explanatory notes
general
The combined balance sheet and profit and loss account comprise
the annual accounts of the majority participations in real estate
companies and in other diversifications.
In consequence of the reduction of the interest in 'Makelaars
kantoor Gemako b.v.' to 50%, the figures of this participation have
no longer been included in the consolidation. The comparative
figures for 1974 were correspondingly adapted.
The general valuation standard for real estate in operation is: costs
of purchase or construction reduced by an annual depreciation.
Depreciation is based on these costs, with due observance of the
estimated length of life. A few objects, the sale of which is
intended in the near future, have been valued at costs of purchase
or construction reduced by income realised.
As a result of the sale of real estate in operation, the difference
between income and book value is accounted for. Except a few
special projects, the sales result thus fixed is transferred to the
replacement reserve.
The fiscal claim weighing on this replacement reserve and the fiscal
claim resulting from valuation differences, have been accounted for
under 'provision for latent tax liabilities'. Their computation is
based on the cash value of future tax liabilities.
Real estate in development is valued at costs, including interest,
incurred for the projects concerned till the moment of lease or sale.
Interest is calculated on the amount invested at the average interest
rate for mortgage loans. The valuation per project will not exceed
the market value of the property.
The result of a sale is accounted for in the year in which a project is
completed or— in case the result of the sale is certain in the year
when part of the project is completed.
The other gains and charges are generally accounted for in the year
to which they relate.
The provision for maintenance is meant to lead to a better
spreading of the costs of periodic maintenance. To the charge of
the result, this provision is annually increased by an amount
calculated per object on the basis of the costs and the frequency of
periodic maintenance and the expenses incurred in such ayear are
charged to this provision.
The method applied entails that the amount that should be present
in the provision can at any time be calculated per real estate project
and per category of maintenance.
In addition to the normal annual payments, any such amounts will
be added to the provision to the charge of the result within a few
years that the provision reaches the amount required. For this
reason, an amount of /500,000.was added to the provision to
the charge of the result for 1975.
A provision is made to cover the risk of unoccupied premises
during the period between completion of development projects
and their first lease. The amount of this provision will annually be
fixed proportionate to the balance sheet value of the qualifying
04 projects.
