B.—l [PT. IV], SUP. to 1937.

STATE ADVANCES OFFICE —continued. ADVANCES TO WORKERS BRANCH. Statement of Liabilities and Assets as at 31st March, 1937. Liabilities. Assets. £ s. d. £ s. d. State Advances Corporation stock issued in £ s. d. Sundry loans .. .. .. 11,989,026 8 1 accordance with section 38 (!) of the State Sundry creditors .. .. .. 616 17 10 Advances Corporation Act, 1934-35 .. 8,928,460 0 0 Interest on loans — Contingent Liability of State Advances CorDeferred .. .. 81,249 19 9 poration under section 38 (2) of the State Overdue .. .. 164,706 10 8 Advances Corporation Act, 1934-35 .. 3,170,704 5 5 Accrued . . . . 103,311 4 8 Profits of State Advances Corporation for the 349,267 15 1 year ended 31st March, 1937, payable in Reserve for bad debts .. .. 227,662 9 9 accordance with section 42 of the State Sinking Fund .. .. .. 94,402 9 3 Advances Corporation Act, 1934-35 .. 79,788 16 11 Interest accrued but not yet due on State Advances Corporation stock as at 31st March, 1937 .. .. .. .. 47,883 9 1 Sundry debtors . . . . . . 1 12 10 Temporary Loan : Settlers Branch . . . . 67,631 12 10 Realization Suspense Account .. .. 2,117 10 9 Loan Charges Account .. .. .. 141,147 59 Sinking Fund investments held by Advances Office Sinking Fund .. . . .. 94,402 9 3 Profit and Loss Account .. .. .. 128,838 17 2 £12,660,976 0 0 £12,660,976 0 0 Profit and Loss Account for the Year ended 31st March, 1937. Dr. £ s. d. Cr. £ s. d. Interest Account: Gross loss for year .. .. 186,110 14 11 Profits from State Advances Corporation under Management Expenses Account .. . . 349 15 0 section 42 of the State Advances Corporation Loan-flotation charges written down .. .. 22,167 4 2 Act, 1934-35 .. .. .. .. 79,788 16 11 Balance: Net loss for year .. .. .. 128,838 17 2 £208,627 14 1 £208,627 14 1 Interest Account for the Year ended 31st March, 1937. Dr. £ s. d. £ s. d. Cr. £ s. d. £ s. d. Interest on loans .. .. 547,259 711 Interest on State Advances CorLess overdue and accrued at poration stock .. .. 305,120 19 11 31st March, 1936.. .. 160,057 17 0 Less overdue and accrued at 387,201 10 11 31st March, 1936.. .. 48,602 8 4 Interest on loans accrued at 31st March, 1937 .. 103,311 4 8 256,518 11 7 Interest accrued but not due at 31st March, 1937. . .. 47,883 9 1 304,402 0 8 Balance : Gross loss transferred to Profit and Loss Account .. .. .. .. 186,110 14 11 £490,512 15 7 £490,512 15 7 Management Expenses Account for the Year ended 31st March, 1937. Dr. £ S. d. Cr. £ s. d. Salaries .. . . .. . . . ■ 300 0 0 Release fees .. .. . . .. . . 0 5 0 General expenses .. .. .. .. 50 0 0 Balance transferred to Profit and Loss Account .. 349 15 0 £350 0 0 £350 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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