Annual Report for the Year Ended 31 March 2001
Trust Particulars
The trust was initially incorporated on 5 August 1988 as the Trust Bank Bay of Plenty Community Trust in accordance with the provisions of the Trustee Banks Restructuring Act 1988. It continues under the provisions of the Community Trusts Act 1999. The purpose of the trust is to provide charitable, cultural, philanthropic, recreational and other benefits to Bay of Plenty communities. In April 1998, the name was changed to the Bay of Plenty Community Trust.
Trustees:
Mrs G. P. Searancke (Chair), Mrs H. A. Brown, Mr S. J. Edward (term expired 15 November 2000), Mrs J. Knudsen,
Mrs J. G. Mahoney (term expired 15 November 2000), Mr E. E. Ogier, Mrs B. M. Ross, Mr B. J. Scantlebury, Mr R. B. Sharp, Mr T. M. Te Heuheu, Ms M. Waaka, Ms K. Withers, Ms T. J. Eggleton (appointed 15 November 2000), Mrs P. J. McLeod (appointed 15 November 2000).
Trust Manager:
Mr B. W. Cronin.
Accountants:
Murray Crossman & Partners, Tauranga.
Auditors:
Ingham Mora, Tauranga.
Bankers:
BNZ, Tauranga.
WestpacTrust, Tauranga.
Financial Advisors:
Frank Russell Company (N.Z.) Ltd, Auckland.
Solicitors:
Sharp Tudhope, Tauranga
Tax Advisors:
KPMG, Christchurch.
Chairman's Report for the Year Ended 31 March 2001
"Donations Up Despite Tough Year"
Prudent investment by community trustees paid big dividends for BoP communities as the trust increased its donations in a very difficult investment year.
It is my pleasure to present my second annual report for the Bay of Plenty Community Trust and to elaborate on how we have helped the communities of our region, which extends from Katikati to the East Cape to Turangi. This is indeed a large and diverse region and to match this we are very fortunate to have trustees who come from Taupo, Rotorua, Whakatane, Opotiki, Te Puke, Tauranga and Katikati. Their knowledge of local community organisations is excellent and I never cease to be amazed at the strength and depth of this trust board's representation.
The major downturn in global equities markets meant that investment income was down dramatically from $10.9m last year to $2.5m. But trustees' adherence to sound investment and careful reserving policies allowed the trust to pay out a record $3.9m in community donations to 235 organisations and commit itself to a further $2.1m.
This year has seen very encouraging progress on three major Bay of Plenty projects as a result of the protocol signed with the mayors of the region - seven councils in total. This protocol helps the trust understand regional priorities from elected representatives' (councils') perspectives and helps those councils understand trust constraints. It enables both councils and the trust to work together for the overall benefit of the Bay of Plenty, without in any way compromising any party's ability to make its own decisions for its own reasons.
The first of these regional projects was the Rotorua International Stadium grandstand extensions which saw the trust make its largest ever one-off donation to date of $1m.
A further $1m was also approved for the Whakatane Aquatic Centre and another $1m for the Tauranga Art Gallery. These funds will be paid out over a two-three year period.
The trust has also renewed its major funding partnerships with Sport BoP (Coachforce) and Presbyterian Support Services (The James Family), for $1.8m over three years and $300,000 over two years respectively.
In last year's report I paid tribute to Stewart Edward from Rotorua who retired from the trust after eight years' dedicated service. Jenny Mahoney of Whakatane also retired last year after serving the trust for four-and-a-half years and I thank her most sincerely for her very valuable contribution to the board.
Two new trustees joined us in November 2000. Pam McLeod from Taupo and Terri Eggleton from Whakatane have brought their own perspectives to the table and we welcome them. These appointments are for a term of four years and with the appointment of four new trustees in 1999, there has been a large turn around of trustees, six of twelve in two years. This is healthy as it means there is new thinking and constant rejuvenation at the board table.
In this the Year of the Volunteer, I very sincerely congratulate each and every organisation which has received a donation from the trust and I acknowledge the contribution that volunteers make to our communities. This trust has very few "hard and fast" rules when it comes to considering donations except that the project must enhance your community and that foremost in our minds is the contribution being made by the volunteers within a particular organisation.
In conclusion, may I say it has been a very rewarding year as chairman and I thank my fellow trustees for all their hard work and diligence. I would also like to sincerely thank our trust manager Bruce Cronin and donations officer Cindy Currie for their smooth running of the trust. Their enthusiasm and attention to all their tasks is exemplary.
GLENYS SEARANCKE, Chair.
Date: 12 June 2001.
Consolidated Statement of Financial Performance for the Year Ended 31 March 2001
2001 2000
$(000) $(000)
Income:
Dividends 4,804 1,327
Interest 2,846 2,238
Other investment income (including unrealised income) (5,187) 7,347
Donations cancelled and refunded 11 17
2,474 10,929
Less expenditure:
Advertising 62 64
Audit fees 6 6
Accountancy fees 17 16
Portfolio management and advisory fees 295 330
Office administration 164 164
Office rental 14 14
Other administration costs 25 42
Trustees' fees 91 105
Trustees expenses 64 59
738 800
Depreciation 8 10
Total operating costs 746 810
Net surplus before donations 1,728 10,119
Donations round 3,682 2,285
Net surplus/(deficit) after donations (1,954) 7,834
Plus/(less) transfers:
Income fluctuation reserve 4,119 (4,942)
Inflation and population reserve (2,897) (636)
Regional facilities reserve 1,000 (1,926)
2,222 (7,504)
Net surplus after reserve transfers 268 330
(The accompanying notes form part of these financial statements.)
Consolidated Statement of Movements in Equity for the Year Ended 31 March 2001
2001 2000
$(000) $(000)
Equity at 1 April 2000- 118,776 111,272
Less donations paid from capital:
Donations round (222) (272)
Dillon Scholarship (46) (58)
118,508 110,942
Net surplus 268 330
Increase/(decrease) in income fluctuation reserve (4,119) 4,942
Increase/(decrease) in inflation and population reserve (2,897) 636
Increase/(decrease) in regional facilities reserve (1,000) 1,926
Total recognised revenue and expenses for the year 1,954 7,834
Equity at 31 March 2001 116,554 118,776
(The accompanying notes form part of these financial statements.)
Consolidated Statement of Financial Position as at 31 March 2001
Note 2001 2000
$(000) $(000)
Equity: 2
Trust capital 89,308 89,308
Income fluctuation reserve 12,840 16,959
Inflation and population reserve 13,480 10,583
Regional facilities reserve 926 1,926
Total equity 116,554 118,776
Represented by-
Current assets:
WestpacTrust-
Current account 30 34
Call account 21 69
Bank of New Zealand-
Term deposit 192 181
Accounts receivable 13 0
Community loans 12 6 19
262 303
Non current assets:
Investments 5 116,527 118,644
Fixed assets 3 19 26
116,546 118,670
Total assets 116,808 118,973
Current liabilities:
Accounts payable (242) (184)
Employees entitlement payable (12) (13)
(254) (197)
Total net assets 116,554 118,776
Signed on behalf of the Board of Trustees:
G. P. SEARANCKE, Chairman.
B. J. SCANTLEBURY, Trustee.
Date: 12 June 2001.
(The accompanying notes form part of these financial statements.)
Consolidated Statement of Cash Flows for the Year Ended 31 March 2001
2001 2000
$(000) $(000)
Cash flows from operating activities-
Cash was provided from:
Investment income 2,459 10,923
Other 2 17
2,461 10,940
Cash was dispersed to:
Suppliers of goods and services (639) (694)
Trustees (92) (100)
Donations to the community (3,854) (2,572)
Dillon Memorial Scholarship (46) (58)
(4,631) (3,424)
Net cash flows from operating activities (2,170) 7,516
Cash flows from investing activities-
Cash was provided from:
Sale of investments 4,500 13,800
Cash was applied to:
Purchase of fixed assets (1) (14)
Purchase of investments (2,381) (21,386)
Net cash flows from investing activities 2,118 (7,600)
Increase/(decrease) in cash held (52) (84)
Add cash at 1 April 2000 103 187
Cash at 31 March 2001 51 103
Reconciliation of net surplus and net cash flows from operating activities-
Net surplus transferred to/(from) equity (1,954) 7,834
Less payments out of capital (net) (268) (330)
Plus non cash items:
Depreciation of fixed assets 8 10
Movement in working capital:
Decrease/(increase) in accounts receivable (13) 12
Increase/(decrease) in accounts payable 57 (10)
Net cash flows from operating activities (2,170) 7,516
(The accompanying notes form part of these financial statements.)
Notes to the Financial Statements for the Year Ended 31 March 2001
1. Statement of Accounting Policies
Reporting Entity
The trust is a charitable trust in accordance with the provisions of the Community Trusts Act 1999. The group consists of Bay of Plenty Community Trust Inc and its subsidiary Bay of Plenty Community Trust Charities Limited.
The financial statements have been prepared as required by the Community Trusts Act 1999 and the trust deed dated
17 August 2000 and in accordance with the Financial Reporting Act 1993.
Measurement Base
The accounting principles recognised as appropriate for the measurement and reporting of financial performance and financial position on an historical cost basis are followed by the group, with the exception of investments which are stated at market value as at 31 March 2001.
Specific Accounting Policies
The following specific accounting policies which materially affect the measurement of financial performance and the financial position have been applied:
(a) Donations:
Donations made during the year from revenue are included in the income statement. Those made from trust capital have been included in the statement of movements in equity.
(b) Investments:
All investments are stated at assessed market value.
(c) Fixed assets:
Fixed assets are stated at cost less accumulated depreciation.
(d) Depreciation:
Depreciation is charged to write off the cost of fixed assets over their expected economic lives using the diminishing value method at rates from 12% to 50% 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 accrual 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 statement of financial performance. Financial instruments are shown at their fair values.
(g) Consolidation:
The Bay of Plenty Community Trust and its subsidiary Charitable Company, Bay of Plenty Community Trust Charities Limited, have been consolidated using the purchase method of consolidation.
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.
2001 2000
$(000) $(000)
2. Equity
Trust capital- 89,308 89,308
General funds: Trust Company
Opening balance 970 (970) 0 0
Less donations from trust capital (268) 0 (268) (330)
Plus transfer from current year surplus (4,924) 5,192 268 330
(4,222) 4,222 0 0
Income fluctuation reserve:
Opening balance 16,959 12,017
Increase/(decrease) in reserve (4,119) 4,942
12,840 16,959
Regional facilities reserve:
Opening balance 1926 0
Increase/(decrease) in reserve (1,000) 1,926
926 1,926
Inflation and population reserve:
Opening balance 10,583 9,947
Increase in reserve 2,897 636
13,480 10,583
Total equity 116,554 118,776

2001 2000
$(000) $(000)
3. Fixed Assets
Office furniture and equipment:
Cost 72 71
Accumulated depreciation 53 45
Book value 19 26
4. Financial Instruments
Investments are stated at market value as at balance date. Accrued interest, accounts payable, community loans and donations approved not yet paid are stated at the amounts expected to be received or paid. Accordingly, the trustees consider that the fair value of each class of financial assets and financial liabilities is the same as the carrying value in the financial position.
Concentration of Investments
Ninety-nine point seven percent (99.7%) of the assets of the trust are represented by investments held with a range of financial institutions. However, the trustees consider the risk of non-recovery of these investments to be minimal. Maximum exposure to credit risk as at balance date is:
2001 2000
$(000) $(000)
Bank balances 51 103
Bank term deposits 192 181
Accounts receivable 13 0
Community loans 6 19
Investments 116,527 118,644
Currency Risk
The trust incurs currency risk as a result of investment transactions entered into by fund managers. The trust has a policy of fully hedging global bonds and fifty percent hedging of global equities.
Interest Rate Risk
The following investments of the trust are sensitive to changes in interest rates: Bank call accounts and deposits, government and local authority securities, and securities held by fund managers.
Fair Value
The carrying value is considered to be the fair value for financial instruments.
5. Investments
The value of investments which are held in equities and fixed interest are subject to market fluctuations. The total investment portfolio has been structured in such a way that any reductions in value in particular asset classes should be offset by increases in other classes; therefore no provision has been made for potential gains or losses that could occur due to market fluctuations. The investment portfolio as at 31 March 2001 is diversified as follows:
ANZ Asset State Street Tower Asset Total
Management Global Advisors Management
New Zealand equities 0 0 6,143 6,143
New Zealand fixed interest 38,648 0 25,542 64,190
New Zealand cash 827 0 14,996 15,823
Global bonds (fully hedged) 0 0 0 0
Global equities (50% hedged) 0 30,371 0 30,371
Total 2001 39,475 30,371 46,681 116,527
Total 2000 36,798 39,259 42,587 118,644

2001 2000
6. Taxation $(000) $(000)
Net surplus (before donations) 1,728 10,119
Less non-assessable income (Bay of Plenty Community Trust Charities Limited) (428) (2,408)
Less unrealised gains/losses (State Street global advisors) 5,659 (6,111)
6,959 1,600
Plus non-deductible expenditure 300 318
Plus imputation credits received 54 96
Holiday pay 0 11
Total taxable income 7,313 2,025
Less beneficiaries distribution: (3,682) (2,285)
Less distribution from Bay of Plenty Community Trust Charities Limited 2,624 1,555
(1,058) (730)
Bay of Plenty Community Trust Charities Limited (5,166) (1,270)
Total trustees' income 1,089 25
Trustees' loss brought forward (1,539) 0
Adjustment to losses brought forward 0 (1,269)
Imputation credits converted to losses (168) (295)
Assessable trustees' Income (618) (1,539)
Taxation at 33% 0 0
7. 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.
8. Related Party Transactions
Bay of Plenty Community Trust Charities Limited (the company) is wholly owned by Bay of Plenty Community Trust Incorporated (the trust). During the year, the trust made a beneficiaries income distribution to the company of $5.17m.
No related party debts have been written off or forgiven during the year.
9. Segment Information
The trust's only activity is to receive income to allocate for charitable, cultural, philanthropic, recreational and other purposes beneficial to the community principally in the Bay of Plenty area.
10. Contingent Liabilities
The following future donations have been approved but are subject in each case to the applicants satisfying particular criteria specific to each recipient.
Year Ending
Donation Recipient 31 Mar 02 31 Mar 03 Subsequent Years
$ $ $
Sport Bay of Plenty 600,000 500,000 0
Halberg Trust 23,000 0 0
Wairaka Kokiri 19,841 0 0
Rangitaki Hakinakina 3,000 0 0
Greenpark School 7,000 0 0
Merivale School 25,000 0 0
Pahoia School 10,000 0 0
Papamoa Surf Life Saving 20,000 0 0
Whakatane District Council 500,000 500,000 0
Tauranga Civic Art Gallery Trust 300,000 300,000 400,000
Total contingent liabilities 1,507,841 1,300,000 400,000
11. Commitments
Capital commitments:
There are no capital commitments.
Lease commitments:
Lease commitments under non-cancellable operating leases:
Less than one year $7,000
12. Community Loans
Community loans:
The community loans have been advanced as follows:
Original Advance Balance Balance
Amount Date 31 Mar 00 31 Mar 01
Selwyn Ridge Primary School $15,000 Sept 99 $11,250 $3,750
Argos Gymnastics Club Inc $10,000 July 99 $7,500 $2,500
Total ($000) $25,000 $18,750 $6,250
The loans are advanced interest free over two years with eight quarterly repayments. All repayments have been made on time.
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(A full list of all distributions of income by way of donations for the year ended 31 March 2001 is available from the trust's office on request.)