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NEW ZEALAND GAZETTE, No. 112

28 SEPTEMBER 2006

Notes to the Financial Statements for the Year Ended 31 March 2006

1. Statement of Accounting Policies

The ASB Charitable Trust ("the trust") is the reporting entity. The trust was formed on 31 May 1989 through the creation of a trust deed by the ASB Bank Community Trust and a donation of $252,000,000.

On 27 February 2006, the trustees of the ASB Charitable Trust resolved to distribute, on or before 31 March 2006, the capital of that trust (including all accumulations of income and capital to that date less accrued liabilities) in specie to the ASB Bank Community Trust. Subsequent to this distribution, the trustees intend to formally wind up the ASB Charitable Trust.

The measurement basis adopted is that of historical cost adjusted for the revaluation of certain assets. Reliance is placed on the fact that the trust is a going concern within the ASB Bank Community Trust. The financial statements have been prepared in accordance with the requirements of the Financial Reporting Act 1993.

Statement of Cash Flows

Cash comprises cash at bank and call deposits but does not include cash or deposits held by the fund managers. Therefore, the statement of cash flows does not reflect the cash flows within the fund managers’ portfolios.

Depreciation

Depreciation is provided over the useful life of the assets. Buildings are depreciated on a straight line basis. Vehicle, office equipment and furniture are depreciated on a diminishing value basis. The rates used are those recommended by the Inland Revenue Department.

Land and buildings 2.5% – 3.0%
Vehicle 31.2%
Office equipment and furniture 9.5% – 48.0%

Dividends, Pooled Funds and Interest

Dividends are recognised as income when they are receivable by the trust and exclude imputation tax credits. Income from pooled funds is recognised on declaration date. Interest income is recognised on an accrual basis.

Grants

Grants are accounted for as they are committed to be distributed to eligible organisations as approved by the trustees.

Expenses

Some expenses are shared jointly with the ASB Bank Community Trust. Whilst each trust bears its own specific costs, the joint expenses are allocated between the trusts on the basis of the number of applications processed by each.

Joint expense allocations were:

Fixed Assets

Fixed assets are valued at cost less accumulated depreciation.

Foreign Currencies

All amounts denominated in foreign currencies are converted to New Zealand dollars at balance date and all realised and unrealised gains and losses are recognised in income and expenditure for the period.

Investments

Investments are stated at market value. Any gains or losses are recognised in income and expenditure for the period. Investment transactions are recorded by the fund managers on a trade date basis.

Financial Instruments

All assets and liabilities of the trust with the exception of fixed assets are financial instruments and are recognised in the statement of financial position. All financial instruments are recorded at market value which equates to fair value.

Financial Instruments (continued)

The trust uses financial instruments with off balance sheet risk to reduce exposure to fluctuations in foreign currency exchange rates. Forward exchange contracts are entered into to hedge foreign currency transactions. These are converted to the New Zealand dollar rate at balance date with all realised and unrealised gains and losses being recognised in the income and expenditure statement.

The quantitative disclosures required by FRS 31 Disclosure of Information about Financial Instruments have been included throughout the financial statements where material.

Reserves

Transfers to the capital maintenance reserve are based on the annual movement in the consumer price index. Transfers to all other reserves from the unallocated surplus are made at the discretion of the trustees.

Taxation

The trust has been accorded tax exempt status in New Zealand and Australia but is liable to taxation on investment income in some other overseas countries. Tax on overseas income is accounted for as a reduction of that income.

Changes in Accounting Policies

There have been no material changes in accounting policies during the period.