18 JULY
NEW ZEALAND GAZETTE
1853

10. Related Party
In the normal course of business the trust has been paid $262,125 (1995 $589,736) of interest from Trust Bank New Zealand Limited. At balance date the bank balances held at Trust Bank New Zealand Limited are $3,147,006 (1995 $5,865,236).

11. Financial Instruments
Investments are stated at estimated market value at balance date. Accrued interest, accounts payable, community loans, and donations approved not yet paid are stated at the amounts expected to be received or paid.

Accordingly, the trustees consider that the fair value of each class of financial assets and financial liabilities is the same as the carrying value in the statement of financial position.

Concentration of Credit Risk

Ninety-one percent of the assets of the trust are represented by the investment in Trust Bank New Zealand Limited shares and term investments with Trust Bank New Zealand Limited. The trustees consider the risk of non-recovery of these investments at balance date to be within satisfactory guidelines.

Currency Risk

The Trust incurs currency risk as as a result of investment transactions entered into by Armstrong Jones (NZ) Limited/Managed Funds. The currency, giving rise to currency risk, in which the trust primarily deals is Australian Dollars. The trust hedges all the Armstrong Jones (NZ) Limited/Managed Funds investment transactions denominated in Australian Dollars through The National Bank of New Zealand Limited.

Interest Rate Risk

The following investments of the trust are sensitive to changes in interest rates: bank call accounts and term deposits, Government and local authority securities, and various debt securities held with Armstrong Jones (NZ) Limited/Managed Funds.

12. Taxation

Net income before taxation as per statement of financial performance .......................... 1996 1995
Add:
Non deductible expenditure ................................................... 551,186 356,856
Imputation credits received .................................................. 6,205,970 3,804,851
Less:
Non assessable income ...................................................... (2,770,364) (1,812,232)
Assessable income for tax purposes ........................................... 18,932,249 11,527,847
Less: loss carry forward entitlement ........................................ 2,363 –
.............................................................................. 18,929,886 11,527,847
Taxation @33% .............................................................. 6,246,862 3,804,189
Less: imputation credits received ............................................ 6,205,970 3,804,851
.............................................................................. 40,892 (662)
Add: imputation credits transferred to loss carried forward .................... – 662
Taxation as per the statement of financial performance ......................... 40,892 –
Less:
Voluntary tax paid ......................................................... 60,000 –
Resident withholding tax ................................................... 20,948 –
Taxation payable (refund) as per the statement of financial position ............ $(40,056) $–

13. Events Subsequent to Balance Date
On 19 April 1996, Westpac Banking Corporation offered a takeover bid to Community Trust Nominees Limited which the various community trusts agreed to accept. The offer transaction involves a fully imputed dividend and a fully imputed taxable bonus issue. The effective offer price in its various forms is $2.92 per share currently held. Therefore the market value of the shares held by Trust Bank Canterbury Community Trust Inc. as at 19 April 1996 is $350,400,000.

Audit Report
To the readers of the financial report of Trust Bank South Canterbury Community Trust Inc.—we have audited the financial statements. The consolidated financial statements provides information about the past financial performance of the Trust Bank Canterbury Community Trust Inc. and its financial position as at 31 March 1996. This information is stated in accordance with the accounting policies included therein.

The Trustees Responsibilities:

The trustees are responsible for the preparation of consolidated financial statements which give a true and fair view of the financial position of the Trust Bank Canterbury Community Trust Inc. as at 31 March 1996 and of the results of operations and cash flows for the year ended on that date.

Auditors’ Responsibilities:

It is our responsibility to express an independent opinion on the consolidated financial statements presented by the trustees and report our opinion to you.