mutual defence organization - TUUM EST

Financial report
Foreign currency
Transactions denominated in foreign currencies are translated into
Canadian dollars at the rates of exchange prevailing at the dates
of the transactions. Investments and cash balances denominated
in foreign currencies are translated at the rates in effect at year
end. Resulting gains or losses from changes in these rates are
included in investment revenue.
Capital assets
Capital assets are recorded at cost. Amortization is computed
using the straight-line method over the following terms:
Building
Furniture and equipment
Software
Computer equipment
Building improvements
Deferred leasing costs
4. INVESTMENTS
50 years
10 years
3 years
3 years
10 years
terms of leases
Investments are summarized as follows: (thousands of dollars)
2000 1999
Market
Market
value Cost value Cost
Cash and short- $ 75,314 $ 75,314 $ 39,691 $ 39,691
term investments
Investment revenue
receivable 10,819 10,819 9,706 9,706
Bonds 843,629 832,523 696,322 724,242
Equities 1,079,771 886,995 1,091,631 800,216
$2,009,533 $1,805,651 $1,837,350 $1,573,855
Determination of market values
Cash and short-term investments, which include bank deposits,
treasury bills, bankers' acceptances and short-term corporate
notes, are valued at cost which approximates market value.
Bonds are debt obligations of governments and corporate
bodies paying interest at rates appropriate to the market at the
date of their purchase. Bonds are recorded at prices based upon
published market quotations. They mature at face value on a
staggered basis over the next 32 years. Effective interest rates to
maturity for these securities range from 3.25% to 9.19%.
Equities include listed and unlisted securities. Listed
securities are recorded at prices based upon published market
quotations. Unlisted securities consist of pooled fund units and
private placements. Pooled fund units are valued at prices based
on the market value of the underlying securities held by the
pooled funds. Private placements are valued at prices based upon
management's best estimates using one of the following methods:
cost, trade prices for similar securities and appraised values.
Investment risk
Investment in financial instruments renders the Association
subject to investment risks. These include the risks arising from
changes in interest rates, in rates of exchange for foreign currency,
and in equity markets both domestic and foreign. They also
include the risks arising from the failure of a party to a financial
instrument to discharge an obligation when it is due.
The Association has adopted investment policies,
standards and procedures to control the amount of risk to
which it is exposed. The investment practices of the Association
are designed to avoid undue risk of loss and impairment of
assets and to provide a reasonable expectation of fair return
given the nature of the investments. The maximum investment
risk to the Association is represented by the market value
of the investments.
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