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NOTES ON THE ACCOUNTS (CONTINUED)

(e) Depreciation

Depreciation is provided at rates calculated to write off the cost of fixed assets over their estimated useful lives on a straight line

basis at the following annual rates:-

Land held on long leases

TV

Nil

Land held on medium and short term

leases

Buildings

Vessels

Over the unexpired terms of the leases

2.5% or over the unexpired

terms of the leases

3.33% - 12.5%

Motor vehicles

Machinery, furniture and other fixed assets

(f) Stocks and work in progress

25%

10%

Stocks and work in progress are valued at the lower of cost and net realisable value. In respect of work in progress, cost includes cost of purchase of materials, direct labour and expenses and an appropriate proportion of production overheads, less any foreseeable losses and progress payments receivable to date. No profit is taken until the work is fully completed.

(g) Investments

Investments held on a long-term basis are stated at cost. Provision is made for any permanent diminution in value which is estimated by the directors.

(h) Assets under construction

Construction cost is transferred to fixed assets on granting of the marine licence.

(i)

Vessels

(ii)

Property

Land cost relating to property which is being developed for investment purposes is included in fixed assets under lease-

hold land.

Property development expenditure, inclusive of interest, is included as cost of development up to the date when the oc- cupation permit is granted.

(i) Translation of foreign currencies

Foreign currency transactions during the year are translated into Hong Kong dollars at the exchange rates ruling at the trans- action dates. Monetary assets and liabilities in foreign currencies are translated into Hong Kong dollars at the market rates of exchange ruling at the balance sheet date except for balances where foreign exchange contracts have been undertaken, in which case the rates applicable to the contracts have been used for the translation. Exchange gains and losses on foreign currency translation are dealt with in the profit and loss account.

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