12 AUGUST 2004

NEW ZEALAND GAZETTE, No. 97

2453

Cash was applied to:

Net increase in investment securities
Net increase in loans and advances
Property, plant and equipment purchased

600,000
–
44,072

1,000,000
–
1,642

644,072
1,001,642

Net cash flow from investing activities

(644,072)
(1,001,642)

Cash flows from financing activities—
Cash was provided from:

Net increase in deposits

–
–

Cash was applied to:

Dividends paid

–
–

Net cash flow from financing activities

–
–

Net increase/(decrease) in cash and cash equivalents
Add cash and cash equivalents at beginning of the year
Cash and cash equivalents at year end

34,994
77,665
112,659

66,682
10,983
77,665

Reconciliation of Net Surplus After Tax to Net Cash Flows from Operating Activities for the Year Ended 31 March 2004

Add/(deduct) movements in working capital:

| Increase (decrease) in sundry creditors | (456,377) | 688,729 |
| Increase (decrease) in interest payable | – | – |
| Increase (decrease) in provision for tax | – | – |
| (Increase) decrease in deferred tax | – | – |
| (Increase) decrease in sundry debtors | (38,299) | (11,496) |
| (Increase) decrease in interest receivable| – | – |

| Net cash flow from operating activities | 680,066 | 1,068,324 |

Statement of Notes to the Accounts for the Year Ended 31 March 2004

1. Statement of Accounting Policies

Reporting Entity

TSB Community Trust is a charitable trust formed by a trust deed dated 30 May 1988, and has adopted a revised deed on 8 February 2001.
These financial statements have been prepared in accordance with this deed and the Community Trusts Act 1999.

Measurement Base

The measurement base is that of historical cost.

Specific Accounting Policies

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

Accounts receivables are stated at their estimated net realisable value.

The TSB Bank Limited shares are stated at the value when gifted of 20,000,000 fully paid shares at 50 cents each, representing $10,000,000. The net asset backing at 31 March 2004 was $7.36 per share.

Donations are recognised in the financial year in which they are authorised and approved by the trustees.

Property, plant and equipment are recorded at cost and will be depreciated on a straight line basis over four years.

The income tax expense charged to the statement of income includes both the current year’s provision and the income tax effects of timing differences calculated using the liability method.

Tax effect accounting is applied on a comprehensive basis to all timing differences. A debit balance in the deferred tax account, arising from timing differences or income tax benefits from income tax losses, is only recognised if there is virtual certainty of realisation.

The financial instruments are recorded at their carrying value which is also the fair value of each of the classes of financial instruments consisting of cash, accrued interest, dividends receivable, investments other than shares in TSB Bank Ltd, accrued charges and donations payable. As stated above, the shares in TSB Bank Ltd are carried at their value when gifted.

For the purpose of the statement of cashflow, cash includes cash on hand and deposits held on call with banks.

The financial statements have been prepared on a G.S.T. inclusive basis.

There have been no changes in accounting policies. All policies have been applied on bases consistent with those used in the previous years.