Landcorp - Crown Ownership Monitoring Unit

Note 35 – Reconciliation of Profit and Operating Cash FlowGroup Group Parent Parent2010 2009 2010 2009Note $000 $000 $000 $000Net profit after tax (5,841) 10,330 (18,796) 31,091Non cash itemsDepreciation and amortisation 16 12,557 12,235 10,713 10,275Non-cash livestock income 1,658 (9,043) 1,741 (8,613)Forest growth 9 (1,179) (1,070) (1,167) (1,054)Allocation of carbon credits (777) – (777)Dividends received from equity accounted joint ventures 11 300 1,250 – –Non-cash movement in equity accounted investments 11 (23) (382) – –Loss on impairment of subsidiary – – 17,854 –(Gain)/loss due to price changes on livestock 4,641 (7,576) 5,807 (14,860)(Gain)/loss due to price changes on forests (55) 2,241 (64) 2,082(Gain)/loss due to price changes on financial instruments 5,325 8,049 5,325 8,049(Gain)/loss on revaluation of property, plant and equipment 11,196 10,199 11,196 10,199Change in deferred tax asset 685 (21,128) (2,213) (16,232)Deferred tax on revaluation of assets 2,783 8,496 2,869 7,828Change in deferred tax liability due to other capital transactions – – – –Movement in working capital itemsInventories 1,582 (3,074) 934 (2,393)Accounts receivable (7,328) 204 (8,061) 10,632Accounts payable and accruals (6,493) 3,672 5,376 (1,137)Employee entitlements 1,201 387 1,148 354Items classified as Investing or Financing activitiesNet loss/(gain) on movement of assets (9,365) (2,866) (10,352) (5,513)Purchase of breeding stock 2,674 2,195 2,870 1,550Change in accounts receivable due to capital items (2,177) 1,780 (3,236) (6,053)Change in accounts payable due to capital items 6,720 (6,663) (3,132) (2,551)Net Cash Flows from Operating Activities 18,085 9,236 18,035 23,654Note 36 – Risk ManagementThe Group is exposed to various risks arising in the ordinary course of business. The Board of Directors authorises the use of financial instrumentsunder approved policy guidelines to manage financial risks. A Treasury Management Committee comprising the executive management team andan independent treasury advisor meet on a monthly basis to co-ordinate and oversee the operation of the treasury function. Details of these risksand risk management policies are explained below:A – Risks due to Agricultural ActivitiesThe Group is exposed to many financial risks relating to agricultural activities:Environmental and climatic risksLike all farmers, Landcorp is exposed to climatic and other environmental risks. Landcorp’s geographic spread of farms usually allows a high degreeof mitigation against adverse climatic (e.g. drought or flooding) and environmental (e.g. disease outbreaks) effects at a regional level. Whenadverse climatic events occur livestock are initially attempted to be accommodated on other Landcorp properties.The geographic spread of Landcorp’s forestry assets also provides a high degree of risk mitigation against risks associated with forestry, such as fireand disease.Landcorp has strong environmental policies and procedures aimed at compliance with environmental and other laws. Environmental policies aredesigned to be compliant with laws in target export markets as well as New Zealand law.89