21 JULY 2005

NEW ZEALAND GAZETTE, No. 110

2663

Financial Advisors:
Russell Investment Group Limited, Auckland.

Solicitors:
Sharp Tudhope, Tauranga

Tax Advisors:
KPMG, Christchurch.

Chairman’s Report for the Year Ended 31 March 2005

It is my pleasure to report to you on the operation of the Bay of Plenty Community Trust for the year ended 31 March 2005. It has been an interesting and challenging year. The trust has increased its donations into our Bay of Plenty Region to $2.9m and in addition has made interest free loans of $1.1m into community projects with some further loans to be drawn down after balance date.

The trust received an $8.3m return on its investments for the year ended 31 March 2005. While this is down significantly on the previous year, it must be remembered that the trust’s earnings for the year to 31 March 2004 were outstanding and not expected to be repeated. The return of 7.50% this year was slightly ahead of budget.

After donations and costs, the trust had a net surplus of $4.6m which supplements its capital to help preserve its real value relative to inflation and population growth, as well as to restore reserves nearer a level that the trustees have been advised is prudent to ensure our ability to maintain donations into our community when income is lower.

The net equity of the trust increased from $118.9m to $123.3m over the year as a result of the above.

Trustees’ expenses and trust administration costs have increased largely because of a significant increase in workload over the year. This reflects the trustees’ more active liaison with its main stakeholders and other community organisations to try to improve the effectiveness and align the trust’s strategies to the communities’ needs. We can work better by working together.

The trustees allocated up to $600,000 of funding during the 2005 financial year to the trust’s community development fund. The objective of this was to make funds available for projects aimed at addressing deprivation issues or regional development projects which improve the economies and employment opportunities in our region. This is a significant change of emphasis with the trust without abandoning our traditional role of supporting the community and voluntary sector which is so important to the wellbeing of our communities. Pursuant to this strategy, the trust has committed to a $1m grant to the Rotorua Energy Events Centre. This development will bring significant economic and employment gains by adding to and building on Rotorua’s present tourism, convention and events infrastructure.

The trust has continued to fund the Sport BoP CoachForce project which aims at coaching and sport development especially at grass roots sport in the Bay of Plenty region. We congratulate those involved in that project for their effort and achievement. The encouragement of sport and recreational activity is seen by the trust as one key component of our communities’ wellbeing.

In January, Dillon Scholarships totalling $71,250 were awarded to 39 tertiary students with disabilities to assist them in meeting the additional costs of their studies. Not all the scholarships had been uplifted at balance date.

The trust is in good hands with caring trustees who have an excellent range of skills and who have contributed a lot of effort to running the trust this year. The trust’s funds are invested conservatively and securely in a diversified manner with a long-term perspective under internationally leading advisors. Trustees have looked at many options for investment and will continue to do so seeking ways to improve returns if possible without incurring risks they are not comfortable with.

I thank my trustees and the trust’s staff for their contribution to another successful year. I also thank particularly all of those in our communities who contributed in so many ways to the sporting and voluntary organisations and our local territorial authorities. They are so important to us. We are lucky to be able to help some with valuable funding through this trust.

RAY SHARP, Chairman.

Date: 8 June 2005.

Consolidated Statement of Financial Performance for the Year Ended 31 March 2005

| Less expenditure: | | |
| Advertising/public reporting | 51 | 45 |
| Audit fees | 7 | 7 |
| Accountancy fees | 9 | 9 |
| Portfolio management and | 337 | 314 |
| advisory fees | | |
| Office administration | 240 | 207 |
| Office rental | 15 | 14 |
| Other administration costs | 75 | 85 |
| Trustees’ fees | 163 | 153 |
| Trustees’ expenses | 56 | 50 |
| | 953 | 884 |