2656 NEW ZEALAND GAZETTE No. 107

Cash flows from financing activities—
Cash was provided by (applied to):
Transfer to Southland Community Trust Charities Limited ...
| 0 | 0 | -13,288,420 | 0 |

Net cash flows from financing activities
| 0 | 0 | -13,288,420 | 0 |

Net increase (decrease) in cash held
| $1,793,541 | -$6,046,878 | $1,661,380 | -$6,046,878 |

Cash reconciliation—
Cash held at beginning of year
| 760,377 | 6,807,255 | 760,377 | 6,807,255 |

Cash held at end of year
| 2,553,918 | 760,377 | 2,421,757 | 760,377 |

Net increase (decrease) in cash held
| $1,793,541 | -$6,046,878 | $1,661,380 | -$6,046,878 |

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

1. Statement of Significant Accounting Policies

General
The financial statements presented here are for the reporting entity the Community Trust of Southland (the trust) and the Community Trust of Southland Group (the group). The group consists of the trust, its wholly owned company Southland Community Trust Charities Limited, and the trust's interests in associates. The Community Trust of Southland was formed under the Trustee Banks Restructuring Act 1988, while the trust is incorporated under the Charitable Trusts Act 1957.

The financial statements are presented in accordance with the Financial Reporting Act 1993.
The financial statements are prepared on the basis of historical cost except that investment assets are stated at valuation.

The accounting policies have been consistently applied by the trust and the group, and are consistent with those of the previous year. Where appropriate, new accounting policies have been introduced to reflect the changes in the nature of activities, particularly investing activities, undertaken by the trust and the group.

Consolidation
The financial statements of the trust’s wholly owned company Southland Community Trust Charities Limited are included in the group financial statements using the purchase method of consolidation.

Associates
Associates are entities in which the group has significant influence, but not control, over the operating and financial policies. The group financial statements include the group’s share of the net deficit of associates on an equity accounted basis.

Investments
The Group states its equity in investments at market value, and reports gains or losses on holding these investments in the statement of financial performance as income from revaluation of investments.

The group intends to hold bank deposits until maturity and states these investments at cost.

Fixed Assets
Fixed assets are initially stated at cost and then depreciated on a straight line basis to allocate the cost of an asset, less any residual value, over its useful life. The estimated useful lives of fixed assets are as follows:

• Land ... indefinite
• Buildings ... 30–40 years
• Furniture and fittings ... 3–15 years
• Office equipment ... 3–8 years
• Motor vehicles ... 5–8 years

Accounts Receivable
The group states these at expected realisable value.

Grants
The group brings these to account when approved by trustees. Unpaid grants are recorded as a liability.

Income Tax
The group provides for income tax on its net income after adjusting for tax accounting differences and any beneficiaries income determinations made pursuant to section OB1 (226) of the Income Tax Act.

Goods and Services Tax
The group is not registered for goods and services tax. The financial statements are prepared so that all components are stated inclusive of G.S.T.

2. Sale of Shares in Trust Bank New Zealand

In May 1996 the trust sold its shares in Trust Bank New Zealand to Westpac Banking Corporation. The effective offer price, including a bonus issue and special fully imputed dividend amounted to $2.92 per share held before the offer.