CASH FLOWS

Investing activities
Investing activities are those activities relating to the movements in short term deposits. The cash flows relating to the Panel's investing activities are reported on a gross basis in the statement of cash flows. The amounts involved are held in term deposits which are rolled over frequently through the year.

Financing activities
Financing activities are those activities relating to changes in the equity structure of the Panel.

Operating activities
Operating activities for the purposes of the Statement of Cash Flows include all activities other than investing and financing activities. Activities funded from the litigation fund are included in this category.

Cash
This means cash balances on hand, held in bank accounts, and short term deposits in which the Panel invests as part of its day-to-day cash management.

The closing balance of cash reported in the Statement of Cashflows is comprised of:

	2008 $	2007 $
Cash and cash equivalents - operations
- Cash	174,624	96,357
- Short term deposits	-	126,379
Cash and cash equivalents - litigation fund
- Cash	26,651	24,865
- Short term deposits	434,393	400,599
Closing cash balance	$635,668	$648,200

CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES

The carrying amounts of financial assets and liabilities in each of the NZ IAS 39 categories are as follows:

	2008 $	2007 $
Loans and receivables
Cash and cash equivalents	635,668	648,200
Trade and other receivables	173,549	63,975
Term deposits	398,749	369,031
Total loans and receivables	$1,207,966	$1,081,206
Financial liabilities measured at amortised cost
Trade and other payables	132,393	61,500
GST payable	11,772	1,083
Total financial liabilities measured at amortised cost	$144,165	$62,583

FINANCIAL INSTRUMENTS

Credit risk
Credit risk represents the risk that a counterparty will default on its contractual obligations to the Panel. Financial instruments which potentially subject the Panel to credit risk consist of bank balances, bank term deposits, interest receivable, and trade and other receivables. The maximum exposure to credit risk at the reporting date is the carrying amount of those instruments as detailed below.

There is limited credit risk for the Panel because most of the financial assets are the Panel's cash or investments. These are deposits with the Bank of New Zealand which is a registered bank in New Zealand and is rated by Moody's Aa2, Standard & Poors AA for its long term senior unsecured obligations payable in New Zealand.

The Panel does not require collateral or security to support financial instruments.

There are no concentrations of credit risk.

Fair values
All financial instruments are recognised in the Statement of Financial Position and are stated at carrying amounts. Given their short term nature, the carrying amounts are considered a reasonable approximation of their fair values. There has been no change from the previous period in the Panel's exposure to risks, how they arise or the Panel's objectives, policies and processes for managing the risk and the methods used to measure the risks.

Liquidity risk
Liquidity risk represents the Panel's ability to meet its contractual obligations associated with financial liabilities. The Panel evaluates its liquidity requirements on an ongoing basis by preparing quarterly budget analyses which are used to manage the timing of investment maturity with payments due. The Panel's creditors are mainly those reported as trade and other payables. The Panel aims to pay these within normal commercial terms: that is, by the 20th of the month, if not earlier.

Currency risk
The Panel does not hold any overseas securities or deposits and is therefore not exposed to any currency risk.

Market risk
The only market risk that the Panel is subject to is interest rate risk. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. As term deposits are at fixed rates and therefore do not fluctuate, the market risk the Panel is exposed to does not impact its reported financial performance and/or equity.

Details are as follows:

	Effective Interest Rate	Total $	Maturities 3 months or less $	Maturities greater than 3 months $
2008
Cash and cash equivalents - operations	0.00%	70,135	70,135	-
- Current account-	4.35%	104,489	104,489	-
- Call account	8.21%	107,979	-	107,979
		$282,603	$174,624	$107,979
Cash and cash equivalents - litigation fund
- Call account	8.00%	26,651	26,651	-
- Short term deposits	8.09%	434,393	434,393	-
Term deposits	8.27%	290,770	-	290,770
		$751,814	$461,044	$290,770
2007
Cash and cash equivalents - operations
- Current account-	0.00%	44,163	44,163	-
- Call account	3.85%	52,194	52,194	-
- Short term deposits	7.67%	126,379	126,379	-
Term deposits	7.70%	100,000	100,000	-
		$322,736	$322,736	-
Cash and cash equivalents - litigation fund
- Call account	6.40%	24,865	24,865	-
- Short term deposits	7.77%	400,599	400,599	-
Term deposits	7.65%	269,031	-	269,031
		$694,495	$425,464	$269,031

The Panel's interest rate risk is limited to interest on call accounts and term investments, the maturities of which are shown above.

Sensitivity analysis
As at 30 June 2008, if the floating interest rate on call deposits had been 100 basis points higher or lower, with all other variables held constant, the surplus/deficit for the year would have been $1,311 (2007 $771) higher or lower.

PERSONNEL COSTS

	2008 $	2007 $
Salaries	148,817	-
Employer contributions to defined contribution plans	1,146	-
Total personnel costs	$149,963	-

IMPACT OF ADOPTION OF NZ IFRS

On 1 July 2007 the Panel adopted NZ equivalents to IFRS for the first time. This requires retrospective application of all NZ IFRS to comparative information.

The changes arising from the adoption of NZ IFRS are as follows:

Statement of financial performance
Other than presentational changes, the change to NZ IFRS has not impacted the statement of financial performance.

Statement of financial position
Previously the Panel had created a general provision for bad debts. As there are no current debts that the Panel believes will be uncollectable, the provision of $10,000 has been removed and credited to Accumulated Funds as at 1 July 2006.

As part of the change to NZ IFRS the Panel now reflects term deposits with maturities less than or equal to three months as part of cash and cash equivalents. Term deposits with maturities greater than three months are classified on their own. Previously all term deposits regardless of their maturity were classified as part of short term deposits. The following is a summary of the changes:

	Previous NZ GAAP $	2007 Effect of Transition $	NZ IFRS $
Cash and cash equivalents - operations	96,257	126,379	222,736
Cash and cash equivalents - litigation fund	24,865	400,599	425,464
Short term deposits - operations	226,379	(126,379)	100,000
Short term deposit - litigation fund	669,630	(400,599)	269,031
Interest receivable - operating	1,570	-	1,570
Interest receivable - litigation fund	2,337	-	2,337
Trade and other receivables	60,068	-	60,068
Less Provision for bad debts	(10,000)	10,000	-
Prepayments	21,930	-	21,930
	$1,093,136	$10,000	$1,103,136
Trade and other payables	61,500	-	61,500
GST payable	1,083	-	1,083
Total current liabilities	$62,583	-	$62,583
Operating funds	333,721	10,000	343,721
Litigation fund	696,832	-	696,832
Total equity	$1,030,553	$10,000	$1,040,553
Total equity and liabilities	$1,093,136	$10,000	$1,103,136

INCOME FROM FINANCIAL ASSETS

	2008 $	2007 $
Loans and Receivables
Interest - operations	21,715	27,415
Interest - litigation fund	58,722	45,629
Total interest income from loans and receivables	$80,437	$73,044

TRADE AND OTHER RECEIVABLES

	2008 $	2007 $
Trade Receivables	168,862	60,068
Total trade and other receivables	$168,862	$60,068

The status of trade and other receivables as at 30 June 2008 is as follows:

	Total $	Not past due $	Up to 30 days past due $	Over 30 days past due $
2008
Gross receivables	168,862	73,141	57,709	38,021
Impairment	-	-	-	-
	$168,862	$73,141	$57,709	$38,012
2007
Gross receivables	60,068	35,892	17,615	6,561
Impairment	-	-	-	-
	$60,068	$35,892	$17,615	$6,561

EMPLOYEE ENTITLEMENTS

	2008 $	2007 $
Accrued salaries and wages	5,944	-
Annual leave	22,608	-
Total employee entitlements	$28,552

TRADE AND OTHER PAYABLES

	2008 $	2007 $
Trade payables	90,342	53,545
Securities Commission services-	6,052	-
Accrued expenses	35,999	7,955
Total trade and other payables	$132,393	$61,500