NEW ZEALAND GAZETTE, No. 109

5 SEPTEMBER 2012

(the "Act"). Pursuant to the Act the Whanganui Community Foundation is incorporated under the Charitable Trusts Act 1957.

The Group consists of the Foundation and its subsidiary Whanganui Charitable Foundation Limited (the "Company"). The Foundation is a tax exempt entity pursuant to CW42 of the Income Tax Act 2007. The Company is a limited liability company registered as a charitable entity under the Charities Act 2005 (CC21727). The Foundation is a Public Benefit Entity which makes grants to qualifying not for profit entities in the Whanganui, Rangitikei, Waimarino and Southern Taranaki regions.

Accounting Policies

The measurement basis adopted is that of historical cost except for land and buildings which are revalued every 3 years and financial assets and liabilities which are recorded at fair value.

Statement of Compliance: The consolidated financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice (NZ GAAP) as represented by the New Zealand Equivalents to the International Financial Reporting Standards (NZ IFRS). For this purpose the Foundation has designated itself a public benefit entity. The financial statements comply with International Financial Reporting Standards issued by the International Accounting Standards Board.

Reliance is placed on the fact that the Foundation is a going concern. The financial statements have been prepared in accordance with the requirements of the Financial Reporting Act 1993.

The Foundation’s functional currency is New Zealand Dollars.

Basis of Preparation

The preparation of financial statements in conformity with NZ IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets, liabilities, income and expense. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Judgements are made by management in the application of NZ IFRS that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in Note 13: Financial Assets and Liabilities.

Consolidated financial statements

The purchase method is used to prepare the consolidated financial statements, which involves adding together like items of assets, liabilities, equity, income and expenses on a line by line basis. All balances and transactions between the Foundation and the Company are eliminated on consolidation.

Statement of Cashflows

The business of the Foundation is the distribution of funds for community benefit. This is supported by the investment portfolio function. Therefore operating activities includes all community distribution and investment functions and the administration that supports these functions.

Cash comprises cash at bank and call deposits but does not include cash or deposits held by the Fund Managers. Therefore the Statement of Cashflows does not reflect the cash flows within the Fund Managers’ investment portfolios.

Revenue - Dividends, Pooled Funds and Interest

Income from Pooled Funds is recognised on declaration date. Interest income is recognised on an accrual basis using the effective interest method.

Grants

Approval of a grant by Trustees results in the recognition of that grant within the Foundation’s financial statements whether or not payment has been made.

Approved grants are payable on the satisfaction of any conditions placed on the recipients. Grants no longer required or not fully utilised by grant recipients are shown separately in the Statement of Comprehensive Income.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, bank balances, deposits held at call with banks, other short term highly liquid investments with original maturities of twelve months or less, which are held to meet short term cash requirements.

Property, Plant & Equipment

Property, plant and equipment are valued at cost, less accumulated depreciation and impairment losses except for freehold land and buildings which are subsequently revalued on a cyclical basis. Land and Buildings are revalued every 3 years.

Valuations are at net current value, as determined by an independent valuer. Any revaluation surplus arising on the revaluation of land and buildings is transferred directly to the asset revaluation reserve. Any revaluation deficit arising in excess of the asset revaluation reserve balance for the land and buildings is recognised in the Statement of Comprehensive Income in the period it arises. Revaluation surpluses which reverse previous revaluation deficits recorded in the Statement of Comprehensive Income are recognised as revenue in the Statement of Comprehensive Income.

Property, plant and equipment is reviewed annually to determine any impairment losses. Impairment losses are recognised in the Statement of Comprehensive Income.

When an item of property, plant and equipment is disposed of, any gain or loss is recognised in the Statement of Comprehensive Income and is calculated as the difference between the sale price and the carrying value of the item.