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Notes to the Financial Statements 

for the year ended 30 June 2005

Note 1: Investments by Counterparty

Investments are undertaken in line with the Department's investment strategy. Investments were held with the following counterparties at 30 June (investments valued at book value).

  2005
Actual
$000
2004
Actual
$000
Current
Westpac 17,269 32,114
National Bank 21,651 18,970
ANZ 18,173 45,340
BNZ 40,909 21,678
ASB 40,997 -
Government stock - 3,002
Total Current 138,999 121,104
 
Non-Current
Westpac - -
National Bank - -
ANZ 10,000 6,000
BNZ 16,048 33,166
ASB 13,633 -
Government stock 4,079 4,132
Total Non-Current 43,760 43,298
Total Investments by Counterparty 182,759 164,402
 
Interest Rates
Short-term deposits 6.92% 5.75%
Term deposits 6.57% 6.12%
Government stock 6.48% 6.45%
 

Note 2: Book Value of Investments

Book Value of Investments
Bank deposits 160,615 133,102
Bank bonds 18,065 24,666
Government stock 4,079 7,134
Total Book Value of Investments 182,759 164,902

Note 3: Financial Instruments

Financial instruments that are potentially subject to credit risk principally consist of cash on hand, bank balances, accounts receivable, short-term deposits and investments.

Credit Risk
The maximum exposures to credit risk at balance date are:

  2005
Actual
$000
2004
Actual
$000
Cash held 8,118 4,438
Accounts receivable 4,009 2,877
Investments 182,759 164,402
Total 194,886 171,717

There are no major concentrations of credit risk with respect to accounts receivable.

Currency Risk
The Residential Tenancies Trust Account has no currency risk, given that any financial instruments it deals with are in New Zealand dollars.

Interest Rate Risk
The Residential Tenancies Trust Account has no interest rate risk, as all investments are held to maturity. Deposits are held with authorised New Zealand banks.

Fair Value
The fair value of all financial instruments is equivalent to the carrying amount disclosed in the Statement of Financial Position, apart from the investment in government stock, the fair value of which is the market value of $4,102,060 (2004: $7,293,255); and bank bonds, the fair value of which is $18,021,473 (2004: $24,510,517).

Note 4: Reconciliation of Net Cash Flows from Operating Activities to Operating Surplus

  2005
Actual
$000
2004
Actual
$000
Operating surplus - -
Add/(less) movements in working capital
(Increase)/decrease in interest payable (3,819) 151
Increase/(decrease) in interest receivable 1,132 (441)
Net cash flows from operating activities (2,687) (290)

Note 5: Commitments and contingencies

The Residential Tenancies Trust Account has no commitments or contingent liabilities at balance date (2004: Nil).

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