| Bengal Fibre Industries Limited |
|
|
|
|
|
|
|
|
|
| Annual
Report 1999 |
|
|
| CONTENTS |
|
|
|
| Company
Information |
|
| Notice of Meeting |
|
| Directors' Report |
|
|
| Auditors' Report |
|
| Balance Sheet |
|
|
| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Account |
|
| Pattern
of Shareholdings |
|
| Summary
of Financial Data |
|
|
|
| COMPANY
INFORMATION |
|
|
| BOARD
OF DIRECTORS |
Ali Mohammad Haji
Mohammad |
|
Chairman |
|
|
Abdul Sattar H. A. Rehman
Bengali |
|
Chief Executive |
|
|
Noor Mohammad Abubakar |
|
|
Farooq Haji Mohammad |
|
|
Yunus Haji Hashim Bengali |
|
|
Faisal G. Bengali |
|
|
Nasim Beg (NIT) |
|
|
Kh. Mansoor Mukhtar
Shah(NIT) |
|
|
Umair Khan (SLIC) |
|
|
| PRINCIPAL
OFFICERS |
|
|
| HEAD OFFICE |
|
Attaullah Khan |
|
|
Vice President |
|
|
|
Rizwan Manai |
|
|
Chief Accountant |
|
|
| FACTORY |
|
Abdul Ghani H.A. Rehman
Bengali |
|
|
Senior Executive Vice
,President |
|
|
|
Ahmed Hashim Memon |
|
|
Chief Engineer |
|
|
| AUDITORS |
|
Sidat Hyder Qamar &
Co. |
|
|
Chartered Accountants |
|
|
| BANKERS |
|
Habib Bank Limited |
|
|
Muslim Commercial Bank
Limited |
|
|
United Bank Limited |
|
|
National Bank of Pakistan |
|
|
Metropolitan Bank Limited |
|
|
Allied Bank Limited |
|
|
Askari Commercial Bank
Limited |
|
|
| REGISTERED
OFFICE |
Bengal House, Aga Khan/G.
Allana Road, |
|
|
Karachi-74000 Phone No.
7526338-41, 7529492 |
|
|
Fax: (09221) 7512857,
E-mail: bengal @ khi.compol.com. |
|
|
| FACTORY |
|
PIct No. 53 & 54,
Sector 15, |
|
|
Korangi Industrial Area, |
|
|
Karachi, Phone No.
5063591-4 |
|
|
Fax: 5063590 |
|
|
| SALES OFFICE |
|
70-Alam Market, Near
Ghordhandas Market |
|
|
Saleh Mohammad Street,
Karachi. |
|
|
Phones: 2419540-2415675,
Fax: 2429520 |
|
|
|
| NOTICE
OF ANNUAL GENERAL MEETING |
|
|
| NOTICE
IS HEREBY GIVEN that the Thirty-Third Annual General Meeting will be held at |
|
| Registered
Office at Bengal House, Agha Khan / G. Allana Road, Karachi on Thursday the |
|
| 23
December, 1999 at 11:30 a.m. to transact the following business: |
|
|
| 1)
To receive and consider the Audited Accounts of the Company for the year
ended |
|
| 30
June, 1999 together with the Directors' and Auditors' Reports thereon. |
|
|
| 2)
To appoint Auditors for the year 1999/2000 and to fix their remuneration. |
|
|
| 3)
To transact any other business of the Company with the permission of the
Chairman. |
|
|
| By
Order of the Board |
|
|
| Karachi:
01 November 1999 |
|
ABDUL SATTAR H.A. REHMAN
BENGALI |
|
|
Chief Executive |
|
|
| NOTES: |
|
|
| 1.
The Share Transfer Books of the Company will remain closed from Saturday the |
|
| 20
November, 1999 to Saturday the 27 November, 1999 (both days inclusive). |
|
|
| 2.
A member of the Company entitled to attend and vote at the Annual General
Meeting |
|
| may
appoint another member as proxy to attend and vote on his/her behalf.
Proxies, in |
|
| order
to be valid, must be received at the Registered Office of the Company not
less |
|
| than
48 hours before the time of holding the Meeting. |
|
|
| 3.
Shareholders are requested to promptly notify the Company of any change in
their |
|
| addresses
to ensure delivery of mail. |
|
|
|
| REPORT
OF THE DIRECTORS |
|
|
| The
Directors are pleased to present the thirty third Annual Report together with
the audited |
|
| accounts
of the company for the year ended June 30, 1999. |
|
|
| FINANCIAL
RESULTS |
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
|
| Operating Profit |
|
34,854,711 |
60,506,260 |
|
| Other Income |
|
160,042 |
599,849 |
|
|
---------- |
---------- |
|
|
35,014,753 |
61,106,109 |
|
| Financial
& other charges |
|
29,349,493 |
31,618,683 |
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
5,665,260 |
29,487 426 |
|
| Taxation |
|
446,167 |
12,771,408 |
|
|
---------- |
---------- |
|
| Profit after taxation |
|
5,219,093 |
16,716,018 |
|
| Accumulated
Profit/(Loss) brought forward |
|
379,308 |
(11,268,088) |
|
|
---------- |
---------- |
|
|
5,598,401 |
5,447,930 |
|
| Appropriation: |
|
| Interim
dividend @ 5% (1998 @ 7.5%) |
|
(3,379,081) |
(5,068,622) |
|
|
---------- |
---------- |
|
| Accumulated
Profit carried forward |
|
2,219,320 |
379,308 |
|
|
========= |
========= |
|
| Earning per share |
|
Re. 0.77 |
Rs. 2.47 |
|
|
| REVIEW
OF RESULTS |
|
|
| The
fiscal 1998-99 has again been quite difficult for Pakistan as the expected
turnaround in |
|
| economy
could not materialize due to numerous reasons, mainly the adversities of
severe |
|
| economic
turmoil in the South East Asian region. However, amidst an extremely
unfavourable |
|
| business
and economic atmosphere, your company has closed its year with pre-tax profit
of |
|
| Rs.
5,665,260 which is lower over the preceding year's pre-tax profit of Rs.
29,487,426. After |
|
| making
provision for taxation, net profit amounts to Rs. 5,219,093 as compared to
Rs. 16,716,018 |
|
| in
the previous year. |
|
|
| Net
sales during the year under review declined by 21.1% to Rs. 272,570,651. This
decrease is |
|
| attributable
to the lower volume, change in sales mix and reduction in the sales prices of
nylon |
|
| and
polyester yarn. |
|
|
| In
case of operating expenses, inspite of strict cost cutting policies adopted
by the management, |
|
| there
is a nominal increase of 3.29% due to inflation. |
|
|
| Financial
charges during the year under review declined by 9.57% to Rs. 24,968,782,
which |
|
| naturally
had its salutary affect on the final figures. |
|
|
| PRODUCTION |
|
|
|
| Total
production of nylon and polyester yarn during the year under review declined
by 10.19% to |
|
| 2,569,716
kgs. As compared to plant capacity, actual production is higher by 2.8% |
|
|
| FUTURE
OUTLOOK |
|
|
| In
the Budget for the year 1999-2000 the Government has enhanced the custom duty
on |
|
| imported
Polyester Chips by 10% to 35%. Furthermore, the prices of Polyester Chips and |
|
| Caprolactam
have also risen due to increase in petroleum prices in the International
Market. |
|
| This
increase coupled with the enhanced Government levy will have an adverse
impact on the |
|
| future
operating results of the company as the prices of yarn have not
correspondingly increased. |
|
| The
matter of additional fiscal levy has been taken up with the Government and it
is hoped that |
|
| the
Government will consider the issue favourably. |
|
|
| DIRECTORS |
|
|
| Elections
to the Board of Directors of the Company took place on March 29, 1999. The
following |
|
| are
currently the Directors of the Company. |
|
|
| 1.
Mr. Ali Mohammad Haji Mohammad (Chairman) |
|
| 2.
Mr. AbduI Sattar H.A. Rehman Bengali (Chief Executive) |
|
| 3.
Mr. Noor Mohammad Abubaker |
|
| 4.
Mr. Farooq Haji Mohammad |
|
| 5.
Mr. Yunus Haji Hashim Bengali |
|
| 6.
Mr. Faisal G. Bengali |
|
| 7.
Mr. Nasim Beg (N.I.T) |
|
| 8.
Mr. Kh. Mansoor Mukhtar Shah (N.I.T.) |
|
| 9.
Mr. Umair Khan (S.L.I.C.) |
|
|
| The
Directors wish to place on record their appreciation for the valuable
services rendered to the |
|
| Company
by outgoing directors and extend warm welcome to the incoming directors. |
|
|
| ACKNOWLEDGMENTS |
|
|
| The
directors place on record their appreciation for the dedicated services
rendered by the |
|
| employees
of the Company. We also view the harmonious relations between management and |
|
| the
employees with satisfaction. The Board's commendation is also extended to the
company's |
|
| bankers
for the valuable financial assistance and timely services rendered by them. |
|
|
| THE
MILLENNIUM BUG |
|
|
| The
Company has taken measures to ensure that its computer applications, systems
and |
|
| hardware
are year 2000 compliant. |
|
|
| PATTERN
OF SHAREHOLDING |
|
|
| The
information about the pattern of holding of shares as on June 30, 1999 is
annexed to this |
|
| report. |
|
|
| AUDITORS |
|
|
| The
present auditors M/s. Sidat Hyder Qamar and Company-Chartered Accountants,
retire and |
|
| being
eligible, offer themselves for re-appointment. |
|
|
| For
and on behalf the |
|
| Board of Directors |
|
|
| Abdul
Sattar H. A. Rehman Bengali |
|
| Chief Executive |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of BENGAL FIBRE
INDUSTRIES LIMITED as |
|
| at
30 June 1999 and the related profit and loss account and statement of changes
in financial |
|
| position
(cash flow statement), together with the notes foreling 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, 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; |
|
|
| ii)
the expenditure incurred during the year was for the purpose of the Company's |
|
| business; and |
|
|
| iii)
the business conducted, investments made and the expenditure incurred during |
|
| the
year were in 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 sheet, profit and loss account and statement of changes in
financial |
|
| position
(cash flow statement), together with the notes forming 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 June |
|
| 1999
and of the profit and the changes in financial position (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. |
|
|
| KARACHI:
O1 NOVEMBER 1999 |
|
|
| CHARTERED
ACCOUNTANTS |
|
|
|
| BALANCE
SHEET AS AT 30 JUNE 1999 |
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
| Capital
and Reserves |
|
| Authorised Capital |
|
| 10,000,000
(1998:10,000,000) |
|
| Ordinary
shares of Rs. 10/- each |
|
100,000,000 |
100,000,000 |
|
|
========= |
========= |
|
| Issued,
subscribed and paid-up capital |
|
67,581,620 |
67,581,620 |
|
| Capital
reserve - share premium |
|
27,840,933 |
27,840,933 |
|
| Accumulated
Profit |
|
2,219,320 |
379,308 |
|
|
---------- |
---------- |
|
|
26 |
97,641,873 |
95,801,861 |
|
| Redeemable
capital |
|
4 |
8,507,476 |
13,180,674 |
|
| Long-term
loans and financial arrangements |
|
5 |
34,498,786 |
23,887,204 |
|
| Liabilities
against assets subject to finance lease |
|
6 |
-- |
920,051 |
|
| Deferred taxation |
|
25,845,487 |
26,765,000 |
|
|
|
|
|
| Current
Liabilities |
|
| Finance
under mark-up arrangements |
|
7 |
86,880,546 |
72,113,347 |
|
| Current maturity |
|
8 |
36,470,235 |
24,594,695 |
|
| Creditors,
accrued and other liabilities |
|
9 |
45,457,019 |
92,199,662 |
|
| Dividend payable |
|
-- |
3,719,810 |
|
| Unclaimed
dividend |
|
94,543 |
41,009 |
|
|
---------- |
---------- |
|
|
168,902,343 |
192,668,523 |
|
| Contingencies
and commitments |
|
10 |
-- |
-- |
|
|
---------- |
---------- |
|
|
335,395,965 |
353,223,313 |
|
|
========= |
========= |
|
| Fixed
Assets - Tangible |
|
| Operating assets |
|
11 |
189,513,558 |
205,996,303 |
|
| Assets
subject to finance lease |
|
11 |
503,806 |
3,293,135 |
|
| Capital
work-in-progress |
|
-- |
1,097,056 |
|
|
---------- |
---------- |
|
|
190,017,364 |
210,386,494 |
|
| Long-term
deposits |
|
647,860 |
537,204 |
|
|
| Current Assets |
|
| Stores and spares |
|
12 |
38,283,627 |
37,776,011 |
|
| Stock-in-trade |
|
13 |
73,418,143 |
79,540,332 |
|
| Trade
debts - unsecured, considered good |
|
|
16,868,648 |
17,390,313 |
|
| Advances,
deposits, prepayments and |
|
|
|
| other receivables |
|
14 |
11,737,912 |
5,745,654 |
|
| Cash
and bank balances |
|
15 |
4,422,411 |
1,847,305 |
|
|
---------- |
---------- |
|
|
144,730,741 |
142,299,615 |
|
|
---------- |
---------- |
|
|
335,395,965 |
353,223,313 |
|
|
========= |
========= |
|
| Auditors'
Report Annexed |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Abdul
Sattar H.A. Rehman Bengali |
|
|
Ali Mohammad Haji
Mohammad |
|
| Chief Executive |
|
Director |
|
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| For
the Year Ended 30 June 1999 |
|
|
|
|
1999 |
1998 |
|
|
Note |
Rupees |
Rupees |
|
|
|
|
| Sales - Net |
|
16 |
272,570,651 |
345,465,903 |
|
| Cost of sales |
|
17 |
220,958,277 |
268,736,188 |
|
|
|
---------- |
---------- |
|
| Gross profit |
|
|
51,612,374 |
76,729,715 |
|
|
|
|
|
| Administrative
expenses |
|
18 |
11,668,356 |
11,407,460 |
|
| Selling expenses |
|
18 |
5,089,307 |
4,815,995 |
|
|
|
---------- |
---------- |
|
|
|
16,757,663 |
16,223,455 |
|
|
|
---------- |
---------- |
|
| Operating profit |
|
|
34,854,711 |
60,506,260 |
|
| Other income |
|
19 |
160,042 |
599,849 |
|
|
---------- |
---------- |
|
|
35,014,753 |
61,106,109 |
|
|
|
|
| Financial charges |
|
20 |
24,968,782 |
27,611,959 |
|
| Other charges |
|
21 |
4,380,711 |
4,006,724 |
|
|
|
---------- |
---------- |
|
|
|
29,349,493 |
31,618,683 |
|
|
|
---------- |
---------- |
|
| Profit
before taxation |
|
|
5,665,260 |
29,487,426 |
|
| Taxation |
|
22 |
446,167 |
12,771,408 |
|
|
|
---------- |
---------- |
|
| Profit after taxation |
|
5,219,093 |
16,716,018 |
|
| Accumulated
Profit / (loss) brought forward |
|
379,308 |
(11,268,088) |
|
|
---------- |
---------- |
|
|
5,598,401 |
5,447,930 |
|
| Appropriation: |
|
|
|
| Interim
dividend @ 5.0% (1998 @7.50%) |
|
(3,379,081) |
(5,068,622) |
|
|
---------- |
---------- |
|
| Accumulated
profit carried forward |
|
2,219,320 |
379,308 |
|
|
========= |
========= |
|
| Earning per share |
|
23 |
Re.0.77 |
Rs.2.47 |
|
|
========= |
========= |
|
| The
annexed notes form an integral part of these accounts. |
|
|
| Abdul
Sattar H.A. Rehman Bengali |
|
|
|
Ali Mohammad Haji
Mohammad |
|
| Chief
Executive |
|
Director |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| For
the Year Ended 30 June 1999 |
|
|
|
1999 |
1998 |
|
|
Rupees |
Rupees |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
| Profit
for the year before tax |
|
5,665,260 |
29,487,426 |
|
| Adjustment for: |
|
| Depreciation |
|
22,180,014 |
23,355,828 |
|
| Financial charges |
|
24,764,901 |
38,991,195 |
|
| workers'
welfare fund |
|
270,000 |
715,000 |
|
| Workers'
welfare fund - Prior year |
|
(436,534) |
686,981 |
|
| Loss
on sale of fixed assets |
|
124,655 |
467,225 |
|
|
--------- |
--------- |
|
|
46,903,036 |
64,216,229 |
|
|
--------- |
--------- |
|
| Operating
profit before changes in operating assets |
|
52,568,296 |
93,703,655 |
|
|
| (Increase)
/ decrease in current assets: |
|
| Stores and spares |
|
(507,616) |
715,659 |
|
| Stock-in-trade |
|
6,122,189 |
(5,898,385) |
|
| Trade debts |
|
521,665 |
4,932,891 |
|
| Advances,
deposits, prepayments and |
|
|
|
| other receivables |
|
(4,880,510) |
645,2i5 |
|
|
---------- |
---------- |
|
|
1,255,728 |
395,380 |
|
| Increase/(decrease)
in current liabilities: |
|
|
|
| Creditors,
accrued and other liabilities |
|
(50,299,683) |
1,198,440 |
|
|
|
3,524,341 |
95,297,475 |
|
| Taxes paid |
|
(2,310,894) |
(1,1 84,599) |
|
|
---------- |
---------- |
|
| Net
cash generated from operating activities |
|
1,213,447 |
94,112,876 |
|
| CASH
FLOWS FROM INVESTING ACTIVITIES |
|
|
|
| Capital
expenditure |
|
(2,717,143) |
(8,421,954) |
|
| Proceed
from sale of fixed assets |
|
781,604 |
1,712,408 |
|
| Long-term
deposits |
|
(110,656) |
885,102 |
|
|
---------- |
---------- |
|
| Net
cash (used in)investing activities |
|
(2,046,195) |
(5,824,444) |
|
|
---------- |
---------- |
|
| Net
cash after investing activities |
|
(832,748) |
88,288,432 |
|
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
| Long-term
loan obtained |
|
50,000,000 |
5,684,000 |
|
| Repayment
of redeemable capital |
|
(4,006,515) |
(3,434,942) |
|
| Repayments
of long term loans |
|
(27,428,190) |
(51,660,210) |
|
| Lease rentals paid |
|
(1,800,726) |
(3,807,530) |
|
| Finance
under mark-up arrangement |
|
14,767,199 |
6,170,633 |
|
| Dividend paid |
|
(7,045,357) |
(1,348,812) |
|
| Interest paid |
|
(21,078,557) |
(41,430,648) |
|
|
---------- |
---------- |
|
| Net
cash generated from / (used in) financing activities |
|
3,407,854 |
(89,827,509) |
|
| Net
increase/(decrease) in cash and cash equivalents |
|
2,575,106 |
(1,539,077) |
|
| Cash
and bank balances at beginning of the year |
|
1,847,305 |
3,386,382 |
|
|
---------- |
---------- |
|
| Cash
and balances at the end of the year |
|
4,422,411 |
1,847,305 |
|
|
========= |
========= |
|
|
|
|
| Abdul
Sattar H.A. Rehman Bengali |
|
Ali Mohammad Haji
Mohammad |
|
| Chief Executive |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| For
the Year Ended 30 June 1999 |
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| 1.
THE COMPANY AND ITS OPERATIONS |
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| Bengal
Fibre Industries Limited is a public limited company incorporated in Pakistan
and |
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| is
listed on Karachi Stock Exchange. The principal activity of the Company is
the |
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| manufacture
and sale of nylon and polyester yarn. |
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| 2.
ACCOUNTING POLICIES |
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| 2.1
Basis for preparation of the accounts |
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| These
financial statements have been prepared in compliance with the |
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| requirements
of International Accounting Standards as adopted by the Institute of |
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| Chartered
Accountants of Pakistan which are applicable to the Company. |
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| 2.2
Accounting convention |
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| These
financial statements have been prepared under the historical cost
'convention'. |
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| 2.3
Retirement benefits |
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| The
Company operates approved funded provident fund schemes, each for |
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| administrative
employees and factory workers. |
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| 2.4 Taxation |
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| Provision
for current taxation is based on taxable income at the current rate of |
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| taxation
after taking into account tax credits available, if any. Deferred Taxation |
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| on
all material timing differences are accounted for using the liability method. |
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| 2.5
Foreign exchange transactions |
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| Liabilities
in foreign currencies are translated into Pak rupees at exchange rates |
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| approximating
those prevailing at the balance sheet date except where forward |
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| exchange
contracts have been entered into for repayment of liabilities, in which |
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| the
rates contracted are applied. |
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| Exchange
differences in respect of foreign currency loans obtained for |
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| acquisition
of fixed assets are incorporated in the cost of relevant fixed assets. |
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| All
other exchange gains and losses are taken to the income currently. |
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| 2.6 Fixed assets |
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