Trustee Banks Restructuring Act 1988 Statement of Financial Performance for the Year Ended 31 March 1997 1997$ 1996$ Income Interest trust bank money market104,528 60,953 Tower Portfolio Management Limited8,852,529 1,922,524 Other785 573 Donations returned1,500 800 Profit on sale of Trust Bank New Zealand shares22,708,563 Total income$31,667,905 $1,984,850 Less expenses Staff expenses: Accident compensation levy1,206 252 Consultants/contract employees7,668 11,430 Travel expenses146 Wages and salaries40,000 31,667 Other staff expenses754 Total staff expenses49,774 43,349 Operating expenses: Auditors' fees1,975 1,698 Computer expenses946 2,487 Depreciation1,175 1,160 Insurance office344 1,244 Photocopying/faxing2,974 1,875 Postage1,117 963 Printing and stationery1,944 2,534 Professional fees39,736 Rent17,428 17,835 Subscriptions169 Telephone2,010 1,609 Travel expenses24 Other operating expenses5,786 901 Total operating expenses75,628 32,306 Trustee expenses: Meeting expenses1,209 Travel expenses991 947 Trustee fees22,257 14,690 Other trustee expenses2,819 Total trustee expenses27,276 15,637 Donation expenses: Advertising10,820 6,307 Presentations and functions2,181 3,941 Other donation expenses7,636 4,732 Total donations expenses20,637 14,980 Fund management expenses: Professional fees Tower121,878 38,094 Other52,898 9,494 Other fund management expenses8,016 Total fund management expenses182,792 47,588 Total expenses$356,107 $153,860 Total income31,667,905 1,984,850 Less total expenses356,107 153,860 Net surplus before donations31,311,798 1,830,990 Less donations general2,059,405 942,859 Net surplus after donations29,252,393 888,131 Net surplus transferred to trust funds$29,252,393 $888,131 The accompanying notes form part of these financial statements. Statement of Movements in Equity for the Year Ended 31 March 1997 1997$ 1996$ Equity at 1 April 199637,478,962 30,065,829 Plus Net surplus29,252,393 888,131 Movements in revaluation reserve 6,525,000 66,731,355 37,478,960 Less Movements in revaluation reserve22,162,500 Total equity at 31 March 1997$44,568,855 $37,478,960 The accompanying notes form part of these financial statements. Statement of Financial Position as at 31 March 1997 Notes 1997$ 1996$ Current assets: Cheque account 6,332 4,716 Accounts receivable 143,936 2,072 Prepayments 1,519 Interest receivable 6,082 Deposits Trust Bank Wellington 363,335 787,725 Total current assets 515,122 800,595 Less current liabilities: Accounts payable 59,085 13,511 Accounts payable Tower 8,573 Total current liabilities 67,658 13,511 Net current assets 447,464 787,084 Non current assets: Fixed assets3 2,610 2,619 Investments4 44,118,781 36,689,257 Total non current assets 44,121,391 36,691,876 Net assets $44,568,855 $37,478,960 Represented by: Trust funds: Revaluation reserve5 1,894,342 24,056,842 Trust fund 42,674,513 13,422,118 Total trust equity $44,568,855 $37,478,960 For and on behalf of the board of trustees: W. A. BRIEN, Chairperson. G. L. REEVE, Trustee. Dated the 26th day of June 1997. The accompanying notes form part of these financial statements. Statement of Cash Flows for the Year Ended 31 March 1997 1997$ 1996$ Cash flows from operating activities Cash was provided from: Tower portfolio income8,724,011 1,181,250 Profit on sale of Trust Bank New Zealand shares22,708,563 Interest on investments110,610 60,766 Donations returned and other income2,285 1,373 31,545,469 1,243,389 Cash was applied to: Payments to suppliers(274,913[teh]) (144,468[teh]) Payments to trustees(25,317[teh]) (14,900[teh]) Donations to community(2,059,405[teh]) (942,859[teh]) (2,359,635[teh]) (1,102,227[teh]) Net inflow (outflow) from operating activities29,185,834 141,162 Cash flows from investing activities Cash was applied to: Purchase of fixed assets(1,166[teh]) Purchase of investments(7,444,942[teh]) Realisation of revaluation reserve(22,162,500[teh]) Net inflow (outflow) from investing activities(29,608,608[teh]) Cash flows from financing activities Cash was provided from: Issue of shares Cash was applied to: Repayment of dividends Net inflow (outflow) from financing activities Net increase (decrease) in cash held(422,774[teh]) 141,162 Opening cash brought forward792,441 651,279 Closing cash carried forward$369,667 $792,441 Shown in statement of financial position as: Deposits Trust Bank Wellington363,335 787,725 Cash at bank Trust Bank Wellington6,332 4,716 Closing cash carried forward$369,667 $792,441 Notes to the Financial Statements for the Year Ended 31 March 1997 1. Statement of Accounting Policies Reporting Entity The financial statements presented here are for the reporting entity Trust Bank Wellington Community Trust. The entity is an incorporated charitable trust under the Charitable Trusts Act 1957. Reporting Basis The trustees have chosen to prepare general purpose financial reports which comply with generally accepted accounting practice. 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 realised value. Dividend Income Dividend income from Trust Bank New Zealand Limited is included in the statement of financial performance when it is received. Donations Donations made are included in the statement of financial performance when paid. Fixed Assets Fixed assets are stated at cost less accumulated depreciation. Depreciation Depreciation is charged at the maximum rates allowable by the Inland Revenue Department. The tax rates are as follows: Computer equipment 2430 percent CP Filing cabinets 14.40 percent DV 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. 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. 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, 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. Nominees of the trust hold 100 percent of the shares in Wellington Community Trust Charities Limited on behalf of the trust. This shareholding comprises 2 shares on which the capital is uncalled. The company has not traded and no financial statements have been prepared for it. 2. Nature of Business The Trust Bank Wellington Community Trust was incorporated as a charitable trust in accordance with the provisions of the Trustee Banks Restructuring Act 1988. The purpose of the community trust is to provide charitable, cultural, philanthropic and recreational benefits to the community, principally in the region of the trust. 3. Fixed Assets Cost$ AccumulatedDepreciation$ BookValue$ 1997 Computer equipment4,167 2,708 1,151 Filing cabinets1,165 14 1,459 $5,332 $2,722 $2,610 1996 Computer equipment$4,167 $1,547 $2,620 4. Investments Investments held by Tower Corporation Holdings Limited comprise: 1997$ 1996$ Money market deposits18,908,393 5,033,132 Trust Bank New Zealand Limited 27,787,500 Discounted securities 1,491,854 NZD fixed interest bonds22,035,912 2,376,771 Equities3,174,475 Total investments at 31 March 1997$44,118,781 $36,689,257 The trust sold 11 250 000 ordinary shares in Trust Bank New Zealand Limited to Westpac Holdings NZ Limited on 27 May 1996. These funds were invested with Tower Corporation Holdings Limited. 5. Revaluation Reserve 1997$ 1996$ Opening balance at 1 April 199624,056,842 17,531,842 Movements in the year(22,162,500[teh]) 6,525,000 Closing balance at 31 March 1997$1,894,342 $24,056,842 6. Taxation For taxation purposes the trust is deemed to be a charitable organisation and on this basis the income is not subject to taxation. The charitable status is under review which may affect the future tax status of the trust. 7. Goods and Services Tax The trust is not registered for goods and services tax purposes. Accordingly these financial statements are stated on a G.S.T. inclusive basis. 8. Items Not Included in Statement of Financial Position The trust has made a commitment of $3,000,000 to the Wellington Regional Stadium Trust subject to the commitment of that trust to construct. Additional donations totalling $1,931,000 have been approved but not uplifted as at 31 March 1997. These are $10,000 for the Te Omanga Hospice, $10,000 for the NZ Dance and Drama Premises Management Trust, $100,000 for Upper Hutt Junior Cricket, $1,800,000 for the St James Theatre Trust and $11,000 for the Scots College Board of Trustees. 9. Reconciliation of Net Surplus with Net Cash Flow from Operating Activities 1997$ 1996$ Net surplus29,252,393 888,131 Add/(deduct) non cash items: Depreciation1,175 1,160 1,175 1,160 Add/(deduct) movements in other working capital items: (Increase)/decrease in accounts receivable(141,864[teh]) 940 (Increase)/decrease in prepayments(1,519[teh]) (Increase)/decrease in accounts payable54,147 (6,875[teh]) (Increase)/decrease in interest receivable6,082 (186[teh]) (83,154[teh]) (6,121[teh]) Less items classified as an investing activity: Income Tower Corporation Holdings Limited15,420 (742,008[teh]) Net cash flow from operating activities$29,185,834 $141,162 Audit Report To the readers of the financial report of Trust Bank Wellington Community Trust. We have audited the financial report. The financial report provides information about the past financial performance of Trust Bank Wellington Community Trust and its financial position as at 31 March 1997. This information is stated in accordance with the accounting policies set out in the notes to the financial statements. Board of Trustees' Responsibilities The board of trustees is responsible for the preparation of a financial report which fairly reflects the financial position of the Trust Bank Wellington Community Trust as at 31 March 1997 and of the results of operations and cash flows for the year ended 31 March 1997. Auditor's Responsibilities It is our responsibility to express an independent opinion on the financial report presented by the board of 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 judgments made by the board of trustees in the preparation of the financial report, and whether the accounting policies are appropriate to the Trust Bank Wellington Community 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. We obtained sufficient evidence to give reasonable assurance that the financial report is 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 in our capacity as auditors we have no relationship with or interests in the Trust Bank Wellington Community Trust, other than having provided consultancy services during the year. Unqualified Opinion We have obtained all the information and explanations we have required. In our opinion the financial report fairly reflects the financial position of the Trust Bank Wellington Community Trust as at 31 March 1997 and the results of its operations and cash flows for the year ended on that date. Our audit was completed on 25 June 1997 and our unqualified opinion is expressed as at that date. SPICER & OPPENHEIM, Chartered Accountants. Wellington. A copy of the 199697 annual report and a schedule of distribution of income by way of donations is available on request at the office of the trust, Level Four, Guardian Assurance House, 111115 Customhouse Quay, or by Telephone: (04) 499 7966.