| B.F. Modaraba |
|
|
|
|
|
|
|
|
| Annual
Report 1999 |
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| CONTENTS |
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| Company Profile |
|
|
| Directors'
Report |
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| Auditors'
Report |
|
| Balance Sheet |
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| Profit
and Loss Account |
|
| Cash
Flow Statement |
|
| Notes
to the Accounts |
|
| Pattern
of Certificate Holdings |
|
|
|
| COMPANY
PROFILE |
|
|
| BOARD
OF DIRECTORS |
|
|
|
| DIRECTORS
OF MODARABA COMPANY |
|
|
| Mr.
Khalid Ebrahim Bawany |
|
| Chief Executive |
|
|
| Mr.
Dawood Ebrahim Bawany |
|
| Chairman |
|
|
| Mr.
Esmail Ebrahim Bawany |
|
|
| Mr.
Ahmed Ebrahim Bawany |
|
|
| Mr.
Omer Amin Bawany |
|
|
| Mr.
Syed Mehmood Ali |
|
|
| COMPANY
SECRETARY |
|
| Mohammad
Yousuf |
|
|
| MODARABA
AUDITORS |
|
| Rahim
Iqbal Rafiq & Company |
|
| Chartered
Accountants |
|
|
| BANKERS |
|
| Habib
Bank Limited |
|
| Faysal
Bank Ltd. |
|
| National
Bank of Pakistan |
|
| Askari
Commercial Bank Limited |
|
| Bank
Al-Habib Limited |
|
| Prime
Commercial Bank Ltd. |
|
| Metropoliton
Bank Ltd. |
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| Al-Baraka
Islamic Investment Bank |
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| REGISTERED
OFFICE AND SHARES DEPARTMENT |
|
| 3rd
Floor, Insurance House No. 2, |
|
| Habib
Square, M.A. Jinnah Road, |
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| Karachi. |
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| Phones:
2418137-9, 2422045 |
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|
|
| 11TH
ANNUAL REPORT OF THE DIRECTORS |
|
| OF
THE MODARABA COMPANY |
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| FOR
THE YEAR ENDED 30 JUNE, 1999 |
|
|
| IN
THE NAME OF ALLAH, THE MOST GRACIOUS, MOST MERCIFUL |
|
|
| Dear
Certificate Holders, |
|
|
|
|
| Assalamo
Alaikum, |
|
|
|
|
| The
Directors of E.A. Management (Pvt.) Ltd. Present the Annual Report and |
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| audited
account of B.F. Modaraba for the period ended June 30, 1999: |
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|
|
|
| FINANCIAL
RESULTS |
|
| Operating
Income |
|
|
3,889,672 |
|
| Operating
expenses |
|
|
972,414 |
|
| Financial
charges |
|
|
1,028 |
|
|
------------------ |
|
|
|
(973,442) |
|
|
|
------------------ |
|
|
|
2,916,230 |
|
|
| Reversal
of provision for overdue lease rentals |
|
96,634 |
|
|
|
|
| Provision
for diminution in value |
|
|
| of
marketable securities |
|
|
(824,514) |
|
| Reversal
of provision in market |
|
|
|
|
| Value
of investment |
|
|
466,755 |
|
|
|
|
------------------ |
|
|
|
|
(261,125) |
|
|
|
|
------------------ |
|
| Profit/(Loss)
before taxation |
|
|
2,655,105 |
|
| Taxation |
|
|
| Current |
|
|
150,000 |
|
| Prior years |
|
|
25,968 |
|
|
|
|
------------------ |
|
|
|
|
(175,968) |
|
|
|
|
------------------ |
|
| Profit/(Loss)
after taxation |
|
|
2,479,137 |
|
|
|
|
| Unappropriated
(loss)/profit brought forward |
|
(20,010,707) |
|
|
|
|
|
------------------ |
|
|
| Transfer
of Statutory Reserve |
|
|
495,827 |
|
|
|
|
|
------------------ |
|
|
|
|
|
495,827 |
|
|
|
|
------------------ |
|
|
| Accumulated
loss carried forward |
|
|
(18,027,397) |
|
|
|
========== |
|
|
| 2)
REVIEW OF OPERATION |
|
|
| We
are pleased to inform you that the modaraba reported a profit of |
|
| Rs.
2,479,137/- in the year under review. Out of that profit Rs. 495,827/- |
|
| has
been transferred to statutory reserve. Modaraba's earning per share remained |
|
| at
Rs. 0.48 per certificate as compared to Rs. -0.9.3 in preceding year. The
profit |
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| has
been achieved with tight control over operating expenses and practical
business |
|
| strategies
against the difficult and uncertain economic condition by optimizing all
available |
|
| venues. |
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|
| 3)
FUTURE PROSPECTS: |
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|
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| The
management of modaraba is expecting better operational results for the |
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| current
year. Besides investment in stock market modaraba has diversified |
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| its
funds towards other profitable channels. |
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|
|
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|
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| Further
we hope that the Stock market will show upward trend. We believe that |
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| during
current year port folio of modaraba is expected to appreciate and will |
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| ensure
capital gains for your modaraba |
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|
|
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| 4) AUDITORS: |
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|
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| Our
existing auditors, Messers Rahim Iqbal Rafiq & Co., Chartered Accountants
are due |
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| for
retirement and being eligible offered themselves for re-appointment for the |
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| year
ending June 30, 2000. |
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|
|
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| 5)
YEAR 2000 COMPLIANCE: |
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| The
modaraba is fully aware of the issue of "Millennium Bug ". The
Computer Soft- |
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| wear,
system of modaraba and modaraba company are year 2000 compliant. |
|
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| 6)
CONCLUSION |
|
| The
Directors place on record their appreciation for the utmost co-operation
provided |
|
| by
Securities and exchange commission of Pakistan and Registrar Modaraba. The |
|
| management
also appreciate the sincerity and devotion shown by the staff members. |
|
|
|
|
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|
ON BEHALF OF THE BOARD |
|
|
|
KHALID EBRAHIM BAWANY |
|
| Dated:
December 15, 1999 |
|
CHIEF EXECUTIVE |
|
|
|
|
| AUDITORS'
REPORT TO THE |
|
| CERTIFICATE
HOLDERS |
|
|
| We
have audited the annexed Balance Sheet as at June 30, 1999 and the related |
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| Profit
and Loss Account and the Statement of Charges in Financial Position |
|
| (Cash
Flow Statement), together with the notes to the accounts for the year ended |
|
| June
30, 1999 of B.F. Modaraba which are Modaraba Company's (E.A. Management |
|
| (Private)
Limited) representation, and we state that we have obtained |
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| all
the information and explanations which we required and, after due
verification |
|
| thereof,
we report that: |
|
|
| (a)
In our opinion, proper books of accounts have been kept by the Modaraba
company in |
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| respect
of B.F. Modaraba as required by the Modaraba Companies and Modaraba |
|
| (floatation
and Control) Ordinance, 1980 and Modaraba Companies and Modaraba |
|
| Rules, 1981; |
|
|
| (b)
In our opinion, the Balance sheet and the Profit and loss Account have been
drawn up |
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| in
conformity with the Modaraba Companies and Modaraba (Floatation and Control) |
|
| Ordinance,
1980 and Modaraba Companies and Modaraba Rules 1981; and |
|
|
| (c)
In our opinion and to the best of our information and according to the
explanations given |
|
| to us; |
|
|
| (i)
The Balance Sheet and the related Profit and Loss Account and the Statement
of |
|
| Changes
in Financial Position (Cash Flow Statement), which are in agreement with |
|
| the
book of accounts, exhibit respectively a true and fair view of the state of
the |
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| Modaraba's
affairs as the June 30, 1999 and the profit and the changes in financial |
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| position
of the year ended on that date; |
|
|
|
|
| (ii)
No Zakat was deductible at source under the Zakat and Ushr Ordinance, 1980;
and |
|
|
| (iii)
The business conducted, investments made and expenditure incurred by the |
|
| Modaraba
are in accordance with the objects, terms and conditions of the |
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| Modaraba. |
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| Karachi: |
|
RAHIM IQBAL RAFIQ & CO. |
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| Dated:
December 15, 1999 |
|
Chartered Accountants |
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|
|
|
|
| BALANCE
SHEET AS ON JUNE 30, 1999 |
|
|
|
NOTE |
1999 |
1998 |
|
|
|
RUPEES |
RUPEES |
|
|
|
|
|
| CERTIFICATE
CAPITAL AND |
|
|
|
| RESERVES |
|
|
|
| Authorised
capital |
|
|
|
| 10,000,000
Modaraba Certificate |
|
|
|
| of Rs. 10/- each |
|
|
100,000,000 |
100,000,000 |
|
|
|
|
========== |
========== |
|
| Issued,
subscribed and paid-up |
|
3 |
51,408,000 |
51,408,000 |
|
| Statutory
Reserve |
|
4 |
520,040 |
24,213 |
|
| General Reserve |
|
|
750,000 |
750,000 |
|
| Accumulated
Loss |
|
|
(18,027,397) |
(20,010,707) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
34,650,643 |
32,171,506 |
|
|
|
|
| DEFERRED
LIABILITIES |
|
5 |
115,276 |
184,455 |
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
maturity of security |
|
|
|
| deposits
from lessees |
|
|
840,512 |
868,512 |
|
|
|
|
|
| Creditors,
accrued and other liabilities |
|
6 |
103,674 |
161,955 |
|
| Taxation |
|
|
189,042 |
39,042 |
|
| Unclaimed
Profit distribution |
|
|
15,075 |
15,075 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,148,303 |
1,084,584 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
35,914,222 |
33,440,545 |
|
|
|
|
|
========== |
========== |
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
|
| FIXED
CAPITAL EXPENDITURE |
|
|
|
| Operating
fixed assets |
|
7 |
1,551,694 |
1,793,105 |
|
|
|
|
|
| LONG
TERM LOAN -to staff |
|
|
23,010 |
127,091 |
|
| CURRENT
ASSETS |
|
|
|
| Stock in trade |
|
8 |
1,250,000 |
1,250,000 |
|
| Investment
in marketable |
|
|
|
| securities |
|
9 |
12,803,827 |
12,849,171 |
|
|
|
|
|
|
| Lease
rentals receivable |
|
10 |
972,520 |
1,105,387 |
|
| Morabaha
Investment |
|
11 |
8,784,000 |
-- |
|
| Trade debts |
|
12 |
1,210,391 |
2,750,683 |
|
| Advances,
deposits, prepayments |
|
13 |
1,885,867 |
1,874,034 |
|
| and
other receivable |
|
|
|
|
| Cash
and bank balances |
|
14 |
7,402,913 |
11,691,074 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
34,309,518 |
31,520,349 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
35,914,222 |
33,440,545 |
|
|
|
|
========== |
========== |
|
|
|
Sd/- |
|
Sd/- |
|
Sd/- |
|
|
Chief Executive |
|
Director |
|
Director |
|
|
E.A. Management (Pvt.) Ltd. |
|
E.A. Management (Pvt.) Ltd. |
|
E.A. Management (Pvt.) Ltd. |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
NOTE |
1999 |
1998 |
|
|
|
RUPEES |
RUPEES |
|
|
|
|
| Operating
Income |
|
15 |
3,889,672 |
2,016,292 |
|
| Operating
expenses |
|
16 |
972,414 |
1,379,908 |
|
| Financial
charges |
|
17 |
1,028 |
525 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(973,442) |
(1,380,433) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
2,916,230 |
635,859 |
|
|
|
|
|
|
| Reversal
of provision for overdue lease rentals |
|
|
96,634 |
3,490,341 |
|
| Provision
for diminution in value |
|
|
|
| of
marketable securities |
|
|
(824,514 |
(8,877,660) |
|
| Reversal
of provision in market |
|
|
466,755 |
-- |
|
| Value
of investment |
|
|
|
|
|
|
|
|
(261,125) |
(5,387,319) |
|
|
|
------------------ |
------------------ |
|
| Profit
/ (Loss) before taxation |
|
2,655,105 |
(4,751,460) |
|
| Provision
for taxation |
|
|
|
| Current
- minimum tax |
|
|
150,000 |
-- |
|
| Prior years |
|
|
|
25,968 |
6,437 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(175,968 |
(6,437) |
|
|
|
|
------------------ |
------------------ |
|
| Profit/(Loss)
after taxation |
|
|
2,479,137 |
(4,757,897) |
|
| Unappropriated
(loss)/profit brought forward |
|
|
(20,010,707) |
(15,252,810) |
|
|
|
|
------------------ |
------------------ |
|
| Transfer
of Statutory Reserve |
|
|
495,827 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
495,827 |
-- |
|
|
|
------------------ |
------------------ |
|
| Accumulated
loss carried forward |
|
(18,027,397) |
(20,010,707) |
|
|
|
========== |
========== |
|
| Earning
Per Certificate - Basic |
|
19 |
0.48 |
(0.93) |
|
|
|
| The
annexed notes form an integral part of these financial statements. |
|
|
|
Sd/- |
|
Sd/- |
|
Sd/- |
|
|
Chief Executive |
|
Director |
|
Director |
|
|
E.A. Management (Pvt.) Ltd. |
|
E.A. Management (Pvt.) Ltd. |
|
E.A. Management (Pvt.) Ltd. |
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
RUPEES |
RUPEES |
|
|
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Profit
/ (Loss) before taxation |
|
|
2,655,105 |
(4,751,460) |
|
|
|
|
|
|
| Adjustment for: |
|
|
|
| Amortization
of lease assets |
|
|
-- |
117,400 |
|
| Depreciation
on owned assets |
|
|
155,579 |
198,131 |
|
| Provision
for gratuity - net |
|
|
32,125 |
38,441 |
|
| Provision
for diminution in value of |
|
|
|
|
| marketable
securities |
|
|
824,514 |
8,877,660 |
|
| Provision
for over due lease rental reversal |
|
|
(96,634) |
(3,490,341) |
|
| Gain
on sale of vehicle |
|
|
(2,168) |
(20,709) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
913,416 |
5,720,582 |
|
| Operating
profit before |
|
|
------------------ |
------------------ |
|
| Working
capital changes |
|
|
3,568,521 |
969,122 |
|
|
|
|
|
| Changes
in working capital |
|
|
|
| (increase)/decrease
in current assets: |
|
|
|
|
|
| Investment
in marketable securities |
|
|
(779,170) |
(12,300,635) |
|
| Morabaha
investment |
|
|
(8,784,000) |
-- |
|
| Leased
rentals receivable |
|
|
229,501 |
3,652,238 |
|
| Trade debts |
|
|
1,540,292 |
12,966,722 |
|
| Advances,
deposits, prepayments and |
|
|
|
|
| other
receivables |
|
|
18,738 |
3,760,871 |
|
|
|
|
| Increase/(decrease)
in current liabilities |
|
|
|
|
|
| Decrease
in security deposit |
|
|
(28,000) |
(502,282) |
|
| Creditors,
accrued and other liabilities |
|
|
(58,281) |
(49,926) |
|
|
|
|
|
|
| Net
increase in working capital |
|
|
(7,860,920) |
7,526,988 |
|
|
|
|
------------------ |
------------------ |
|
| Cash
generated from operations |
|
|
(4,292,399) |
8,496,110 |
|
| Taxes paid |
|
|
(56,539) |
(25,968) |
|
| Gratuity paid |
|
|
(101,304) |
(13,791) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(4,450,242) |
8,456,351 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
RUPEES |
RUPEES |
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
| Proceeds
from disposal of fixed assets |
|
|
30,000 |
27,000 |
|
| Proceeds
from disposal of leased assets |
|
|
28,000 |
502,282 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash generated (used in) / |
|
|
58,000 |
529,282 |
|
| from
investing activities |
|
|
|
------------------ |
------------------ |
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
| Long
term loan to staff |
|
|
104,081 |
(19,100) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash used in financing activities |
|
|
104,081 |
(19,100) |
|
|
|
|
------------------ |
------------------ |
|
| Net
(decrease)/increase in cash and |
|
|
|
|
| bank balances |
|
|
(4,288,161) |
8,966,533 |
|
|
|
|
|
|
| Cash
and bank balances at the beginning |
|
|
|
|
| of the year |
|
|
11,691,074 |
2,724,541 |
|
|
|
|
|
|
| Cash
and bank balances at the end |
|
|
------------------ |
------------------ |
|
| of the year |
|
|
7,402,913 |
11,691,074 |
|
|
|
|
========== |
========== |
|
|
|
Sd/- |
|
Sd/- |
|
Sd/- |
|
|
Chief Executive |
|
Director |
|
Director |
|
|
E.A. Management (Pvt.) Ltd. |
|
E.A. Management (Pvt.) Ltd. |
|
E.A. Management (Pvt.) Ltd. |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
| 1.
LEGAL STATUS AND NATURE OF BUSINESS |
|
| B.F
Modaraba was formed under the Modaraba companies and Modaraba |
|
| (Floatation
and Control), ordinance 1980 and the rules framed there under, |
|
| and
is managed by E.A. Management (Pvt) Limited. The Modaraba is listed |
|
| on
Stock Exchanges in Pakistan. |
|
|
| It
is a perpetual multi-purpose Modaraba and is primarily engaged in leasing, |
|
| investments,
trading and rendering of services etc. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
| 2.1
(i) Basis for preparation |
|
|
|
| These
accounts have been prepared in accordance with international |
|
|
| accounting
standards, as applicable in Pakistan. |
|
|
|
|
|
| (ii)
Accounting Convention |
|
|
|
| These
financial statements have been prepared under the historical cost |
|
| convention. |
|
|
|
|
| 2.2 Gratuity |
|
|
|
| The
modaraba operates an unfunded gratuity scheme for all its employees |
|
| eligible
for the scheme. Provision is made annually to cover the obligation |
|
| under
the scheme. |
|
|
|
|
|
|
| 2.3 Taxation |
|
|
|
| Current |
|
|
|
| The
charge for current taxation is based on taxable income at current rate |
|
| of
tax after recognizing tax credit and rebates available, if any or at the |
|
| rate
of 0.5 percent of turnover, whichever is higher. |
|
|
|
|
| Deferred |
|
| The
Modaraba accounts for deferred taxation on all major timing differences |
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| using
the liability method but does not account for deferred tax debits. |
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| 2.4
Operating fixed assets and depreciation |
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| a.
Assets leased out |
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| Leased
assets are stated at cost less accumulated amortization. |
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| Amortization
is charged to income applying the annuity method, |
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| whereby
the depreciable values of assets are amortized over the |
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| leased period. |
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| In
respect of acquisition and termination of the leased assets during |
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| the
year, amortization is charged proportionately from the day of |
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| acquisition
and upto termination respectively. |
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| b.
Assets in own use |
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| Operating
fixed assets are stated at cost less accumulated depreciation. |
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| Depreciation
is charged to income applying the reducing balance |
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| method
at the rates specified in operating assets note. Acquisition |
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| in
the year are depreciated for a full year irrespective of the date of |
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| purchase.
No depreciation is charged on assets in the year of their |
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| disposal. |
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| Maintenance
and normal repairs are charged to the income as and |
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| when
incurred. Major renewals and replacement are capitalized and |
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| assets
so replaced, if any, are retired. |
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| Gain
or loss on disposal of assets is included in the income currently. |
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| 2.5
Stock in trade |
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| Stock
is valued at lower of cost and net realisable value. Cost is |
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| determined
on the basis of moving average cost. |
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| 2.6 investments |
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| Investment
in shares are valued at cost & market value which ever |
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| is lower. |
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| Gain
or loss on sale of investment is included in the income currently. |
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| 2.7
Revenue recognition |
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| i)
Rental income is recognised as and when lease rentals become due on |
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