TRUSTEES' REPORT

On behalf of the Trustees I am pleased to present the Annual Report of the Trust for the year ending 31 March 2012.

Unfortunately the volatility in the financial markets continued during the last financial year. The ongoing uncertainty related to Europe and the Euro was a particular contributor to the volatility of international markets, and this has continued into the current financial year. Despite this, the Trust has continued to serve our communities in a social environment where demands for assistance are increasing.

DONATIONS

During the year the Trust approved 716 donations, totalling a net $4.7 million. The number of applications received during the year increased to 921, a rise of 3% over the previous year. The Trust approved 78% of those applications, while 188 applications (20%) were declined and 17 applications (2%) were withdrawn by the applicant. All applications received, except those withdrawn by the applicant, were presented to the Board for consideration.

The average request of $12,866 was slightly lower than the previous year, and the average donation amount approved also decreased, from $5,594 to $5,366. The ratio of the average request to the average donation increased slightly for 2011/12 to 2.40.

The Trust’s unique relationship with the four Regional Sports Trusts operating within our region continues to be important, and the funding we provide to them generates strong benefits for their communities. We were pleased to be able to maintain our support for the Regional Sports Trusts at the same level as the previous year. The Trust’s Summer Reading Programme, has now completed its 15th successful year of operation. Since it was first established the Summer Reading Programme has extended to cover a wider age range, and it also now offers a condensed mid-winter programme. The Trustees wish to place on record our thanks to the staff at the participating libraries, particularly those on the organising committee, for their continued support of the programme – we are well aware that the success of the programme would not be possible without this support. The Trust also supported a further series of ‘Maths is Fun’ programmes during the school holidays in several locations throughout the region.

FINANCIAL

As at 31st March 2012, the Trust’s net assets were $137.2 million, which was a reduction of $7.5 million from the previous year. The net loss from investments for the year was $1.4 million, and with the addition of administration expenses and donations led to the Trust’s overall net loss of $7.5 million. The loss includes $10.5 million of unrealised losses on our investments, due to changes in currency values as well as market movements.

The Trust continued its policy of being 50% hedged on average during the last financial year, and hedging gains partly offset the unrealised losses due to changing currency values. Further rebalancing of the equity portfolios has been undertaken. This rebalancing partly reflects changes to relative asset values as financial markets recover at different rates; however, it also reflects changes to the Trust’s investment strategy to place slightly greater emphasis on growth rather than income.

The Trust’s net assets were $4.0 million above the adjusted capital base of the Trust of $133.1 million. The Trust continues to be managed efficiently, with operating expenses for the year 8% below budget, at $1.3 million. Towards the end of the financial year, the Trust moved to electronic delivery of documentation to trustees, which is expected to generate both financial and operational efficiencies for the Trust.

TRUSTEES

During the year the term of four trustees expired. Ron Garrod was reappointed for a further term of four years. Beverley Fullerton-Smith and Keith Moretta retired after one term on the Trust, while John Gordon retired having completed two terms. The Trust wishes to record its thanks to Beverley, Keith