3330 NEW ZEALAND GAZETTE, No. 127 14 AUGUST 2008

11. Reconciliation of Net Surplus With Operating Cash Flows

12. Contingent Liabilities and Commitments

Commitments

The trust has no commitments (Nil – 2007).

Lease Commitments

The lease on the present Westerman’s premises commenced on 1 July 2004 and expires on 30 June 2016. The rent payable is to be reviewed at the conclusion of the second and fourth years and the rental will be adjusted, if necessary, in accordance with any increase in the consumer price index. In July 2010, the rent is market assessed but is limited to a 20% increase over the rent set in 2008. During the year ended 31 March 2008, $47,592 was recognised as an expense in the income statement in respect of operating leases ($46,918 – 2007).

Contingencies

There are no contingent liabilities or contingent assets at balance date (Nil – 2007).

13. Related Part Transactions

Related party transactions were as follows:

(a) The trust’s premises are leased from a company in which Mr K. Atkinson, former trustee, has a financial interest (refer note 12). The rent paid for the period was $47,592 ($46,918 – 2007). As at balance date, there was no outstanding balance owed on the lease.

(b) The trust uses the payroll software and database consultancy of IMS Limited, a company in which Mr K. Atkinson, former trustee, has a financial interest. The costs were prearranged on normal market rates for such services and were approved by the full board. $501 was paid for this service during the year ($4,030 – 2007). As at balance date, there was no outstanding balance owed.

(c) Mr K. Atkinson retired from his role as a trustee at the end of May 2007. Mr K. Atkinson had served on the trust for 8 years (two terms).

Trustees update their personal register of interests at each trust meeting. A folder containing each trustee’s register of interests is readily available to members of the public.

In addition, a record of all declarations of interests with any donation application is maintained and is also included in the trustees’ register of interest folder. Trustees abstain from decisions regarding donations to entities in which they have an interest.

14. Financial Instruments

The trustees regularly review their statement of investment policies and objectives.

(a) Market Risk

Market risk embodies the potential for both loss and gains and includes currency risk, interest risk and price risk.

The trust’s investment strategy and the management of the investment risk are detailed in the statement of investment policies and objectives. The trust’s investments are diversified across a range of assets including New Zealand and overseas equities, New Zealand bonds, New Zealand and overseas property and cash. Within each asset class, there are defined policies and mandates to ensure diversification, to minimise investment risk and to limit exposure to any one investment.

Each asset class has a defined target allocation and is managed within a defined allocation range.

In addition, the trust has a risk management policy which includes a tactical asset allocation policy. This policy is to identify times when the trustees should instigate a process to review the short term investment strategy of the trust.

(b) Currency Risk

The trust has exposure to currency risk through its investments in offshore equities. The investment policy requires full hedging of currency risk for overseas bonds, when held, and 50% hedging of currency risk for overseas equities. There has been no currency hedging on overseas equities as a resolution to this effect was passed by the board in October 2004. This decision has been constantly reviewed. Currency risk is managed by fund managers with a range of tolerance.