NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 June 2004

While market value accounting has not been adopted, Net Fair Values of financial instruments are determined on the following bases:

Financial assets and liabilities – current quoted market price for assets and liabilities (where available) necessary to realise the asset or settle the liability; or discounted expected future cash flows arising from the securities, using appropriate market yields.

Although certain financial assets are carried at an amount above Net Fair Value, the directors have not caused those assets to be written down as it is intended to retain those assets to maturity.

Currency swaps and forward foreign exchange contracts – the Net Fair Values are calculated using market yields and/or exchange rates appropriate to the instrument.

Although best judgment has been employed in the estimation of Fair Values there is inevitably an element of subjectivity involved in the calculations. This is particularly so in the case of those financial instruments which, like the majority of  the Corporation’s financial assets, have a thin or non-existent market. Therefore, the Fair Value estimates presented below are not necessarily the amounts that could have been realised at 30 June 2004.

		Net Fair Value 2003-04 A$’000	Carrying Value 2003-04 A$’000		Net Fair Value 2002-03 A$’000	Carrying Value 2002-03 A$’000
Financial Assets
Tradeable Securities:
Domestic
Securities – Government		342,979	320,960		357,825	324,541
Banks & Other Financial Institutions		672,722	672,567		518,729	517,667
Bills and Other Securities		1,380,313	1,369,535		1,009,635	1,063,681
Overseas
Bills and Other Securities		287,753	287,371		368,089	278,428
Total Tradeable Securities:		2,683,767	2,650,433		2,254,278	2,184,317
Non-Tradeable Securities:
Advances to Clients		2,825,371	2,822,778		2,917,406	2,831,341
Total Financial Assets		5,509,138	5,473,211		5,171,684	5,015,658
Financial Liabilities
Domestic Unsettled Forward Transactions		150,305	160,000		186,210	185,500
Tradeable Securities
Domestic Preferred Stocks		3,319,153	3,328,024		2,238,903	2,196,315
Domestic Commercial Paper		308,828	308,821		1,001,608	1,001,741
Domestic Other Securities		128,767	108,347		144,414	111,902
Overseas Other Securities		398,249	373,825		415,614	363,509
Total Tradeable Securities		4,154,997	4,119,017		3,800,539	3,673,467
Non-Tradeable Securities
Deposits		1,274,741	1,274,824		1,180,027	1,180,073
Total Financial Liabilities		5,580,043	5,553,841		5,166,776	5,039,040

Net Fair Values

The Net Fair Values of readily tradeable derivative financial instruments, referred to in note 11 at balance date are as follows

		2003-04 Net Fair Value A$’000		2002-03 Net Fair Value A$’000
Interest Rate Swaps		38,259		(19,944)
Cross Currency Swaps		18,573		(1,734)
Forward Foreign Exchange		0		29
Forward Rate Agreement		(138)		11
Options Purchased		9		20
Options Sold		(9)		(1)
Total Derivative Contracts		56,694		(21,619)

Note. Principal values of derivative financial instruments have no carrying value in the financial statements.