Statement of Financial Performance for the Year Ended 31 March 2003
Notes 2003 2002
$ $
Revenue:
Dividend from TSB Bank Ltd 2 8,100,000 3,585,000
Interest received 137,569 93,826
Other income 19,600 550
Operating revenue 8,257,169 3,679,376
Expenses:
Audit fees 1,727 1,716
Trustees' honoraria 58,311 53,460
Trustees' expenses 11,120 9,630
Other expenses 81,670 71,404
Depreciation 2,083 1,640
Operating expenses 154,911 137,850
Funds available for distribution 8,102,258 3,541,526
Donations during the year 4,198,250 3,341,400
Net surplus before taxation 3,904,008 200,126
Taxation expense 4 - -
Net surplus after taxation 3,904,008 200,126
Statement of Financial Position as at 31 March 2003
Notes 2003 2002
$ $
Accumulated funds:
Capital 100 100
Initial gift 1 10,000,000 10,000,000
10,000,100 10,000,100
Retained funds 4,852,911 948,903
Total funds 14,853,011 10,949,003
Represented by-
Current assets:
Petty cash 151 134
TSB Bank Limited 77,514 10,849
Accrued interest 26,445 14,949
Dividend receivable 3,515,000 -
3,619,110 25,932
Less current liabilities:
Accrued charges 21,989 17,860
Donations payable 898,000 213,400
Working capital 2,699,121 (205,328)
Property, plant and equipment 7 3,890 4,331
Investments:
Shares in TSB Bank Limited 1 10,000,000 10,000,000
TSB Bank Ltd investments 2,050,000 1,050,000
Suspensory loan 13 100,000 100,000
14,853,011 10,949,003
For and on behalf of the trustees:
P. BUTTERWORTH, Chairperson.
Statement of Cashflows for the Year Ended 31 March 2003
Notes 2003 2002
$ $
Cashflow from operating activities-
Cash was provided from:
Other income 19,600 550
Dividends from TSB Bank 4,585,000 3,585,000
Interest received 126,073 86,479
4,730,673 3,672,029
Cash was applied to:
Donations 3,513,650 3,128,000
Payments to suppliers and trustees 148,699 136,575
3,662,349 3,264,575
Net cashflows from operating activities 9 1,068,324 407,454
Cashflows from investing activities-
Cash was provided from:
Principal from investments - 3,435,000
Cash was applied to:
Investments 1,000,000 3,885,000
Purchase of office equipment 1,642 2,098
Net cashflows from investing activities 1,001,642 (452,098)
Net increase/(decrease) in cash held 66,682 (44,644)
Plus opening cash 1 April 2002 10,983 55,627
Closing balance 31 March 2003 10 77,665 10,983
Statement of Movements in Equity for the Year Ended 31 March 2003
2003 2002
$ $
Equity at 1 April 2002 10,949,003 10,748,877
Retained surplus for the year 3,904,008 200,126
Total recognised revenues and expenses 3,904,008 200,126
Equity at 31 March 2003 14,853,011 10,949,003
Statement of Notes to the Accounts
1. Statement of Accounting Policies
Reporting Entity
TSB Community Trust is a charitable trust formed by a trust deed dated 30 May 1988. A new trust deed was adopted by the trust on 8 February 2001. The financial statements have been prepared in accordance with this deed and the Community Trusts Act 1999.
Measurement Base
The measurement base is that of historical cost.
Specific Accounting Policies
The following specific accounting policies which materially affect the measurement of financial performance and financial position have been applied.
Specific Accounting Policies
Receivables are stated at their estimated realisable value.
Investments
The TSB Bank Limited shares are stated at the value when gifted: 20,000,000 fully paid shares at 50 cents each, representing $10,000,000. The net asset backing at 31 March 2003 was $6.46 per share.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost, office equipment will be depreciated on a straight line basis over four years.
Income Tax
The income tax expense charged to the statement of income includes both the current year's provision and the income tax effects of timing differences calculated using the liability method.
Tax effect accounting is applied on a comprehensive basis to all timing differences. A debit balance in the deferred tax account, arising from timing differences or income tax benefits from income tax losses, is only recognised if there is virtual certainty of realisation.
Financial Instruments
The financial instruments are recorded at their carrying value which is also the fair value of each of the classes of financial instruments consisting of cash, accrued interest, dividends receivable, investments other than shares in TSB Bank Ltd, accrued charges and donations payable. As stated above, the shares in TSB Bank Ltd are carried at their value when gifted.
Cashflows
For the purpose of the statement of cashflow, cash includes cash on hand and deposits held on call with banks.
Goods and Services Tax
The financial statements have been prepared on a G.S.T. inclusive basis.
Changes in Accounting Policies
Dividend income is now recognised when the bank provides for an obligation to pay the dividend. This change in accounting policy has resulted in additional dividend income of $3,515,000 being included in the current year, leading to an increase in trust equity and dividends receivable of the same amount. All other policies have been applied on bases consistent with those used in the previous years.
2. Dividend
The dividend includes $3,315,000 relating to the final instalment received from the bank for year ended 31 March 2002, $1,270,000 interim dividend for the year ended 31 March 2003 and, for the first time, the $3,515,000 final dividend receivable from the bank for the year ended 31 March 2003.
3. Financial Instruments
Financial instruments that potentially have credit risk are cash, accrued interest and accrued charges.
The maximum credit risk exposure at balance date is the carrying value of bank, accrued interest and accrued charges. This is also the fair value.
4. Income Tax
The company has income tax losses of $377,524 (2002 - $309,078) available to be carried forward and set off against future assessable income.
5. Commitments and Contingent Liabilities
At balance date, $560,000 has been approved for donations in the 2003/2004 financial year (2002 - $523,800).
6. Publishing Requirements
A comprehensive list itemising all recipients was published in Taranaki's The Daily News on the following dates:
1st round 18 September 2002
2nd round 12 March 2003
3rd round 9 May 2003
A copy of the list of grants is available to anyone upon request (P.O. Box 667, New Plymouth).
7. Property, Plant and Equipment
2003 2002
$ $
Office equipment at cost 21,288 19,646
Accumulated depreciation 17,398 15,315
3,890 4,331
8. Segment Information
The company operates predominately in one industry - investment. All operations are carried out within New Zealand.
9. Reconciliation of Net Surplus With Net Cashflows From Operating Activities
2003 2002
$ $
Net surplus- 3,904,008 200,126
Add/(less):
Depreciation 2,083 1,640
Movements in working capital items:
(Increase)/decrease in receivables (3,526,496) (7,347)
Increase/(decrease) in payables 688,729 213,035
Net cashflows from operating activities 1,068,324 407,454
10. Cash Balances in the Statement of Financial Position
2003 2002
$ $
Petty cash 151 134
TSB Bank Ltd 77,514 10,849
77,665 10,983
11. Related Party Transactions
The trust paid donations throughout the year to community organisations of which the trustees may be members. These donations were made on normal terms and conditions. There were no amounts outstanding at 31 March relating to these transactions.
12. Transactions at Nil or Nominal Value
Professional services have been provided to the trust during the year at no cost.
13. Suspensory Loan
An interest free suspensory loan of $100,000 was made to the Waitara Railway Preservation Society in 2001. The funding is to be used for infrastructure, heritage, tourism and job creation. The loan is secured over the rail with the provision that the mortgage will be suspended after four years if, in the trust's view, the Waitara Railway Preservation Society has fulfilled certain obligations under the loan.
14. Consolidated Financial Statements
The trust has not prepared consolidated financial statements which would include the results and financial position of TSB Bank Ltd. A copy of the financial statements of TSB Bank Ltd are available on request from the office of the trust.
Auditors' Report
To the Readers of the Financial Statements of the TSB Community Trust
We have audited the financial statements. The financial statements provide information about the past financial performance of the trust and its financial position as at 31 March 2003. This information is stated in accordance with the accounting policies set out.
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 2003 and the results of 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 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:
? the significant estimates and judgements made by the trustees in the preparation of the financial statements; and
? whether the accounting policies are appropriate to the trust's circumstances, 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 in order to provide us with sufficient evidence to give 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.
Other than in our capacity as auditor, we have no relationship with, or interests in, the trust.
Unqualified Opinion
We have obtained all the information and explanations we have required.
As stated in note 14, the trust has not prepared consolidated financial statements which would include the results and financial position of TSB Bank Ltd. This is a departure from Financial Reporting Standard No. 37 which requires consolidated financial statements to be prepared including all subsidiaries. Had the trust prepared the consolidated financial statements, an estimate of the effect would have been to show a group net surplus after taxation for the year of $17,213,400 and total group accumulated funds of $134,096,000 as at 31 March 2003.
In our opinion:
? proper accounting records have been kept by the trust as far as appears from our examination of those records; and
? except for the effect of the departure from applicable Financial Reporting Standard No. 37 as outlined above, the financial statements:
- comply with generally accepted accounting practice in New Zealand;
- give a true and fair view of the financial position of the trust 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 21 August 2003 and our unqualified opinion is expressed as at that date.
LANDRIGAN WAITE, Chartered Accountants, New Plymouth.