| Kohinoor Industries Limited |
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| ANNUAL REPOR T 1995 |
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| CONTENTS |
|
| Company Information |
|
2 |
|
|
|
| Notice
of Annual General Meeting |
3 |
|
| Directors
Report to the Shareholders |
5 |
|
| Pattern
of Holdings of the Shares |
7 |
|
|
| Auditor's
Report to the Members |
8 |
|
| Balance Sheet |
|
10 |
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|
|
|
|
|
| Profit & Loss Account |
|
12 |
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|
| Cash Flow Statement |
|
13 |
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|
| Notes to the Accounts |
|
14 |
|
|
| Form of Proxy |
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|
|
|
| COMPANY INFORMATION |
|
| Board of Directors |
|
| Mr. M. Naseem Saigol Chairman/Chief Executive |
|
| Mrs. Sehyr Saigol |
|
| Mr. Khalil A. Malik |
|
| Mr. Shahid Sethi |
|
| Mr.
Irfan Zubair |
|
| Ch.
Abdul Ghafoor |
|
| Mr.
Mohammad Ashraf (NIT Nominee) |
|
|
|
|
| Company Secretary |
|
| Mr. Haroon Ahmad Khan |
|
|
|
| Auditors |
|
|
| Manzoor
H ussain Mir & Co. |
|
| Chartered Accountants |
|
|
| Chief Internal Auditor |
|
| Mr. Jameel ur Rehman |
|
|
|
|
| Bankers |
|
| Allied
Bank of Pakistan Limited |
|
| Askari
Commercial Bank Limited |
|
| Emirates
Bank International Limited |
|
| Faysal Bank Limited |
|
| Habib Bank Limited |
|
| National
Bank of Pakistan |
|
| Standard
Chartered Bank |
|
| Union Bank Limited |
|
| United Bank Limited |
|
|
| Registered Office |
|
|
| 6-
Egerton Road, Lahore |
|
| Tel: 6306131 (5 Lines) |
|
|
| Mills |
|
|
|
| Kohinoor Nagar |
|
|
| Faisalabad. |
|
|
|
|
| Notice
of Annual General Meeting |
|
| Notice
is hereby given that the Forty sixth Annual General Meeting of shareholders
of KOHINOOR INDUSTRIES |
|
| LIMITED
will be held on Saturday 30 March, 1996 at 10 30 A.M at Hotel Faletti's
Eqerton, Road, Lahore to transact |
|
| the
following business. |
|
| 1.
To confirm the minutes of the Forty fifth Annual General Meeting of the
Company held on 29 March, 1995. |
|
| 2.
To receive and adopt the Annual Audited Accounts for the year ended 30
September, 1995 along with |
|
| Directors' and Auditors' Reports thereon. |
|
|
| 3.
To elect Six Directors for a period of 3 years pursuant to sections 178 &
180 of the Companies Ordinances 1984. |
|
|
| The
Board has fixed the number of Directors as seven. In pursuance of section l83
of the Companies |
|
| Ordinance,
1984 Mr. Muhammad Ashraf (NIT Nominee) does not retire. The six. retiring
Directors are: |
|
| i). Mr. M. Naseem Saigol |
iv). Mr. Shahid Sethi |
|
| ii). Mrs. Sehyr Saigol |
v). Mr. Irfan Zubair |
|
| iii). Mr. Khalil A. Malik |
vi). Ch. Abdul Ghafoor |
|
|
| 4.
To appoint Auditors to hold office till the conclusion of the next Annual
General Meeting and fix their |
|
| remuneration. |
|
| 5.
Any other business with the permission of the Chair. |
|
|
| SPECIAL BUSINESS: |
|
| To
pass the following Resolutions pursuant to Section 196(3) of the Companies
Ordinance, 1984. |
|
|
| RESOLVED
that the company be and is hereby authorised to sell one of its spinning units comprising 17,280
spindles |
|
| and
back process machinery along with related liabilities and also vacant land measuring 45 acres approximately |
|
| situated
in the premises of the Company at Faisalabad subject to approval from concerned financial institutions and |
|
| other departments, if required. |
|
|
| FURTHER
RESOLVED that Chief Executive of the company be and is hereby authorised to
sell the said spinning unit |
|
| and
vacant land, negotiate with interested parties, settle the terms and
conditions of sale with them and transfer the |
|
| said
spinning unit and vacant land to purchaser(s). |
|
|
| STATEMENT
UNDER SECTION 160(1) (b) OF THE COMPANIES ORDINANCE, 1984. |
|
| Material
Information: During the year financial charges exceeding
Rs. 276 million have been incurred by the |
|
| company
and in order to reduce these the company intends to generate liquidity by
sale of above assets and repay |
|
| expensive
borrowings. This will not only reduce the financial costs to the company for
perpetuity, but will also |
|
| generate
substantial capital gains to the company. |
|
| Directors'
Interest: The Buyer for above assets has not yet been
finalized, however, these assets will not be sold to |
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| any
of the Directors or to a Private Company in which Directors are interested. |
|
| Book
Closure: The Share Transfer Books of the Company will
remain closed from 28 March 1996 to 03 April, 1996 |
|
| (both days inclusive). |
|
| By Order of the Board |
|
| (HAROON AHMAD KHAN) |
|
| Company Secretary |
|
| LAHORE: 07 March, 1996 |
|
|
|
| Notes: |
|
| 1.
Any person who seeks to contest the election of Directors, shall file at the
Registered Office of the Company, |
|
| not
later than 14 days before the day of the meeting, his intention to offer
himself for election as Director in |
|
| terms
of Section 178(3) of the Companies Ordinance, 1984. |
|
| 2.
A member entitled to attend and vote at the above meeting may appoint another
member as proxy. |
|
| 3.
Proxies in order to be effective, must be received at the Registered Office
of the Company not later than forty |
|
| eight
hours before the time of meeting and must be duly stamped, signed and
witnessed. |
|
| 4.
Shareholders are requested to promptly notify the Company of any change in
their addresses, if any. |
|
|
| Directors'
Report to the Shareholders |
|
| The
Directors of the Company are pleased to place before you the 46th Annual
Report together with the financial |
|
| statements
and Auditor's Report thereon for the year ended September 30, 1995. |
|
| The
period under review continued to be a difficult year for the textile
industry. This was yet another year of cotton |
|
| crop
failure. Profitability of the company suffered adversely because of
phenomenal increase in cotton prices |
|
| disproportionate
with increase in yarn prices and rise in other input costs mainly the fuel
and power. This resulted |
|
| in
escalation of cost of sales from 83% to 96% of sales bringing down the gross
profit rate from 17% to only 4%. |
|
| Consequently,
despite an increase of almost one billion rupees in the sales revenue the
year ended in a loss of |
|
| Rs.
191.6 million. Our continued BMR policy, however, helped achieve 80% increase
in our exports which went up |
|
| to
Rs. 1.847 billion aggregating the total sales to Rs. 3.265 billion. Operating
results for the year are as follows: |
|
|
|
(Rupees in Thousands) |
|
| Gross
profit |
139,030 |
|
| Operating expenses |
185,613 |
|
|
|
| Operating loss |
46,583 |
|
| Other income |
(130,883) |
|
| financial charges |
275,904 |
|
|
145,021 |
|
| Loss before taxation |
191,604 |
|
| Provision for taxation |
15,227 |
|
| Loss for the year |
206,831 |
|
|
| By
the grace of Allah cotton crop this year has been good and we have managed to
procure almost 80% of our |
|
| year's
requirements at reasonable prices. This coupled with some relief due to
devaluation of Pak Rupee is expected |
|
| to
improve the current year's results.' |
|
| The
management is carrying out financial restructuring of the company and intends
to dispose of some vacant land |
|
| to
extinguish high cost liabilities. This will improve liquidity position of the
company and generate substantial capital |
|
| gains. |
|
| The
following comments are offered on the auditors observations as contained in
their report. |
|
| As
reported in our last report and in the notes to the accounts, claim's of the
company against government taken |
|
| over
concerns is pending with Lahore High Court;, Lahore and is subjudice. |
|
| In
our opinion an amount of Rs. 9.821 million recoverable from Kohinoor Textile
Mills Limited is considered good |
|
| and
the company has filed a suit for recovery of the amount. The amount of Rs. 5.833 millions is, however, doubtful |
|
| of recovery. |
|
| Provision
of section 80-D- is unconstitutional. A number of appeals on this matter have
been filed by different |
|
| companies
in the Honourable Supreme Court of Pakistan against the judgement of
Honourable Lahore High Court |
|
| and is subjudice. |
|
|
|
| During
the year under review Mr. M. Azam Saigol and Mrs. Amber Saigol resigned and
in their place Ch. Abdul |
|
| Ghafoor
and Mr. lrfan Zubair were co-opted on the Board. The Board thanks the
outgoing Directors for their |
|
| cooperation
during their tenure of Directorship. |
|
| The
auditors M/s Manzoor Hussain Mir & Co., Chartered Accountants retire and
being eligible, offer themselves for |
|
| reappointment. |
|
| A
statement showing the pattern of holding of the shares held by the
shareholders of Kohinoor Industries Limited as |
|
| on
September 30, 1995 is attached., |
|
| The
workers management relations remained very cordial during the year. We record
our sincere thanks to our |
|
| employees
and the bankers for their continued support and cooperation during the year
under review, and hope to |
|
| get
the same cooperation and support in future. |
|
| M. NASEEM SAIGOL |
|
| Chief Executive |
|
| LAHORE |
|
| 07 March, 1996 |
|
|
| Pattern
of holdings of the Shares |
|
| held
by the Shareholders, as at 30 September, 1995 |
|
| No. of |
|
Shareholding |
Total |
|
|
|
| Share Holders |
From |
|
To |
Shares Held |
|
|
|
| 453 |
1 |
|
100 |
|
14,534 |
|
| 487 |
101 |
|
500 |
|
120,736 |
|
| 208 |
501 |
|
1000 |
|
146,574 |
|
| 440 |
1001 |
|
5000 |
|
990,017 |
|
| 84 |
5001 |
|
10000 |
|
594,003 |
|
| 38 |
10001 |
|
15000 |
|
449,912 |
|
| 14 |
15001 |
|
20000 |
|
232,536 |
|
| 6 |
20001 |
|
25000 |
|
132,465 |
|
| 5 |
25001 |
|
30000 |
|
134,668 |
|
| 2 |
30001 |
|
35000 |
|
69,000 |
|
| 2 |
35001 |
|
40000 |
|
75,923 |
|
| 1 |
40001 |
|
45000 |
|
40,838 |
|
| 3 |
45001 |
|
50000 |
|
140,287 |
|
| 1 |
50001 |
|
55000 |
|
50,255 |
|
| 3 |
60001 |
|
65000 |
|
186,617 |
|
| 2 |
80001 |
|
85000 |
|
163,219 |
|
| 1 |
95001 |
· |
100000 |
|
97,341 |
|
| 2 |
105001 |
|
110000 |
|
216,929 |
|
| 1 |
115001 |
|
120000 |
|
115,125 |
|
| 2 |
120001 |
|
125000 |
|
246,547 |
|
| 2 |
140001 |
|
145000 |
|
282,871 |
|
| 1 |
160001 |
|
165000 |
|
160,131 |
|
|
| 1 |
170001 |
|
175000 |
|
170,834 |
|
| 1 |
200001 |
|
205000 |
|
201,242 |
|
| 1 |
225001 |
|
230000 |
|
228,446 |
|
| 1 |
245001 |
|
250000 |
|
246,568 |
|
| 1 |
320001 |
|
325000 |
|
321,534 |
|
| 1 |
985001 |
|
990000 |
|
986,774 |
|
| 1 |
1040001 |
|
10454000 |
|
1,042,304 |
|
| 1 |
1075001 |
|
1080000 |
|
1,075,637 |
|
| 1 |
1370001 |
|
1375000 |
|
1,371,290 |
|
| 1 |
2380001 |
|
2385000 |
|
2,382,561 |
|
| 1 |
2400001 |
|
2405000 |
|
2,400,524 |
|
| 1 |
6530001 |
|
6535000 |
|
6,533,542 |
|
| 1 |
7235001 |
|
7240000 |
|
7,237,781 |
|
| 1771 |
|
28,859,565 |
|
|
| Note:
The slabs not applicable, have not been shown. |
|
|
| CATEGORIES
OF SHAREHOLDERS |
NUMBER |
SHARES HELD |
PERCENTAGE |
|
| Individuals |
|
1702 |
20315803 |
|
70.40 |
|
| Investment Companies |
|
11 |
2876982 |
|
9.97 |
|
| Insurance Companies |
|
3 |
1091012 |
|
3.78 |
|
| Joint Stock Companies |
|
21 |
58638 |
|
0.20 |
|
| Financial Institutions |
14 |
1573706 |
|
5.45 |
|
| Foreign Companies |
|
16 |
2902900 |
|
10.06 |
|
| Modaraba Companies |
|
4 |
40524 |
|
0.14 |
|
|
1771 |
28859565 |
|
100.00 |
|
|
|
| Auditors'
Report to the Members |
|
| We
have audited the annexed balance sheet of Kohinoor Industries Limited as at
30 September, 1995 and the |
|
| related
profit and loss account and cash flow statement, together with the notes
forming part thereof, for the year |
|
| then
ended and we state that we have obtained all the information and explanations
which to the best of our |
|
| knowledge
and belief were necessary for the purposes of our audit and, after due
verification thereof, and subject |
|
| to
the observations expressed in the annexure to this report and the extent to
which the notes referred to may effect, |
|
| we report that: |
|
| a)
in our opinion, proper books of account have been kept by the company as
required by the Companies |
|
| Ordinance, 1984; |
|
| b) in our opinion: |
|
| (i) the balance sheet and profit and loss
account together with the notes thereon have been drawn up in |
|
| conformity
with the Companies Ordinance, 1984, and are in agreement with the books of
account and |
|
| are
further in accordance with accounting policies consistently applied; except
for the change as stated |
|
| at
Note 2(d) with which we concur; |
|
| (ii)
the expenditure incurred during the year was for the purpose of the company's
business; and |
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| (iii)
the business conducted, investments made and the expenditure incurred during
the year were in |
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| accordance
with the objects of the company; |
|
| c)
in our opinion and to the best of our information and according to the
explanations given to us, the balance |
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| sheet,
profit and loss account and the cash flow statement, together with the notes
forming a part thereof, give |
|
| the
information required by the Companies Ordinance, 1984, in the manner so
required and respectively give |
|
| a
true and fair view of the state of the company's affairs as at 30 September,
1995 and of the loss and the |
|
| cash flow for the year then ended; and |
|
| d)
in our opinion, no- Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
|
|
| Annexure
to Auditors' Report |
|
| 1)
The claims of the company against government taken over concerns reported at
note 15 remained unresolved. |
|
| The
writ filed in Lahore High Court against Federal Government is till subjudice. |
|
| 2)
Advance listed at note 21-A (a) and (c) aggregating to Rs. 15.114 million in
our opinion are not good for |
|
| recovery
for which no provision is made in the account. |
|
| 3)
Minimum tax liability levied u/s 80-D of the Income-tax Ordinance, 1979
aggregating to Rs. 27.655 million |
|
| for
the years 1994 and 1995 is not provided. |
|
|
|
|
| BALANCE SHEET |
|
|
|
Note |
1995 |
1994 |
|
|
(Rupees in Thousand) |
|
| SHARE
CAPITAL AND RESERVES: |
|
| SHARE CAPITAL : |
|
| Reserves |
|
(3) |
288,596 |
250,953 |
|
| Unappropriated
profit/( Loss) |
|
(4) |
360,824 |
398,467 |
|
|
|
(206,679) |
153 |
|
|
|
442,741 |
649,573 |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
(5) |
344,815 |
344,815 |
|
| REDEEMABLE CAPITAL |
|
(6) |
41,090 |
63,656 |
|
| DEBENTURES
AND LONG TERM LOANS |
|
|
|
| Custom debentures |
|
(7) |
_ |
10,661 |
|
| Long
term loans |
|
(8) |
367.255 |
469,196 |
|
|
|
|
367,255 |
479,857 |
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
| TO FINANCE LEASE |
|
(9) |
185,235 |
131,867 |
|
| CURRENT LIABILITIES |
|
| Short
term loans and running finances |
(10) |
644,175 |
356,179 |
|
| Current
portion of long term liabilities |
(11) |
280.028 |
181,120 |
|
| Creditors,
provisions and accrued charges |
(12) |
324,276 |
220,664 |
|
| Unclaimed dividend |
|
611 |
613 |
|
|
1,249,090 |
758,576 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
(13) |
|
|
2,630,226 |
2,428,344 |
|
|
| The
annexed notes (1) to (34) form an integral part of these financial
statements. |
|
|
| As
at 30 September, 1995 |
|
|
|
Note |
1995 |
1994 |
|
|
|
|
(Rupees in Thousand) |
|
| FIXED
ASSETS -- TANGIBLE |
|
(14) |
1,769,288 |
1,759,912 |
|
| GOVT.
TAKEN OVER CONCERNS |
|
(15) |
35,999 |
38,261 |
|
| LONG
TERM LOAN-UNSECURED |
|
(16) |
12,117 |
16,762 |
|
| LONG TERM DEPOSITS |
|
|
39,141 |
30,246 |
|
| CURRENT ASSETS |
|
|
|
| Stores and spares |
|
(17) |
29,732 |
49,770 |
|
| Stock in trade |
|
(18) |
229,872 |
134,493 |
|
| T race debts |
|
(19) |
46,053 |
57,333 |
|
| Short term investments |
|
(20) |
146,250 |
40,500 |
|
| Advances,
deposits, prepayment and |
|
|
| other receivables |
|
|
(21) |
292,623 |
290,966 |
|
| Cash and bank balances |
|
(22) |
29,151 |
10,101 |
|
|
773,681 |
583,163 |
|
|
|
2,630,226 |
2,428,344 |
|
|
| Profit
and Loss Account |
|
| for
the year ended 30th September, 1995 |
|
|
|
Note |
1995 |
1994 |
|
|
|
(Rupees in Thousand) |
|
| SALES |
|
(23) |
3,265,021 |
2,265,887 |
|
| COST OF SALES |
|
(24) |
3,125,991 |
1,887,538 |
|
| GROSS PROFIT |
|
|
139,030 |
378,349 |
|
| OPERATING EXPENSES |
|
|
|
| Administrative |
|
(25) |
51,165 |
48,378 |
|
| Selling |
|
(26) |
134,448 |
96,465 |
|
|
|
185,613 |
144,844 |
|
|
|
| OPERATING
PROFIT/(LOSS) |
|
(46,583) |
233,505 |
|
| OTHER INCOME |
|
|
(28) |
130,883 |
6,084 |
|
|
|
84,300 |
239,589 |
|
| FINANCIAL EXPENSES |
|
(27) |
275,904 |
188,621 |
|
| PROFIT/(LOSS)
FOR THE YEAR |
|
(191,604) |
50,968 |
|
| WORKERS'
PROFIT PARTICIPATION FUN D |
|
_ |
2,661 |
|
| PROFIT/(LOSS)
BEFORE TAXATION |
|
(191,604) |
48,307 |
|
| PROVISION
FOR TAXATION - Earlier years |
(30) |
15,227 |
2,421 |
|
| PROFIT/(
LOS S) AFTER TAXATION |
|
(206,831) |
45,886 |
|
| PROFIT BROUGHT FORWARD |
|
152 |
909 |
|
| TRANSFERRED
TO GENERAL. RESERVE |
|
_ |
(9,000) |
|
| PROFIT
AVAILABLE FOR APPROPRIATIONS |
|
(206,679) |
37,795 |
|
| APPROPRIATION: |
|
|
| Proposed bonus shares @ (1994 - 15%) |
|
_ |
37,642 |
|
| UNAPPROPRIATED;
PROFIT/ (LOSS)- CARRIED |
|
| TO BALANCE SHEET |
|
(206,679) |
153 |
|
| The
annexed notes (1) to (34) form an integral part of these financial
Statements. |
|
|
| Cash Flow Statement |
|
| for
the year ended 30th September, 1995 |
|
|
|
|
|
1995 |
1994 |
|
|
(Rupees in Thousand) |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Net
profit/(Loss) before taxation |
|
(191,604) |
48,307 |
|
| Depreciation |
|
145,765 |
113,365 |
|
| Profit
on sales of investment |
|
|
(105,750) |
_ |
|
| Profit
on sale of assets |
|
|
(19,871) |
(4,605) |
|
| Financial charges: |
|
275,905 |
181,621 |
|
| Operating
profit before working capital charges |
104,445 |
338,688 |
|
|
| (Increase)/Decrease
in stores and spares |
|
20,038 |
3,354 |
|
| (Increase)/Decrease
in stock in trade |
|
(95,379) |
6,391 |
|
| (Increase)/Decrease
in trade debtors |
|
11,280 |
(35,659) |
|
| (Increase)/Decrease
in advances, deposits and prepayments |
5,251 |
(123,068) |
|
| Increase/(Decrease)
in creditors, accrued and other liabilities |
58,624 |
61,608 |
|
| CASH
GENERATED FROM OPERATIONS |
|
104,259 |
251,314 |
|
|
|
|
| Financial charges paid |
|
(230,916) |
(172,653) |
|
| Income tax paid |
|
(15,227) |
(30,652) |
|
| Dividend paid |
|
(2) |
_ |
|
| NET
CASH FROM OPERATING ACTIVITIES |
|
(141,886) |
48,009 |
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Investments |
|
(146,250) |
_ |
|
| Fixed capital expenditure |
|
(163,427) |
(294,599) |
|
| Sale proceed of investment |
|
146,250 |
_ |
|
| Sale proceed of fixed assets |
|
28,137 |
8,841 |
|
| Long term deposits & loans |
|
(8,895) |
2,591 |
|
| Proceeds from issue of right shares |
|
_ |
46,473 |
|
| Premium on issue of right shares |
|
_ |
92,945 |
|
| Net cash used in investing activities |
|
(144,185) |
(143,749) |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Long
term loan received |
|
121,365 |
97,669 |
|
| Short term loans |
|
287,996 |
85,956 |
|
| Finance lease |
|
· |
|
123,200 |
31,868 |
|
| Repayments of: |
|
| Redeemable capital |
|
(13,567) |
(20,572) |
|
| Loan from banks |
|
(141,155) |
(62,506) |
|
| Finance lease |
|
(66,176) |
(53,826) |
|
| Custom debentures |
|
(6,543) |
(1,031) |
|
| Net cash generated/(used)in financial
activities |
305,120 |
77,558 |
|
| Net increase/(decrease) in cash |
|
19,049 |
(18,182) |
|
| Cash and bank balances as at 1st October
1994 |
10,101 |
28,283 |
|
| Cash and bank balances as at 30th
September 1995 |
29,150 |
10,101 |
|
|
|
|
| Notes to the Accounts |
|
| for
the year ended 30th September, 1995 |
|
| 1.
STATUS AND NATURE OF BUSINESS |
|
|
| Kohinoor
Industries Limited is a public quoted company incorporated in Pakistan under
the Companies Act, |
|
| 1913
(now Companies Ordinance, 1984). The principal activity of the company is to
manufacture and sell the |
|
| textile
products. The weaving section,' however, being un-economical has since been
closed down. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| The
policies adopted by the company, which are consistent with those of the
previous year (except those |
|
| stated
otherwise) are as follows: |
|
| (a)
Accounting Convention |
|
| These
accounts have been prepared on the basis of historical cost convention. |
|
| (b)
Staff Retirement Benefits |
|
| The
company operates a contributory provident fund for all its permanent
employees and contributions, |
|
| based
on salaries and wages, are made monthly to cover the obligations. Gratuity is
accounted for |
|
| as and when paid. |
|
| (c)Taxation |
|
| The
charge is based on taxable income, if any, as adjusted for tax purposes and
after taking into |
|
| account
all tax credits, rebates and available tax losses. No provision has been made
for deferred |
|
| taxation
as the major timing differences are not expected to reverse for a
considerable period. |
|
| (d)
Foreign Currency Translation |
|
| Foreign liabilities (except those for which
foreign exchange rates have been booked, and are translated |
|
| at
the fixed rates) are converted in the local currency at the rates prevailing
at the balance sheet date. |
|
| Previously
exchange rate variance was charged to cost of assets. However, this year
exchange rate |
|
| variance
amounting to Rs. 3.690 million has been charged to profit & loss account
under the head |
|
| financial
expenses for more appropriate presentation of the financial statements and
the loss for the |
|
| year
is effected accordingly. |
|
| (e)
Contingencies and Commitments |
|
| These
are accounted for as and when these become due. |
|
| (f)
Fixed Assets and Depreciation |
|
| All
fixed assets are shown at their purchase cost, except land which is stated at
revalued amount, |
|
| together
with any incidental expenses of acquisition, including foreign exchange rate
variance and |
|
| interest
accrued upto the date when the assets commence commercial production. |
|
|
| Depreciation
is calculated so as to write off the cost of fixed assets, except freehold
land, on a |
|
| reducing
balance basis using the normal rates currently applicable for tax purposes. A
full year's |
|
| depreciation
is charged in the year of acquisition except major additions to machinery
which are |
|
| depreciated
on prorata basis for the working period. No depreciation is charged in the
year of |
|
| disposal
and on addition in fixed assets due to foreign exchange rate variance (see
Not |
