42  Annual Report 22 Capital management The Law Commission’s capital is its equity, which comprises accumulated funds and other reserves. Equity is represented by net assets. The Law Commission is subject to the financial management and accountability provisions of the Crown Entities Act 2004, which impose restrictions in relation to borrowings, acquisition of securities, issuing guarantees and indemnities and the use of derivatives. The Law Commission manages its equity as a by-product of prudently managing revenues, expenses, assets, liabilities, investments and general financial dealings to ensure the Law Commission effectively achieves its objectives and purpose whilst remaining a going concern. 23 Explanation of significant variances against budget Explanations for significant variances from the Law Commission’s budgeted figures in the Statement of Intent (SOI) are as follows: Statement of financial performance Variations in both personnel and project costs were primarily due to additional projects being added to the work programme after the publication of the SOI. Statement of financial position Overall the net position of the balance sheet is in line with budget. Variances within the asset class have occurred as a result of the time delays between confirmation of the work programme and the timelines set for the production and publication of the SOI. Statement of changes in cash flows Cash flow requirements are simply estimates and are calculated on the basis of some known and some unknown variables with reference to the work programme timelines.