3 SEPTEMBER
THE NEW ZEALAND GAZETTE
2469

APPROPRIATION ACCOUNT FOR YEAR ENDED 31 MARCH, 1981

1981 1980
Provision for donations .. .. .. .. .. .. .. .. .. .. $60,000 $50,000
Reserve account .. .. .. .. .. .. .. .. .. .. .. .. 390,986 375,932
$450,986 $425,932

Net profit—
1981 1980
Donation provision balance transferred .. .. .. .. 450,647 422,800
339 132
$450,986 $425,932

STATEMENT OF SOURCE AND APPLICATION OF FUNDS

1981 1980
Source of funds—
Profit after tax .. .. .. .. .. .. .. .. .. .. .. 450,647 422,800
Depreciation .. .. .. .. .. .. .. .. .. .. .. .. 178,471 126,744
Total funds from operations .. .. .. .. .. .. .. $629,118 $549,544

From other sources—
Donation provision transferred .. .. .. .. .. .. 239 3,132
Increase in provision for donations .. .. .. .. 10,000 10,000
Depositors’ funds .. .. .. .. .. .. .. .. .. .. 16,956,903 9,683,200
Deferred taxation .. .. .. .. .. .. .. .. .. .. 199,467 170,920
Total source of funds .. .. .. .. .. .. .. .. .. $17,795,827 $10,416,886

Application of funds—
Net purchase of fixed assets .. .. .. .. .. .. .. 423,486 1,385,283
Investments .. .. .. .. .. .. .. .. .. .. .. .. 6,493,419 3,372,381
Mortgages and personal loans and overdrafts .. .. 8,727,029 3,889,384
Trustee Bank Visa outstandings .. .. .. .. .. .. 15,158 35,668
Share of associate company .. .. .. .. .. .. .. 170,000 30,000
Provision for donations .. .. .. .. .. .. .. .. 1,998,366 1,684,170
Increase in working capital—
Cash .. .. .. .. .. .. .. .. .. .. .. .. .. .. 425,263 142,585
Fixed deposits .. .. .. .. .. .. .. .. .. .. .. 1,800,000 1,291,000
Debtors .. .. .. .. .. .. .. .. .. .. .. .. .. 19,196 17,309
Creditors .. .. .. .. .. .. .. .. .. .. .. .. (126,812) (39,409)
Taxation .. .. .. .. .. .. .. .. .. .. .. .. .. (177,440) 297,305
Accrued interest on investments .. .. .. .. .. 420,758 244,373
Accrued interest on investment accounts .. .. (362,993) (269,993)
$1,998,366 $1,684,170

STATEMENT OF THE ACCOUNTS

Statement of accounting policies—The general accounting principles as recommended by the New Zealand Society of Accountants for the measurement and reporting of results and financial position on an historical cost basis have been followed in the preparation of these financial statements.

The following particular accounting policies which significantly affect the measurement of the bank’s profit and financial position have been applied on a basis consistent with the previous years.

Depreciation—Depreciable fixed assets are depreciated on a straight line basis at rates estimated to write off the cost, less residual value, over the useful life of each class of asset. The principle rates in use are:

Buildings 1 percent and 2½ percent.
Office equipment, fixtures and fittings 10 percent and 20 percent.
Computer equipment 12½ percent.

Investment accounts and term deposits—

1981 1980
Under and including—
1 year .. .. .. .. .. .. .. .. .. .. .. .. .. 26,227,200 14,663,939
1-2 years .. .. .. .. .. .. .. .. .. .. .. .. 5,309,928 6,079,393
2-3 years .. .. .. .. .. .. .. .. .. .. .. .. 7,063,308 8,828,364
3-5 years .. .. .. .. .. .. .. .. .. .. .. .. 1,483,280 1,516,870
$40,083,716 $31,088,566

Taxation—The charge for income tax is the amount of tax liability in respect of the accounting profit for the year.

The liability for deferred taxation arises from items of income and expenditure being included in taxation calculations in periods different from those in which they are dealt with in the financial accounts. The significant timing differences relate to depreciation and accrued income.

1981 1980
Net profit before tax .. .. .. .. .. .. .. .. 791,647 714,800
Less permanent differences .. .. .. .. .. .. 33,870 65,912
757,777 @ 45c 341,000 648,888 @ 45c 292,000
Plus share of tax of associate company .. .. 33,690
Total tax provided in accounts .. .. .. .. .. $374,690

Less timing differences—transferred to deferred tax .. .. .. .. .. .. 199,467 170,920
Tax liability for year .. .. .. .. .. .. .. .. 141,533 121,080
Less provisional tax paid .. .. .. .. .. .. 138,489 295,476
Tax payable (receivable) .. .. .. .. .. .. .. 3,044 $174,396
Deferred tax 1 April 1980 .. .. .. .. .. .. 363,033 1/4/79 394,113
Plus movement .. .. .. .. .. .. .. .. .. .. 199,467 170,920
Deferred tax 31 March 1981 .. .. .. .. .. .. $764,500 31/3/80 $565,033

Fixed deposits—Coupon maturity dates cover the period 9 April, 1981, to 9 January, 1982. As these investments can be realised as liquidity conditions dictate they have been treated as Current Assets.

New Zealand Government stock and transferable certificates of deposit—New Zealand Government stock and transferable certificates of deposit are recorded at par value less discount which is amortised over the term of the investment on a straight line basis. The cost price as at 31st March was as follows:

1981 1980
Transferable certificate of deposit .. .. .. .. $536,996 $830,123
New Zealand Government stock .. .. .. .. .. .. 32,130,679 25,860,831

New Zealand Government stock is held pursuant to the ratio requirements of the Trustee Savings Bank Act 1948, and subsequent amendments and under normal circumstances is held to the coupon maturity date. As at 31 March 1981, the estimated market value of the N.Z. Government stock portfolio was $28,238,499 and the transferable certificates of deposit portfolio was $74,982 (1980 $20,658,200 $892,400).

Personal loans—Interest on loans is added to the principal sum at the date of the advance. The interest revenue is recognised on the basis of the ‘Rule of 78’ method. Unearned interest as at 31st March was $173,504 (1980 $172,915).

Northern Trustee Computerbank Ltd.—The Ordinary Share investment has been shown using the equity accounting basis:

1981 1980
100,000 ordinary shares paid to 80c .. .. .. .. 80,000 80,000
80,000 ordinary shares paid to $1 .. .. .. .. 74,086 38,418
Accumulated profits to previous year .. .. .. 15,158 33,668
Share of profit current year .. .. .. .. .. .. 169,244 154,086
Debentures (at cost) .. .. .. .. .. .. .. .. .. 33,000 33,000
$202,244 $187,086

Valuation of assets—Fixed assets are recorded at cost:

                        Cost        Accumulated   Book Value
                        $           Depreciation  $

Land .. .. .. .. .. .. .. .. 275,194 .. 275,194
Buildings .. .. .. .. .. .. 3,031,793 171,412 2,860,381
Plant, furniture and fittings .. 1,652,444 573,719 1,078,725
Total .. .. .. .. .. .. .. .. $4,959,431 $745,131 $4,214,300

The latest Government valuation of land and buildings plus additions at cost are:

Date of Valuation Land Buildings Total
1976 .. .. .. .. .. .. 22,500 122,000 144,500
1977 .. .. .. .. .. .. 16,300 94,700 111,000
1978 .. .. .. .. .. .. 14,500 40,500 55,000
1979 .. .. .. .. .. .. 15,500 32,500 48,000
1980 .. .. .. .. .. .. 374,500 2,924,527 3,299,027
$443,300 $3,214,227 $3,657,527

Contingent liabilities and commitments—

Contingent Liabilities:
Subsidy on Home Loan Account.

Commitments:
Mortgages approved but not advanced as at 31 March .. .. .. .. .. .. 1981 1980
$6,044,036 $1,804,400

Capital Commitments:
Commitments in respect of plant, land and buildings as at 31 March .. 1981 1980
$234,565 $126,125

AUDITOR’S REPORT TO THE TRUSTEES OF TARANAKI SAVINGS BANK

We have obtained all the information and explanations that we have required. In our opinion proper accounting records have been kept by the bank, so far as appears from our examination of those records.

In our opinion the accompanying balance sheet, profit, and loss account, and statement of source and application of funds give, using the historical cost method, a true and fair view of the financial position of the bank at 31 March 1981, and the results of its business and the changes in financial position for the year ended on that date.

HUTCHISON HULL AND CO., Chartered Accountants.
New Plymouth, 27 May 1981.

BANK OF NEW ZEALAND SAVINGS BANK LTD.
Deposits Guaranteed by Bank of New Zealand
BALANCE SHEET AS AT 31 MARCH 1981

Liabilities

1981 1980
Depositors’ balances, including interest credited—
Ordinary accounts .. .. .. .. .. .. .. .. .. .. 227,602 214,137
Thrift accounts .. .. .. .. .. .. .. .. .. .. 1,128 1,077
Investment accounts .. .. .. .. .. .. .. .. .. 175,280 141,605
404,010 356,819