i. Stocks and work-in-progress
Stocks are stated at the lower of cost and net realisable value. Work-in-progress is valued at cost (including a proportion of production overheads where appropriate) plus a proportion of profits less amounts received on account and receivable and after making full provision for all known losses for contracts in
progress.
j. Foreign exchange
Transactions in foreign currencies are converted at exchange rates ruling at the transaction dates. Foreign currency balances are translated at the approximate rates of exchange ruling at the balance sheet date. All exchange differences are included in the determination of trading profit.
The accounts of overseas subsidiary companies are translated into Hong Kong dollars at the approximate rates of exchange ruling at the balance sheet date. Exchange differences are dealt with as a movement in reserves.
2. Fixed assets
M
Group
Properties
completed
HK$Millions
Properties under development HK$Millions
Other
assets HK$Millions
Total
Total
1985 HK$Millions
1984 HK$Millions
Net book value at 1st January, 1985
3,298.4
125.9
541.8
3,966.1
3,319.3
Transfer to current assets
(213.8)
(213.8)
(334.2)
Transfer between categories
15.6
(18.8)
3.2
Exchange difference
Additions
(32.8)
(32.8)
(14.8)
826.4
163.8
219.5
1,209.7
893.0
Revaluation
383.5
383.5
300.5
4,277.3
270.9
764.5
5,312.7
4,163.8
Less:
Disposals
227.3
5.9
233.2
86.5
Depreciation and amortisation charged
in 1985
24.8
109.7
134.5
111.2
252.1
115.6
367.7
197.7
Net book value at 31st December, 1985
4,025.2
270.9
648.9 4,945.0
3,966.1
Representing assets stated:
At cost
At valuation
2,519.1
143.8
1,123.1
3,786.0
2,860.2
1,778.7
127.1
0.9
1,906.7
1,718.3
4,297.8
270.9
1,124.0 5,692.7
4,578.5
Less: Accumulated depreciation and
amortisation
272.6
475.1
747.7
612.4
Net book value at 31st December, 1985
4,025.2
270.9
648.9 4,945.0
3,966.1
Other assets comprise motor vehicles, plant, machinery, equipment, vessels, furniture and fixtures.
During the year the Group purchased certain premises in China Building for a consideration of HK$200 million and subsequently granted a 30-year lease on these premises to The Hongkong & Shanghai Banking Corporation for HK$175 million. The granting of the lease has been treated as a disposal of property and the cost of the Group's reversionary interest at HK$25 million is included in completed properties and not depreciated. Under the terms of the lease The Hongkong & Shanghai Banking Corporation has the option, upon giving 12 months' notice, to vacate any floor of the premises, at which time the Group is required to pay a discounted lump- sum compensation based on the prevailing market rentals for the vacated premises for the unexpired period of the lease. At the date of these accounts this option has not been exercised.
35
HUTCHISON WHAMPOA LIMITED