Statement of Financial Performance for the Year Ended 31 March 2006
Notes 2006 2005
$ $
Income
Dividends 7,000,000 6,265,000
Interest 376,813 259,573
7,376,813 6,524,573
Expenses
Audit fees 9,000 9,096
Trustee honoraria 79,672 74,747
Trustee expenses 12,182 13,842
Other expenses 246,268 188,494
Depreciation 28,679 24,711
Total expenses 375,801 310,889
Net surplus 7,001,012 6,213,684
Donations during current year 6,510,987 4,576,714
Suspension of loan – 100,000
Net surplus transferred to equity 490,025 1,536,969
Statement of Movements in Equity for the Year Ended 31 March 2006
2006 2005
$ $
Net surplus 490,025 1,536,969
Balance retained as trustees’ income added to equity 490,025 1,536,969
Equity at start of year 17,554,465 16,017,496
18,044,490 17,554,465
Statement of Financial Position as at 31 March 2006
Notes 2006 2005
$ $
Trust equity 2 18,044,490 17,554,465
Current liabilities:
Accrued charges 54,026 52,406
Donations payable 1,891,380 546,200
1,945,406 598,606
Total equity and liabilities 19,989,895 18,153,071
Current assets:
Petty cash 54 195
Bank 47,517 84,787
Dividend receivable 4,975,000 4,515,000
Accrued interest 62,875 50,313
5,085,446 4,650,295
Non current assets:
Property, plant and equipment as per schedule (at book value) 3 54,449 72,776
Investments 4 14,850,000 13,430,000
Total assets 19,989,895 18,153,071
For and on behalf of the trustees:
COLLEEN TUUTA. 5 July 2006.
KEMP BROUGHTON. 5 July 2006.
Statement of Cash Flows for the Year Ended 31 March 2006
Notes 2006 2005
$ $
Operating activities—
Cash was provided from:
Interest income received 364,250 249,005
Dividend income received 6,540,000 5,290,000
6,904,250 5,539,005
Cash was applied to:
Donations paid 5,165,807 4,444,314
Operating expenditure 344,566 282,588
5,510,373 4,726,902
Net cash inflow/(outflow) from operating activities 1,393,877 812,103

Investing activities—
Cash was applied to:
Net increase in investment securities 1,420,000 780,000
Property, plant and equipment purchased 11,288 59,780
1,431,288 839,780
Net cash inflow/(outflow) from investing activities (1,431,288) (839,780)
Net increase/(decrease) in cash (37,411) (27,677)
Add opening cash brought forward 84,982 112,659
Ending cash carried forward 47,571 84,982
Cash balances in balance sheet:
Petty cash 54 195
Bank 47,517 84,787
Ending cash carried forward 47,571 84,982
Notes to the Financial Statements for the Year Ended 31 March 2006
1. Statement of Accounting Policies
TSB Community Trust is a trust established by 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 System
The measurement system adopted is that of historical cost.
Particular Accounting Policies
The following is a summary of the significant accounting policies adopted by the trust in the preparation of these financial statements.
Property, Plant, Equipment and Depreciation
Property, plant and equipment are recorded at cost and will be depreciated on a straight line basis over four years.
Taxation
From 1 April 2004, section CB4 (1) (m) of the Income Tax Act (1994) exempts the trust from income tax.
Accounts Receivable
Accounts receivable are stated at their estimated realisable value.
Investments
The TSB Bank Limited shares are stated at the value when gifted on 20,000,000 fully paid shares at 50 cents representing $10,000,000. The net asset backing at 31 March 2006 was $9.66 per share.
Goods and Services Tax
The financial statements have been prepared on a GST inclusive basis.
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 Limited, accrued charges and donations payable. As stated above, the shares in TSB Bank Limited are carried at their value when gifted.
Cashflow
For the purpose of the statement of cashflow, cash includes cash on hand and deposits held on call with banks.
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. Analysis of Equity
The trust deed makes distinction between trust capital and accumulated trustees’ income. The equity of the trust consists of the following:
2006 2005
Capital:
Trust capital 100 100
Initial gift 10,000,000 10,000,000
10,000,100 10,000,100
Balance at beginning of year 7,554,365 6,017,396
Net surplus held by trustee 490,025 1,536,969
Balance at end of year 8,044,390 7,554,365
$18,044,490 $17,554,465
3. Property, Plant and Equipment
2006 Cost$ AccumulatedDepreciation$ 2005 BookValue$
Buildings 2,070 1,554 516
Fixtures and fittings 9,913 3,242 6,671
Other fixed assets 122,311 75,049 47,262
134,294 79,845 54,449
2005
Buildings 2,070 1,036 1,034
Fixtures and fittings 8,818 832 7,986
Other fixed assets 114,253 50,498 63,755
125,142 52,366 72,776
4. Investments
2006 2005
$ $
Other investments:
Shares in TSB Bank Limited 10,000,000 10,000,000
TSB Bank Limited investments 2,850,000 3,430,000
TSB Bank Limited investments – reserve held 2,000,000 –
14,850,000 13,430,000
5. Contingent Liabilities
There are no contingent liabilities at year ead (31 March 2005 – $Nil).
6. Capital Commitments
There are no capital commitments at year end (31 March 2005 – $Nil).
7. Related Parties
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 2006 relating to
these transactions.
8. Reconciliation of Net Profit with cashflows from operating activities
2006 2005
$ $
Reported surplus 490,025 1,536,969
Add non-cash items:
Depreciation and loss on disposal 29,615 24,710
Suspension of loan – 100,000
519,640 1,661,679
Add/(less) movements in other working capital items:
Increase/(decrease) in sundry creditors 1,346,800 135,993
(Increase)/decrease in sundry debtors (472,563) (985,569)
Net cash inflow from operating activities 1,393,877 812,103
9. 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 the bank, accrued interest and accrued charges. This is also the fair value.
10. Publishing Requirements
A comprehensive list itemising all recipients was published in the Taranaki Daily News on the following dates:
1st Quarter 9 August 2005
2nd Quarter 10 November 2005
3rd Quarter 28 December 2005
4th Quarter 25 April 2006
A copy of the list of grants is available to anyone upon request (P.O. Box 667, New Plymouth).
11. Segment Information
The trust operates predominantly in one industry – investment. All operations are carried out within New Zealand.
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 its financial position as at 31 March 2006 . This information is stated in accordance with the accounting policies set out.
Trustees’ Responsibilities
The trustees are responsible for the preparation, in accordance with New Zealand law and generally accepted accounting practice, of financial statements which fairly reflects the financial position of TSB Community Trust as at 31 March 2006 and the results of its operations and cash flows for the year ended on that date.
Auditors’ Responsibilities
It is our responsibility to express to you an independent opinion on the financial statements presented by the trustees.
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 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.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion, the financial statements fairly reflect the financial position of TSB Community Trust as at 31 March 2006 and the results of its operations and cash flows for the year ended on that date.
Our audit was completed on 11 July 2006 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.