28 AUGUST

NEW ZEALAND GAZETTE

3223

Net cash inflow/(outflow) from operating activities
13
(20,932,387)
(10,742,104)

Cash flows from investing activities—
Cash was provided from/(applied to):

Investments
21,228,575
11,840,372

Fixed assets
(46,156)
(61,890)

Loans
(209,284)
(1,055,263)

Net cash inflow/(outflow) from investing activities
20,973,135
10,723,219

Net increase/(decrease) in cash held
40,748
(18,885)

Add cash at beginning of the year
(15,282)
3,603

Total cash balance at end of year
25,466
(15,282)

Statement of Significant Accounting Policies for the Year Ended 31 March 2003

A. Basis of Preparation

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 presented are those for The Community Trust of Southland Group (“the group”). The group consists of The Community Trust of Southland (“the trust”), its wholly owned subsidiary company Southland Community Trust Charities Limited and the trust’s interests in associates.

The financial statements comply with the Financial Reporting Act 1993 and the Community Trusts Act 1999. They comprise statements of the following: significant accounting policies, financial performance, movements in trust funds, financial position, cash flows, as well as notes to these statements.

The financial statements are prepared on the basis of historical cost except that investment assets are stated at valuation.

B. Consolidation Method

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.

C. 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.

D. Trust Capital

Following the sale of the group’s shares in Trust Bank New Zealand Limited in April 1996 for $158,460,000, 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 “trust capital” value of the group and that this value would be maintained.

E. Capital Maintenance Reserve

The capital maintenance reserve represents the additional amount necessary to preserve the real value of the trust capital allowing for inflation as measured by the Consumers Price Index (all groups) and payments of grants out of capital.

F. 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 is maintained. In years when net income from investments is higher than the grant levels, surplus income will be transferred to this reserve. In years when there is insufficient income to sustain the level of grants, an appropriate amount will be transferred from the grants maintenance reserve to income.

G. Basis of Recognising Components of the Financial Statements

The following general accounting policies are adopted:

Assets

A transaction results in an asset being recognised in the statement of financial position when it will probably give rise to ongoing benefits for the group and those benefits can be measured with reliability.

Liabilities

A transaction results in a liability being recognised in the statement of financial position when it will probably give rise to the need for the group to sacrifice assets in the future and those sacrifices can be measured with reliability.

Revenue

Revenue is recognised in the statement of financial performance when a transaction gives rise to an increase in the value of the group’s net assets, and that increase can be measured with reliability.

Expenses

An expense is recognised in the statement of financial performance when a transaction results in a decrease in the value of the group’s net assets, and that decrease can be measured with reliability.

Classification of Assets and Liabilities Between Current and Non-current

An amount is classified as current when it is expected to be settled or extinguished within one year of the date of the financial statements. All other amounts are classified as non-current.

H. Fixed Assets

Fixed assets are initially stated at cost and then depreciated on a straight line basis. 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