Statement of Financial Performance for the Year Ended 31 March 2004
Notes 2004 2003
$ $
Dividends 5,200,000 8,100,000
Interest 185,583 137,569
Other income 22,763 19,600
Operating revenue 5,408,346 8,257,169
Audit fees 17,513 1,727
Trustees' honoraria 73,720 58,311
Trustees' expenses 9,348 11,120
Other expenses 164,523 81,670
Depreciation 10,257 2,083
Operating expenses 275,361 154,911
Funds available for distribution 5,132,985 8,102,258
Donations during the year 3,968,500 4,198,250
Net surplus before taxation 1,164,485 3,904,008
Net surplus after taxation 1,164,485 3,904,008


Statement of Movements in Equity for the Year Ended 31 March 2004
2004 2003
$ $
Equity at beginning of the year 14,853,011 10,949,003
Net surplus for the year 1,164,485 3,904,008
16,017,496 14,853,011
Equity at end of the year 16,017,496 14,853,011
Statement of Financial Position as at 31 March 2004
2004 2003
$ $
Current assets:
Petty cash 113 151
Bank 112,546 77,514
Accrued interest 39,744 26,445
Dividend receivable 3,540,000 3,515,000
3,692,403 3,619,110
Non current assets:
Property, plant and equipment 2 37,706 3,890
Investments 3 12,750,000 12,150,000
12,787,706 12,153,890
Total assets 16,480,109 15,773,000

Current liabilities:
Accrued charges 48,813 21,989
Donations payable 413,800 898,000
462,613 919,989
Trust equity:
Trust capital 100 100
Initial gift 10,000,000 10,000,000
Retained funds 6,017,396 4,852,911
16,017,496 14,853,011
Total funds employed 16,480,109 15,773,000
The accompanying notes from part of these financial statements.
For and on behalf of the trustees:
C. B. TUUTA, Trustee.
Date: 27 July 2004.
Statement of Cash Flows for the Year Ended 31 March 2004
Notes 2004 2003
$ $
Cash flows from operating activities-
Cash was provided from:
Interest income received 172,283 126,073
Dividend income received 5,175,000 4,585,000
Other income received 22,763 19,600
Taxation refund - -
5,370,046 4,730,673
Cash was applied to:
Donations paid 4,452,700 3,513,650
Operating expenditure 237,280 148,699
Taxation paid - -
4,689,980 3,662,349

Net cash flow from operating activities 680,066 1,068,324
Cash flows from investing activities-
Cash was provided from:
Net decrease in investments - -
Property, plant and equipment sold - -
- -
Cash was applied to:
Net increase in investment securities 600,000 1,000,000
Net increase in loans and advances - -
Property, plant and equipment purchased 44,072 1,642
644,072 1,001,642

Net cash flow from investing activities (644,072) (1,001,642)
Cash flows from financing activities-
Cash was provided from:
Net increase in deposits - -
Cash was applied to:
Dividends paid - -
Net cash flow from financing activities - -

Net increase/(decrease) in cash and cash equivalents 34,994 66,682
Add cash and cash equivalents at beginning of the year 77,665 10,983
Cash and cash equivalents at year end 112,659 77,665
Reconciliation of Net Surplus After Tax to Net Cash Flows from Operating Activities for the Year Ended 31 March 2004
Notes 2004 2003
$ $
Net surplus after taxation 1,164,485 389,008
Add non-cash items:
Less depreciation 10,257 2,083
Less doubtful debts provision - -
Add/(deduct) movements in working capital:
Increase (decrease) in sundry creditors (456,377) 688,729
Increase (decrease) in interest payable - -
Increase (decrease) in provision for tax - -
(Increase) decrease in deferred tax - -
(Increase) decrease in sundry debtors (38,299) (11,496)
(Increase) decrease in interest receivable - -
Net cash flow from operating activities 680,066 1,068,324
Statement of Notes to the Accounts for the Year Ended 31 March 2004
1. Statement of Accounting Policies
Reporting Entity
TSB Community Trust is a charitable trust formed by a trust deed dated 30 May 1988, and has adopted a revised deed on
8 February 2001.
These 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.
Accounts receivables are stated at their estimated net realisable value.
The TSB Bank Limited shares are stated at the value when gifted of 20,000,000 fully paid shares at 50 cents each, representing $10,000,000. The net asset backing at 31 March 2004 was $7.36 per share.
Donations are recognised in the financial year in which they are authorised and approved by the trustees.
Property, plant and equipment are recorded at cost and will be depreciated on a straight line basis over four years.
The income tax expense charged to the statement of income includes both the current year's provision and the income tax effects of timing differences calculated using the liability method.
Tax effect accounting is applied on a comprehensive basis to all timing differences. A debit balance in the deferred tax account, arising from timing differences or income tax benefits from income tax losses, is only recognised if there is virtual certainty of realisation.
The financial instruments are recorded at their carrying value which is also the fair value of each of the classes of financial instruments consisting of cash, accrued interest, dividends receivable, investments other than shares in TSB Bank Ltd, accrued charges and donations payable. As stated above, the shares in TSB Bank Ltd are carried at their value when gifted.
For the purpose of the statement of cashflow, cash includes cash on hand and deposits held on call with banks.
The financial statements have been prepared on a G.S.T. inclusive basis.
There have been no changes in accounting policies. All policies have been applied on bases consistent with those used in the previous years.
2. Property, Plant and Equipment
Cost$ AccumulatedDepreciation$ 2004 BookValue$
Buildings 2,070 518 1,552
Office equipment 63,291 27,137 36,154
65,361 27,655 37,706

Cost$ AccumulatedDepreciation$ 2003 BookValue$
Office equipment 21,288 17,398 3,890
21,288 17,398 3,890
3. Investments (at cost)
2004 2003
$ $
TSB Bank Limited short term investments 2,650,000 2,050,000
Shares in TSB Bank Limited 10,000,000 10,000,000
Suspensory loan 100,000 100,000
12,750,000 12,750,000
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.
4. Other Income
2004 2003
$ $
Other income 2,807 19,600
Returned donations 19,954 -
22,761 19,600
5. Commitments and Contingent Liabilities
At balance date, $NIL has been approved for donations in the 2004/2005 financial year (2003 - $560,000).
6. Financial Instruments
Financial instruments that potentially have credit risk are cash, accrued interest, and accrued charges and investments. The maximum credit risk exposure at balance date is the carrying value of the bank, accrued interest, and accrued charges and investments. This is also the fair value.
7. Income Tax
The trust has income tax losses of $468,303 (2003 - $377,524) available to be carried forward and set off againt future assessable income.
8. Publishing Requirements
A comprehensive list itemising all recipients was published in Taranaki's The Daily News on the following dates:
1st round 11 September 2003
2nd round 13 December 2003
3rd round 10 May 2004
A copy of the list of grants is available to anyone upon request (P.O. Box 667, New Plymouth).
9. Segment Information
The trust operates predominately in one industry - investment. All operations are carried out within New Zealand.
10. Related Party Transactions
The parent entity holds 100% of the shares in TSB Bank Limited. In the normal course of business, some trustees may have bank accounts with TSB Bank Limited. The parent entity has deposits with TSB Bank Limited that have earned interest throughout the year amounting to $185,583. At 31 March 2004, the parent entity had $2,650,000 deposited with TSB Bank Limited (2003 - $2,050,000). 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.
Auditors' Report
To the Trustees of the TSB Community Trust
We have audited the financial statements. The financial statements provide information about the past financial performance of TSB Community Trust and Group and its financial position as at 31 March 2004. This information is stated in accordance with the accounting policies set out.
Trustees' Responsibilities
The trustees are responsible for the preparation of financial statements, in accordance with New Zealand law and generally accepted accounting practice, which fairly reflects the financial position of TSB Community Trust and Group as at 31 March 2004 and the results of its operations and cash flows for the year ended 31 March 2004.
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 TSB Community Trust and Group'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 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 TSB Community Trust and Group.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion, the financial statements fairly reflects the financial position of TSB Community Trust and Group as at 31 March 2004 and the results of its operations and cash flows for the year ended on that date.
Our audit was completed on 27 July 2004 and our unqualified opinion is expressed as at that date.
DELOITTE, Chartered Accountants, Hamilton, New Zealand.
Note
The above financial statements are for the parent entity TSB Community Trust and do not include the TSB Community Trust group information. A full set of consolidated financial statements, which includes the parent entity and group information, is available for inspection at the trust offices at 64-66 Vivian Street, New Plymouth.
The audit report covers both the parent and group financial statements.