3122 NEW ZEALAND GAZETTE, No. 109 5 SEPTEMBER 2012

Revaluation Reserves

The Revaluation Reserve of $368,813 as at 31 March 2012 comprises the cumulative revaluation of a building owned by the Company (2011: $396,796).

Retained Earnings

Retained earnings is the accumulation of surpluses and losses since inception.

10 Related Party Information
The Trustees are key management personnel of the Foundation as defined by NZ IAS 24: Related Party Disclosures. As the Trustees are not employees of the Foundation, they do not receive short term employee benefits, post employment benefits, other long term benefits, or termination benefits. Trustees are appointed by the New Zealand Government and remunerated at rates set by the Government. These rates were last set in June 2002. During the year Trustees received honoraria and meeting fees of $63,432 (2011: $52,183).

The Foundation has paid rent to the Company of $23,478 (2011: $23,391).

The Company has paid a management fee to the Foundation of $5,870 (2011: $5,935).

The Company owed the Company nil at 31 March 2012 (2011: $692,233).

The Foundation paid $480 to Claire Timpany M.CGD(H. Dist) for design services during the year ended 31 March 2012. Claire Timpany is the daughter of Judith Timpany who is Chief Executive of the Foundation.

No related party debts have been written off or provided for as doubtful.

11 Key Personnel Compensation

12 WRPHO Loan
The Foundation has made a loan to the Whanganui Regional Primary Health Organisation (“WRPHO”). The loan is secured and regular monthly repayments are made. The loan is at a concessionary interest rate of 6% which is accounted for as a community distribution grant with interest forgone being added back to income.

13 Financial Instruments

Fair Value Measurement

Financial instruments are required to be specified in a hierarchy of fair value based on the degree to which fair value is observable.

Level 1: Fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly (i.e as prices) or indirectly (i.e derived from prices).

Level 3: Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data.

All financial instruments held by the Group at fair value are classified as Level 1 and there have been no transfers between levels during the year.

Risks arising from the Group’s financial assets and liabilities are inherent in the nature of the Group’s activities, and are managed through an ongoing process of risk identification, measurement and monitoring. The Group is exposed to credit risk, liquidity risk, and market risk (including currency, interest rate and pricing risks).

The Group’s income is generated from its financial assets. Liabilities which arise from its operations are met from cash flows provided by these assets.

Information regarding the fair value of assets and liabilities exposed to risk is regularly reported to the Foundation’s management, the Foundation’s Investment Audit and Compliance Committee and ultimately to the Board of Trustees. The Investment Portfolio is regularly rebalanced to ensure that asset classes remain within the Strategic Asset Allocation set out in the Foundation’s Statement of Investment Policy and Objectives (SIPO).

The SIPO sets out the Foundation’s investment objectives. These can be summarised as:

• to ensure that the investment fund is invested prudently;
• to provide inter-generational equity with regard to distribution levels over time;
• to ensure that money is available for distribution, as required, to meet the needs and distribution policies of the Foundation; and
• to maintain the value of the investment fund’s capital base in real terms and to grow such capital value at a level equal to the population base growth of the region. Real in this context relates to the changes in the Consumer Price Index (CPI).

The Investment Portfolio

The Foundation manages its Investment Portfolio in terms of its SIPO. The SIPO is monitored on a regular basis by the Board of Trustees and, as required, amended to reflect international best investment practice. The Portfolio’s Strategic Asset Allocation is reviewed at three yearly intervals. The Strategic Asset Allocation was last reviewed in 2012. Michael Chamberlain and Associates assists both management and Trustees with investment advice and portfolio monitoring.

Portfolio Characteristics

The Foundation is not directly involved with the analysis, sale or purchase of individual asset securities other than bonds and term deposits. Investments are made into either pooled funds or segregated accounts with Fund Managers.