Statement of Financial Performance for the Year Ended 31 March 2007
Notes 2007 2006
$ $
Revenue:
Investment income (net) 6 3,035,252 8,064,709
Interest received 218,272 205,046
Donations returned 428 25,000
Rental income 127,421 104,254
Other income 24,314 23,034
GST prior period adjustment 2,200 -
Total revenue 3,407,887 8,422,043
Less expenses:
Auditors' fees 7,500 7,965
Depreciation 3 7,152 8,107
Donation expenses 19,162 6,659
Operating costs 379,552 370,118
Trustee expenses 10,112 7,225
Trustee fees 56,082 52,223
Total expenses 479,560 452,297
Net surplus before donations 2,928,327 7,969,746
Less:
Donations 1,155,908 1,001,780
Net surplus after taxation 1,772,419 6,967,966
Statement of Movements in Equity for the Year Ended 31 March 2007
Surplus and revaluations
Net surplus for the period 1,772,419 6,967,966
Total surplus/(deficit) and revaluations for the period 1,772,419 6,967,966
Total movements in equity for the year 1,772,419 6,967,966

Equity at 1 April 2006 44,929,226 37,961,260
Equity at 31 March 2007 46,701,645 44,929,226
Statement of Financial Position as at 31 March 2007
Current assets:
Bank accounts 26,803 100,299
Term investments 4 768,540 500,966
Accounts receivable - trade 20,167 9,845
Prepayments 5,309 5,309
Karori Wildlife Sanctuary Trust 100,000 100,000
GST refund due 9,970 6,009
Taxation refund - 157
Total current assets 930,789 722,585
Current liabilities:
Accounts payable - trading 49,649 41,927
Accounts payable - investment 57,434 41,198
Marac Finance Limited 2,512 2,223
Total current liabilities 109,595 85,348
Working capital 821,194 637,237

Non current assets:
Property, plant and equipment 3 19,388 25,075
Investments 5 45,866,151 44,274,515
Total non-current assets 45,885,539 44,299,590
Non current liabilities
Marac Finance Limited 5,089 7,601
Total non-current liabilities 5,089 7,601
Net assets 46,701,644 44,929,226
Represented by:
Equity
Trust capital brought forward 44,929,226 37,961,260
Surplus for the year 1,772,419 6,967,966
Total equity 46,701,645 44,929,226
For and on behalf of the board of trustees:
MATHEW BLACKBURN, Chairperson.
LINDA RIEPER, Trustee.
Date: 27 June 2007.
Notes to the Financial Statements for the Year Ended 31 March 2007
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 New Zealand Institute of Chartered Accountants.
Differential Reporting
The Community Trust of Wellington is a qualifying entity within the New Zealand Institute of Chartered Accountants Differential Reporting Framework. The trust is not publicly accountable and satisfies the relevant size criteria. The Community Trust of Wellington has applied all financial reporting standards with the exception that the exemption to not prepare a statement of cash flows under FRS10 has been applied.
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 - 60.0%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.
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 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
2007 2006
$ $
Furniture and office equipment
At cost 51,385 49,920
Less accumulated depreciation 31,997 24,845
Net book value 19,388 25,075
Depreciation charge for the year 7,152 8,107
4. Investments (Current)
2007 2006
$ $
Investments:
ASB Bank Limited 768,540 -
Bank of New Zealand - 500,966
Total current investments 768,540 500,966
5. Investments (Non Current)
Investments held by Tyndall Investment Management comprise:
Equities 19,315,853 20,345,492
19,315,853 20,345,492
Investments held by Tower Asset Management comprise:
International fixed interest bonds 8,702,013 8,168,354
8,702,013 8,168,354
Investments held by ING New Zealand Limited comprise:
Fixed interest fund 5,767,147 5,535,477
5,767,147 5,535,477
Investments held by Walker Capital Management Limited comprise:
Money market deposits 1,041,659 728,420
Equities 9,804,540 8,144,795
Other investments 1,607 18,645
10,847,806 8,891,860
Secured investments (non current):
Karori Wildlife Sanctuary Trust 1,233,333 1,333,333
1,233,333 1,333,333
Total non-current investments 45,866,152 44,274,516
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)
2007 2006
$ $
Portfolio income-realised and unrealised revenue 3,342,430 8,315,789
Less fund management fees and expenses (307,178) (251,080)
Total investment income (net) 3,035,252 8,064,709
7. Contingent Liabilities
There are no contingent liabilities as at 31 March 2007 (2006 - $Nil).
8. Commitments
(a) Donations
As at 31 March 2007, The Community Trust of Wellington has the following commitments:
2007 2006
$ $
Less than one year 395,000 255,000
Between one and two years 20,000 30,000
Between two and five years - -
415,000 285,000
(b) Lease Commitments
Commitments existed for non-cancellable operating leases as follows:
Less than one year 154,928 146,267
Between one and two years 154,928 154,928
Between two and five years 44,151 157,503
354,007 458,698
Total rental expenses for the year ended 31 March 2007 is $143,095 (2006 - $125,775).
Commitments existed for non-cancellable finance leases as follows:
Less than one year 3,590 3,590
Between one and two years 2,722 3,590
Between two and four years - 2,722
6,312 9,902
(c) Capital Commitments
There are no capital commitments as at 31 March 2007 (2006 - $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:
2007 2006
$ $
Bank accounts 26,803 100,299
Accounts receivable and prepayments 25,476 15,154
Investments (current) 868,540 600,966
Investments (non current) 45,866,151 44,274,515
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 2007 year, Frances Russell, the Chief Executive Officer of The Community Trust of Wellington, was also
a trustee of the New Zealand Affordable Arts Trust and the Wellington Zoo Trust. During the 31 March 2007 year, The Community Trust of Wellington donated $25,000 (2006 - $25,000) and $20,000 (2006 - Nil) to the New Zealand Affordable Arts Trust and the Wellington Zoo Trust respectively. Further, Frances Russell's partner is the chairperson of the Museum Trust. During the year under review, The Community Trust of Wellington donated $20,000 to the Museum Trust (2006 - Nil). No related party debt was owing or written off in the 31 March 2007 year. In the 31 March 2007 year, Alma Andrews, trustee, was on the board of the Orongomai Marae which won the community award in Upper Hutt and received $1,000.
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 2007. 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 2007, and of the results of their 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 statements; 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 statements. Other than our capacity as auditors, we have no relationship with or interests 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 2007 and the results of its operations for the year ended on that date.
Our audit was completed on 27 June 2007 and our unqualified opinion is expressed as at that date.
HORWATH AUDIT (WELLINGTON), Chartered Accountants, Wellington.
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A copy of the complete annual report, which includes a list of the successful recipients for the 2006/2007 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