2368 NEW ZEALAND GAZETTE No. 73

Notes to the Financial Statements For the Year Ended 31 March 1994

1. Statement of Accounting Policies

General Accounting Policies

The general accounting policies adopted in the preparation of these financial statements are:

• The measurement base adopted is the historical cost basis, with the exception of investments in Trust Bank New Zealand Limited, which are recorded at the value established at the time of the public issue in March 1994.

• Reliance has been placed on the fact that the entity is a going concern.

• The matching of revenues earned and expenses incurred using accrual accounting except that dividend income and grants are accounted for on a cash basis.

Particular Accounting Policies

The following are the particular accounting policies which have a material effect on the measurement of results and financial position:

(a) Dividend Income: Dividend income from Trust Bank New Zealand Limited is included in the income and expenditure account when it is received.

(b) Grants: Grants made are included in the income and expenditure account when paid.

(c) Shares: Shares held in Trust Bank New Zealand Limited are stated at the price established at the time of the public issue in March 1994.

Changes in Accounting Policies

As a result of the recent Trust Bank New Zealand Limited share issue, the trust has been able to accurately determine the market value of its shares in Trust Bank New Zealand Limited for the first time. Previously, the shares were recorded at cost. The effect of this change is shown in the revaluation reserve.

There have been no other material changes in accounting policies since the previous annual financial statements. All other policies have been applied on a basis consistent with those used in the previous years annual financial statements.

2. Investments

Shares in Trust Bank New Zealand Limited held at the beginning of the year comprised: 3,750,000 ordinary shares of $1 each, fully paid. A one for one bonus issue and then a two for one share split took place on 1 February 1994 as part of Trust Bank New Zealand Limited's capital reconstruction.

In March 1994, as part of a Trust Bank Wellington Limited share issue, the trust sold 3,750,000 (25 percent) of the shares held in Trust Bank New Zealand Limited for $2.10 each. The share issue resulted in the Trust Bank Community Trusts selling 11.1 percent of their Trust Bank New Zealand Limited shares and new shares being issued to enable 21.6 percent public ownership of Trust Bank New Zealand Limited. The proceeds of $7,875,000 received by the trust have been invested for future use to meet the purposes of the trust.

The trust's investment in Trust Bank New Zealand Limited is valued at $2.10 at 31 March 1994. This being the issue price of the shares and this value is deemed to be their value.

The shares now held in Trust Bank New Zealand Limited comprise: 11,250,000 ordinary shares of 50 cents each fully paid.

Regional community trusts have agreed to an embargo on any sale of their shares (other than as part of the offer or among the participating community trusts) for at least 12 months following flotation.

The 9 regional community trusts will together hold approximately 78 percent of the capital of Trust Bank New Zealand Limited. This means that, as a group, they will retain control of the trust bank group. The Trust Bank Wellington Community Trust holds 2000 shares outright and 11,248,000 are held by Community Trust Nominees Limited which acts as a bare trustee and has legal ownership of these shares while the community trust retains beneficial ownership. This holding of 11,250,000 shares represents 33.33 percent of the total shareholding in Community Trusts Investments Limited and Community Trusts Nominees Limited. Community Trusts Nominees Limited is required to act for the participating community trusts, including in the exercise of the voting rights attached to the shares, in the manner directed by Community Trusts Investments Limited. The directors of Community Trusts Investments Limited and Community Trusts Nominees Limited are the same.

Community Trusts Investments Limited is owned by the participating community trusts in proportion to their present individual shareholdings in Trust Bank New Zealand Limited. The articles of Community Trusts Investments Limited, together with a deed of trust entered into by the participating community trusts, are the mechanisms adopted to regulate the ongoing relationship of the participating community trusts and to manage their collective shareholding in Trust Bank New Zealand Limited.

3. Taxation

For taxation purposes the trust is deemed to be a charitable organisation. Its income is not subject to taxation.

4. 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.