11 AUGUST
THE NEW ZEALAND GAZETTE
2229

Liabilities—continued
1977
$
1976
$

Provision for taxation
.. 66,213
45,763
Prepaid ..
43,435
51,499
Tax payable
.. 22,778
—
Provision for grants
.. 15,000
10,000
Provisions for building alterations reserve
.. 20,000
—
Premium due on redemption of Government stock
.. 16,050
16,050
Reserve Fund:
Balance at 31 March 1976..
283,768
233,435
Add balance of appropriation account
.. 49,991
50,333
—
—
333,759
283,768
18,228,862
15,714,644

Assets—continued
1977
$
1977
$
1976
$

Office equipment and furniture
.. ..
.. 113,264
88,308
Depreciation to date
.. ..
.. 246,389
214,050
.. ..
.. 73,045
59,281
173,344
154,769
18,228,862
15,714,644

PROFIT AND LOSS ACCOUNT FOR YEAR ENDED 31 MARCH 1977

1977
$
1976
$

To interest credited and accrued to depositors..
603,957
468,527
To charges and administration expenses
.. 471,576
367,590
To depreciation
.. 13,764
11,822
To provision for building alteration reserves
.. 20,000
—
To provision for taxation
.. 66,213
45,763
To net profit to profit and loss appropriation account
.. ..
62,664
57,669

1,238,174
951,371

By Interest:
New Zealand Government stock
.. ..
.. 416,668
367,448
Local authorities
.. ..
.. 97,383
83,304
Fixed deposits
.. ..
.. 133,583
74,079
Mortgages
.. ..
.. 548,194
403,815
Personal loans
.. ..
.. 12,068
6,335

Total investment income..
.. ..
.. 1,207,896
934,981
By Commission, brokerage ,etc.
.. ..
.. 29,090
15,202
By rents received
.. ..
.. 1,188
1,188

1,238,174
951,371

PROFIT AND LOSS APPROPRIATION ACCOUNT FOR YEAR ENDED 31 MARCH 1977

$
$

To provision for grants
.. ..
.. 15,000
10,000
To balance to reserve fund
.. ..
.. 49,991
50,333

64,991
60,333

By balance of funds appropriated for Grants 1975 not distributed
.. ..
.. 50
By refund of income tax
.. ..
.. 2,327
2,614
By net profit from profit and loss account
.. ..
.. 62,664
57,669

64,991
60,333

G. S. RAYMOND, President.
D. R. PARKER, General Manager.

AUDITORS’ REPORT

We have examined the balance sheet of the South Canterbury Savings Bank as at 31 March 1977, and the related profit and loss account for the year then ended. Our examination was 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 accordance with an accounting policy of the Bank depreciation on fixed assets has been calculated to reduce each asset to its estimated residual value by the end of its probable useful life. The rates used are those approved by the Commissioner of Inland Revenue. It is considered that the amount charged in the profit and loss account does not differ materially from that which would result from calculation depreciation on the straight line method.

We have obtained all the information and explanations that we have required and in our opinion, the accompanying balance sheet and the profit and loss account together with the statement of accounting policy and notes attached thereto present fairly the financial position of the South Canterbury Savings Bank at 31 March 1977, and the results of its operations for the year then ended.

Timaru, 23 May 1977.

HUBBARD, CHURCHER & CO., Chartered Accountants.

STATEMENT OF ACCOUNTING POLICY

1. Accounting principles—The accounts have been prepared in accordance with general accounting principles, consistent with previous years, based on historical cost, and there have been no changes to accounting policy during the year.
2. Revenue recognition—Interest received includes interest accrued to 31 March, 1977.
3. Personal loans—Advances by way of personal loans have been adjusted for interest yet to mature as shown in the balance sheet. The policy is to add interest to the full advance at the commencement of the loan. This amount is brought into revenue during the appropriate financial years by applying the “Rule of 78”.
4. Depreciation—The fixed assets have been depreciated at ordinary depreciation rates as allowed by the Inland Revenue Department. All assets still in use are included in the Bank’s books and it is calculated that the depreciation rates being used will write off the items over the period of their useful lives. In accordance with the Bank’s established policy, no additional depreciation as provided for by the Inland Revenue Department as special exemptions on the purchase of plant have been claimed for taxation purposes.
5. Investments—New Zealand Government stock and local authority securities are shown at face value and are generally held until maturity. The redemption due on maturity in regard to stock purchased under par is shown as a reserve to be brought into account upon either maturity or sale of the stock concerned.
6. Mortgages—Mortgage applications approved, but for which the funds have not been uplifted at 31 March 1977, amount to $512,730.
7. Property—The Bank owns premises in Timaru, Temuka, and Waimate, and leases premises in Ashburton, Geraldine, Tinwald, and Timaru. The leases have been negotiated to provide long-term tenancy options. Provision has been made in the accounts for future development of head office building in Timaru.
8. Taxation—The amount provided for income tax is the amount of the calculated tax liability in respect of the accounting profit shown for the year by the profit and loss account.

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