7 SEPTEMBER NEW ZEALAND GAZETTE 3139

12. Reconciliation with operating surplus

                                                             2000         1999
                                                              $            $

    Net surplus 13,530,536 9,722,129
    Less grants (9,630,707) (9,570,828)
    3,899,829 151,301

Add/(less) movement in working capital
Increase (decrease) in liabilities 851,429 560,901
(Increase) decrease in accounts receivable 40,507 197,647
891,936 758,548

Add/(less) movement in items classified as investing/financing
Asset purchases 20,886 47,137
20,886 47,137

Add/(less) movement in non-cash items
Revaluation of investments (56,654) (2,571,061)
Depreciation 84,316 71,004
27,662 (2,500,057)

Net cash provided by operating activities 4,840,313 (1,543,071)

13. Financial instruments

General

The Group states its investments at balance date at estimated market value. The trustees consider that the fair value of the financial assets is identical to the value in the statement of financial position.

Concentration of credit risk

The Group has significant funds in trading bank deposits. The Group limits risk by spreading the deposits over several trading banks. The Group has not required collateral or other security to support its financial statements. The Group further limits risk through its policy of placing investment funds with separate fund managers, with each fund manager having an investment mandate which requires that they diversify their investments on the Group’s behalf. The Group has sought and obtained the advice of a professional financial adviser prior to making investment allocations and placing decisions.

Interest rate risk

The bank deposits are sensitive to changes in interest rates, as are a proportion of the funds managed by the fund managers and a portion of the loan to Topoclimate South Trust.

14. Capital commitments

Commitments of $1,453,333 exist for grants which will be distributed from either capital or future income sources in future years. These grants have not been recorded in either the statements of financial performance or financial position.

15. Taxation

                                                             2000         1999
                                                              $            $

    Net surplus as per statement of financial performance 13,530,536 9,722,129
    Less Charitable business exemption (1,250,015) (911,404)
    Unrealised (gain)/loss on grey list equities (1,033,505) 2,411,197
    Unrealised (loss)/gain on currency hedging (218,175) -
    Unrealised (gain)/loss on New Zealand equities (180,802) 68,485
    (2,682,497) 1,568,278
    Add Non deductible expenditure 409,584 391,430
    Imputation credits received 433,487 494,665
    RWT credits received 10,604 43,635
    NRWT credits received 128,621 102,894
    Total taxable income 11,830,335 12,323,031
    Less Allocation of beneficiaries’ income to the charitable company (10,500,000) (11,222,486)
    Non-taxable equity accounting income - (16,202)
    Allocation of beneficiaries’ income to tax exempt entities (95,000) (106,284)
    (10,595,000) (11,222,486)
    Total trustees’ income 1,235,335 1,100,545
    Less Tax losses brought forward (710,242) -
    Assessable income for tax purposes 525,093 1,100,545