NOTES TO FINANCIAL
STATEMENT |
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NOTE 1 > |
ORGANIZATION |
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The Beldon II Fund (the Fund)
was established in 1988 as a private foundation organized to
distribute monies to public charities involved in environmental
preservation. In accordance with the donor's wishes, the Fund will spend out its assets and close during 2009. |
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NOTE 2 > |
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES |
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BASIS OF ACCOUNTING |
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The Fund's financial statements
are presented on the accrual basis of accounting. Revenue is recognized
when earned and expenses are recognized when incurred. |
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ACCOUNTING ESTIMATES |
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The preparation of financial
statements in accordance with accounting principles generally
accepted in the United States of America requires management
to make estimates and assumptions which affect the reported amounts
of assets and liabilities and the disclosure of contingencies,
if any, at the date of financial statements and revenue and expenses
during the reporting period. Actual results could differ from
these estimates. |
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INVESTMENTS |
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Investments are reported at their fair value. Fair value is determined using quoted market prices
for marketable securities and at the values reported by the Funds for alternative investments. Some
of the values reported for alternative investments are based on unaudited numbers. Also, the fair
value of these investments can be based on significant estimates made by the fund managers.
Actual values could differ. Management believes it will not have to adjust these values. Realized
gains and losses on sale are determined by comparison of purchase cost to proceeds. For donated
investments, cost is the donor's cost. Invested cash includes receivables and payables for pending
trades. |
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FIXED ASSETS, DEPRECIATION AND
AMORTIZATION |
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Fixed assets are stated at cost.
Depreciation is computed using the straight-line method over
the estimated useful life of the assets as follows: |
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Equipment |
3-7 years |
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Furniture and fixtures |
7 years |
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Leasehold improvements |
10 years |
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All Fixed assets will be fully depreciated by May 2009. |
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CASH AND CASH EQUIVALENTS |
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Cash and cash equivalents are checking accounts and operating money market funds. |
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NOTE 3 > |
INVESTMENTS |
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The
Fund's investments consist of the following as of December 31,
2007 and 2006: |
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2007 |
2006 |
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COST |
FAIR VALUE |
COST |
FAIR VALUE |
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Invested cash |
$ 14,493,916 |
$ 14,493,916 |
$ 16,130,527 |
$ 16,130,527 |
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Common stocks |
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715,247 |
840,455 |
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Stock fund |
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158,867 |
204,164 |
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Alternative investments |
3,257,892 |
5,105,911 |
10,924,950 |
15,450,015 |
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$ 17,751,807 |
$ 19,599,826 |
$ 27,929,591 |
$ 32,625,161 |
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The invested cash at December 31, 2007 includes $3,791,566 of alternative investment proceeds in transit from the manager.
The Fund's gain on sale of investments and change in urealized gain was comprised of the following: |
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2007 |
2006 |
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Realized Gains |
$ 4,306,020 |
$ 5,796,838 |
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Change in unrealized appreciation, net of change in deferred Federal excise tax |
(2,819,075) |
(3,482,415) |
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1,486,945 |
2,314,423 |
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NOTE 4> |
FEDERAL EXCISE TAXES |
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The Fund's investment income, reduced by certain allowable expenses, is subject to federal excise
tax at a rate of either 1% or 2%. The Fund was required to pay excise tax at the 1% rate for 2007
and 2006. One of the Fund's alternative investments also generated unrelated business income
taxes in 2006.
The Fund is also required to make minimum annual charitable distributions within certain time
periods. The :required distribution is 5% of the average fair market value of investment assets, less
the excise tax on investment income. The Fund has satisfied this requirement.
Deferred excise taxes are recorded on the unrealized appreciation on investments using the Fund's
normal 1% excise tax rate. |
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NOTE 5> |
LEASE COMMITMENTS |
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The Fund is subject to a 1O-year lease for office space at 99 Madison Avenue, New York, NY, that
commenced June 1, 1999. A security deposit of $33,750 was required under the terms of the
lease. Minimum lease payments required by the lease are $135,000 per year, terminating May 31 ,
2009. |
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NOTE 6> |
RETIREMENT PLAN
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The Fund maintains a defined contribution plan. All full-time, permanent employees are eligible
to participate after three months of service. Effective January 1, 2002, the plan was amended to
provide improved benefits. Full vesting occurs after two years of service instead of graduated
vesting over six years. Each year the Fund contributes 10% of participants' gross salary to the
plan. In addition, the Fund will match elective contributions by employees up to 5% of salary.
Contributions for the years ended December 31, 2007 and 2006 were $143,268 and $151,038,
respectively. |
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NOTE 7> |
LONG TERM GRANTS PAYABLE |
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The Foundation estimates its long term grant commitments will be paid as follows:
2009 $100,000 |
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NOTE 8> |
FUND CLOSING |
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The Fund will close its office during 2009. During 2008 and 2009 the Fund will incur certain expenses with respect to this closing including employee termination costs. A liability has not been recorded for these costs as the cost are conditioned on the employees remaining until their services are no longer required.
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