11 OCTOBER THE NEW ZEALAND GAZETTE 4269

The attached notes form part of and are to be read in conjunction with these accounts.

PROFIT AND LOSS ACCOUNT FOR YEAR ENDED 31 MARCH 1984

Note 1984 $ 1983 $
Income—
Government securities 6,892,164 4,316,656
Local authority securities 20,144 23,949
Mortgages 10,766,823 9,127,998
Personal loans 640,774 480,304
Other investments 1,532,682 1,417,143
Rents, commissions, fees etc. 1,038,028 598,058
Share of income of associate co. 28,651 1,780
Profit on sale of property 70,396 43,117
20,990,662 16,209,005
Less Expenditure—
Interest to depositors 11,205,504 9,320,276
Administrative expenses 5,295,480 4,056,146
Trustees honoraria 27,573 18,900
Loss on sale of securities 937,699 716,769
Depreciation 361,527 289,744
17,827,783 14,401,835
Operating profit 3,162,879 1,807,170
Less taxation 1,350,000 767,517
Net profit for year 1,812,879 1,039,653
Less provision for donations 150,000 100,000
1,662,879 939,653
Add donation provision balance 4,445 430
Add reserve fund brought forward 5,475,818 4,535,735
Reserve fund as at 31 March 1984 $7,143,142 $5,475,818

STATEMENT OF CHANGES IN FINANCIAL POSITION

1984 $ 1983 $
Source of Funds—
Profit after tax 1,812,879 1,039,653
Depreciation 361,527 289,744
Total funds from operations 2,174,406 1,329,397
From Other Sources—
Donation provision transferred 4,445 430
Increase in provision for donations 50,000 25,000
Depositors’ funds 23,931,400 21,884,755
Deferred taxation 162,891 60,113
Decrease in working capital 4,293,479
Total source of funds 30,616,621 23,299,695

Application of Funds—
Net purchase of fixed assets 1,639,761 1,774,781
Investments 16,709,688 6,964,673
Mortgages and personal loans and overdrafts 11,577,373 11,141,279
Trusteebank visa outstanding 539,799 315,098
Provision for donations 150,000 100,000
Increase in working capital 3,003,864
30,616,621 23,299,695

Increase in Working Capital—
Cash 54,096 (490,043)
Fixed deposits (4,045,500) 4,090,000
Debtors 86,729 (15,419)
Creditors (402,862) (124,717)
Taxation (146,170) (226,180)
Accrued interest on investments 224,527 169,114
($4,293,479) $3,003,864

R. G. DUNLOP, President.
B. J. RUDD, General Manager.

NOTES TO THE ACCOUNTS

1. 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 have been followed in the preparation of these financial statements.
   — the measurement base adopted is that of historical cost
   — accrual accounting is used to match expenses and revenues

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 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: 12 percent

New Zealand Government Stock—
New Zealand Government stock is recorded at par value less discount on acquisition which is amortised over the term of the investment on a straight line basis.

The stock is held pursuant to ratio requirements and under normal circumstances is held to maturity. Periodically stock is sold to improve interest yield.

2. Term Investment Accounts—

1984 $ 1983 $
Under 1 year 52,167,494 36,660,331
1–2 years 12,601,667 18,406,409
2–3 years 4,876,672 4,656,452
3–5 years 6,556,310 4,496,690
$76,202,143 $64,219,882

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.

1984 $ 1983 $
Provision for Taxation—
Balance 358,931 132,751
Total tax provided in accounts 1,350,000 766,000
1,708,931 898,751
Less timing differences transferred to deferred tax 162,891 60,113
1,546,040 838,638
Less Tax paid 1,040,939 479,707
Tax Payable $505,101 $358,931

1984 $ 1983 $
Deferred Taxation—
Provision for deferred tax 982,068 921,955
Plus 1983–84 movement 162,891 60,113
$1,144,959 $982,068

4. Fixed Deposits—
   Coupon maturity dates cover the period April 1984 to October 1985. As these investments can be realised as liquidity conditions dictate they have been treated as current assets.

5. New Zealand Government Stock—(Refer also note 1)

1984 $ 1983 $
Cost 63,637,183 46,493,133
Amortised discount 438,418 1,012,189
$64,075,601 $47,505,322
Market value 68,542,143 44,199,618

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 $950,325 (1983: $711,604).

7. Northern Trustee Computerbank Ltd.—
   The ordinary share investment has been shown using the equity accounting basis.

1984 $ 1983 $
Ordinary shares $1 each 140,000 80,000
Accumulated profits to previous year 74,435 74,172
Plus share of profit for year 52,175
Less share of provision for taxation 22,524 29,651 263
244,086 154,435
Debentures (at cost) 93,000 33,000
$337,086 $187,435