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annual report 2011

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IOOF | <strong>annual</strong> <strong>report</strong> <strong>2011</strong><br />

Tax consolidation<br />

IOOF Holdings Ltd and its wholly owned entities have implemented the tax consolidation legislation.<br />

The entities have entered into tax sharing and funding agreements. Under the terms of the tax funding agreement, the wholly owned<br />

entities fund or are reimbursed by IOOF Holdings Ltd for their share of the income tax expense / benefit arising in respect of their<br />

activities. This is recognised as a current tax related payable / receivable by IOOF Holdings Ltd and is either funded or reimbursed by<br />

the wholly owned entities each month.<br />

In the opinion of the directors, the tax sharing agreement is also a valid agreement under the tax consolidation legislation and limits<br />

the joint and several liability of the wholly owned entities in the case of a default by IOOF Holdings Ltd.<br />

Taxable income for the tax consolidated group includes the profit generated by IOOF Ltd benefit funds, which is distributable<br />

to policyholders of the Benefit Fund. The profit of these funds forms part of the consolidated profit for the calculation of the tax<br />

expense.<br />

12 Cash and cash equivalents<br />

Consolidated Parent<br />

<strong>2011</strong> 2010 <strong>2011</strong> 2010<br />

$’000 $’000 $’000 $’000<br />

Bank balances 152,999 132,780 45,959 617<br />

The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note 5 Risk<br />

management.<br />

13 Receivables<br />

Consolidated Parent<br />

<strong>2011</strong> 2010 <strong>2011</strong> 2010<br />

$’000 $’000 $’000 $’000<br />

Receivables 39,848 35,623 14,299 11,539<br />

Provision for impairment of receivables (32) (30) - -<br />

Interest receivable - related parties 156 186 - -<br />

Security bond 4,500 5,000 - -<br />

Other debtors 374 936 - 6<br />

Stockbroking debtors 6,242 3,245 - -<br />

Accrued income 21,980 22,708 43 2<br />

73,068 67,668 14,342 11,547<br />

The Group’s exposure to credit and currency risks, and impairment losses related to trade and other receivables, is disclosed in Note 5<br />

Risk management.<br />

page 81

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