2202 NEW ZEALAND GAZETTE, No. 84 26 JULY 2007

8. Fixed Assets

9. Contingent Liabilities

There are no contingent liabilities at balance date (2006 – Nil) apart from donation commitments as per Note 3.

10. Segmental Reporting

The trust operates as a charitable trust in the Canterbury, Marlborough, Nelson and Chatham Islands. As all operations occur within New Zealand, segmental reporting is not required.

11. Related Party

In the normal course of business, the trust has no related parties with any entity, other than those advised in Note 1.

12. Financial Instruments

Investments are stated at market value at balance date. Accounts receivable and accounts payable are stated at the amounts expected to be received or paid. Accordingly, the trustees consider that the fair value of each class of financial assets and financial liabilities is the same as the carrying value in the financial position.

Concentration of Investments

Ninety-nine percent (97%) of the assets of the trust are represented by investments held with a range of financial institutions. The trustees consider the risk of non-recovery of these investments to be mitigated by prudent investment strategies and an appropriately diversified portfolio.

Currency Risk

The trust incurs currency risk as a result of investment transactions entered into by fund managers. Such risks are mitigated by foreign currency hedges where appropriate. At 31 March 2007, the trust had entered into foreign exchange contracts to hedge foreign denominated investments in the amount of $48,398,970 (2006 – $50,745,975).

Interest Rate Risk

The following investments of the trust are sensitive to changes in interest rates: Bank call accounts and deposits, government and local authority and securities held by fund managers. Interest rate risk is mitigated by the use of interest rate swaps where appropriate. At 31 March 2007, the trust had entered into interest rate swaps contracts in the amount of $89,048,883 (2006 – $98,048,914).

13. Managed Funds Investment

The trust held the following funds at balance date:

14. Taxation

The Canterbury Community Trust is exempt from income tax with effect from 1 April 2004. This means that Canterbury Trust House Limited is now the only taxable entity in the group. Canterbury Trust House Limited has a tax loss to carry forward as at 31 March 2007 of $2,026,490 (2006 – $1,689,421). The benefit of these losses is not recognised.

15. Community Loans

The trust has approved seven new community loans during the year ended 31 March 2007. The loans have been approved with an average term of 10 years and incur an average interest rate of 3% per annum. Where appropriate, the loans have been secured by registered instruments. The loan obligations at balance date were all current and considered collectable.

Auditors’ Report to the Trustees of The Canterbury Community Trust

We have audited the consolidated financial statements. The consolidated financial statements provide information about the past financial performance and cash flows of the trust and subsidiaries for the year ended 31 March 2007 and their financial position as at that date. This information is stated in accordance with the accounting policies set out in Note 1.