31 JULY

NEW ZEALAND GAZETTE

2315

Contingencies

There are no contingent liabilities at balance date.

12. Segmental Reporting

The trust operates as a charitable trust distributing funds to the community in the central North Island region.

13. Financial Instruments

Financial instruments include short-term deposits, New Zealand bonds, international bonds, derivatives and investments in managed funds both within New Zealand and overseas.

13.1 Credit Risk

The trustees regularly review their investment strategy. The investment strategy ensures an appropriate diversification of investments so that the trust has no significant concentration of counterparty or credit risk.

13.2 Fair Values

The trust has recorded its financial assets and liabilities at current market values, which represent estimated fair values and credit risk exposure.

13.3 Currency Risk

The trust has exposure to currency risk through its investments in offshore equities and bonds. The current investment policy requires full hedging of currency risk for overseas bonds when held and 50% hedging of currency risk for overseas equities. Since October 2002, the trust has held a tactical hedging position with 100% cover on overseas equities. Currency risk is managed by fund managers with a range of tolerance.

Offshore investments are denominated into the following foreign currency groupings:

13.4 Credit Facilities

The trust has no credit facilities.

13.5 Interest Rate Risk

The trust investments in fixed rate securities are subject to interest rate risk.

14. Net Current Assets

Cash, bank deposits and accrued income are expected to be realised within 12 months. All liabilities are due within 12 months.

Audit Report

To the Trustees of Eastern & Central Community Trust Inc.

We have audited the consolidated financial report. The consolidated financial report provides information about the past financial performance and financial position of Eastern & Central Community Trust Inc. group (the trust) as at 31 March 2003. This information is stated in accordance with the accounting policies set out in the consolidated financial report.

Trustees' Responsibilities

The trustees are responsible for the preparation, in accordance with New Zealand law and generally accepted accounting practice, of a financial report which gives a true and fair view of the financial position of the trust as at 31 March 2003 and of the results of its operations and cash flows for the year ended 31 March 2003.

Auditors' Responsibilities

It is our responsibility to express an independent opinion on the financial report presented by the trustees and report our opinion to you.

Basis of Opinion

An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial report. It also includes assessing:

• the significant estimates and judgements made by the trustees in the preparation of the financial report; and
• whether the accounting policies are appropriate to the trust's circumstances, consistently applied and adequately disclosed.

We conducted our audit in accordance with generally accepted auditing standards in New Zealand. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial report is free from material misstatements, whether caused by fraud or error. In forming our opinion, we also evaluated the overall adequacy of the presentation of information in the financial report.\n
Our firm has provided taxation and accounting advice to the trust during the year. Other than this and our responsibilities as auditors, we have no relationship with or interests in the trust.

Unqualified Opinion

We have obtained all the information and explanations we have required.

In our opinion:

• proper accounting records have been kept by the trust so far as appears from our examination of those records; and
• the attached consolidated financial report
  • complies with generally accepted accounting practice in New Zealand;