Income Statement for the Year Ended 31 March 2008
Notes 2008 2007
$ $
Revenue:
Investment income 2 (2,115,385) 3,342,428
Interest received 186,077 218,272
Donations returned 2,127 428
Rental income 124,548 127,421
Other income 23,722 24,314
GST prior period adjustment – 2,200
Profit on sale of fixed assets 1,561 –
Total operatingrevenue (1,777,350) 3,715,063
Less expenses:
Donation expenses 20,659 19,162
Finance expenses 6 806 949
Fund management fees 305,500 307,178
Personnel expenses 4 178,591 160,790
Trustee expenses 10,237 10,111
Trustee fees 49,955 56,082
Operating costs 3 252,978 217,812
Other expenses 5 12,432 14,652
Total expenses 831,158 786,736
Net (deficit)/surplus before donations (2,608,508) 2,928,327
Less:
Donations 1,397,126 1,155,908
Net (deficit)/surplus for the year (4,005,634) 1,772,419


Statement of Changes in Equity for the Year Ended 31 March 2008
Surplus and revaluations:
Net (deficit)/surplus for the year (4,005,634) 1,772,419
Total (deficit)/surplus and revaluations for the year (4,005,634) 1,772,419
Total movements in equity for the year (4,005,634) 1,772,419
Equity at 1 April 2007 46,701,645 44,929,226
Equity at 31 March 2008 42,696,011 46,701,645
Balance Sheet as at 31 March 2008
Current assets:
Cash and cash equivalents 68,683 26,803
Held-to-maturity investments 8 833,383 768,540
Trade receivables 24,259 20,167
Prepayments 2,831 5,309
Karori Wildlife Sanctuary Trust Inc 8 100,000 100,000
GST refund due 13,090 9,970
Investments at fair value through profit and loss 8 40,598,789 44,632,819
Total current assets 41,641,035 45,563,608
Current liabilities:
Trade and other payables 91,441 107,084
Marac Finance Limited – 2,512
Total current liabilities 91,441 109,595
Working capital 41,549,594 45,454,013
Non current assets:
Property, plant and equipment 7 13,084 19,388
Karori Wildlife Sanctuary Trust Inc 8 1,133,333 1,233,333
Total non-current assets 1,146,417 1,252,721
Non current liabilities:
Marac Finance Limited – 5,089
Total non-current liabilities – 5,089
Net assets 42,696,011 46,701,645
Represented by—
Equity:
Trust equity brought forward 46,701,645 44,929,226
Trustees’ (deficit)/surplus for the year (4,005,634) 1,772,419
Total equity 42,696,011 46,701,645
For and on behalf of the board of trustees:
MATHEW BLACKBURN, Chairperson.
LINDA RIEPER, Trustee.
Date: 6 August 2008.
Notes to the Financial Statements for the Year Ended 31 March 2008
1. Statement of Significant Accounting Policies
Reporting Entity
The Community Trust of Wellington (“the Trust”) is an incorporated Charitable Trust under the Charitable Trusts Act 1957.
These financial statements have been prepared in accordance with Generally Accepted Accounting Practice (GAAP) in
New Zealand. They comply with the New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) and other Financial Reporting Standards as appropriate for not-for-profit entities that qualify for and apply differential reporting concessions.
Basis of Preparation
The accounting principles recognised as appropriate for the measurement and reporting of the income statement and balance sheet on a historical cost basis are followed by the Trust, except that certain investments are disclosed at fair value.
The information is presented in New Zealand dollars as it is the functional and presentational currency.
Differential Reporting
The Trust qualifies for differential reporting as it is not publicly accountable, and is not large as defined by the Framework for Differential Reporting. The Trust has taken advantage of all available differential exemptions.
The Trust changed its accounting policies on 1 April 2007 to comply with NZ IFRS. The transition to NZ IFRS is accounted for in accordance with NZ IFRS 1 First-time Adoption of New Zealand Equivalents to International Financial Reporting Standards, with 1 April 2006 as the date of transition. An explanation of how the transition from superseded policies to NZ IFRS has affected the Trust’s balance sheet and income statement is discussed in note 13.
Accounting policies set out below have been applied in preparing the financial statements for the year ended 31 March 2008, the comparative information presented in these financial statements for the year ended 31 March 2007 and in the preparation
of the opening NZ IFRS balance sheet at 1 April 2006, the Trust’s date of transition.
Specific Accounting Policies
The following specific accounting policies which materially affect the measurement of financial performance and the financial position have been applied:
(a) Revenue
Rental revenue in relation to operating leases is recognised in the income statement on a straight-line basis over the lease term.
Dividend revenue from investments is recognised when the Trust’s rights to receive payment have been established. Interest income is recognised as interest accrues using the effective interest method.
(b) Income Tax
The Trust is exempt from income tax under section CB4(1)(m) of the Income Tax Act 2004.
(c) Property, Plant & Equipment
Property, plant and equipment is stated at cost less accumulated depreciation and impairment.
(d) Depreciation
Depreciation has been calculated as follows.
Furniture and equipment 9.0% – 60.0%
(e) Investments Including Investments in Managed Funds
Shares in listed companies and quoted fixed interest investments are designated as “financial assets at fair value through the profit and loss” as the portfolios are managed on a fair value basis in accordance with a documented investment strategy. They are initially recorded at cost and subsequently revalued to market bid price each balance date. Gains and losses are recorded in the income statement as part of the investment income.
(f) Financial Instruments
Financial instruments are recognised if the Trust becomes a party to the contractual provisions of the instruments. Financial assets are initially measured at fair value plus transaction costs except for those classified as fair value through profit or loss which are initially measured at fair value. Financial assets are derecognised if the Trust’s rights to the cash flows from the financial assets expire or if the Trust transfers a financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular purchases and sales of financial assets are accounted for at trade date. Financial liabilities are derecognised if the Trust’s obligations, specified in the contract, expire, are discharged or cancelled.
Held-to-Maturity Investments
If the Trust has the intent and ability to hold debt securities to maturity, then they are classified as held-to-maturity. Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method, less any impairment losses.
Investments at Fair Value Through Profit and Loss
An instrument is classified at fair value through the profit and loss if it is held for trading or is designated as such upon initial recognition. Financial instruments are designated at fair value through the profit and loss if the Trust manages such investments and makes purchase and sale decisions based on their fair value. Upon initial recognition, attributable transaction costs are recognised in the income statement when incurred. Subsequent to initial recognition, financial instruments at fair value through profit and loss are measured at fair value and changes therein are recognised in the income statement.
Loans and Receivables
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method less any impairment.
Cash and cash equivalents comprise cash balances and call deposits.
(g) Impairment
The carrying amount of the Trust’s assets are reviewed each balance date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.
If the estimated recoverable amount of an asset is less then its carrying amount, the asset is written down to its estimated recoverable amount and an impairment loss is recognised in the income statement.
The estimated recoverable amount of investments carried at amortised cost is calculated as the present value of estimated future cash flows, discounted at their original effective interest rate. Receivables with a short duration are not discounted.
The estimated recoverable amount of other assets is the greater of their fair value, less costs to sell, and value in use. Value in use is determined by estimating future cash flows from the use and ultimate disposal of the asset and discounting these to their present value using a pre-tax discount rate that reflects current market rates and the risks specific to the asset. For an asset that does not generate largely independent cash flows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
Impairment losses are reversed when there is a change in the estimates used to determine the recoverable amount.
An impairment loss on an investment in shares classified as available-for-sale or on property carried at fair value is reversed through the relevant reserve. All other impairment losses are reversed through the income statement.
(h) Operating Leases
Operating lease payments, where the lessor effectively retains substantially all the risks and rewards of ownership of the leased items, are included in the determination of the net surplus in equal instalments over the lease term.
2. Investment Income
2008 2007
$ $
Portfolio income-realised revenue 3,513,893 3,628,790
Net change in fair value of financial assets (5,629,279) (286,361)
Total investment income (2,115,385) 3,342,428
3. Operating Costs
2008 2007
$ $
Included in operating costs:
Operating lease payments 157,949 148,300
Total operating costs 157,949 148,300
4. Personnel Expenses
2008 2007
$ $
Wages and salaries 172,351 155,590
Other staff expenses 6,240 5,200
Total personnel expenses 178,591 160,790
5. Other Expenses
2008 2007
$ $
Auditors’ fees 7,800 7,500
Depreciation 4,632 7,152
Total other expenses 12,432 14,652
6. Finance Expenses
2008 2007
$ $
Interest expense 806 949
Total finance expenses 806 949
7. Property, Plant and Equipment
2008 2007
$ $
Furniture and office equipment:
At cost 44,352 51,385
Less accumulated depreciation 31,268 31,997
Net book value 13,084 19,388
Depreciation charge for the year 4,632 7,152
Leased Assets
The Trust leased assets where the Trust was entitled to retain ownership of the asset at the end of the lease agreement. At
31 March 2008, the net carrying amount of the leased assets was $Nil (2007 – $4,296). See note 11.
8. Other Investments
2008 2007
$ $
Financial assets designated as fair value through the profit and loss:
NZ Fixed Interest – ING NZ Limited 5,976,812 5,767,147
Trans Tasman Equities –ING NZ Limited 2,691,789 –
Trans Tasman Properties – Mint Asset Management Limited 4,701,316 –
International Equities – Tyndall Investment Management Limited 16,549,073 19,315,853
International Fixed Interest – Tower Asset Management Limited 9,506,152 8,702,013
Trans Tasman Equities – Walker Capital Management Limited 1,173,647 5,156,827
Trans Tasman Property – Walker Capital Management Limited – 5,690,978
Total 40,598,789 44,632,819

2008 2007
$ $
Held-to-maturity investments:
ASB Term Deposit – 072 – 513,116
ASB Term Deposit – 078 – 255,424
ASB Term Deposit – 079 731,998 –
Bank of New Zealand – 027 101,384 –
Total held-to-maturity investments 833,383 768,540
ASB Bank 079 Bank of New Zealand 027
Maturity Date: 9th April 2008 Maturity Date: 20th April 2008
Interest Rate: 8.87%p.a. Interest Rate: 8.54%p.a.
Current Balance: $731,998.44 Current Balance: $101,384.11
2008 2007
$ $
Loans and receivables—
Karori Wildlife Sanctuary Trust Inc:
Current portion 100,000 100,000
Term portion 1,133,333 1,233,333
Total Karori Wildlife Sanctuary Trust Inc 1,233,333 1,333,333
The loan is guaranteed by the Wellington City Council. The loan has a repayment term of 15 years which commenced on
1 August 2005. The interest rate is calculated against an agreed formula. The rate for the year under review was 6.7%.
9. Financial Instruments
Significant accounting policies
Details of significant accounting policies and methods adopted, including the criteria for recognition and the basis of measurement applied in respect of each of the class of financial assets are disclosed in note 1 to the financial statements.
The trustees have approved a statement of investment policy and objectives (SIPO) which establishes investment portfolio objectives and target asset allocations. Performance against these targets is reviewed at least quarterly by the trustees and asset reallocations undertaken as required.
Fair Value
The carrying amount of financial assets and financial liabilities recorded in the financial statements represents their respective fair values, determined in accordance with the Trust’s accounting policies.
Liquidity Risk
All financial assets at fair value through profit and loss can be realised within 12 months. There are no significant financial liabilities. The Trust’s investments are managed to ensure that the Trust will have sufficient liquidity to meet expected cashflow requirements. Liquidity risk is managed through the Trust’s asset allocation strategy, which provides exposure to both growth and income assets, and the benchmark portfolio against which investment returns are monitored. The Trust’s benchmarks are maintained through rebalancing between investment managers to bring the weights to benchmark.
Credit Risk
Financial instruments which potentially expose the Trust to credit risk consist of cash and short term deposits, fixed interest securities and receivables and, indirectly, investments in unitised products which invest in cash and fixed interest investments. The maximum exposure to credit risk is the carrying value of these financial instruments:
2008 2007
$ $
Cash and short term deposits 833,382 768,450
Fixed interest – domestic 5,976,812 5,767,147
Fixed interest – offshore 9,506,152 8,702,013
The significant counterparties of the Trust are its investment managers: ING NZ Limited, Tower Asset Management Limited, Tyndall Investment Management NZ Limited, Walker Capital Management Limited and Mint Asset Management Limited, which the trustees consider to be financial institutions of high quality. The investments are held in trust by the investment managers for the benefit of the Trust. The managers operate within the portfolio mix approved by the trustees.
Currency Risk
The Trust is indirectly exposed to currency risk in that future currency movements will affect the valuation of investments in unitised products which invest in foreign currency denominated investments. The Trust has no directly held investments denominated in a foreign currency. Risk management activities are undertaken by the Trust’s investment managers to operate within the guidelines provided by the trustees.
Interest Rate Risk
The Trust is exposed to interest rate risk in that future interest rate movements will affect cash flows and net market values of fixed interest assets and, indirectly, the valuation of investments in unitised products which invest in cash and fixed interest investments.
Interest rate risk management activities are undertaken by the investment manager in accordance with the investment mandate set by the trustees.
Financial Instruments Risk Management
Exposure to credit, interest rate and currency risks arise in the normal course of the Trust’s operations. The Trust’s concentrations of credit risk are managed by ING NZ Limited, Tower Asset Management Limited, Tyndall Investment Management Limited, Walker Capital Management Limited and Mint Asset Management Limited, through diversified investment portfolios.
10. Contingent Liabilities
There are no contingent liabilities as at 31 March 2008 (2007 – $Nil).
11. Commitments
(a) Donations
As at 31 March 2008, The Community Trust of Wellington had the following commitments:
2008 2007
$ $
Less than one year 90,200 395,000
Between one and five years – 20,000
90,200 415,000
(b) Lease Commitments
Commitments existed for non-cancellable operating leases as follows:
2008 2007
$ $
Less than one year 154,816 154,928
Between one and five years 52,136 154,928
More than five years – 44,151
206,951 354,007
The premises lease expires 10 July 2009 with a right of renewal for three years to 10 July 2012. The sublease for Property Pack (Wellington) Limited expires 9 July 2009. The remaining tenants are required to give 3 months’ notice to terminate their tenancies. Rental payments of $69,212 are expected to be received during 2009.
During the year ended 31 March 2008, $157,949 was recognised as an expense in the income statement in respect of operating leases (2007 – $148,300). $124,548 was recognised as income in the income statement in respect of subleases (2007 – $127,421).
Commitments existed for non-cancellable finance leases as follows:
2008 2007
$ $
Less than one year – 3,590
Between one and five years – 2,722
– 6,312
(c) Capital Commitments
There are no capital commitments as at 31 March 2008 (2007 – $Nil).
12. 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 and
the following grants were made in respect of related party transactions:
2008 2007
$ $
Frances Russell
NZ Affordable Art Trust 15,000 15,000
Wellington Zoo Trust 100,000 20,000
Wellington Museums Trust 10,000 20,000
Frances Russell is the Executive Director of The Community Trust of Wellington and also a trustee of The Affordable Art Trust and the Wellington Zoo Trust. Frances Russell’s partner was the chairperson of the Wellington Museums Trust for part of the 2008 financial year.
Alma Andrews
Orongomai Marae – 1,000
Alma Andrews is a trustee of the The Community Trust of Wellington. She was also a member of the Board of Orongomai Marae in 2007. During that year, Orongomai Marae won the Community Trust of Wellington community award in Upper Hutt.

Patricia Hall and Richard Fernyhough
Changemakers Refugee Forum Incorporated 20,000 30,000
Patricia Hall and Richard Fernyhough are trustees of The Community Trust of Wellington. During the 2008 financial
year, Patricia Hall became a mentor to the CEO of Changemakers Refugee Forum Incorporated and Richard Fernyhough joined the advisory committee for Changemakers Refugee Forum Incorporated.
Moira Lawler
Nga Uruora - Kapiti Project Incorporated 12,040 –
Moira Lawler is a trustee of The Community Trust of Wellington and is also a committee member for the Nga Uruora - Kapiti Project Incorporated.
13. Impacts of the Adoption of the New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS)
The Trust changed its accounting policies on 1 April 2007 to comply with NZ IFRS. The transition to NZ IFRS is accounted for in accordance with NZ IFRS-1: First-time Adoption of New Zealand Equivalents to International Financial Reporting Standards, with 1 April 2006 as the date of transition.
This has involved changes in accounting policy:
(i) Investments in managed funds are deemed to be financial instruments at Fair Value through the profit and loss. The new classification has not changed the accounting treatment from that under previous GAAP.
(ii) Unquoted fixed interest investments are initially recorded at cost and subsequently amortised using the effective interest method, less any impairment losses. In practice, this is the same as the previous policy carrying at cost.
There have been changes to the disclosures made to comply with NZ IFRS.
There are no material impacts resulting from the adoption of NZ IFRS in relation to the recognition or measurement of income, expenses, assets or liabilities other than the reclassifications noted above.
Audit Report
To the Trustees of The Community Trust of Wellington.
We have audited the financial statements. The financial statements provide information about the past financial performance of The Community Trust of Wellington (“the Trust”) and its financial position as at 31 March 2008. This information is stated in accordance with the accounting policies as attached.
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 the Trust as at 31 March 2008 and the results of their operations 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 of the Trust.
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 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 the Trust.
Unqualified Opinion
We have obtained all the information and explanations we have required.
In our opinion:
? proper accounting records have been kept by the Trust as far as appears from our examination of those records; and
? the financial statements:
– comply with generally accepted accounting practice in New Zealand; and
– fairly reflects the financial position of the Trust as at 31 March 2008 and the results of its operations for the year ended on that date.
Our audit was completed on 6 August 2008 and our unqualified opinion is expressed as at that date.
DELOITTE, Chartered Accountants, Wellington.
–––––––––––––––
A copy of the complete annual report, which includes a list of the successful recipients for the 2007/2008 financial year,
is available on request from the office of the trust at Level 1, 28 Grey Street, Wellington. Telephone: (04) 499 7966.
Website: www.comtrustwn.co.nz