3516 NEW ZEALAND GAZETTE, No. 133 28 AUGUST 2008

• NZ IFRIC 13 Customer Loyalty programmes. NZ IFRIC 13 will become mandatory for the Group’s 2009 financial statements, and is not expected to have any impact on the consolidated financial statements.

• NZ IFRIC 14 The Limit on a defined benefit Asset. Minimum funding requirements and their interaction. NZ IFRIC 14 will become mandatory for the Group’s 2009 financial statements, and is not expected to have any impact on the consolidated financial statements.

4. Determination of Fair Values
   A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(a) Investment Property
An external, independent valuation company, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued, values the Group’s investment property on an annual basis. The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The discounted cashflow technique is also applied as a cross-check of the valuation.

(b) Investments in Equity and Debt Securities
For investments that are actively traded in organised financial markets, fair value is determined by reference to exchange quoted market bid prices at the close of business on the statement of financial position date.

Investments in pooled funds are valued at the unit exit price determined by the fund manager at the close of business on the statement of position date.

(c) Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date.

(d) Derivatives
The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (based on government bonds).

The fair value of interest rate swaps is based on broker quotes. Those quotes are tested for reasonableness by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date.

Notes to the Financial Statements in New Zealand Dollars ($000’s)

5. Revenue
   | | Group | Parent |
   |--------------------------------|----------------|----------------|
   | | 2008 | 2007 | 2008 | 2007 |
   | Rents received | 113 | 116 | – | – |
   | Managed Fund income: | | | |
   | – Interest | 7,138 | 6,163 | 7,209 | 6,227 |
   | – Investment income | (2,165)| 5,831 | (2,165)| 5,831 |
   | Other | 49 | – | 58 | 13 |
   | Total revenue | 5,135 | 12,110 | 5,102 | 12,071 |

6. Other Income
   | | Group | Parent |
   |--------------------------------|----------------|----------------|
   | | 2008 | 2007 | 2008 | 2007 |
   | Change in fair value of investment property | 100 | 60 | – | – |
   | Net gain on sale of property, plant and equipment | 100 | 60 | – | – |

7. Investment
   | | Group | Parent |
   |--------------------------------|----------------|----------------|
   | | 2008 | 2007 | 2008 | 2007 |
   | Fund manager fees | 459 | 426 | 459 | 426 |
   | Investment advisory fees | 125 | 113 | 125 | 113 |
   | | 584 | 539 | 584 | 539 |

8. Other Expenses
   | | Group | Parent |
   |--------------------------------|----------------|----------------|
   | | 2008 | 2007 | 2008 | 2007 |
   | Public and statutory reporting | 21 | 19 | 21 | 19 |
   | Auditors remuneration (analysis below) | 13 | 15 | 13 | 15 |
   | Promotion | 39 | 36 | 39 | 36 |
   | Depreciation | 10 | 15 | 10 | 15 |
   | Professional fees (analysis below) | 47 | 55 | 42 | 55 |
   | Property costs | 82 | 62 | 64 | 66 |
   | Salaries | 287 | 283 | 287 | 286 |
   | Other operating | 103 | 97 | 97 | 83 |