THE COMMUNITY TRUST OF MID & SOUTH CANTERBURY INC

CHAIRPERSON’S REPORT

FOR THE YEAR ENDED 31 MARCH 2013

Financial Performance

In this, our 25th year of operation, the level of investment returns for this financial year was very pleasing to the Community Trust and more than met expectations. The investment income at $2.567M and movement in management funds providing $2.092M gave a total income of $4.660M equating to a 10.52% return on the managed funds.

The income at this level flows through the financial performance and provides a surplus that adds to the Community Trust’s Equity which is now just under the $45M mark.

The operating expenditure was contained well within the budgeted guidelines. The total for this year was $289,638 compared to $312,752 the previous year. This is a reduction of $23,114 as a result of close budget monitoring of expenses.

The movement in equity statement depicts the total year and covers the donations approved of $808,928 leaving $3,443M to be added to the Trust’s equity which now stands at $45.837M compared to the beginning of the year when equity was $42.494M.

In the financial accounts, Note 2 gives a breakdown of the capital fund and the positives from a year of high returns. This shows that the inflation reserve is equalised and a general reserve is reinstated at a level of $2.007M.

Having completed our budgeting process early in 2013 it is expected that the Community Trust will have a steady year in the 2013/14 financial year.

We acknowledge the input from our Investment Advisor, Michael Chamberlain MCA NZ Limited, who collates our investment reports and advises on our strategies and objectives. The Investment world is still very mixed and the need to have good policies in place is very prevalent. Our accounting services are provided by Paul Wolffenbuttel of H C Partners L P and the accounting advice received is appreciated.

Community House

During the 2011 year a decision was taken to remove Community House from our investment funds and recognise the property as a support to the South Canterbury welfare providers by supplying good quality subsidised office accommodation. It is expected that this property will do better than break even and we are not bench marking commercial returns. This financial year we have achieved our target. In accomplishing this there was a need to increase rentals at the commencement of the financial year to accommodate higher insurance costs and the longer term maintenance.

Community House, as a community support hub, is being well utilised. We acknowledge the donation from the Timaru District Council’s Community Development Committee towards the overall running costs of Community House, Timaru. This donation payment assists in keeping rentals for non-profit tenants at the lowest possible level.

Donations

The Community Trust approved in total $808,928 in donations for the year and this compares with $1.431M the previous year and an average of $1.090M over the recent four year period.

The major allocations were Mid and South Canterbury schools $134,323, Geraldine Historical Society $75,000, Lister Home Inc $50,000, Peel Forest Outdoor Pursuits Charitable Trust $40,000 and $25,000 each to Southern Netball Club and Te Aitarakihi Trust. The Community Trust had a conservative approach to donations this year, mainly because of the level of our investment returns the previous year and this, along with the higher level of donations made, had affected the total equity. We are conscious that this is an intergenerational funding base and the need to grow the total equity fund for the future.