NOTES TO THE FINANCIAL STATEMENTS

for the year ended 30 June 2001

NOTE 1   STATEMENT OF ACCOUNTING POLICIES

(a)	Reporting entity The Takeovers Panel is a body corporate established by the Takeovers Act 1993. The financial statements presented here are prepared pursuant to section 16 of the Takeovers Act 1993 and section 41 of the Public Finance Act 1989. They are the first full annual financial statements prepared by the Panel. There are no comparatives as there was no appropriation in the previous year.
(b)	Measurement system The accounting principles recognised as appropriate for the measurement and reporting of results and financial position on an historical cost basis have been applied.
(c)	Accounting policies
	(i)	Budget figures The budget figures are those approved by Panel members on 30 November 2000. The budget figures are prepared in accordance with generally accepted accounting practice.
	(ii)	Short term deposits Short term deposits are shown at cost.
	(iii)	GST GST is accounted for by the net method.
	(iv)	Financial instruments All financial instruments are recognised in the Statement of Financial Position.
	(v)	Income tax The Panel is exempt from income tax under the Income Tax Act 1994.

NOTE 2   REMUNERATION OF MEMBERS OF THE PANEL

Members are remunerated on the basis of time spent on the work of the Panel. Members’ fees for the year ended 30 June 2001 were:

J.C. King	31,057
G.G.H. Gilmour	5,300
D.O. Jones	5,950
A. Lawrence	4,000
J.M. Ott	3,800
K.J. O’Connor	4,700
P.A. Randall	5,550
D.M.D. Rawstorne	5,300
	$65,657

NOTE 3   PREPAYMENT FOR USE OF ASSETS

This represents amounts paid to the Securities Commission to finance the purchase of assets required by the Commission to service the requirements of the Panel. The amounts are being written off, having regard to the expected life of the assets and the interim estimated period of the arrangements with the Commission, over the following periods:

Furniture, fittings and library	5 years
Office equipment	3 years
For the year ended 30 June 2001:	$
Amount paid to finance the purchase of assets	33,309
Amount amortised for use of assets	(3,001)
Balance at 30 June 2001	$30,308

NOTE 4   RECONCILIATION OF STATEMENT OF FINANCIAL PERFORMANCE WITH STATEMENT OF CASH FLOWS

	2001 Actual $
Reported surplus (deficit)	113,463
Add increase in equity capital	49,000
Movement in working capital:
- Increase (decrease) in creditors	121,589
- (Increase) decrease in receivables	(64,883)
56,706
Net cash flows from operating activities	$219,169

NOTE 5   CASH FLOWS

The cash flows relating to the Panel’s investing activities are reported on a net basis in the Statement of Cash Flows. The amounts involved are held in short term deposits which are rolled over frequently through the year.

NOTE 6   FINANCIAL INSTRUMENTS

(a)	Credit risk Financial instruments which may subject the Panel to credit risk consist of bank balances and bank short term deposits. The Panel’s investments are deposited with a registered bank in New Zealand. The Panel does not require collateral or security to support financial instruments.
(b)	Fair values All financial instruments are recognised in the Statement of Financial Position and are stated at fair values.

NOTE 7   COMMITMENTS

There were no lease or capital commitments at balance date.

NOTE 8   CONTINGENT LIABILITIES

There were no contingent liabilities at balance date.

NOTE 9   TRANSACTIONS WITH RELATED PARTIES

There were no transactions with related parties during the year.

NOTE 10   BUDGET VARIANCES

Expenditure
Significant variances from budget were:

(i)	Fees paid to members were lower than budgeted arising from fewer meetings being held than anticipated.
(ii)	Various other expenses were lower than budgeted arising from some of the Panel’s set-up costs being less than budgeted and other expenditure being deferred until the new financial year.
(iii)	Securities Commission services to the Panel were higher than the budget provision reflecting the extensive professional and administrative requirements for the establishment of the Panel’s operational capability and to prepare for the introduction of the Code.