Statement of Financial Performance for the Year Ended 31 March 2006
Notes 2006 2005
$ $
Revenue:
Investment income (net) 6 8,064,709 2,567,026
Interest received 205,046 215,931
Donations returned 25,000 –
Rental income 104,254 105,460
Other income 23,034 25,264
GST prior period adjustment – 17,236
Total revenue 8,422,043 2,930,917
Less expenses:
Auditors’ fees 7,965 7,500
Depreciation 3 8,107 6,143
Donation expenses 6,659 6,420
Interest expenses – 659
Operating costs 370,118 369,405
Trustee expenses 7,225 7,668
Trustee fees 52,223 50,770
Total expenses 452,297 448,565
Net surplus before donations 7,969,746 2,482,352
Less:
Donations 1,001,780 655,470
Net surplus 6,967,966 1,826,882
Statement of Movements in Equity for the Year Ended 31 March 2006
Surplus and revaluations
Net surplus for the year 6,967,966 1,826,882
Total surplus/(deficit) and revaluations for the year 6,967,966 1,826,882
Other movements
Allocated to donation reserve fund – (171,085)
Total other movements – (171,085)
Total movements in equity for the year 6,967,966 1,655,797

Equity at 1 April 2005 37,961,260 36,305,463
Equity at 31 March 2006 44,929,226 37,961,260
Donation reserve account
Opening balance as at 1 April 2005 – –
Allocation from prior years’ trust funds – 171,085
Less:
Donations paid from prior years’ funds – 171,085
Closing balance as at 31 March 2006 – –
Statement of Financial Position as at 31 March 2006
Current assets:
Bank accounts 100,299 115,942
Term investments 4 500,966 1,595,223
Accounts receivable – trade 9,845 83,513
Accounts receivable – investment – 7,034
Prepayments 5,309 8,082
Karori Wildlife Sanctuary Trust 4 100,000 175,000
GST refund due 6,009 35,857
Taxation refund 157 157
Total current assets 722,585 2,020,808
Current liabilities:
Accounts payable – trading 41,927 104,332
Accounts payable – investment 41,198 31,109
Marac Finance Limited 2,223 1,935
Total current liabilities 85,348 137,376
Working capital 637,237 1,883,432

Non current assets:
Property, plant and equipment 3 25,075 26,574
Investments 5 44,274,515 36,061,078
Total non-current assets 44,299,590 36,087,652
Non current liabilities
Marac Finance Limited 7,601 9,824
Total non-current liabilities 7,601 9,824
Net assets 44,929,226 37,961,260
Represented by:
Equity
Trust capital brought forward 37,961,260 36,305,463
Surplus for the year 6,967,966 1,826,882
Other movements – (171,085)
Total equity 44,929,226 37,961,260
For and on behalf of the board of trustees:
MATHEW BLACKBURN, Chairperson.
LINDA RIEPER, Trustee.
Date: 1 June 2006.
Statement of Cash Flows for the Year Ended 31 March 2006
Cash flows from operating activities—
Cash was provided from:
Interest on investments 376,125 145,840
Rental income 104,254 105,460
Donations returned 25,000 –
Miscellaneous income 29,284 12,764
Realised gains on sale of investments 3,374,040 2,745,995
Dividends received 1,313,202 192,272
Income taxes refunded – 15,507
GST received 29,848 –
5,251,753 3,217,838
Cash was applied to:
Payments to suppliers 422,391 407,524
Payments to trustees 62,258 56,522
Payments to fund managers 251,080 205,492
Donations to community 1,008,468 779,475
GST paid – 17,243
1,744,197 1,466,256
Net cash inflow from operating activities 3,507,556 1,751,582
Cash flows from investing activities
Cash was provided from:
Realisation from investments 1,595,223 10,069,832
The Embassy Theatre Trust – 400,000
Karori Wildlife Sanctuary Trust 66,667 –
1,661,890 10,469,832
Cash was applied to:
Purchase of property, plant and equipment 6,608 6,558
Investment funds 5,178,481 12,221,975
5,185,089 12,228,533
Net cash inflow/(outflow) from investing activities (3,523,199) (1,758,701)

Net increase/(decrease) in cash held (15,643) (7,119)
Add opening cash brought forward 115,942 123,061
Ending cash carried forward 100,299 115,942
Cash balances in balance sheet:
Cash at bank 100,299 115,942
100,299 115,942
Reconciliation With Reported Operating Surplus
2006 2005
$ $
Net opening surplus 6,967,966 1,826,882
Add non-cash items:
Depreciation 8,107 6,143
Loss on sale of fixed assets – 215
Small balance assets written off – 1,613
Unrealised gains on investments (3,527,588) 134,818
(3,519,481) 142,789
3,448,485 1,969,671
Add/(less) movements in other working capital items:
(Increase)/decrease in accounts receivable 73,668 (73,143)
(Increase)/decrease in prepayments 2,773 1,010
Increase/(decrease) in accounts payable (52,316) 46,271
Increase/(decrease) in taxation liability – 15,507
Increase/(decrease) in GST liability 29,847 (34,479)
Increase/(decrease) in interest accrual 7,034 (7,034)
Increase/(decrease) in finance leases (1,935) 4,864
59,071 (47,004)
Add/(deduct) movements in trust funds:
Donations paid from prior year’s trust fund – (171,085)
Net cash inflow from operating activities 3,507,556 1,751,582
Notes to the Financial Statements for the Year Ended 31 March 2006
1. Statement of Accounting Policies
Reporting Entity
The financial statements presented here are for the entity The Community Trust of Wellington (“the trust”). The trust is an incorporated charitable trust under the Charitable Trusts Act 1957. The trust prepares its financial statements in accordance with the Act and the financial reporting standards issued by the Institute of Chartered Accountants of New Zealand.
Measurement Base
The measurement base adopted is historical cost with the exception of certain items for which specified accounting policies are identified.
Accounts Receivable
Accounts receivable are stated at expected realisable value.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is calculated on a diminishing value basis to allocate the cost over its useful life:
Furniture and office equipment 9.0%DV – 48.0%DV
Investment Income (Net)
Investment income (net) includes gross investment income less management fees payable to the fund managers.
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 donations reserve account when paid.
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.
Goods and Services Tax
The financial statements have been prepared using a GST exclusive figures to the extent that GST is claimable.
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.
Cash and Cash Equivalents
For the purposes of the statement of cash flows, cash comprises cash balances (net of bank overdrafts) and demand deposits. Cash excludes treasury bills that are not used as part of the group’s day-to-day cash management.
Taxation
The Community Trust of Wellington is exempt from income tax under section CB4 (1) (m) of the Income Tax Act 1994.
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 Trusts 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.
3. Property, Plant and Equipment
2006 2005
$ $
Furniture and office equipment
At cost 49,920 43,312
Less accumulated depreciation 24,845 16,738
Net book value 25,075 26,574
Depreciation charge for the year 8,107 6,143
4. Investments (Current)
2006 2005
$ $
Investments:
ASB Bank Limited – 1,092,470
Bank of New Zealand 500,966 502,753

Sub total 500,966 1,595,223

Karori Wildlife Sanctuary Trust 100,000 175,000
Total current investments 600,966 1,770,223
5. Investments (Non Current)
Investments held by Tyndall Investment Management comprise:
Equities 20,345,492 14,682,137
20,345,492 14,682,137
Investments held by Tower Asset Management comprise:
International fixed interest bonds 8,168,354 7,693,140
8,168,354 7,693,140
Investments held by ING New Zealand Limited comprise:
Fixed interest fund 5,535,477 5,100,442
5,535,477 5,100,442
Investments held by Walker Capital Management Limited comprise:
Money market deposits 728,420 318,867
Equities 8,144,795 6,939,577
Other investments 18,645 1,915
8,891,860 7,260,359
Secured investments (non current):
Karori Wildlife Sanctuary Trust 1,333,332 1,325,000
1,333,332 1,325,000
Total non-current investments 44,274,515 36,061,078
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 commencing 1 August 2005. As at 31 March 2006, the balance, terms and conditions associated with the loan were transferred from Wellington Community Trust Charities Limited to The Community Trust of Wellington. It is the intention of the trustees to hold the investments long-term and accordingly, they have been classified as non-current assets.
6. Investment Income (Net)
2006 2005
$ $
Portfolio income-realised and unrealised revenue 8,315,789 2,803,234
Less fund management fees and expenses (251,080) (236,208)
Total investment income (net) 8,064,709 2,567,026
7. Contingent Liabilities
There are no contingent liabilities as at 31 March 2006 (2005 – $Nil).
8. Commitments
(a) Donations
As at 31 March 2006, The Community Trust of Wellington has the following commitments:
2006 2005
$ $
Less than one year 255,000 200,000
Between one and two years 30,000 200,000
Between two and five years – –
285,000 400,000
(b) Lease Commitments
Commitments existed for non-cancellable operating leases as follows:
Less than one year 146,267 127,518
Between one and two years 154,928 42,000
Between two and five years 157,503 –
458,698 169,518
Total rental expenses for the year ended 31 March 2006 is $125,775 (2005 – $125,775).
Commitments existed for non-cancellable finance leases as follows:
Less than one year 3,590 4,775
Between one and two years 3,590 3,172
Between two and four years 2,722 6,345
9,902 14,292
(c) Capital Commitments
The are no capital commitments as at 31 March 2006 (2005 – $Nil).
9. 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.
Fair Value
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 ING New Zealand Limited, Tower Asset Management, Tyndall Investment Management and Walker Capital Management Limited. Credit risk also exists with the loan agreements entered into during the year. The 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:
2006 2005
$ $
Bank accounts 100,299 115,942
Accounts receivable and prepayments 15,154 98,629
Investments (current) 600,966 1,770,223
Investments (non current) 44,274,515 36,061,078
Currency Risk
The Community Trust of Wellington incurs currency risk as a result of investment transactions managed by ING New Zealand Limited, Tower Asset Management, Tyndall Investment Management and Walker Capital Management Limited.
Interest Rate Risk
The investments of The Community Trust of Wellington, which are sensitive to changes in interest rates, are managed by ING New Zealand Limited, Tower Asset Management, Tyndall Investment Management and Walker Capital Management Limited. The Community Trust of Wellington is also exposed to interest rate fluctuation on short term deposits.
10. Related Party Transactions
The Community Trust of Wellington has a code of conduct and a register of interests in regard to related party transactions. The code of conduct requires trustees and management to declare any interests in transactions that the trust may undertake. In
the 31 March 3006 year, Frances Russell, the Chief Executive Officer of The Community Trust of Wellington, was also
a trustee of the New Zealand Affordable Arts Trust. During the 31 March 2006 year, The Community Trust of Wellington donated $25,000 (2005 – $20,000) to the New Zealand Affordable Arts Trust. No related party debt was owing or written off in the 31 March 2006 year.
Audit Report
To the readers of the financial report of The Community Trust of Wellington.
We have audited the attached financial report. The financial report provides information about the past financial performance of The Community Trust of Wellington and its financial position as at 31 March 2006. This information is stated in accordance with the accounting policies as attached.
Trustees’ Responsibilities
The trustees of The Community Trust of Wellington 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 as at 31 March 2006, and of the results of its 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 report 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 report. It also includes assessing:
? the significant estimates and judgements made by the trustees in the preparation of the financial report; and
? whether the accounting policies are appropriate to The Community Trust of Wellington’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 report. Other than our capacity as auditors, we have no relationship with or interest in The Community Trust of Wellington.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion:
? proper accounting records have been kept by The Community Trust of Wellington as far as appears from our examination of those records; and
? the attached financial report:
– complies with generally accepted accounting practice in New Zealand;
– gives a true and fair view of the financial position of The Community Trust of Wellington as at 31 March 2006 and the results of its operations for the year ended on that date.
Our audit was completed on 1 June 2006 and our unqualified opinion is expressed as at that date.
HORWATH AUDIT (WELLINGTON), Chartered Accountants, Wellington.
–––––––––––––––
A copy of the complete annual report, which includes a list of the successful recipients for the 2005/2006 financial year,
is available on request from the office of the trust at Level One, 28 Grey Street, Wellington. Telephone: (04) 499 7966.
Web site: www.comtrustwn.co.nz