries are included in the financial statements using the purchase method of consolidations.
Bank
Bank is stated as the balance in the bank account rather than the balance as per the cash book.
Statement of Cash Flows
Cash comprises cash at bank and call deposits but excludes charitable purposes reserve fund cash at bank and call deposits.
Dividends
Dividends are recognised as income when they are received by the trust. They are recorded net of any imputation tax credits.
Donations
Donations are accounted for as they are distributed or committed to be distributed to eligible organisations as approved by the trustees.
Expenses
Some expenses are shared jointly with the ASB Charitable Trust. Whilst each trust bears its own specific costs, the joint expenses are allocated between each trust on the basis of the number of applications processed by each.
Joint expense allocations were:
2001 2000
This trust 40% 40%
ASB Charitable Trust 60% 60%
Investments
Investments in shares are valued at the net tangible asset backing as disclosed in the latest published accounts. Any revaluation difference is transferred to the investment reserve. Investment in managed funds and other investments are stated at market value. Any gains or losses are recognised in income and expenditure for the period. Investment transactions are recorded by the fund managers on a settlement date basis.
Financial Instruments
All assets and liabilities of the trust are financial instruments and are recognised in the balance sheet. All financial instruments are recorded at market value or fair value or are not materially different from market value or fair value.
The trust uses financial instruments with off balance sheet risk to reduce exposure to fluctuations in foreign currency exchange rates. Forward exchange contracts are entered into to hedge foreign currency transactions. These are converted to the
New Zealand dollar rate at balance date with all realised and unrealised gains and losses being recognised in the income and expenditure statement.
The quantitative disclosures required by FRS 31 Disclosure of Information about Financial Instruments have been included throughout the financial statements where material.
Reserves
Transfers to reserves from the unallocated surplus are made at the discretion of the trustees.
Taxation
Taxation includes both current and deferred tax. Deferred tax is calculated using the comprehensive liability method.
Comparatives
Certain comparatives have been restated for disclosure purposes.
Changes in accounting policies
There have been no material changes in accounting policies during the period.

2001 2000
$000 $000
2. Income
Profit on sale of shares:
Realisation of shares in ASB Group Limited 545,000 0
Book value of investment (190,375) 0
Realisation expenses (856)
353,769 0
Investments:
Managed funds (21,542) 0
Other income received 8,280 322
Investment loss (3) (85)
(13,265) 237
3. Investments
Shares in ASB Group Limited:
Balance as at 1 April 190,375 163,850
Increase in net tangible assets 0 26,525
Realisation of shareholding (190,375) 0
Balance as at 31 March 0 190,375
The increase in net tangible assets is based on unaudited accounts of ASB Group Limited as at 31 December 1999.
Change in Shareholding
On 30 March 1999, an arrangement was entered into whereby the trust exchanged its 25% shareholding in ASB Bank Limited for a 25% shareholding in ASB Group Limited. The exchange was at net book value with no resulting profit or loss from the exchange in shareholding. The ASB Group Limited holds 100% of the shares in ASB Bank Limited and ASB Life Assurance Limited.
The investment held in ASB Group Limited was disclosed based on the shares held and net tangible assets of ASB Group Limited as at 31 December 1999 in accordance with the trust's accounting policy.
In October 2000, the 25% shareholding in ASB Group Limited was sold for $545,000,000. The net proceeds attributable to the charitable purposes reserve fund, combined with other transactions during the period, was donated to the ASB Charitable Trust.
2001 2000
$000 $000
Managed by external managers:
Transfers to managers 485,000 0
Movement in market valuue (21,542) 0
463,458 0
Investments managed by external managers comprise:
Cash, deposits and miscellaneous 62,329 0
Bonds 230,181 0
Equities 170,948 0
Portfolio total 463,458 0
Other Investments
These consist of securities and deposits managed in-house-
Investments comprise:
Call deposits 30,298 17
Call deposits charitable purposes reserve fund 0 302
Term deposits 0 3,589
Term deposits charitable purposes reserve fund 0 782
Bonds 1,374 1,377
31,672 6,067
"Other investments" are managed in-house. Included in these are deposits, certain of which are subject to a right of set-off under the terms of the trust's banking agreement. There has been no set-off applied in the presentation of these accounts.
2001 2000
$000 $000
4. Taxation
Surplus before taxation 360,061 32,332
Net dividend (20,350) (6,050)
Unrealised investment revaluations 0 (26,525)
Capital gain on sale of shares (353,769) 0
Income attributable to charitable purposes reserve fund (1,212) (38)
Non-deductible expenditure 465 417
Distribution to tax approved beneficiaries 0 (180)
Taxable loss brought forward (199) (155)
Taxable loss carried forward (15,004) (199)
Taxation charge @ 33% 0 0
5. Donations
For this year:
Committed and disbursed 4,159 3,028
Committed but not yet disbursed 7,059 2,872
Total donations approved 11,218 5,900
Donations written back (332) (72)
10,886 5,828
Committed but not yet disbursed:
Committed in previous years 457 615
Committed this year 7,059 2,866
7,516 3,481
6. Reserves
Investment reserve:
Balance as at 1 April 128,300 104,249
Increase in value of ASB Group Limited shares 0 26,525
Increase attributable to the charitable purposes reserve fund 0 (2,474)
Allocation to surplus on realisation of shares (128,300) 0
Balance as at 31 March 0 128,300
The investment reserve reflected both the realised and unrealised increase in the net tangible asset value of the shareholding in ASB Group Limited. It excluded the portion of the increases attributable to the charitable purposes reserve fund.
Charitable purposes reserve fund:
Balance as at 1 April 18,131 15,481
Increase in value of ASB Group Limited shares 0 2,474
Income 3,111 603
Donations to charitable organisations 0 (427)
Donations transferred to ASB Charitable Trust 310 0
Profit on sale of shareholding 32,991 0
Donation to ASB Charitable Trust (54,543) 0
Balance as at 31 March 0 18,131
The charitable purposes reserve fund represented funds contributed by ASB Charitable Trust to enable the trust to participate in the issue of new equity by ASB Group Limited. In order to maintain the non taxable status of this reserve, the trust was required to segregate these funds contributed from ASB Charitable Trust and the income attributable thereto. There were also certain restrictions on the distribution of income from this fund.
2001 2000
$000 $000
General Reserve:
Balance as at 1 April 1,000 1,000
Allocation from surplus 99,000 0
Balance as at 31 March 100,000 1,000
7. Trust Capital
Balance as at 1 April 44,320 44,320
Allocation from surplus 283,000 0
Balance as at 31 March 327,320 44,320
8. Other Expenditure
Audit fees 13 6
Facilities rental 26 28
Legal fees 48 11
Occupancy costs 19 23
Other operating costs 178 70
Public and statutory reporting 50 57
Staff expenses 263 212
Trustees' fees 68 62
Trustees' expenses 17 11
682 480
9. Subsidiaries
Name Interest Held Balance Date Principal Activity
ASB Trusts Amateur Public Sports Promotion Limited 100% 31 March Donations to amateur sport bodies
ASB Trusts Public Amenities Development Limited 100% 31 March Donations to public beautification bodies
These subsidiaries have not traded during the year as they were only incorporated on 29 March 2001.
10. Financial Instruments
Currency Risk
The trust invests in securities that are denominated in foreign currencies and therefore, result in a currency risk. In order to minimise the currency risk, foreign currency assets are hedged.
2001 2000
$000 $000
Foreign currency denominated assets 274,943 0
Less: Foreign currency contracts 198,900 0
Unhedged exposure 76,043 0
Interest Rate Risk
The trust, through its fund managers, invests in securities that are subject to interest rate risk. The trust actively monitors this risk and changes asset allocations and maturity profiles accordingly.
Credit Risk
The trust, in the normal course of business, enters into arrangements with other parties. These arrangements give rise to credit risk for the trust and hence policies and procedures are maintained so that this risk is minimised. No collateral is required in respect of financial assets.
For all classes of financial assets held by the trust, the maximum credit risk exposure to the trust is the carrying value as disclosed in the financial statements at balance date.
Due to the diversification of the investment portfolio and the policies and procedures in place, there is no significant concentrations of credit risk.
Fair Values
All financial instruments are carried at market value.
11. Foreign Currency Monetary Assets
As at 31 March 2001, the trust had the following foreign currency monetary assets that were not hedged.
Foreign currency exposure-
Receivables stated in NZ$ equivalents: 2001 2000
$000 $000
U.S.A. & Canada 42,584 0
U.K. & Continental Europe 25,474 0
Japan & Far East 7,985 0
76,043 0
Audit Report
To the Trustees of the ASB Bank Community Trust:
We have audited the financial statements comprising the statement of income and expenditure, the statement of movements in trust funds, the balance sheet, the statement of cash flows and the notes to these financial statements. The financial statements provide information about the past financial performance of the trust and its financial position as at 31 March 2001. This information is stated in accordance with the accounting policies in the notes to these financial statements.
Trustees' Responsibilities
The trustees are responsible for the preparation of financial statements which give a true and fair view of the financial position of the trust as at 31 March 2001 and the results of its 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.
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 judgements made by the trustees in the preparation of the financial statements;
? whether the accounting policies are appropriate to the trust's circumstances, consistently applied and adequately disclosed.
We conducted our audit in accordance with New Zealand Auditing Standards issued by the Institute of Chartered Accountants of 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 obtain 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.
Our firm carries out other assignments for the company in the area of taxation advice and special consultancy projects. The firm has no other interests in the trust.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion, the financial statements:
? comply with New Zealand generally accepted accounting practice;
? give a true and fair view of the financial position of the trust as at 31 March 2001 and the results of its operations and cash flows for the year ended on that date.
Our audit was completed on 28 May 2001 and our unqualified opinion is expressed as at that date.
KPMG, Auckland.
ASB Charitable Trust
Statement of Income and Expenditure for the Year Ended 31 March 2001
Note 2001 2000
$000 $000
Income:
Investments 3 (9,098) 65,529
Rent 8 8
Donation from ASB Bank Community Trust 3 54,543 0
45,453 65,537
Direct expenditure:
Fund management, custodian and advisory fees 2,171 1,997
43,282 63,540
Other expenditure 8 774 676
Net surplus 42,508 62,864
The net surplus has been allocated as follows:
Capital maintenance reserve 4 10,048 4,770
Uncommitted surplus available for distribution 32,460 58,094
42,508 62,864
Statement of Movement in Trust Funds for the Year Ended 31 March 2001
Total trust funds at beginning of year 473,440 440,299
Net surplus 42,508 62,864
Committed donations 5 (37,153) (29,723)
Total trust funds at end of year 478,795 473,440
The notes to these financial statements form part of and should be read in conjunction with this statement of income and expenditure and statement of movement in trust funds.
Balance Sheet as at 31 March 2001
Notes 2001 2000
$000 $000
Source of funds-
Trust funds:
Capital 6 251,786 251,786
Capital maintenance reserve 4 79,440 69,392
General reserve 4 100,000 100,000
Retained surplus 47,569 52,262
478,795 473,440
Liabilities:
Creditors 962 588
Committed donations 5 32,942 24,491
33,904 25,079
512,699 498,519
Employment of funds-
Investments:
Managed funds 2 510,163 434,480
Other investments 2 186 61,788
510,349 496,268
Current assets:
ASB Bank Community Trust 76 51
Cash 7 7
Debtors 145 14
Other assets 0 71
228 143
Fixed assets 7 2,122 2,108
512,699 498,519
Approved on behalf of the board:
JUDITH BASSETT, R. J. FINLAYSON,
Chairperson. Deputy Chairman.
Date: 28 May 2001. Date: 28 May 2001.
The notes to these financial statements form part of and should be read in conjunction with this balance sheet.
Statement of Cash Flows for the Year Ended 31 March 2001
2001 2000
$000 $000
Cash flows from operating activities-
Cash was provided from:
Income received on other investments 2,662 3,271
Refunds of expenses by ASB Bank Community Trust 518 460
Net G.S.T. 107 0
Receipts from rentals 8 8
Donation from ASB Bank Community Trust 54,543 0
57,838 3,739
Cash was disbursed on:
Net G.S.T. 0 (1)
Payment to suppliers, trustees and staff (1,301) (1,128)
Fund management and advisory fees (1,800) (2,133)
(3,101) (3,262)
Net cash inflow from operating activities 54,737 477
Cash flows from investing activities-
Cash was provided from:
Receipts from fund managers 22,000 81,000
ASB Group Limited term loan 61,067 0
83,067 81,000
Cash was disbursed on:
Purchase of fixed assets (68) (34)
Transfers to fund managers (109,567) 0
ASB Group Limited term loan 0 (60,000)
Net cash (outflow)/inflow from investing activities (26,568) 20,966
Cash flows from funding activities-
Cash was disbursed on:
Donations to charitable organisations (28,702) (21,208)
Net cash outflow from funding activities (28,702) (21,208)
Net cash (outflow)/inflow from activities (533) 235
Add opening cash brought forward 619 384
Ending cash carried forward 86 619
Cash comprises:
Cash at bank 7 7
Call deposits 79 612
86 619
The notes to these financial statements form part of and should be read in conjunction with this statement of cash flows.
Reconciliation of Reported Surplus to Net Cash Flow from Operating Activities for the Year Ended 31 March 2001
2001 2000
$000 $000
Reported surplus- 42,508 62,864
Add non-cash items:
Depreciation 66 77
Unrealised movement in bonds 2 6
Interest receivable on ASB Group Limited term loan 0 (1,067)
68 (984)
Movements in working capital items:
Increase/(decrease) in creditors 363 (134)
Increase/(decrease) in ASB Bank Community Trust (25) 1
Increase in debtors (131) (3)
Decrease/(increase) in other assets 71 (71)
278 (207)
Fund managers' losses/(income reinvested) 11,883 (61,196)
Net cash inflow from operating activities 54,737 477
Notes to the Financial Statements for the Year Ended 31 March 2001
1. Statement of Accounting Policies
The ASB Charitable Trust ("the trust") is the reporting entity. The trust was formed on 31 May 1989 through the creation of a trust deed by the ASB Bank Community Trust and a donation of $252,000,000.
The measurement basis adopted is that of historical cost adjusted for the revaluation of certain assets. Reliance is placed on the fact that the trust is a going concern. The financial statements have been prepared in accordance with the requirements of the Financial Reporting Act 1993.
Bank
Bank is stated as the balance in the bank account rather than the balance as per the cash book.
Statement of Cash Flows
Cash comprises cash at bank and call deposits but does not include cash or deposits held by the fund managers. Therefore, the statement of cash flows does not reflect the cash flows within the fund managers' portfolios.
Depreciation
Depreciation is provided over the useful life of the assets. Buildings are depreciated on a straight line basis. Vehicle, office equipment and furniture are depreciated on a diminishing value basis. The rates used are those recommended by the Inland Revenue Department.
Dividends
Dividends are recognised as income when they are received by the trust and exclude imputation tax credits.
Donations
Donations are accounted for as they are distributed or committed to be distributed to eligible organisations as approved by the trustees.
Expenses
Some expenses are shared jointly with the ASB Bank Community Trust. Whilst each trust bears its own specific costs, the joint expenses are allocated between the trusts on the basis of the number of applications processed by each.
Joint expense allocations were:
2001 2000
This trust 60% 60%
ASB Bank Community Trust 40% 40%
Fixed Assets
Fixed assets are valued at cost less accumulated depreciation.
Foreign Currencies
All amounts denominated in foreign currencies are converted to New Zealand dollars at balance date and all realised and unrealised gains and losses are recognised in income and expenditure for the period.
Investments
Investments are stated at market value, except for the ASB Group Limited term loan which is stated at cost plus accrued interest. Any gains or losses are recognised in income and expenditure for the period.
Investment transactions are recorded by the fund managers on a settlement date basis.
Financial Instruments
All assets and liabilities of the trust with the exception of fixed assets are financial instruments and are recognised in the balance sheet. All financial instrument are recorded at market value or fair value or are not materially different from market value or fair value.
The trust uses financial instruments with off balance sheet risk to reduce exposure to fluctuations in foreign currency exchange rates. Forward exchange contracts are entered into to hedge foreign currency transactions. These are converted to the
New Zealand dollar rate at balance date with all realised and unrealised gains and losses being recognised in the income and expenditure statement.
The quantitative disclosures required by FRS 31 Disclosure of Information about Financial Instruments have been included throughout the financial statements where material.
Reserves
Transfers to the capital maintenance reserve are based on the annual movement in the Consumer Price Index.
Transfers to all other reserves from the unallocated surplus are made at the discretion of the trustees.
Taxation
The trust has been accorded tax exempt status in New Zealand and Australia but is liable to taxation on investment income in some other overseas countries. Tax on overseas income is accounted for as a reduction of that income.
Comparatives
Certain comparatives have been restated for disclosure purposes.
Changes in accounting policies
There have been no material changes in accounting policies during the period.
2001 2000
$000 $000
2. Investments
Managed by external managers:
Balance as at 1 April 434,480 454,284
Movement in market value (11,883) 61,196
Transfers/(withdrawals) 87,566 (81,000)
Balance as at 31 March 510,163 434,480
Investments managed by external managers comprise:
Cash, deposits and miscellaneous 46,991 69,154
Bonds 250,437 135,686
Equities 212,735 229,640
Portfolio total 510,163 434,480
Other investments comprise:
Call deposits 79 612
Bonds 107 109
ASB Group Limited term loan 0 61,067
186 61,788
"Other investments" are managed in-house. Included in these are deposits, certain of which are subject to a right of set-off under the terms of the trust's banking agreement. There has been no set-off applied in the presentation of these accounts.
On 1 April 1999, the trust provided a 5 year term loan of $60 million to a related party ASB Group Limited, at a fixed interest rate of 7.11%. This was repaid on 3 October 2000.
2001 2000
$000 $000
3. Income
Investments:
Managed funds (11,883) 61,196
Other income received 629 57
Investment loss (2) (6)
Interest on ASB Group Limited term loan 2,158 4,282
(9,098) 65,529
Donation from ASB Bank Community Trust
The net proceeds attributable to the charitable purposes reserve fund in respect of the sale of the shares in ASB Group Limited, combined with other transactions during the period, was donated to the ASB Charitable Trust.
4. Reserves
Capital maintenance reserve:
Balance as at 1 April 69,392 64,622
Allocation from surplus 10,048 4,770
Balance as at 31 March 79,440 69,392
General reserve:
Balance as at 1 April 100,000 100,000
Balance as at 31 March 100,000 100,000
5. Donations
For this year:
Committed and disbursed 13,434 8,156
Committed but not yet disbursed 25,523 21,691
Total donations approved 38,957 29,847
Donations written back (1,804) (124)
37,153 29,723
Committed but not yet disbursed:
Committed in previous years 7,575 2,820
Committed this year 25,367 21,671
32,942 24,491
6. Trust Capital
Balance as at 1 April 251,786 251,786
Balance as at 31 March 251,786 251,786
7. Fixed Assets
2001 2000
Cost Accumulated Book Cost Accumulated Book
Depreciation Value Depreciation Value

Land and buildings 2,079 175 1,904 2,079 154 1,925
Vehicle, office equipment and furniture 723 505 218 643 460 183
2,802 680 2,122 2,722 614 2,108

2001 2000
$000 $000
8. Other Expenditure
Audit fees 20 24
Depreciation 40 42
Loss on disposal of fixed asset 0 3
Legal fees 23 6
Occupancy costs 34 33
Other operating costs 61 43
Public and statutory reporting 78 86
Staff expenses 390 324
Trustees' fees 102 93
Trustees' expenses 26 22
774 676
9. Statement of Cash Flows
The depreciation charged to the cash flow statement includes a sum of $26,497 (2000 $28,153) on charged to the ASB Bank Community Trust as facilities rental.
10. Financial Instruments
Currency Risk
The trust invests in securities that are denominated in foreign currencies and therefore, result in a currency risk. In order to minimise the currency risk, foreign currency assets are hedged.
2001 2000
$000 $000
Foreign currency denominated assets 355,068 329,132
Less foreign currency contracts 248,052 215,668
Unhedged exposure 107,016 113,464
Interest Rate Risk
The trust, through its fund managers, invests in securities that are subject to interest rate risk. The trust actively monitors this risk and changes asset allocations and maturity profiles accordingly.
Credit Risk
The trust, in the normal course of business, enters into arrangements with other parties. These arrangements give rise to credit risk for the trust and hence policies and procedures are maintained so that this risk is minimised. No collateral is required in respect of financial assets.
For all classes of financial assets held by the trust, the maximum credit risk exposure to the trust is the carrying value as disclosed in the financial statements at balance date.
Due to the diversification of the investment portfolio and the policies and procedures in place, there is no significant concentrations of credit risk.
Fair Values
All financial instruments are carried at market value.
11. Foreign Currency Monetary Assets
As at 31 March 2001, the trust had the following foreign currency monetary assets that were not hedged.
Foreign Currency Exposure
Receivables stated in NZ$ equivalents:
2001 2000
$000 $000
U.S.A. and Canada 29,898 65,611
U.K. and Continental Europe 19,906 22,417
Japan and Far East 5,808 9,227
Australia 51,404 16,209
107,016 113,464
Audit Report
To the Trustees of ASB Charitable Trust:
We have audited the financial statements comprising the statement of income and expenditure, the statement of movements in trust funds, the balance sheet, the statement of cash flows and the notes to these financial statements. The financial statements provide information about the past financial performance of the trust and its financial position as at 31 March 2001. This information is stated in accordance with the accounting policies in the notes to these financial statements.
Trustees' Responsibilities
The trustees are responsible for the preparation of financial statements which give a true and fair view of the financial position of the trust as at 31 March 2001 and the results of its 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.
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 judgements made by the trustees in the preparation of the financial statements;
? whether the accounting policies are appropriate to the trust's circumstances, consistently applied and adequately disclosed.
We conducted our audit in accordance with New Zealand Auditing Standards issued by the Institute of Chartered Accountants of 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 obtain 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.
Our firm carries out other assignments for the company in the area of taxation advice and special consultancy projects. The firm has no other interests in the trust.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion, the financial statements:
? comply with New Zealand generally accepted accounting practice;
? give a true and fair view of the financial position of the trust as at 31 March 2001 and the results of its operations and cash flows for the year ended on that date.
Our audit was completed on 28 May 2001 and our unqualified opinion is expressed as at that date.
KPMG, Auckland.
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A copy of the list of all distributions of income and capital approved or paid by the ASB Bank Community Trust and
ASB Charitable Trust is available on request from ASB Trusts, P.O. Box 68-048, Newton, Auckland.