1844
THE NEW ZEALAND GAZETTE
No. 77

RESERVE BANK OF NEW ZEALAND—continued

BALANCE SHEET AS AT 31 MARCH 1981

Notes in circulation $000 $000
1981 1980
558,244 513,425

Demand deposits—
(a) State 314,558 265,060
(b) Banks 735 8,353
(c) Marketing accounts 38,182 95,692
(d) Other 240,659 370,226
594,134 739,331

Time deposits 207,000

Liabilities in currencies other than New
Zealand currency:
(a) Demand 87,066 430
(b) Time 364,671 447,531
451,737 447,961

Allocation of special drawing rights
by I.M.F. 189,599 155,444
Other liabilities 58,118 61,902
67,028 58,769

Reserves:
(a) General reserve 40,940 12,000
(b) Other reserves 26,088 46,769

Profit and loss appropriation account.. 8,232 11,165

                           $1,927,092  $2,194,997

Gold $000 $000
1981 1980
699 699

Overseas assets:
(a) Current accounts and
short term bills 104,323 203,409
(b) Investments (see note
1(b)) 9,954 9,653
(c) Holdings of special
drawing rights 41,684 37,368
155,961 250,430

New Zealand coin 14,089 10,055
Discounts 16,570 5,611

Advances—
(a) To the State 1,568 253
(b) To marketing accounts 663,469 645,965
(c) Export credits 38,937 39,597
(d) Other 516,873 594,834
1,220,847 1,280,649

Investments in New Zealand
(see note 1(b))
(a) New Zealand Govern-
ment securities 302,481 451,663
(b) Other 37 27
302,518 451,690

Other assets 216,408 195,863

                           $1,927,092  $2,194,997

NOTES: To be read in conjunction with the Annual Accounts.

1. Statement of Accounting Policies—The particular accounting policies adopted by the Bank which significantly affect the measurement and the reporting of its results and financial position on an historical cost basis, modified by the revaluation of certain assets, are as follows:

(a) Foreign Currency Conversions—Overseas assets and liabilities at balance date are converted to New Zealand currency using appropriate telegraphic transfer rates ruling at that date.

(b) Investments—Overseas investments are shown in the balance sheet at cost. A market value is not available for the majority of investments held, the maturity value is $NZ10.2 million, 1980 $NZ9.9 million. New Zealand investments are shown at the lower of cost or market value (market value $309.6 million, 1980 $452.4 million).

(c) Exchange Rate Fluctuations—The profit or loss arising from appreciation or depreciation of the Bank’s net overseas assets due to movements in basic exchange rates is settled with Treasury in terms of Section 26 of the Reserve Bank of New Zealand Act 1964. The loss in respect of the year ended 31 March 1981 subject to such settlement was $9.5 million, 1980 $14.6 million.

(d) Fixed Assets and Depreciation Policy—The Bank’s buildings at Wellington and Christchurch, along with other fixed assets, are written off over their estimated economic lives on a straight line basis as follows:

Buildings                   1 per cent per annum.
Other Fixed Assets..         20 per cent per annum.

The Bank’s existing building at Auckland has been fully written off.

(e) Changes in Accounting Policies—During the year the Bank changed its accounting policy in regard to buildings and separate building reserves are no longer being kept. As a result a total of $24.2 million was transferred to the General Reserve.
Land held at Christchurch and Wellington, previously written off in the year of acquisition, has now been revalued to the July 1979 Government valuation creating a revaluation reserve of $2.6 million which is included in “Other Reserves”.
In previous years all other fixed assets, with the exception of buildings, were written off in the year of acquisition. Other fixed assets purchased during 1980/81 are being written off over five years.

2. Contingent Liability—In respect of an investment of 250,000 one pound sterling shares in the Commonwealth Development Finance Co. Ltd. of which 50p per share is uncalled (New Zealand equivalent $307,000, 1980 $287,489).

3. Capital Commitment—The estimated cost of the new Auckland building is now $15.7 million, of which $11.1 million has been paid to date.

4. Exchange Contracts—As at 31 March 1981 the Bank had entered into Exchange Contracts for the purchase and/or sale of overseas currency totalling $NZ1,188.4 million, 1980 $NZ812.1 million. (The risk on these contracts is covered by the indemnity described in Note 1(c).)

R. W. WHITE, Governor.
D. L. WILKS, Deputy Governor.

R. J. LANG, Chief Accountant.

REPORT OF THE AUDITORS TO THE RESERVE BANK OF NEW ZEALAND

We have audited the accounts of the Reserve Bank of New Zealand for the year ended 31 March 1981 and have obtained all the information and explanations we have required.

In our opinion the above financial statements are properly drawn up so as to give, under the historical cost convention as modified by the revaluation of land, a true and fair view of the state of affairs of the Bank as at 31 March 1981 and of its results for the year then ended.

HUTCHISON, HULL & CO. } Chartered Accountants.
McCULLOCH MENZIES

Wellington, New Zealand 25 June 1981.