NEW ZEALAND GAZETTE

No. 84

Reconciliation of Reported Surplus to Net Cash Flow from Operating Activities for the Year Ended 31 March 2001

Add non-cash items:

| Unrealised investments revaluations | 0 | (26,525) |
| Unrealised movement on bonds | 3 | 85 |
| | 3 | (26,440) |

Movements in working capital items:

| Increase/(decrease) in creditors | 137 | (17) |
| Increase in debtors | (140) | 0 |
| Increase/(decrease) in ASB Charitable Trust | 25 | (1) |
| | 22 | (18) |
| Fund managers’ losses | 21,542 | 0 |
| Net cash inflow from operating activities | 27,859 | 5,874 |

Notes to the Financial Statements for the Year Ended 31 March 2001

1. Statement of Accounting Policies

The ASB Bank Community Trust (“the trust”) is the reporting entity. The trust was formed on 30 May 1988 through the creation of a trust deed in compliance with the Trustee Banks Restructuring Act 1988. Under the terms of the trust deed, the trust was settled with 60 million $1 fully paid ordinary shares in ASB Bank Limited representing 100% of the issued capital. As at 31 March 1988, the net tangible asset backing of those 60 million shares was $147,655,000. In 1989, 45 million shares were sold to the Commonwealth Bank of Australia for $252,000,000 which was then donated to the ASB Charitable Trust. In October 2000, the remaining 15 million shares were sold to the Commonwealth Bank of Australia for $545,000,000.

The measurement basis adopted is that of historical cost adjusted for the revaluation of certain assets. Reliance is placed on the fact that the trust is a going concern. The financial statements have been prepared in accordance with the requirements of the Financial Reporting Act 1993.

Basis of Preparing Consolidated Financial Statements

The financial statements comprise the trust and its subsidiaries. Subsidiaries are those entities controlled by the trust. The financial statements of subsidiaries are included in the financial statements using the purchase method of consolidations.

Bank

Bank is stated as the balance in the bank account rather than the balance as per the cash book.

Statement of Cash Flows

Cash comprises cash at bank and call deposits but excludes charitable purposes reserve fund cash at bank and call deposits.

Dividends

Dividends are recognised as income when they are received by the trust. They are recorded net of any imputation tax credits.

Donations

Donations are accounted for as they are distributed or committed to be distributed to eligible organisations as approved by the trustees.

Expenses

Some expenses are shared jointly with the ASB Charitable Trust. Whilst each trust bears its own specific costs, the joint expenses are allocated between each trust on the basis of the number of applications processed by each.

Joint expense allocations were:

Investments

Investments in shares are valued at the net tangible asset backing as disclosed in the latest published accounts. Any revaluation difference is transferred to the investment reserve. Investment in managed funds and other investments are stated at market value. Any gains or losses are recognised in income and expenditure for the period. Investment transactions are recorded by the fund managers on a settlement date basis.

Financial Instruments

All assets and liabilities of the trust are financial instruments and are recognised in the balance sheet. All financial instruments are recorded at market value or fair value or are not materially different from market value or fair value.

The trust uses financial instruments with off balance sheet risk to reduce exposure to fluctuations in foreign currency exchange rates. Forward exchange contracts are entered into to hedge foreign currency transactions. These are converted to the New Zealand dollar rate at balance date with all realised and unrealised gains and losses being recognised in the income and expenditure statement.

The quantitative disclosures required by FRS 31 Disclosure of Information about Financial Instruments have been included throughout the financial statements where material.