Extracts from GLOSSARY OF TERMS and PERSONS REFERRED TO FREQUENTLY as contained in the Report.

E & Y	Ernst & Young, Chartered Accountants	1st ref
HICKEY, MS E.M.	Partner and National Director of Accounting from 1990 for Ernst & Young	1st ref
the arrangements	The contractual and other arrangements entered into by the BNZ in March 1988 under which BNZ is indemnified by BNZS against losses up to $200 million in its loans and investments.	1st ref
the Bank	Bank of New Zealand	1st ref
GARTY, P.A.	Audit Partner of Ernst & Young, Chartered Accountants, responsible for audit of BNZ.	1st ref
SHELTON, D.C.	Chief Financial Officer of BNZ from December 1989 to June 1991.	1st ref
PURVIS, C.P.	Chief Manager, Group Accounting, BNZ. Involved with BNZ group accounting in 1988 to [1993]	1st ref

                                              APPENDIX M

Bank of New Zealand

Audit File

Error Schedule

The following amounts were considered to be unders and overs in the accounts of BNZ for the period ended 31 March 1990.

		($)
1.	Insurance Policy Overstatement - on a net present value method the insurance benefits have been taken up in excess of related costs	(27,000,000)
2.	Restructuring costs taken up in the accounts which we do not consider to be required as they are an ongoing expense	13,000,000
3.	Sale of London Building - not fully taken up in the accounts being a profit on sale	700,000
4.	Overaccruals - expenditure accruals (example BAH)	1,000,000
5.	Gratuities overstated	5,000,000
		----------
	Net overstatement of profit	$(7,000,000)
		==========

We were comfortable with the level of specific and general provisions made in respect of the New Zealand book. However, on the basis of our review of the Australian loans we believe that there were some conservative provisions made in Australia and additionally there was general provisions made in excess of what we had expected. It is difficult to quantify this amount, however, it may be in the region of $20-30m.

Thus it would appear the over and unders in respect of the profit for the year ended 31 March 1990 can be accepted on the balance of reivew and judgement to agree the unbooked items would not materially affect the accounts as being true and fair.

Also, bank of Western Samoa has only been equity accounted for the period ended 31 December 1988. There is a potential equity accounting of the additional profits of 50% of, say, $3m (ie, $1.5m).

Peter Garty

1990