Annual Report 2008/09: Part 3 - Residential Tenancies Trust Account financial statements
Statement of financial performance for the year ended 30 June 2009
| Actual 2008 $ 000 |
|
Actual 2009 $ 000 |
| |
Revenue |
| 21,003 |
Interest earned from bank deposits |
21,232 |
| 21,003 |
Total revenue |
21,232 |
| |
Expenditure |
| 21,003 |
Interest to Department of Building and Housing |
21,232 |
| - |
Operating surplus |
- |
Note: RTTA audit fees are paid by the Department of Building and Housing.
Reconciliation of Movements in Bondholders' Funds for the year ended 30 June 2009
Actual 2008
$ 000 |
|
Actual 2009
$ 000 |
| 230,976 |
Bondholders' funds at 1 July |
260,445 |
| 144,604 |
Bonds lodged |
159,069 |
| 115,135) |
Bonds refunded |
(127,679) |
| 260,445 |
Bondholders' funds at 30 June |
291,835 |
Statement of financial position as at 30 June 2009
Actual 2008
$ 000 |
|
Note |
Actual 2009
$ 000 |
| |
Current assets |
| 9,250 |
Cash and cash equivalents |
|
8,988 |
| 180,950 |
Investments |
2 |
212,150 |
| 14,212 |
Receivables |
|
17,499 |
| 204,412 |
Total current assets |
|
238,637 |
| |
Non-current assets |
| 76,200 |
Investments |
2 |
73,800 |
| 76,200 |
Total non-current assets |
|
73,800 |
| 280,612 |
Total assets |
|
312,437 |
| |
Current liabilities |
| 20,142 |
Payables |
|
20,574 |
| 25 |
Other |
|
28 |
| 20,167 |
Total current liabilities |
|
20,602 |
| 260,445 |
Net assets |
|
291,835 |
| |
Bondholders' funds |
| 230,976 |
Opening balance |
|
260,445 |
| 29,469 |
Net increase |
|
31,390 |
| 260,445 |
Closing balance of bondholders' funds |
|
291,835 |
Statement of cash flows for the year ended 30 June 2009
Actual 2008
$ 000 |
|
Note |
Actual 2009
$ 000 |
| |
Cash flows from operating activities |
| |
Cash was provided from: |
| 18,216 |
Interest received |
|
17,945 |
| |
Cash was disbursed to: |
| (19,199) |
Interest payments to Department of Building and Housing |
|
(20,800) |
| (983) |
Net cash from operating activities |
5 |
(2,855) |
| |
Cash flows from investing activities |
| |
Cash was provided from: |
| 185,451 |
Proceeds from maturity of investments |
|
270,514 |
| |
Cash was disbursed to: |
| (212,450) |
Purchase of investments |
|
(299,314) |
| (10) |
Disposal of goods |
|
3 |
| (27,009) |
Net cash from investing activities |
|
(28,797) |
| |
Cash flows from financing activities |
| |
Cash was provided from: |
| 144,604 |
Lodgement of bonds |
|
159,069 |
| |
Cash was disbursed to: |
| (115,135) |
Refund of bonds |
|
(127,679) |
| 29,469 |
Net cash from financing activities |
|
31,390 |
| 1,477 |
Net increase/(decrease) in cash |
|
(262) |
| 7,773 |
Cash at the beginning of the year |
|
9,250 |
| 9,250 |
Cash at the end of the year |
|
8,988 |
Notes to the financial statements for the year ended 30 June 2009
Note 1: Statement of accounting policies for Residential Tenancies Trust Account
Reporting entity
The Department of Building and Housing manages the Residential Tenancies Trust Account pursuant to the Public Finance Act 1989 and the Residential Tenancies Act 1986. The Department took over direct management of the Residential Tenancies Trust Account on 18 August 1992.
All interest arising from any investment in the Residential Tenancies Trust Account belongs to the Crown and is treated as other revenue to the Department of Building and Housing.
Investments are held in approved securities under the Public Finance Act 1989. The Department of Building and Housing pays costs associated with the management of the Residential Tenancies Trust Account as departmental expenses.
The financial statements of the Residential Tenancies Trust Account are for the year ended 30 June 2009. The financial statements were authorised for issue by the Chief Executive of the Department on 30 September 2009.
Basis of preparation
The financial statements of the Residential Tenancies Trust Account have been prepared in accordance with the requirements of the Public Finance Act 1989, which includes the requirements to comply with New Zealand generally accepted accounting practice (NZ GAAP).
These financial statements have been prepared in accordance with, and comply with, NZ IFRS as appropriate for public benefit entities.
The accounting policies set out below have been applied consistently to all periods presented in these financial statements.
The financial statements have been prepared on a historical cost basis.
The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($ 000). The functional currency of the Residential Tenancies Trust Account is New Zealand dollars.
Revenue
The Trust derives revenue from interest on investments. Interest on investments is accrued on a monthly basis.
Cash
Cash is defined as coins, notes and demand deposits in the Trust bank account and other deposits held on call.
Receivables
Receivables are stated at estimated realisable value.
Investments
Investments are not generally traded but held to maturity. Investments in government stock and bonds are valued at cost with premiums and discounts on investments accounted for on a yield to maturity basis. Investments in bank deposits are valued at cost.
Financial instruments
he Residential Tenancies Trust Account is party to financial instruments as part of its normal operations. These financial instruments include accounts payable and receivable, cash, deposits and investments. Revenue and expenditure in relation to all financial instruments are recognised in the Statement of Financial Performance.
Except for those items covered by a separate accounting policy, all financial instruments are shown at estimated fair value.
Taxation
The Residential Tenancies Trust Account is exempt from income tax in terms of the Income Tax Act 2004. Accordingly, no charge for income tax has been provided for.
Changes in accounting policies
There have been no changes in accounting policies. All policies have been applied on a basis consistent with the previous year.
Note 2: Investments by Counterparty
Investments are undertaken in line with the Department's investment strategy. Investments were held with the following counterparties as at 30 June (investment values at book value).
Actual 2008
$ 000 |
|
Actual 2009
$ 000 |
| |
Current |
| 32,200 |
Westpac |
41,000 |
| 80,450 |
ANZ/National Bank |
54,950 |
| 25,500 |
BNZ |
65,500 |
| 42,800 |
ASB |
50,700 |
| 180,950 |
Total current |
212,150 |
| |
Non-current |
| 24,000 |
Westpac |
5,000 |
| 12,700 |
ANZ/National Bank |
7,500 |
| 20,500 |
BNZ |
10,000 |
| 19,000 |
ASB |
51,300 |
| 76,200 |
Total non-current |
73,800 |
| 257,150 |
Total investments by counterparty |
285,950 |
| |
Weighted average interest rates |
| 8.77% |
Short-term deposits |
5.50% |
| 8.83% |
Term deposits |
7.60% |
Note 3: Book value of Investment
Annual 2008
$000 |
|
Actual 2009
$000 |
| 257,150 |
Bank deposits |
285,950 |
| 257,150 |
Total book value of investments |
285,950 |
Fair value of the investments approximates the book value.
Note 4 : 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
Credit risk is the risk that a third party will default on its obligations. The maximum exposures to credit risk at balance date are:
Annual 2008
$000 |
|
Actual 2009
$000 |
| 9,250 |
Cash held |
8,988 |
| 14,212 |
Accounts receivable |
17,499 |
| 257,150 |
Investments |
285,950 |
| 280,612 |
Total |
312,437 |
There are no major concentrations of credit risk for accounts receivable.
The Crown Retail Deposit Guarantee Scheme for deposits held with banks that have opted into the scheme provides a guarantee of $1 million per depositor per guaranteed institution. Deposits beyond this level are not covered by this scheme.
Currency risk
Currency risk is the risk that the value of debtors and creditors due in foreign currency will fluctuate because of changes in foreign exchange rates.
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
Interest rate risk is the risk that the return on the funds invested will fluctuate due to changes in market interest rates. 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.
Note 5: Reconciliation of Operating Surplus to Net Cash Flows from Operating Activities
Annual 2008
$000 |
|
Actual 2009
$000 |
| - |
Operating surplus |
- |
| |
Add/(less) movements in working capital |
| (2,787) |
Increase)/decrease in interest receivable |
(3,287) |
| 1,804 |
Increase/(decrease) in interest payable |
432 |
| (983) |
Net cash flows from operating activities |
(2,855) |
Note 6 : Commitments and contingencies
The Residential Tenancies Trust Account has no commitments or contingent liabilities at balance date (2008: nil).
Note 7: Events after the balance date
No events have occurred between the balance date and date of signing these financial statements that materially affect the financial statements.
Note 8: Capital management
The Residential Tenancies Trust Account’s capital is its bondholders’ funds and is represented by net assets.