The Community Trust-Trust Directory for the Year Ended 31 of March 2001
Trust Particulars:
The Community Trust was incorporated as a charitable trust in accordance with the provisions of the trustee provisions of the Community Trusts Act 1999.
The purpose of The Community Trust is to provide charitable, cultural and philanthropic and recreational benefits to the community.
Date of Trust Deed: 30 May 1988.
Settlor: Minister of Finance.
Trustees: R. H. Scott (Chair), J. M. McKendry, D. Close, P. Richardson, W. Dormer, P. Sigglekow, B. G. Hadlee, F. J. Smith, B. Lowe-Johnson, R. Todd, P. H. Malone, S. S. J. Wong
Trust Manager: W. Ward.
Accountants: Hadlee Kippenberger and Partners, P.O. Box 577, Christchurch (M. J. Hadlee).
Taxation Consultant: KPMG, P.O. Box 274, Christchurch (O. M. Wallis).
Auditors: PricewaterhouseCoopers, P.O. Box 13-244, Christchurch (J. A. Orr).
Fund Managers: Alliance Capital, AMP, Bankers Trust, Lazard Freres, Marvin and Palmer, Merrill Lynch (formerly Mercury Asset Management), Towers Perrin.
Custodial Trustee: J P Morgan (formerly The Chase Manhattan Bank).
Bankers: WestpacTrust.
Solicitors: Chapman Tripp Sheffield Young, P.O. Box 2510, Christchurch.
The Community Trust Trustees' Report for the Year Ended 31 March 2001
Objectives of the Trust and Charitable Company Subsidiary
To provide charitable, cultural, philanthropic and recreational benefits to the communities of Canterbury, Marlborough
and Nelson.
Policies and Structure of the Trust and Charitable Company Subsidiary
These organisations are structured to include community representatives from the three regions. Their policies are to manage and distribute their income and capital to the community they serve.
Activities of the Trust
During the period under review, the trust and its charitable subsidiary have provided financial assistance to a wide range of community groups in Canterbury, Marlborough and Nelson. In addition to responding to applications for assistance, these organisations have initiated several new projects of benefit to community groups.
Trustees' Remuneration
During the period, the trustees of the trust received fees of $139,975 (2000 $108,055).
Review of Results and Financial Position
The total distribution from the trust and charitable company was $19.0 million (2000 $15.9 million) (by way of donations) to community groups during the last 12 months.
Signed on behalf of the Board of Trustees:
Chairperson: R. H. SCOTT.
Trustee: W. DORMER.
Date: 28 May 2001.
The Community Trust Consolidated Statement of Financial Performance for the Year Ended 31 March 2001
Note 2001 2000
Revenue 2 7,171,127 40,606,532
Less investment fees 2 2,106,611 2,008,114
Less expenses 2 1,053,692 1,119,907
Net surplus before taxation 4,010,824 37,478,511
Less retentions
Transfer to capital base reserve 4 11,278,948 2,898,410
Available for distribution (7,268,124) 34,580,101
Donations to tax approved entities 3 12,076,139 12,189,188
Net surplus/(deficit) transferred to trust funds (19,344,263) 22,390,913
The Community Trust Consolidated Statement of Movements in Trust Funds for the Year Ended 31 March 2001
Note 2001 2000
Total trust funds at beginning of year 461,946,701 440,347,579
Less donations paid from capital 3 (6,962,273) (3,716,451)
454,984,428 436,631,128
Add net surplus/(deficit) for the year (19,344,263) 22,390,913
Donations transferred to reserves 4 - 26,250
Increase in capital base reserve 11,278,948 2,898,410
Total trust funds at end of year 446,919,113 461,946,701
Represented by:
Core real capital base reserve 4 358,000,000 358,000,000
Accumulated income reserve 4 67,860,460 96,746,996
Capital base reserve 4 21,058,653 7,199,705
446,919,113 461,946,701
The Community Trust Consolidated Statement of Financial Position as at 31 March 2001
Note 2001 2000
Trust funds 4 446,919,113 461,946,701
Represented by-
Current assets:
WestpacTrust operating accounts 108,237 18,748
Bank deposits 1,304,416 3,496,947
Accounts receivable 89,411 6,255
Taxation refund due 13 301 121
1,502,365 3,522,071
Investments:
Property investments 7 5,771,863 4,180,788
Managed funds 439,684,440 456,974,854
Community loans 6,833 54,582
445,463,136 461,210,224
Fixed assets 8 108,024 129,218
Total assets 447,073,525 464,861,513
Current liabilities:
Accounts payable and goods and services tax 154,412 106,812
Committed donations and special projects - 2,808,000
Total liabilities 154,412 2,914,812
Net assets 446,919,113 461,946,701
The Community Trust Consolidated Statement of Cash Flows for the Year Ended 31 March 2001
Note 2001 2000
Cash was provided by (used for)-
Operations: 5
Income from investments 23,529,369 34,301,793
Payments to suppliers, employees and trustees (2,906,234) (2,962,848)
Payments of taxation (180) (16)
Payments of Goods and Services Tax (4,159) (1,271)
Donations to the community (21,846,412) (15,904,164)
Payments to beneficiaries - (687,903)
(1,227,616) 14,745,591
Investing:
Managed funds investments 866,544 (11,872,343)
Movement in term deposits 2,192,531 (2,833,861)
Community loans 47,749 92,338
Sale (purchase) of fixed assets (1,789,719) (133,953)
1,317,105 (14,747,819)
Increase in cash 89,489 (2,228)
Cash at beginning of year 18,748 20,976
Cash at end of year 108,237 18,748
Represented by:

WestpacTrust operating accounts 108,237 18,748
The Community Trust Notes to the Financial Statements for the Year Ended 31 March 2001
1. Statement of Accounting Policies
General Accounting Policies
The following general accounting policies have been adopted in the preparation of the financial statements.
(i) The Community Trust was incorporated as a charitable trust in accordance with the provisions of Community Trusts Act 1999. These financial statements have been prepared in accordance with applicable financial reporting standards.
(ii) Community Trust Charities Limited is a charitable company incorporated under the Companies Act 1993 and is a reporting entity for the purposes of the Financial Reporting Act 1993. The financial reports of Community Trust Charities Limited have been prepared in accordance with the Financial Reporting Act 1993.
(iii) Canterbury Trust House Limited was incorporated on 18 December 1995 under the Companies Act 1993. Canterbury Trust House Limited is a reporting entity for the purposes of the Financial Reporting Act 1993. The financial statements of Canterbury Trust House Limited have been prepared in accordance with the Financial Reporting Act 1993.
(iv) The measurement base adopted is that of historical cost, except for the revaluation of investments. Reliance is placed on the fact that the trust is a going concern.
(v) The matching of revenue earned and expenses incurred using accrual accounting concepts.
Specific Accounting Policies
Depreciation
Depreciation has been charged in the financial statements using rates allowed by the Inland Revenue Department which will write off the cost of assets less their estimated residual value over their estimated economic lives.
The depreciation rates used are:
Buildings 3% c.p.
Office equipment 6-60% c.p.
Furniture and fittings 14-40% d.v.
Computer 28-48% d.v
Fixed Assets and Investment Property
Fixed assets and investment property are recorded at cost less accumulated depreciation.
Investments
Investments are shown at market value. Net income including realised and unrealised gains or losses from holding or trading these investments is recorded in the statement of financial performance.
Donations
Donations are accounted for on a cash basis.
Dividend Income
Dividend income is included in the statement of financial performance when it is received.
Income Tax
Income tax expense is recognised on the surplus available for distribution before taxation, adjusting for differences between taxable and accounting income.
Goods and Services Tax
The subsidiary of Community Trust Charities Limited, Canterbury Trust House Limited, is registered for G.S.T. Accordingly, its financial performance and financial position have been consolidated within the accounts on a G.S.T. exclusive basis. Subject to the above, the trust is not registered for G.S.T. purposes and therefore, the financial statements have been prepared on a G.S.T. inclusive basis.
Financial Instruments
Foreign currency transactions are translated to New Zealand currency at the exchange rate ruling at the dates of the transactions. Amounts receivable and payable in foreign currencies at balance date are translated at the exchange rate at that date. Exchange differences arising from the translation of amounts payable and receivable in foreign currencies are recognised in the statement of financial performance.
Off-balance sheet financial instruments that are designated as hedges are recognised on the same basis as the underlying hedged item. Off-balance sheet transactions that do not constitute specific hedges are stated at market value and any resultant gain or loss is recognised in the statement of financial performance.
Cash
For the purpose of the statement of cash flows, cash comprises WestpacTrust balances only. Cash excludes bank deposits not used as part of the trust's day-to-day cash management.
Basis of Consolidation
The Community Trust, Community Trust Charities Limited and its subsidiaries, Canterbury Trust House Limited, Amateur Game or Sport Promoter Limited and District Improvement Organisation Limited, have been consolidated using the purchase method of consolidation.
Changes in Accounting Policies
There have been no changes in accounting policies except that donations have been reported on a cash payments basis compared with an accrual basis the previous year. All policies have been applied on bases consistent with those used last year.
2. Revenue and Expenses
2001 2000
Revenue:
Rents received 413,263 314,909
Interest received 113,511 45,753
Investment income 6,621,385 40,245,870
Commissions received 22,968 -
7,171,127 40,606,532
Investment fees:
Fund managers fees 1,540,191 1,472,610
Custodial fees 373,703 351,733
Advisory fees 192,717 83,771
2,106,611 2,008,114
Expenses:
Advertising, public relations, distribution and other costs 272,424 324,437
Computer and system review costs 18,719 15,687
Depreciation, loss on sale and depreciation recovered 219,838 179,446
Professional fees 150,077 172,275
Property costs 41,466 23,305
Salaries and staff recruiting fees 211,193 296,702
Trustees fees 139,975 108,055
1,053,692 1,119,907
3. Donations
The names of organisations to whom distributions have been made by the trust under section 13 of Community Trusts Act 1999 during the financial year and the amounts distributed are shown in the annual report.
2001 2000

Donations paid from income 12,076,139 12,189,188
Donations paid from capital 6,962,273 3,716,451
(Includes prior year adjustments for cancellation, refunds, etc.) 19,038,412 15,905,639
Future commitments 614,975 39,375
Donations approved from income 14,375,358 12,189,188
Donations approved from capital 9,416,993 3,716,451
Donations approved for year 23,792,351 15,905,639
Funds carried forward as accumulated income are available for the payment of donations in future years.
Budgeted donations unspent in the current year are to be distributed in the following year.
Future donation commitments represent donations approved in the current or previous years which are to be distributed from either capital or future income sources.
The directors recognise that there is a need to ensure a fairness and equity between the regions as far as payments of donations are concerned in relation to budgetary allocations.
4. Trust Funds
2001 2000
Core real capital base reserve:
Balance brought forward 358,000,000 358,000,000
Donations paid from capital (6,962,273) (3,716,451)
Transfer from accumulated income reserve 6,962,273 3,716,451
358,000,000 358,000,000
Accumulated income reserve:
Balance brought forward 96,746,996 57,672,167
Net surplus/(deficit) for year (19,344,262) 22,390,913
Transfer to core real capital base reserve (6,962,273) (3,716,451)
Donations transferred to reserves - 26,250
Adjustment to capital base reserve (2,580,000) 20,374,117
67,860,460 96,746,996
Capital base reserve:
Balance brought forward 7,199,705 24,675,412
Retention as per statement of financial performance 11,278,948 2,898,410
Adjustment to capital base reserve 2,580,000 (20,374,117)
21,058,653 7,199,705
Total trust funds 446,919,113 461,946,701
Donations transferred to reserves represents unspent donations for specific Making It Happen projects for the Canterbury region transferred to accumulated income reserves.
The capital base reserve is an allowance for the erosion of the value of the core real capital base reserve, due to inflation.
For 2001, this was calculated based on inflation at 3.1% on a core real capital base reserve of $367,779,705 being the original core real capital base reserve of $358,000,000 plus the adjusted capital base reserve of $9,779,705.
5. Reconciliation of Net Surplus to Net Operating Cashflow
2001 2000
Net surplus from statement of financial performance (19,344,263) 22,390,913
Adjustments for non cash items in net surplus:
Depreciation 219,838 169,785
Managed funds income unrealised 16,423,870 (6,299,179)
(2,700,555) 16,261,519
Adjustments for changes in working capital:
Decrease/(increase) in accounts receivable (83,156) (6,255)
Increase/(decrease) in accounts payable 47,600 (5,188)
Increase/(decrease) in donations payable (2,808,000) (712,678)
Increase/(decrease) in taxation payable (180) (16)
(5,544,291) 15,537,382

Add capital base reserve transfer 11,278,948 2,898,410
Deduct donations paid from capital (6,962,273) (3,690,201)
Cash flow from operations (1,227,616) 14,745,591
6. Capital Commitments
There are no capital commitments at balance date (2000 Nil).
7. Investment Properties
The investment property of the trust is valued at cost less accumulated depreciation. Payments made on the investment property as at 31 March 2001 consist of the purchase of the land at 262 Oxford Terrace and adjoining property, architectural and legal fees, stamp duty, building consent permits and building costs to date. A further investment property was purchased during the year, situated at 95 Oxford Terrace.
2001 2000
Land 814,583 814,583
Building construction and associated property costs 5,379,515 3,633,524
Less accumulated depreciation (422,235) (267,319)
5,771,863 4,180,788
8. Fixed Assets
Cost Accumulated
Depreciation 2001
Book
Value 2000
Book
Value
Computer 135,499 98,990 36,509 53,531
Motor vehicles - - - 11,465
Furniture and fittings and office equipment 107,014 35,499 71,515 64,222
Fixed assets 242,513 134,489 108,024 129,218
9. Contingent Liabilities
There are no contingent liabilities at balance date (2000 Nil) apart from donation commitments as per note 3.
10. Segmental Reporting
The trust operates as a charitable trust in the Canterbury, Marlborough and Nelson areas. As all operations occur within
New Zealand, segmental reporting is not required.
11. Related Party
In the normal course of business, the trust has no related parties with any entity, other than those advised in note 1.
12. Financial Instruments
Investments are stated at market value at balance date. Accounts receivable, accounts payable and community loans 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-eight percent (98%) 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.
Currency Risk
The trust incurs currency risk as a result of investment transactions entered into by fund managers.
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 and securities held by fund managers.
Some loans and advances with related parties do not carry interest and therefore do not hold any interest rate risk.
13. Taxation
2001 2000
Net income before taxation as per statement of financial performance 4,010,824 37,478,511
Add non deductible expenditure: 343,078 312,763
Imputation credits received 432,461 764,565
Witholding taxes on investments 193,914 185,325
Canterbury Trust House Limited loss 221,791 192,650
Less revaluation of equities 18,225,833 (10,357,764)
Allocated as beneficiaries income (8,679,076) (12,018,857)
Donations to tax approved entities (12,076,069) (12,189,188)
Assessable income for tax purposes 2,672,756 4,368,005
Less loss carry forward entitlement (2,101,642) (3,591,193)
Taxable income 571,114 776,812
Taxation @ 33% 188,468 256,348
Less imputation credits received (432,461) (764,565)
Tax credits on New Zealand and overseas dividends (188,468) (185,325)
Resident withholding tax (301) (121)
Add excess imputation credits 432,461 693,542
Taxation payable (refund) as per the statement of financial position (301) (121)
Excess imputation credits converted to loss carry forward ($432,461) 1,310,489 2,101,642
Auditors' Report to the Trustees of The Community Trust
We have audited the consolidated financial statements. The consolidated financial statements provide information about the past financial performance and cash flows of the trust and subsidiaries for the year ended 31 March 2001 and their financial position as at that date. This information is stated in accordance with the accounting policies set out therein.
Trustees' Responsibilities
The trustees are responsible for the preparation and presentation of the consolidated financial statements which give a true and fair view of the financial position of the trust and subsidiaries as at 31 March 2001 and their financial performance and cash flows for the year ended on that date.
Auditors' Responsibilities
We are responsible for expressing an independent opinion on the consolidated financial statements presented by the trustees and reporting 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:
(a) the significant estimates and judgements made by the trustees in the preparation of the consolidated financial statements; and
(b) whether the accounting policies are appropriate to the circumstances of the trust and subsidiaries, 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 to provide us with sufficient evidence to give reasonable assurance that the consolidated 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 consolidated financial statements.
We have no relationship with or interests in the trust and subsidiaries other than in our capacity as auditors.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion:
(a) proper accounting records have been kept by the trust and subsidiaries as far as appears from our examination of those records; and
(b) the consolidated financial statements:
(i) comply with generally accepted accounting practice in New Zealand; and
(ii) give a true and fair view of the financial position of the trust and subsidiaries as at 31 March 2001 and their financial performance 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.
PRICEWATERHOUSECOOPERS, Chartered Accountants, Christchurch.
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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.)