Page 232 EXPLANATORY NOTES TO BE READ IN CONJUNCTION WITH THE BALANCE SHEET
Note 1
GENERAL
The Accounts for the period from the inception of the Scheme to Febru ary 29, 1948, were the responsibility of the United Africa Company (Managing Agency) Ltd., and were submitted by them to the Ministry of Food on March 7, 1949. A copy of the Balance Sheet at February 29, 1948, and the Managing Agency's Report thereon is attached. (See Schedule IV.)
The conditions obtaining at the beginning of the period are described in that report, and those obtaining throughout the period are described in Chapter V of this report.
As a result of these conditions, the Corporation and some of its Con- tractors did not find it possible to maintain for all aspects of their operations the proper books of account that are necessary to give a true and fair view of the state of the Corporation's affairs and to explain its transactions.
Note 2. Rates of Exchange
.
East African and Australian currencies have been converted at the rates ruling at the date of the Balance Sheet.
FIXED ASSETS
Note 3. Title Deeds to Land in East Africa
The Corporation is in negotiation with the Tanganyika Government and the Colonial Office on the details of Land Leases. (See para. 53 of the general report.)
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Note 4. Buildings and Installations
It was decided to carry out a revaluation of these assets, because (a), their cost was inflated by exceptional expenditure incurred in initiating a new venture of this character, and (b), it has proved impossible to record actual
costs.
The basis of the valuation, which has been agreed with the Contractors concerned, is the estimated cost of erecting these assets by contract under normal conditions in East Africa computed by reference to the cost of labour, materials and overhead charges ruling at the time the valuation was made.
At the date of the Balance Sheet, the revaluation had been completed for KONGWA, URAMBO, DAR-ES-SALAAM, IFUNDA and NAIROBI.
The Corporation is of the opinion that this valuation will form the basis for a proper charge for depreciation in this and future years.
As regards the Accounts now under review, depreciation has been written off the valuation figures from the date on which the particular building or installation was completed at rates which are considered to be sufficient to extinguish the cost of the assets over their expected life.
The difference between the total of the valuation and the total cost as furnished by the Contractors has been transferred to-" Development, Land- Clearing and Agricultural Expenditure."
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