15 SEPTEMBER
THE NEW ZEALAND GAZETTE
3119

Loss on sale of securities—(note 1)
Provision for taxation
Associate company—adjustment due to change in accounting policy
Net profit

1983
$
716,768.98
767,769.00
16,213
1,039,653.41
$16,209,004.92

1982
$
420,392.00
420,392.00
687,147
703,360.00
$12,894,175.39

Interest accrued and received
from—
N.Z. Government stock
Local authority stock
Mortgages
Personal loans
Other sources

1983
$
4,516,656.46
23,948.74
9,127,998.03
480,303.77
1,417,142.81
$15,566,049.81

1982
$
3,421,754.77
95,762.68
6,885,491.14
293,374.95
1,554,854.33
$12,251,237.87

Commission—travel department
Other commissions—fees and sundry receipts
Share of profit of associate company
Profit on sale of property

1983
$
297,816.75
300,241.56
1,780.00
43,116.80
$16,209,004.92

1982
$
212,269.10
307,102.28
13,762.92
109,803.22
$12,894,175.39

STATEMENT OF SOURCE AND APPLICATION OF FUNDS

1983
$
Profit after tax
1,039,653
Depreciation
289,744
Total funds from operations
1,329,397

From other sources—
Donation provision transferred
430
Increase in provision for donations
23,000
Depositors' funds
21,884,755
Deferred taxation
60,113
Total source of funds
$23,299,695

1982
$
703,360
232,811
936,171
1,520
15,000
22,357,928
157,455
3,766,070
$27,234,144

Application of funds—
Net purchase of fixed assets
1,774,781
776,910
Investments
6,964,673
7,102,847
Mortgages and personal loans and overdrafts
11,141,279
19,024,305
Trustee bank visa outstanding
315,098
275,088
Provision for donations
100,000
75,000
Increase in working capital
3,003,864
—
$23,299,695
$27,234,144

Increase in working capital—
Cash
(490,043)
891,144
Fixed deposits
4,090,000
(4,390,000)
Debtors
(15,419)
56,367
Creditors
(124,717)
(79,825)
Taxation
(226,180)
(129,707)
Accrued interest on investments
169,114
176,377
(398,891)
(290,426)
$3,003,864
($3,766,070)

NOTES TO 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 principal rates in use are:

Buildings, 1 percent and 2½ percent.
Office equipment, fixtures and fittings 10 percent and 20 percent.
Computer equipment, 12 percent.

NOTE 1—Loss on sale of securities—Low coupon Government Stock has been sold during the year to allow the Bank to purchase higher yielding Government securities.

NOTE 2—Term Investment Accounts—

1983
$
Under and including
1 year
36,660,330
1-2 years
18,406,409
2-3 years
4,656,452
3-5 years
4,496,690
$64,219,881

1982
$
30,858,792
13,997,135
5,448,303
1,670,000
$51,974,230

NOTE 3—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.

1983
$
Balance
132,751
Total tax provided in accounts
767,517
Less share of associate company
1,517
898,751
Less timing differences transferred to deferred tax
60,113
838,638
Less tax paid
479,707
Tax payable
$358,931

1982
$
3,044
467,622
12,622
458,044
157,455
300,589
167,838
$132,751

Deferred—
Provision for deferred tax
921,955
764,500
Plus movement
60,113
157,455
$982,068
$921,955

NOTE 4—Fixed deposits—Coupon maturity dates cover the period 24 April 1983 to 6 October 1985. As these investments can be realised as liquidity conditions dictate they have been treated as current assets.

NOTE 5—New Zealand Government stock—New Zealand Government stock is 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:

1983
$
New Zealand Government stock
46,493,133

1982
$
40,067,765

New Zealand Government stock is held pursuant to the ratio requirements of the Trustee Savings Bank Act 1948 and subsequent amendments. As at 31 March 1983, the estimated market value of the New Zealand Government stock portfolio was $44,199,618.

NOTE 6—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 31 March was $711,604 (1982: $494,153).

NOTE 7—Northern Trustee Computerbank Ltd.—The ordinary share investment has been shown using the equity accounting basis. 1982 figures have been restated to reflect a change in accounting policy.

1983
$
80,000 ordinary shares
80,000
Accumulated profits to previous year
74,172
Change in accounting policy
—
Share of profit current year
263
154,435
Debentures (at cost)
33,000
$187,435

1982
$
80,000
90,436
(16,213)
(51)
154,172
33,000
$187,172

NOTE 8—Valuation of assets—Fixed assets are recorded at cost:

Cost
$
Accumulated Depreciation
$
Book Value
1983
$
1982
$
Land
718,454
—
718,454
299,555
Buildings
4,954,422
227,955
4,726,467
3,059,295
Plant, furniture and fittings
2,733,467
954,951
1,778,516
1,379,550
Total 1983
8,406,343
1,182,906
7,223,437
—
Total 1982
5,719,804
981,404
—
4,738,400

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

Date of Valuation
Land
Buildings
Total
1978
14,500
40,500
55,000
1979
15,500
289,654
305,154
1980
501,500
4,012,769
4,514,269
1981
110,800
318,700
429,500
1982
13,200
208,904
222,104
$655,500
$4,870,527
$5,526,027