2704

THE NEW ZEALAND GAZETTE

No. 128

Other expenses—Other expenses, including expenditure on computer programme development, are charged to the accounts in the year in which the expenditure is incurred.

Depreciation—Fixed assets, other than freehold land, 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 principal annual rates in use are:
Buildings: 1 percent to 2.5 percent
Computer equipment, office furniture and motor vehicles: 10 percent to 15 percent

As land and buildings were revalued as at 31 March 1983, depreciation for the current year was charged on the same basis as in previous years.

Taxation—Taxation charged against profits for the year is the estimated expense for the year. Tax allocation accounting has been adopted by the bank for significant timing differences in respect of accrued investment income, depreciation, capital profits and losses, and amortisations of Government and local authority stock purchases and sales.

Valuation of Assets

Current assets and investments—All current assets and investments are shown at cost with the exception of Government and local authority stock. From 1 April 1980, stock has been valued at cost adjusted by the amortisation of the discount or premium on purchase, calculated on a yield basis, over the term of the stock. The discount or premium is calculated after adjusting for interest accrued in the purchase price. Government and local authority stock purchased prior to 1 April 1980 and still held at balance date is recorded at face value.

In certain circumstances low yielding Government stock has been realised for long term cash flow and profit advantage. Replacement stock purchased to maintain the required level of investment has been valued in line with the valuation policy adopted for the stock previously held.

Fixed assets—Fixed assets are shown at cost with the exception of land and buildings which are valued at 90 percent of an independent valuation.

Changes in Accounting Policies

Except for the revaluation of land and buildings there has been no change in the accounting policies this year.

NOTE 2:

Government and Local Authority Stock

New Zealand Government stock is held pursuant to the statutory requirements of the Trustee Savings Bank Act 1948 and subsequent amendments and is based on the face value.

NOTE 3:

Fixed Assets

Freehold land and buildings were written up to 90 percent of a registered valuation as at 31 March 1983. Capital work in progress and leasehold properties are shown at cost.

The latest Government valuations of land and buildings dated from 1 July 1981, plus subsequent additions at cost, amount to $5,459,000

Capital commitments outstanding at 31 March 1983 amount to $600,000 (1982, $60,000).

NOTE 4:

Taxation

Taxation due in respect of the current year is $109,907. The charge for deferred taxation consists of taxation payable in future years on timing differences arising through the amortisation and the sale of stock $551,617, the decrease in interest accrued $167,015, the increase in depreciation $48,221 and other items $6,486.

STATEMENT OF SOURCE AND APPLICATION OF FUNDS

AUDITORS' REPORT TO THE TRUSTEES OF THE OTAGO 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 financial statements give, using the historical cost method modified by the revaluation of land and buildings, a true and fair view of the financial position of the bank at 31 March 1983, and the results of its operations and the source and application of funds for the year ending on that date.

Dunedin, 2 May 1983.

GILFILLAN MORRIS & CO.
HUTCHISON HULL & CO.
Chartered Accountants.

CONTENTS

BY AUTHORITY: P. D. HASSELBERG, GOVERNMENT PRINTER, WELLINGTON, NEW ZEALAND—1983

Price $2.25