B.—l [PT. IV], SUP. TO 1937.

STATE ADVANCES OFFlCE—continued. RURAL ADVANCES BRANCH. Statement op Liabilities and Assets as at 31st March, 1937. Liabilities. Assets. £ g. d. £ s. d. State Advances Corporation stock issued in ac- £ s. d. Bonds issued .. .. .. 4,213,050 0 0 cordance with section 38 (1) of the State Interest on loans — Advances Corporation Act, 1934-35 .. 3,815,195 0 0 Overdue .. .. .. 81,975 10 1 Contingent liability of State Advances CorAccrued .. .. .. 9,234 1 8 poration under section 38 (2) of the State 91,209 11 9 Advances Corporation Act, 1934-35 .. 254,341 12 8 Reserve for bad debts .. . . 38,303 18 4 Interest on State Advances Corporation stock accrued but not due at 31st March, 1937 .. 20,460 18 10 Interest-tax due in accordance with section 6 and 7of the Finance Act, 1932-33 .. 4,786 0 0 Temporary advance to Settlers Branch . . 42,909 0 3 Realization Suspense Account .. .. 3,261 12 ]1 Profits from State Advances Corporation for the year ended 31st March, 1937, payable in accordance with section 42 of the State Advances Corporation Act, 1934-35 .. 5,173 0 4 Loan Charges Account .. .. .. 126,651 7 11 Profit and Loss Account .. .. .. 69,784 17 2 £4,342,563 10 1 £4,342,563 10 1 Profit and Loss Account for the Year ended 31st March, 1937. Dr. £ s. d. Gr. £ s. d. Interest Account: Gross loss for year .. .. 41,507 17 1 Profits from State Advances Corporation under Loan flotation charges written down .. .. 12,665 2 8 section 42 of the State Advances Corporation Management Expenses Account .. .. 230 0 0 Act, 1934-35 .. .. .. .. 5,173 0 4 Balance: Net loss for year .. .. .. 49,229 19 5 £54,402 19 9 £54,402 19 9 £ s. d. £ s. d. Loss for the year .. .. .. .. 49,229 19 5 Balance .. .. .. .. .. 69,784 17 2 Balance from previous year .. .. .. 20,554 17 9 £69,784 17 2 £69,784 17 2 Interest Account for the Year ended 31st March, 1937. Dr. £ s. d. £ s. d. Gr. £ s. d. £ s. d. Interest on bonds .. .. 209,332 10 3 Interest on State Advances CorLess overdue and accrued at poration stock .. .. 128,678 9 2 31st March, 1936 .. .. 48,302 611 Less accrued at 31st March, 1936 20,434 2 6 161,030 3 4 108,244 6 8 Interest accrued but not due at 31st March, 1937 9,234 1 8 Interest on State Advances Corporation stock accrued but not due at 31st March, 1937 .. .. 20,460 18 10 Interest on mortgages .. .. 70 6 0 Less accrued at 31st March, 1936 19 3 7 51 2 5 Balance : Gross loss transferred to Profit and Loss Account .. .. .. .. 41,507 17 1 £170,264 5 0 £170,264 5 0 Management Account for the Year ended 31st March, 1937. £ s. d. £ s. d. Salaries .. . . .. .. .. 200 0 0 Balance transferred to Profit and Loss Account .. 230 0 0 General expenses . . .. . . .. 30 0 0 £230 0 0 £2.30 0 0 Note.—See departmental note on Advances to Settlers Branch accounts. Geo. G. Rose, Superintendent. I hereby certify that the Balance-sheet and accompanying accounts have been duly examined and compared with the books and documents submitted for audit, and correctly state the position as disclosed thereby, subject to the departmental notes enfaced thereon and to the following exceptions : (1) The amount of exchange paid in respect of the interest which has been paid in London on the loans of this account has not been charged to the account, but has been borne by the Consolidated Fund ; (2) the State Advances Corporation stock should not appear in the Balance-sheet as an investment of the Superintendent. It is vested in the Minister of Finance to whom the stock was issued in exchange for mortgage securities transferred to the Corporation in terms of the State Advances Corporation Act, 1934-35 ; (3) contingent liability of the State Advances Corporation should not appear among the assets of the Superintendent, as it is not the property of the Superintendent. In terms of the legislation, so long as this liability exists the surplus profits of the Corporation are payable to the Public Account and not to the State Advances Account ; (4) the Profit and Loss Account is overstated to the extent of the interest on the Corporation stock and of the profits of the Corporation which have been paid to the Public Account in accordance with the statute. —J, H. Fowler, Controller and Auditor-General,

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