22 SEPTEMBER NEW ZEALAND GAZETTE 2941

N. S. Jones, Mr R. S. McKnight, Mr C. D. Matthewson, Dr J. Ng, Mr D. Pasley, Mr J. D. Polson, Ms H. A. Russell and Mr R. F. Walls.

Secretary: Mr K. G. Ellwood, 60–66 Tennyson Street, P.O. Box 5751, Dunedin.
Bankers: Trust Bank Otago Limited.
Solicitors: Anderson Lloyd.
Auditors: Taylor McLachlan & Partners.

Trust Bank Otago Community Trust Inc.

Trustees Report for the Year Ended 31 March 1994

The trustees have pleasure in presenting the sixth annual report of the trust. The trustees’ duties, which have not changed since last year, include managing the assets of the trust and applying funds for charitable, cultural, philanthropic, recreational and other purposes, being purposes beneficial to the community generally, within the Otago provincial district.

Donations

• The reason for some donations being unpaid at balance date is either, because certain conditions upon which the donation becomes payable are not yet fulfilled by the donee, or payment is to be spread over future years. By entering into arrangements to pay some donees over a period of years, the trust has been able to assist some larger projects in a more practical way. While payment of future years donation instalments is not legally binding upon the trust, undertakings of this nature are closely monitored by the trustees relative to the trust’s projected income.

A full list of donations made during the year can be obtained from the secretary.

National Disaster Relief Fund

Our trust operates in conjunction with all other trust bank community trusts towards the maintenance of a national disaster relief fund. During the year a donation was made towards the Kaikoura Relief Fund of which our trust’s share was $1,350.

Review of Financial Results

(i) Shares in Trust Bank New Zealand Limited

The financial year has been dominated by the decision of trustees to sell part of the trust’s shareholding in Trust Bank New Zealand Limited. Whereas the trust formerly owned 13.5 percent of the issued capital of the bank, that has now reduced to 5.4 percent.

For some years trustees have considered that it has not been prudent to continue to effectively have all of the trust’s assets in a single investment. Opportunities for diversification have been limited, however the decision taken last year to increase the bank’s capital base opened the door for community trusts, as part of that exercise, to sell some of their shares.

As a consequence, the trust in March 1994 realised $62 million from the sale of 30 million shares in the bank which, at balance date was on short term deposit. Trustees have retained professional advisers, with whom they are currently working in order to determine how these funds should be re-invested in the longer term to the best advantage of the trust and its beneficiaries.

The shares retained by the trust, together with those shares retained by other community trusts, except South Canterbury, have been dealt with in accordance with the terms of a deed of trust entered into in December 1993. That deed provides for the collective shareholding of the community trusts, except South Canterbury, to be substantially held by Community Trust Nominees Limited and managed by Community Trusts Investments Limited as agents. This deed and the articles of association of Community Trusts Investments Limited provide a detailed code governing share transactions by community trusts. The procedures are intended to ensure that the strategic value of the collective shareholding of the community trusts is preserved and that material transactions in parcels of shares either between community trusts, or with third parties are conducted in an orderly manner. The deed also prescribes procedures designed to ensure that community trusts have influence in relation to the appointment of directors to the board of Trust Bank New Zealand Limited. The intent is to ensure that there continues to be an appropriate level of experience, skills and other attributes present on the board of Trust Bank New Zealand Limited.

(ii) Financial Performance

The income of the trust rose significantly during the year, both as a result of increased dividends from the bank as well as increased interest income arising from the proceeds from the sale of shares. The work required as part of the process involved in selling off part of the trust’s shareholding in the bank has led to increases in administration costs and professional fees. Overall the achievements made during the year have been extremely pleasing and trustees consider the affairs of the trust to be in an excellent position.

Acknowledgements

During the year, the trust lost the services of one of its trustees, Mr Stephen Alexander of Dunedin. His contribution was extremely valuable and sincerely appreciated by all trustees. Mr Richard McKnight was appointed as trustee by the Associate Minister of Finance in May 1993.

The financial statements of the trust follow this report.