THE COMMUNITY TRUST OF MID & SOUTH CANTERBURY INC

CHAIRPERSON’S REPORT

FOR THE YEAR ENDED 31 MARCH 2014

Financial Performance

The financial returns recorded for the year ended 31 March 2014 did not match the high level of the previous year. Early reports of the financial year had shown that results would fluctuate and returns would be at a lower level.

However the results were still positive for the Community Trust in that the equity moved from just under the $46M mark to $46.419M.

Total income from the investment account was $1.879M and movement in managed funds was $0.047M, these two sources totalling $1.926M. The previous year total income had been $4.660M. Operating and direct investment expenditure was in line with our budgeted guidelines and there were no marked deviations to impact on the financial results.

The summary of Statement of Financial Performance, page 6 of the report, shows donations approved at $0.979M compared to the previous year of $0.809M and net income transferred to Capital Account of $0.482M compared to $3.443M.

Note 2 of the Financial Statements gives a breakdown of the capital fund and that a transfer was made from the general reserve to the inflation reserve of $191,847, leaving a general reserve balance of $1.816M. The general reserve was reinstated the previous year as a flow on from higher income returns.

During the year the Board authorised the commencement of a Global shares portfolio under the management of Elevation Capital and this was funded by the previously held units in a global weighted fund. This portfolio is listed as Offshore Equity in the Financial Accounts and the total amount is similar in both years – 2014 $11.9M, 2013 $11.8M.

It was considered that the future prospects of our own portfolio was better than that of a weighted fund. Having completed our budgeting exercise at the beginning of 2014 it is anticipated that the Community Trust will record a steady year in the 2014/15 financial year.

Michael Chamberlain, MCA NZ Limited is our Investment Advisor and we acknowledge his input through the collation of our investment reports and advice to the formulation of our strategies, objectives and policies. Accounting services are provided by Paul Wolfenbuttel of H C Partners L P and this professional advice is greatly valued.

Community House

The capital cost of Community House is not part of our investment funds as the property is provided as a support to the South Canterbury welfare organisations. The purpose is to supply good quality subsidised office space to these organisations enabling them to fully function services to their clients. The Community Trust target a financial return of marginally better than break-even as we do not expect to sustain a negative result.

Community House is a well utilised community support hub with 21 tenants in occupation. This year Farmers Market was located to the Community House carpark, creating an activity there on Saturday mornings. The Board have adopted a long term maintenance plan for the property and this will commence in the 2014/15 year.

We acknowledge input to Community House by the Timaru District Council’s Community Development Committee donation of $10,000 which is put towards the overall running costs. This donation definitely assists in keeping rentals to the non-profit organisations who are tenants at the lowest possible level.

Donations

Donations approved totalled $978,814 and this compares with $808,928 the previous year. Over the recent five year period the Community Trust has allocated $5.338M averaging $1.068M per year.