Annual Report 2009

In the financial year 2007/08, the Israeli economy, like that of the rest of the world, was characterized by continued turbulence, which is reflected, in part, in the financial statements and expressed, inter alia, by the significant loss of profits on investments. Conversely, the rate of governmental support for the operating revenues has increased from 33.6% in the previous year, to 36% in the current year.

Whereas the Development Fund continued to grow during the financial year 2007/08, the Endowment Funds decreased, mainly due to turbulent market conditions and the sharp decline in the dollar exchange rate.

Consequently, the Statement of Revenues and Expenditures in the 2007/2008 Financial Statements reflects a debit balance, due to the following:

• Depreciation of the Institute’s investments held by the GEM Trust
• A sharp decline in the dollar exchange rate, leading to fewer shekels from dollar revenues
• The difference in the Generally Accepted Accounting Principles between the US and Israel.

In Israel, the non-tradeable equity component of the Institute’s share in GEM’s holdings is reflected at cost, whereas in the US such equity would have been reflected in its fair market value.

Revenues and Expenditures:

All figures are given in reported thousands of new Israeli shekels (NIS) as of September 30, 2008. The rate of exchange at that time stood at NIS 3.421 to 1 U.S. dollar.