2450 NEW ZEALAND GAZETTE No. 85

Particular Accounting Policies

Income

Income from managed funds includes both realised and unrealised income and is recorded net of fund management expenses. Dividends from Trust Bank New Zealand Limited are recognised as income when they are received by the trust and exclude imputation tax credits.

Interest is recognised on an accrual basis.

Donations

Donations are accounted for as they are distributed or committed to be distributed to eligible organisations as approved by the trustees.

Foreign Currencies

All amounts denominated in foreign currencies are converted to New Zealand dollars at balance date. All realised and unrealised gains and losses are recognised in income and expenditure for the period.

Taxation

The trust has been registered as exempt in New Zealand from interest and dividend PAYE and holds a current certificate of exemption but may be liable to taxation on investment income in some overseas countries. Tax on overseas income is accounted for as a reduction of that income.

The trust is not registered for goods and services tax purposes. Accordingly, these financial statements are stated on a G.S.T. inclusive basis.

Reserves

For a 5 year period commencing in 1995 a reserve building programme has been implemented.

The capital maintenance reserve represents the additional amount necessary to preserve the real value of the capital allowing for inflation as measured by the consumers’ price index (CPI).

The investment fluctuation reserve allows donations at a stable level from year to year even though investment income may fluctuate. If investment income, after necessary transfers to the capital maintenance reserve is more than the target donations level, the excess will be added to the investment fluctuation reserve. If it is less, the deficit will be transferred out of the investment fluctuation reserve.

Investments

The shares in Trust Bank New Zealand Limited which are held as a long-term investment are valued at year end market value. Any revaluation difference is transferred to an investment revaluation reserve.

Hedging Instruments

The trust through its investment managers enters into hedging instruments such as futures, options and forward exchange contracts. These are converted to the New Zealand dollar rate at balance date with all realised and unrealised gains and losses being recognised in income and expenditure as net income from managed funds.

Statement of Cash Flows

Cash comprises cash at bank and call deposits but does not include cash or deposits held by the fund managers.

Changes in Accounting Policies

Donations are now recorded on a commitment basis rather than a cash basis. This has increased the amount recorded as donations by $637,560.

The investment in Trust Bank New Zealand Limited has been recorded at market value compared to cost in previous years. This has resulted in a revaluation of $35,936,731.

There have been no other material changes in accounting policies during this accounting period.

1. Income

Dividends—trust bank .................................................................................. 2,175 1,946
Interest .............................................................................................. 2,833 192

                                                                               $5,008      $2,138

2. Professional Fees

Auditors:

Audit fees  .....................................................................................      1           1
Other professional fees  ......................................................................      4           9

Community Trust Investment Limited ............................................................ 8 –
Legal advisors .................................................................................. – –
Professional investment advisors ............................................................. 59 –

                                                                               $73        $10