KU Annual Report 2007 - Page 32

17. ECONOMIC DEPENDENCY As disclosed at note 4 a large source of revenue is government funding. This funding predominately supports programs for early childhood education and care. 18. SEGMENT INFORMATION The company operated in one business segment, being the provision of early childhood education and care services and in one geographical location being Australia. 19. RELATED PARTY disclosures There were no related party transactions. 20. a) 2007 2006 $ $ NOTES TO THE CASH FLOW STATEMENT Reconciliation of Surplus for the period to Net Cash Flows From Operating Activities Surplus for the period 1,764,008 2,760,891 488,281 442,767 (2,125) 18,496 - (642,011) Dividends received (405,981) (563,672) Interest received (426,785) (398,205) (2,744,595) 669,857 3,342,880 817,714 623,744 739,375 2,639,427 3,845,212 14,104,293 12,776,412 Depreciation and amortisation of non-current assets (Gain)/loss on sale of non-current assets Gain on investment securities Changes in net assets and liabilities: (Increase)/decrease in current receivables and other assets Increase in current payables and other liabilities Increase in provisions Net cash from operating activities b) Reconciliation of Cash and Cash Equivalents For the purposes of the cash flow statement, cash and cash equivalents include cash at bank and on hand. Cash and cash equivalents at the end of the financial year as shown in the cash flow statement is reconciled to the related items in the balance sheet as follows: Cash and cash equivalents Cash includes $11,083,938 (2006: $7,467,491) which is held for disbursement in accordance with government funding agreements, including to organisations other than KU (note 11). 21. a) FINANCIAL INSTRUMENTS Financial Risk Management Objectives The company does not enter into or trade financial instruments for speculative purposes. The company does not use derivative financial instruments. The company’s investments expose it primarily to the financial risks of changes in interest rate and market fair value adjustments. b) Significant Accounting Policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognised, in respect of each class of financial asset, financial liability and equity instruments are disclosed in note 2 to the financial statements. 32 KU’s 112 th Annual Report 2007