Notice Type
General Section
Notice Title

The Community Trust of Wellington and its Subsidiary Company

Consolidated Statement of Financial Performance for the Year Ended 31 March 2003
Notes 2003 2002
$ $
Income:
Investment income (net) 9 (7,271,617) (157,080)
Capital gain on disposal of fixed assets - 27,848
Interest received 286,981 45,879
Donations returned 20,190 12,000
Rental income 106,567 161,998
Total income (6,857,879) 90,645
Less expenses:
Auditors' fees 9,000 8,450
Depreciation 9,189 7,580
Donation expenses 14,384 16,857
Interest - 10,249
Operating costs 344,890 401,943
Trustee expenses 18,640 27,554
Trustee fees 58,797 50,690
Total expenses 454,898 523,323
Net surplus/(deficit) before donations and taxation (7,312,777) (432,678)
Less:
Donations 1,447,290 1,939,695
Net surplus/(deficit) before taxation (8,760,067) (2,372,373)
Consolidated Statement of Movements in Trust Funds for the Year Ended 31 March 2003
Trust funds at 1 April 2002 42,774,445 45,404,069
Less:
Allocated to donation reserve from prior years' trust funds 176,818 257,250
Net deficit 8,760,067 2,372,373
Total trust funds at 31 March 2003 33,837,560 42,774,446
Donation reserve account:
Opening balance as at 1 April 2002 - -
Allocation from prior years' trust funds 176,818 257,250
Less:
Donations paid from prior years' trust funds 176,818 257,250
Closing balance as at 31 March 2003 - -
Consolidated Statement of Financial Position as at 31 March 2003
Current assets:
Bank accounts 27,149 15,755
Term investments 27,037,912 -
Accounts receivable - trading 12,694 22,687
Accounts receivable - investment 22,909 74,396
Prepayments 8,722 7,770
Taxation refund 633 628
The Embassy Theatre Trust 80,000 50,000
Goods and services tax 1,203 1,088
Total current assets 27,191,222 172,324
Less current assets:
Accounts payable - trading 64,061 81,067
Accounts payable - investment - 413,068
Total current liabilities 64,061 494,135
Net current assets 27,127,161 (321,811)
Non current assets:
Fixed assets 3 28,112 30,651
Investments 4 6,682,287 43,065,606
Total non current assets 6,710,399 43,096,257
Net assets 33,837,560 42,774,446
Represented by:
Trust funds 33,837,560 42,774,446
Total trust funds 33,837,560 42,774,446
For and on behalf of the board of trustees:
MOIRA LAWLER, Chairperson.
STEVE STIRRAT, Trustee.
Date: 5 June 2003.
Consolidated Statement of Cash Flows for the Year Ended 31 March 2003
Cash flows from operating activities-
Cash was provided from:
Interest on investments 238,608 37,385
Rental income 106,567 26,138
OPEX recovered 3,727 16,223
Donations returned 30,190 2,000
Miscellaneous income 80 -
Capital gain on sale of investment property - 27,848
379,172 109,594
Cash was applied to:
Payments to suppliers (357,504) (308,916)
Payments to fund managers (179,172) (166,596)
Payments to trustees (88,165) (74,526)
Donations to community (1,638,492) (2,301,945)
Tax paid (6) 1,818
G.S.T. paid (197) (2,785)
(2,263,536) (2,852,950)
Net inflow (outflow) from operating activities (1,884,364) (2,734,356)
Cash flows from investing activities-
Cash was provided from:
Sale of investment property - 1,300,000
Net realisation from investments 28,842,211 2,079,200
The Embassy Theatre Trust 50,000 -
28,892,211 3,379,200
Cash was applied to:
Purchase of fixed assets (6,650) (2,115)
Term investments (26,989,803) -
(26,996,453) (2,115)
Net inflow (outflow) from investing activities 1,895,758 3,377,085
Cash flows from financing activities-
Cash was provided to:
BNZ loan principal repayments - (664,519)
Interest expense - (11,796)
Net cash flows from financing activities - (676,315)
Net increase (decrease) in cash held 11,394 (42,586)
Opening cash brought forward 15,755 58,341
Closing cash carried forward 27,149 15,755
Shown in statement of financial position as:
Cash at bank 27,149 15,755
Closing cash carried forward 27,149 15,755
Consolidated Notes to the Financial Statements for the Year Ended 31 March 2003
1. Statement of Accounting Policies
Reporting Entity
The financial statements presented here are for the reporting entity The Community Trust of Wellington and its wholly owned company, Wellington Community Trust Charities Limited. The Community Trust of Wellington 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.
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 company.
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 statement of movements in trust funds 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:
Furniture and office equipment 13.2 - 48.0 %DV
Goods and Services Tax
The Community Trust of Wellington financial statements are prepared on a G.S.T. inclusive basis.
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 Community Trust of Wellington was incorporated as a charitable trust in accordance with the provisions of the Trustee Banks Restructuring Act 1988 and now superseded by the Community Trust Act 1999. 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 company, Wellington Community Trust Charities Limited, is restricted by its constitution to providing charitable benefits to the community, principally in the region of The Community Trust of Wellington.
The Community Trust of Wellington and its subsidiary company operate under the trading name of "The Community Trust of Wellington".
3. Fixed Assets
2003
Cost Accumulated
Depreciation Book
Value
$ $ $
Furniture and office equipment 61,281 33,169 28,112
61,281 33,169 28,112
2002
Cost Accumulated
Depreciation Book
Value
$ $ $
Furniture and office equipment 54,631 23,980 30,651
54,631 23,980 30,651
4. Investments
2003 2002
$ $
Secured Investments (Current):
The Embassy Theatre Trust 80,000 50,000
Total 80,000 50,000
On 30 June 1998, The Embassy Theatre Trust entered in a 5th 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 next repayment will be on 1 July 2003.
2003 2002
$ $
Term investments (current):
ANZ Banking Group 7,075,573 -
ASB Bank Limited 6,013,828 -
Bank of New Zealand 2,864,560 -
National Bank 11,083,951 -
Total 27,037,912 -
Investments (Non Current)
2003 2002
$ $
Investments held by Tower Asset Management comprise:
Money market deposits - 2,668,489
Fixed interest bonds - 2,664,851
Equities - 18,017,843
Other investments - 435,177
Total - 23,786,360
Investments held by BT Funds Management (NZ) Limited comprise:
Cash 79,977 -
Currency (5,489) 175,746
Fixed interest bonds 4,697,833 1,399,001
Equities 9,966 13,873,607
Short term investment - 1,840,791
Investment trusts - 10,101
Total 4,782,287 17,299,246
Secured investments (non current):
The Embassy Theatre Trust 400,000 480,000
Karori Wildlife Sanctuary Trust 1,500,000 1,500,000
Total 1,900,000 1,980,000
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.
It is the intention of the directors to hold the investments long term and accordingly they have been classified as non current assets.
5. Taxation
The Community Trust of Wellington is not exempt from income tax as a charitable trust. No taxation liability arises for the year ended 31 March 2003.
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.
6. Commitments
(a) Donations
As at 31 March 2003, The Community Trust of Wellington has the following commitments:
2003 2002
$ $
Less than one year 382,921 657,500
Between one and two years 177,500 657,500
Between two and five years - 150,000
560,421 1,456,000
(b) Lease Commitments
Commitments existed for non-cancellable operating leases as follows:
Less than one year 126,000 132,036
Between one and two years 126,000 132,036
Between two and five years 168,000 289,107
420,000 553,179
(c) Capital Commitments
The group has no capital commitments as at 31 March 2003 (2002 $Nil).
7. Contingent Liabilities
The trust has no contingent liabilities as at 31 March 2003 (2002 $Nil).
8. 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, BT Funds Management (NZ) Limited and Guardian Trust Funds Management. 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:
2003 2002
$ $
Bank accounts 28,649 15,755
Accounts receivable 35,603 97,083
Investments (current) 27,117,912 50,000
Investments (non current) 6,682,287 43,065,606
Currency Risk
The Community Trust of Wellington incurs currency risk as a result of investment transactions managed by Tower Asset Management, BT Funds Management (NZ) Limited and Guardian Trust Funds Management.
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, BT Funds Management (NZ) Limited and Guardian Trust Funds Management. The Community Trust of Wellington is also exposed to interest rate fluctuation on loans, as the debt is on a floating rate.
9. Investment Income (Net)
2003 2002
$ $
Portfolio income-realised and unrealised revenue (7,027,465) 198,400
Less fund management fees and expenses (244,152) (355,480)
Total investment income (net) (7,271,617) (157,080)
10. Reconciliation of Net Surplus (Deficit) with Net Cash Flow From Operating Activities and Movements in Trust Funds
2003 2002
$ $
Net surplus/(deficit) (8,760,067) (2,372,373)
Add/(deduct) financing items:
Interest expense - 11,796
Add/(deduct) non cash items:
Depreciation 9,189 7,580
Movements in portfolio 7,097,228 -
Portfolio investment income reinvested - 42,138
(1,653,650) (2,310,859)
Add/(deduct) movements in other working capital items:
(Increase)/decrease in accounts receivable 12,715 (45,776)
(Increase)/decrease in prepayments (951) (6,204)
Increase/(decrease) in accounts payable (17,429) 275,545
Increase/(decrease) in G.S.T. (115) (4,633)
Increase/(decrease) in taxation paid (6) 1,818
Increase/(decrease) in interest accrual (48,110) -
(53,896) 220,750
Add/(deduct) items classified as an investing activity:
Movement-Tower Asset Management - 8,962
Movement-BT Funds Management (NZ) Limited - (404,959)
- (395,997)
Add/(deduct) movements in trust funds:
Donations paid from prior year's trust fund (176,818) (257,250)
Net cash flow from operating activities (1,884,364) (2,743,356)
Audit Report
To the readers of the financial report of The Community Trust of Wellington and its subsidiary company.
We have audited the financial report. The financial report provides information about the past financial performance and financial position of The Community Trust of Wellington and its subsidiary company as at 31 March 2003. This information is stated in accordance with the accounting policies.
Board of Trustees' Responsibilities
The board of trustees are responsible for the preparation of a financial report which gives a true and fair view of the financial position of The Community Trust of Wellington and its subsidiary company as at 31 March 2003 and of the results of operations and its cash flows for the year ended on that date.
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 Community Trust of Wellington and its subsidiary company's circumstances, consistently applied and adequately disclosed.
We conducted our audit in accordance with New Zealand auditing standards. 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.
Our firm carries out other assignments for The Community Trust of Wellington and its subsidiary company in the area of special consultancy projects. Other than in our capacity as auditors, we have no other relationship with or interest in The Community Trust of Wellington and its subsidiary company.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion:
? proper records have been kept by The Community Trust of Wellington and its subsidiary company as far as appears from our examination of those records; and
? the financial report:
- complies with generally accepted accounting practice;
- fairly reflects the financial position of The Community Trust of Wellington and its subsidiary company as at 31 March 2003 and the results of its operations and cash flows for the year ended on that date.
Our audit was completed on 5 June 2003 and our unqualified opinion is expressed as at that date.
GRANT THORNTON, Wellington.
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A copy of the complete annual report, which includes a list of the successful recipients for the 2002/2003 financial year,
is available on request from the office of the trust at Level One, 28 Grey Street, Wellington, or by phoning (04) 499 7966.