18 JULY NEW ZEALAND GAZETTE 1845

Market Risk

The value of investment, which are held in shares and New Zealand stocks are subject to market fluctuations. No provision has been made for potential gains or losses that could occur due to market fluctuations.

Fair Value

The carrying value is considered to be the fair value for all financial instruments.

8. Taxation

The trust is a charitable organisation in terms of tax legislation. Its income is not subject to taxation.

9. 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.

10. Subsidiary Charitable Company

The trust has set up a registered charitable subsidiary named Bay of Plenty Community Trust Charities Limited. No assets have been transferred to this company as at 31 March 1996 and it has not traded during the year.

11. Segment Information

The trust's only activity is to receive income to allocate for charitable, cultural, philanthropic, recreational and other purposes beneficial to the community.

Schedule of Distributions of Income by Way of Donations for the Year Ended 31 March 1996

Donations made by the trust may be summarised as follows:

(A full list covers a number of pages and is attached to the original of this document. A copy is available on request.)

Statement From the Chairman, Mr Rob Tait, on Behalf of the Trust Bank Bay of Plenty Community Trustees

The Trust Bank Bay of Plenty Community Trust recently voted in support of a Westpac offer to buy its shares in trust bank. The trust will invest the sale proceeds of approximately 90 million dollars and expects to increase the level of donations to the Bay of Plenty communities.

Since the formation of the trust in 1988, the assets have comprised almost entirely its holding of shares in Trust Bank New Zealand Limited. The income of the trust has been the dividends received on the shares. Donations will now be made from the income received from the diversified investments planned by the trust.

The trust owned approximately 7 percent of TBNZ which it held on behalf of the Bay of Plenty community who built and supported Trust Bank Bay of Plenty (formerly Bay of Plenty Savings Bank Limited) since its formation in 1964.

Why Sell?

As a result of inquiries from other banks, a number of the regional trust bank community trusts considered a sales of their TBNZ shares and wished to diversify their asset base. This effectively, for all shareholders, placed the bank on the market. Our trust was obliged to analyse any proposal, and if a sale was to proceed, ensure that the Bay of Plenty community receive maximum value.

Considerations

The trust placed emphasis on the historical roots of trust bank and gave great weight to such factors as community links, the regional focus and New Zealand ownership of the bank. We regarded it as imperative to ensure that in any sale, a premium in value was extracted for those unique features.

Steps Taken

Our trustees sought advice from 2 sets of economic and investment analysts. We also sought specialist legal advice and in particular as to our obligations as trustees to act prudently and to spread investment risk.

The advice necessitated that the sale process be a contestable one to ensure that maximum value was obtained for our investment.

This was done and the offer is reflective of one of the highest prices paid for an Australasian bank.

When the Westpac offer was finalised, the advice given to our trustees was unequivocal and recommended that we should accept.

The Future

1. Trust Bank: The founders of trust bank have provided an extraordinary legacy for the communities of New Zealand. The trust bank name will continue and will be part of a vibrant robust banking organisation serving the banking needs of our community. The trust is satisfied that the founders desire for the community to have sound banking services and an asset for the benefit of the community are now being respected to an extent they might never have envisaged.

2. The Trust: The trust will receive approximately $90,000,000.00. This capital fund will be invested in a wide range of local, regional and national assets. The income flow from those investments will continue to be available for donations and