NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2002
1
PRINCIPAL ACCOUNTING POLICIES
a
Accounting Convention
These financial statements have been prepared
under the historical cost convention, modified to include the
revaluation of certain fixed assets.
b
Bad and Doubtful Debts
A general provision against bad and doubtful
debts is made on the basis of the year end reviews of the
classified advances.
Specific provisions are made when credit
risks or economic factors make recovery doubtful. Furthermore
provision this year is based on an individual review of all
advances dependent on the classification into which each advance
falls. Interest on doubtful advances is not credited to the
profit for the current financial year and specific provisions
are established for substandard, doubtful and loss advances.
c
Investments
Treasury bills are stated at maturity value
and a provision is made for interest not earned at the balance
sheet date.
d
Depreciation
Depreciation is provided on the straight line
basis so as to write off the cost of the fixed assets over their
estimated useful lives, which are as follows:
Premises
- 50 years
Motor vehicles
- 5 years
Computer equipment & software - 3 years
Furniture and Other equipment - 7
years
e
Exchange Rates
Assets and liabilities in foreign currencies
are translated to Leones at the appropriate rates of exchange
ruling at 31 December 2002
Exchange rates used for year-end translations were:
US $1 to Le 2,070
GBP 1 to Le 3,075
