14 OCTOBER NEW ZEALAND GAZETTE 3605

Note 1999 1998
$ $
Invest South Limited ... 4 1,246,122 1,229,920

Total investment assets 189,537,948 188,424,458

Total assets $190,788,582 $190,076,380

Signed on behalf of the board of trustees:
C. S. BALLANTYNE, Chairman.
SHIRLEY J. PALMER, Trustee.

Consolidated Statement of Cash Flows for the Year Ended 31 March 1999

Note 1999 1998
$ $

Cash flows from operating activities—
Cash was provided by (applied to):
Administration expenses ... (1,332,611) (905,960)
Grants to the community ... (9,261,051) (6,508,002)
Interest and dividends ... 9,050,591 13,046,539

Net cash flows from operating activities ... 9 (1,543,071) 5,632,577

Cash flows from investing activities—
Cash was provided by (applied to):
Investments ... 1,047,184 (2,848,864)
Fixed assets ... (186,193) (990,172)
Loans ... (415,540) 0

Net cash flows from investing activities ... 445,451 (3,839,036)

Net increase (decrease) in cash held ... (1,097,620) 1,793,541

Cash reconciliation—
Cash held at beginning of year ... 2,553,916 760,375
Cash held at end of year ... 1,456,296 2,553,916

Net increase (decrease) in cash held ... (1,097,620) 1,793,541

Notes to the Financial Statements for the Year Ended 31 March 1999

1. Statement of Significant Accounting Policies

General

The financial statements presented here are for the reporting entity the Community Trust of Southland Group (the group). The group consists of the Community Trust of Southland (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, and 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 for trust funds have been modified this year, however as they impact only on the treatment of funds within total trust funds it has no impact on the financial position of the trust. All other policies have been applied on bases consistent with those used in the prior year.

Consolidation

The financial statements of the trust’s wholly owned company Southland Community Trust Charities Limited are included in the 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 financial statements include the group’s share of the net surplus of associates on an equity accounted basis.

Initial Trust Capital

Following the sale of the group’s shares in Trust Bank New Zealand Limited in April 1996 the trustees agreed that the value of the trust at that time should be maintained for the benefit of current and future generations living in the region. For this purpose the trustees agreed that $158,460,000 would be considered as the “Initial Trust Capital” value of the group, and that this value would be maintained.

Capital Maintenance Reserve

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

Grants Maintenance Reserve

While the trustees have adopted a long-term investment strategy, they accept that annual returns from investments are likely to fluctuate from year to year. In recognition of this a grants maintenance reserve has been established. In years when net