11 JULY NEW ZEALAND GAZETTE 2103

Non-current assets:

Investments 9 203,676 212,554
Fixed assets 10 1,639 1,566
205,315 214,120
Total assets 206,305 215,232

N. J. CLARKE, Trustee.
R. H. T. AWA, Trustee.
Dated this 17th day of June 2002.

Consolidated Statement of Cash Flows for the Year Ended 31 March 2002

| Notes | 2002 $'000 | 2001 $'000 |

Cash flow from operating activities—
Cash was provided from:
Investment income received 16,616 17,773

Cash was disbursed to:
Payments to suppliers and employees (2,049) (1,871)
Donations paid from income (7,985) (13,141)
Tax paid – (39)
(10,034) (15,051)

Net cash flow from operating activities 14 6,582 2,722

Cash flow from investing activities—
Cash was applied to:
Net increase in investments (4,162) (497)
Purchase of fixed assets (131) (362)
Net cash flow from investing activities (4,293) (859)

Cash flow from financing activities—
Cash was applied to:
Donations paid from capital (1,990) (2,015)
Net cash flow from financing activities (1,990) (2,015)

Net increase (decrease) in cash held 299 (152)
Cash at beginning of the year (53) 99
Ending cash carried forward 246 (53)

The Waikato Community Trust Incorporated Notes To and Forming Part Of the Consolidated Financial Statements for the Year Ended 31 March 2002

1. Statement of Accounting Policies

Basis of Reporting

The financial statements presented here are for the reporting entity The Waikato Community Trust Incorporated and its wholly-owned subsidiary Trust Waikato Charities Limited, Trust Waikato Amateur Sport Limited and Trust Waikato District Improvements Limited.

The financial statements have been prepared in accordance with the requirements of the Institute of Chartered Accountants of New Zealand for the measurement and reporting of profit on an historical cost basis with the exception of investments which are recorded at market value.

Specific Accounting Policies

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

(a) Reserves Policy

The following reserving policies were adopted by the trust in 1998. These policies were reviewed in conjunction with the strategic asset allocation review undertaken in 2000. These policies were further reviewed in November 2001, following 18 months of poor investment performance, and the consequential reduction of the investment fluctuation reserve below target levels.

Trust Funds

In order to prudently manage the financial affairs of the trust, the trustees have adopted the following policies for accounting for the trust’s capital and retained earnings.

• Capital

Following the sale of the trust’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 Waikato region. For this purpose, the trustees agreed that $169,800,000 would be considered as the “initial capital” of the trust. The “initial capital value” is increased each year to show the “base capital value” which reflects growth due to inflation and regional growth. An amount was transferred from retained earnings in 1997 to increase the capital of the trust from its original amount.