22 NOVEMBER
THE NEW ZEALAND GAZETTE
5319

Add Extraordinary Item net
of taxation (note 8)
Tax paid profit after
extraordinary item
Retained profit brought
forward ..
Add Provision for donations
reversed
Retained profit

1984
$
69,732
588,210
2,219,329
2,807,539

1983
$
...
648,118
1,561,211
2,209,329
10,000
$2,219,329

FUNDS STATEMENT FOR YEAR ENDED 31 MARCH 1984

Source of Funds—
From Operations:
Tax paid profits
Add back items not
requiring funds
—Depreciation
—Taxation..
—Other
Total funds from
operations
From Other Sources:
Depositors’ balances
increase
Repayment of investment
principal on
—Mortgages and
personal loans
—Local authority
stock
—Government stock
Term loan net increase
Decrease in cash resources
Use of Funds—
Investments:
—Government stock
—Mortgage and
personal loans
Repayment of mortgage
principal
Payment of taxation
Fixed asset purchases net
of disposal proceeds
Increase in cash resources

1984
$
518,478
205,837
424,209
(75,910)
1,072,614
7,300,074
10,445,067
2,000
845,440
2,602,164
$22,267,359
2,228,911
17,824,837
20,053,748
58,694
463,740
1,691,177

1983
$
648,118
129,516
539,389
(56,645)
1,260,378
8,860,004
7,526,202
389,197
20
243,140
$18,278,941
4,426,207
10,134,995
14,561,202
818,296
207,607
2,691,836

NOTES TO THE ACCOUNTS

1. Statement of Accounting Policies—
   1.1 General Accounting Policies
   The going concern concept has been adopted in the preparation
   of these accounts, with historical cost as the measurement base.
   Accrual accounting is used to match income and expenses.
   1.2 Particular Accounting Policies
   (a) Government Stock
   Discounts and premiums on certain Government stocks are
   amortised from the date of purchase so that stocks will attain their
   redemption values by maturity date. The current years discount
   and premium amortisation is reflected in the profit statement.
   (b) Personal Loans
   The Bank’s policy is to add interest to the advance at the
   commencement of the loan. The ‘rule of 78’ method of accounting
   for income is used to apportion the income between accounting
   periods. The effect of this method is that income earned over the
   term of the loan represents a level rate of return on the declining
   loan balance outstanding. The personal loan investment is net of
   unearned interest.
   (c) Depreciation
   Fixed assets are depreciated on the straight-line method at rates
   which will write off the cost over their estimated useful lives. The
   principal rates are:
   Furniture and fittings 10% to 20%
   Computer Equipment 20% to 25%
   (d) Taxation
   The charge for income tax is the amount of the tax liability in
   respect of the accounting profit for the year and includes both current
   and deferred tax.

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 accrued interest
income, discounts earned and premiums paid on Government Stock
and depreciation.

1.3 Changes in Accounting Policies
There have been no changes in accounting policies. All policies
have been applied on bases consistent with those used in prior years.

2. Investments—
   Government stocks are recorded at cost adjusted by the discount
   or premium amortised to date. Stocks are generally held until
   maturity date and therefore, differences in the following bases of
   valuation have little financial effect on the Bank. Statutory ratio
   requirements are based on the nominal value of stocks.

New Zealand Government Stock—
Cost price plus amortisation
Nominal value
Market value

1984
$
38,204,111
38,731,823
38,186,908

1983
$
35,873,078
36,058,823
32,595,647

3. Fixed Assets—

1984
Accumulated
Deprecia-
Cost $
tion $
Book
Value $

1983
Accumulated
Deprecia-
Cost $
tion $
Book
Value $

Land ..
Buildings
Improvements to
leasehold
premises
Furniture, fittings
and equipment

78,771
83,831

16,285

78,771
69,566

674,726
98,292
576,434
289,314
144,412
144,902
1,803,190
280,589
1,522,601
687,107
430,126
256,981
$2,477,916
$378,881
$2,099,035
$1,141,043
$590,823
$550,220

4. Current Taxation Refund—

Taxation on profit
Taxation on extraordinary item (note 7)
Less timing differences transferred to deferred
taxation
Less provisional tax paid
Taxation payable/(refund) ..

1984
$
424,209
21,206
445,415
60,607
384,808
($62,492)

1983
$
539,389
...
539,389
57,376
482,013
$16,440

5. Term Liabilities—
   The Housing Corporation of New Zealand liabilities relate to
   supplemented mortgage loans advanced for eligible depositors under
   the home ownership savings scheme.

6. Deferred Taxation Payable—

Deferred taxation last year
Add timing differences transferred (note 4)
Deferred taxation this year

1984
$
766,294
60,607
$826,901

1983
$
708,918
57,376
$766,294

7. Term Investment Accounts—

Repayable within
1 year
1-2 years
2-3 years
3-5 years

1984
$
63,684,460
5,861,000
1,418,000
100,000
$71,063,460

1983
$
51,439,558
3,043,000
5,211,300
47,000
$59,740,858

Rates of interest payable range from 7.0 percent to 15.5 percent
per annum.

8. Extraordinary Item—

Realised reserves upon sale of Cuba
Street Property
—Capital
—Revenue
Less taxation payable

1984
$
59,425
21,206
$69,732

1983
$
31,513
...
38,219
Nil