1782
THE NEW ZEALAND GAZETTE
No. 83

Current assets—
Cash on hand and at banks .. .. $ 108,380 $ 141,443
Fixed deposits .. .. 150,000 190,000
Short term investments .. .. 177,145 480,585
Interest accrued on investments .. .. 167,734 171,673
Owing by other trustee savings banks .. .. 17,524 2,383
Sundry debtors .. .. 11,611 6,645
Taxation refund .. .. .. 22,440
Stationery on hand .. .. 46,924 36,905
Total current assets .. .. 679,318 1,052,074

Other assets—
Computer charges at cost .. 26,033
Less accumulated amounts written off .. 9,023 17,010 18,961
Cheques estimated charge .. 3,500
Less accumulated amounts written off .. 3,500 .. 2,470
Total other assets .. .. 17,010 21,431

Investments—
Government stock .. .. 9,130,392 8,129,789
Local authorities .. .. 874,335 851,760
Mortgages .. .. 8,555,193 7,175,118
Fixed deposits .. .. 686,000 416,000
Personal loans .. .. 222,165
Less future interest .. .. 22,075 200,090 164,868
Total investments .. .. 19,446,010 16,737,535

Fixed assets—
Land, buildings and improvements at cost or value .. .. 455,255 452,176
Furniture, fittings and equipment at cost .. 126,343 112,831
581,598 565,007
Less accumulated depreciation .. 112,476 91,877
Total fixed assets .. .. 469,122 473,130
20,611,460 18,284,170

To be read in conjunction with the Statement of Accounting Policies which form part of the Financial Statements.

STATEMENT OF ACCOUNTING POLICIES

GENERAL ACCOUNTING PRINCIPLES

The general accounting principles of the New Zealand Society of Accountants statements, for the measurement and reporting of the financial results and situation on a historical basis, have been followed. Particular accounting policies used which significantly affect the measurement of the Bank’s profit and its financial position are set out below.

1. Government stock—
   (a) Between 1971 and 1973 several parcels of low yielding Government stock were exchanged for stocks yielding a higher rate of interest. The contracts provide for the stock, with a face value of $2,817,240, to be resold on various dates, between 1984 and 1986. The contracted selling price will result in a capital loss and this is being amortised on a straight line basis over the period concerned. Up to 31 March 1975, the annual provision was made from the Reserve Fund, in accordance with section 27.1 (6) of the Trustee Savings Bank Act 1948, and shown as a separate item in the balance sheet. A change of policy has been implemented during the year ended 31 March 1976 and the annual provision has been charged against the appropriation account, with the accumulated provision being deducted from the book value of Government stock.

(b) Values of Government stock—
Values of the stocks held at 31 March 1976 were
Cost price .. .. $9,190,455
Face value .. .. $9,200,740
Market value .. .. $7,385,438

2. Interest—
   (a) Interest on Investments: Interest on investments and mortgages is brought into revenue during the period in which it is earned, rather than the period during which it is received.

(b) Personal Loans: The policy is to add interest to the full advance at the commencement of the loan, and this amount is brought into revenue during the appropriate financial year by applying the “Rule of 78”.

(c) Investment Accounts: Interest accrued on depositors’ investment accounts is calculated at the full rate payable and an adjustment, based on past experience of early maturities is then made to acknowledge that some accounts will close before maturity.

3. Depreciation—
   (a) Up to 31 March 1975 depreciation was calculated on rates allowable for taxation purposes. For the year ending 31 March 1976, and for subsequent years, depreciation is calculated on a straight line basis. The principal write off periods in use for fixed assets are
   Buildings .. .. 10 to 50 years
   Office equipment .. .. 10 years
   Furniture .. .. 10 years
   Vehicles .. .. 5 years

(b) The net effect of the change in the basis of calculation is to increase the 1976 pretax profit by $1,658.53.

(c) The Head Office land and buildings were revalued in 1975 and depreciation is written off the buildings on the basis of the new valuation. All other assets are included at cost.

4. Taxation—
   The liability for deferred taxation arises from timing differences related to—
   (a) Accrued interest.
   (b) Depreciation allowances.
   The full amount of taxation on the recorded profit is charged against the Revenue Account. The portion of that tax payable during the 1976/77 financial year is shown as a current liability and the balance is included in a provision for future taxation.

5. Computer Equipment—
   (a) Landing charges have been capitalised and are being written off on a straight line basis over the term of the lease.
   (b) The major part of the equipment used by the data processing department is subject to a lease which expires in March 1979. The annual lease rentals are being charged directly to the revenue account.

6. Stock on hand—
   The stock on hand, shown in the balance sheet, represents bulk stationery supplies which have been valued at cost.

7. Contingent liabilities—
   There are outstanding letters of credit totalling $55,000 held by various trading banks to facilitate day to day transactions of our branches.

8. Commitments—
   (a) The bank has entered into a contract to purchase a property for $17,500 for use as a branch office.
   (b) The bank has agreed to invest in a registered local authority loan to the extend of $16,500.
   (c) Mortgages approved but not yet advanced total $379,730.

R. P. ANDREWS, President.
G. I. C. McDOUALL, General Manager.

AUDITORS’ CERTIFICATE

We have examined the records and financial accounts of the Wanganui Savings Bank for the year ended 31 March 1976, as required by section 29 (3) of the Trustee Savings Banks Act 1948. Our examinations were made in accordance with the general principles of auditing and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion the accompanying revenue account, appropriation account and balance sheet, together with the statement of accounting policies, present fairly the financial position of the Wanganui Savings Bank at 31 March 1976, and the results of its operations for the year then ended.

CLARKE MENZIES AND CO., Auditors.
Wanganui, 28 April 1976.

1545

WAIKATO SAVINGS BANK

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 1976

Interest to depositors—
On open accounts .. .. .. $ 1,021,778 $ 979,716
Closed accounts and matured investment accounts .. .. 618,652 527,157
Accrued on investment accounts .. 221,554 178,431
Home layby accounts: suspensory free deposits .. .. 1,524 2,123
1,863,508 1,687,427
Administrative expenses .. .. 1,645,324 1,394,380
Trustees’ honoraria .. .. 5,410 3,498
Depreciation .. .. 64,983 48,071
Provision for taxation .. .. 151,086 134,918
Net profit—carried down .. .. 194,103 181,964
$3,924,414 $3,450,258