18 JULY NEW ZEALAND GAZETTE 2163

Notes to the Consolidated Financial Statements for the Year Ended 31 March 2002

1. Statement of Accounting Policies

1.1 Reporting Entity

Eastern and Central Community Trust Inc. is a charitable trust incorporated in accordance with the provisions of the Community Trusts Act 1999.

The trust has a wholly owned company – Eastern & Central Community Trust Charities Limited – which is registered under the Companies Act 1993.

The consolidated financial statements have been prepared in accordance with the Financial Reporting Act 1993.

1.2 Measurement Base

The measurement base applied is that of historical cost adjusted for the market valuation of investments.

1.3 Specific Accounting Policies

The following are the particular accounting policies which have a material effect on the measurement of results and financial position.

1.3.1 Basis of Consolidation

The consolidated financial statements include the trust and its wholly owned company accounted for using the purchase method. All significant inter-entity transactions are eliminated on consolidation. Both entities have a common balance date of 31 March.

1.3.2 Investment Income

Investment Income is accounted for on an accruals basis recognising both realised and unrealised gains or losses in value.

1.3.3 Foreign Currency

Foreign Currency balances are converted to NZD at the year end rate of exchange unless covered by a forward exchange contract. Where such contracts are in place, the contracted rate is adopted. Transactions completed during the year are converted at the rate applying at the approximate date of the transaction. Foreign exchange gains and losses are included within the statement of financial performance.

1.3.4 Investments

Investments are recorded at market value at year-end.

1.3.5 Cash

Cash comprises cash at bank, call deposits and short-term deposits but does not include cash held by fund managers.

1.3.6 Donations

Donations are recognised as a liability of the trust when they are approved by trustees and notified to applicants notwithstanding that the applicants may still have to fulfil some conditions.

1.3.7 Fixed Assets

Fixed assets are recorded at cost less accumulated depreciation.

1.3.8 Depreciation

Depreciation is provided on a straight line basis on all tangible fixed assets at rates calculated to allocate the assets’ cost less estimated residual value over their estimated useful lives.

The depreciation periods are:

1.3.9 Income Tax

Income tax expense recognises the obligation payable to the Inland Revenue Department.

1.3.10 G.S.T.

G.S.T. inclusive accounting has been adopted, as the trust is not registered for G.S.T.

1.4 Changes in Accounting Policies

Taxation has been provided for the first time this year. The provision of $193,770 has increased the net deficit for the year and increased current liabilities. There have been no other changes in accounting policies. All policies have been consistently applied.

1.5 Changes in Presentation

The reporting of donations has been reclassified as a distribution from equity and disclosed in the statement of movements in equity. Previously the donations were recorded in the statement of financial performance. Comparative figures have also been reclassified to enable proper comparison.

2. Income From Investments

3. Taxation