6 AUGUST NEW ZEALAND GAZETTE 2645

Reconciliation of net surplus and net cash flows from operating activities—

| | 1998
$(000) | 1997
$(000) |
|------------------------|----------------|
| Net surplus transferred to equity | 8,129 | 9,078 |
| Less payments out of capital (Net) | (330) | (2,389) |
| Fixed asset purchases in accounts payable | – | (20) |
| Accrued income included in investments | (3,508) | – |
| Add (less) non cash items: | | |
| Depreciation of fixed assets | 12 | 14 |
| Amortisation of Government stocks | 14 | 13 |
| Movement in working capital: | | |
| Decrease/(increase) in accounts receivable | 542 | (502) |
| Increase/(decrease) in accounts payable | 272 | (1) |
| Net cash flows from operating activities | $5,131 | $6,193 |

(The accompanying notes form part of these financial statements.)

Notes to the Financial Statements for the Year Ended 31 March 1998

1. Statement of Accounting Policies

Reporting Entity

The Bay of Plenty Community Trust Incorporated is a charitable trust registered under section 14 (i) of the Trustee Banks Restructuring Act 1988. The group consists of Bay of Plenty Community Trust Inc and its subsidiary Bay of Plenty Community Trust Charities Limited.

The financial statements have been prepared as required by the Trustee Banks Restructuring Act 1988 and the trust deed dated 30 May 1988 and in accordance with generally accepted accounting practice.

Measurement Base

The accounting principles recognised as appropriate for the measurement and reporting of earnings and financial position on a historical cost basis are followed by the trust, with the exception of investments which are market valued as at 31 March 1998.

Specific Accounting Policies

The following specific accounting policies which materially affect the measurement of financial performance and the financial position have been applied:

(a) Donations: Donations made during the year from revenue are included in the income statement. Those made from trust capital have been included in the statement of movements in equity.

(b) Investments: All investments are stated at assessed market value.

(c) Fixed Assets: Fixed assets are stated at cost less accumulated depreciation.

(d) Depreciation: Depreciation is charged to write off the cost of fixed assets over their expected economic lives using the diminishing value method at rates from 12 percent to 40 percent per annum.

(e) Accounts Receivable: Accounts receivable are recorded at their estimated realisable value.

(f) Financial Instruments: The trust includes all financial instrument arrangements in the balance sheet using the concept of accrual accounting. Financial instruments are valued as per note 1, measurement base. These instruments arise as a result of everyday operations and include bank, accounts receivable, accounts payable and investments. Revenues and expenses in relation to all financial instruments are recognised in the statement of financial performance. Financial instruments are shown at their fair values.

(g) Consolidation: The Bay of Plenty Community Trust and its subsidiary charitable company, Bay of Plenty Community Trust Charities Limited have been consolidated using the purchase method of consolidation.

Changes in Accounting Policies

All accounting policies have been applied on bases consistent with those used in previous years.

2. Dividends

| | 1998
$(000) | 1997
$(000) |
|----------------|----------------|
| Trust Bank New Zealand Limited | – | 2,140 |
| Community Trusts Investment Limited | – | – |
| | – | $2,140 |

From the current year onwards, dividends included in "Investment Income".