Document KXVvZqxn7Gny0NN5myMz60bX

PLAINTIFF'S EXHTOrr 3 fco COSTORMED COPTf ANNUAL REPORT PURSUANT TO SECTIONS 13 AND 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended 31 December 1 Commission file number 2-53436 IMPERIAL CHEMICAL INDUSTRIES LIMITED (Exact name of registrant as specified in its charter) Imperial Chemical House. Millbank, London, SHIP 3J7 (Address of principal executive offices) SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT: None. SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT: None. ITEM 1. GRANGES IN OWNERSHIP AND CONTROL (a) Describe briefly any material changes, not previously reported, in the ownership or control exercisec by any person or government over the registrant. None. (b) State the name of any person or government, not previously reported .in this connection, which directly o.r indirectly owns or controls the registrant and describe briefly the nature of such control. None. ITEM 2. CHANGES IN CHARACTER OF BUSINESS Describe briefly any material changes, not previously reported, in the general character of the business done by the registrant and its subsidiaries. Nona. ITEM 2. CHANGES IN PROPERTY Describe briefly any significant and unusual additions, abandonments or retirements of, or any significant and unusual changes, not previously reported, in the general character anc! location of principal plants and other important units of the registrant and its subsidiaries. None. ITEM 4. MODIFICATION OF SECURITIES OF REGISTRANT If any material modifications, not previously reported, have been made in any security, a description of which has been previously reported, or have been made in the indenture, charter, or other constituent instrument defining rights of the holders of such security, give the title of ne issue and state briefly the general effect of such modifications. None. 1 ITEM 5. (a) LIMITATIONS AFFECTING SECURITY HOLDERS Outline briefly the provisions of any law or decree not previously reported, and any amendment not previously reported to any law or decree previously reported, determining' the extent to which dividends or other payments upon ary class of registered securities may be p-'iitL to foreign holders and the withholding of taxer; from such payments. None. (b) Outline briefly any limitations, not previously reported, imposed either by the law of the country in which the registrant was organized or the charter or other constituent documents of the registrant on the right of foreigners to hoid or vote any class of registered securities. None. ITEM 6. SECURITIES OF OTEER ISSUERS GUARANTEED BY REGISTRANT If the registrant has guaranteed any class of securities of any other issuer, furnish the following information: (a) Outline briefly any material modifications, not previously reported, in any such contract of guarantee previously reported. None. (b) An to guarantees not previously reported, state the name of the issuer and the title and amount of securities guaranteed and outline briefly the contract of guarantee. Date Amount Description of Transaction January 2, 1976 US$9,500.000 Guarantee by ICC of 50)4 of indebtedness of Rubicon Chemicals, Inc., under Bank Loan Agreement. January 22, 1976 80,000,000 Swiss Francs Guarantee by ICI of public Bond issue of ICI Finance (Netherlands) N.V. under written by Swiss Credit Bank. Swiss Bank Corporation and Union Bank of Switzerland. 2 ITEM 7. INCREASES AND DECREASES IN OUTSTANDING ECUITY SECURITIES (a) (b) (c) (d) Give the following information as to all increases and decreases during the fiscal year in the amount of equity securities of the registrant outstanding: The title of the cla3s of securities invo'ved; The date of the transaction; The amount of securities involved and whether an increase or a decrease; a brief description of the transaction in which the increase or decrease occurred. If previously reported, the description may be incorporated by a specific reference to the previous filing. (a) Ordinary Stock 1 units (b) Kay 18 1976 to June 18 1976 (c) Increases of 61,759.105 (d) Incorporated by reference to Fora 6-K filed for the month of May 1976. Ordinary Stock June 18 1976 3,676,216 Incorporated by reference to Form 6-K 1 units. filed for the month o June 1976 (e) If the transaction involved a sale of securities which were not registered under the Securities Act of 1933, an indication of the exemption claimed and the facts relied upon to make the exemption available. If previously reported, the information may be incorporated by a specific reference to the previous filing. All such sales were exempt from the registration requirements of the Securities Act of 1933 as amended, as.not involving a public offering or sale in the United States of America. ITEM 8. EXCHANGE CONTROL Describe briefly any material changes, not previously reported, in existing foreign exchange controls or the adoption of new controls in the country under the laws of which the registrant was organized. None. k / f r l I TEM '3. INDEX 10 FINANCIAL STATEMENTS AND EXHIBITS Page IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES AND IMPERIAL CHEMICAL INDUSTRIES LIMITED: Reports of independent accountants 12-17 Imperial Chemical Inaustries Limited and Subsidiaries Consolidated Statement of Income for the years ended December 31. 1975 and 1976 In pounds sterling Expressed in US dollars l3 19 Consolidated Statement of financial December 31, 1975 and 1976 In pounds sterling expressed in US dollars position at 20 21 Consolidated statement of source and application of funds lor the 'ears ended December 31. '-975 and 1976 In pounds sterling Expressed in US dollars 2k 25 Consolidated statement of income retained and other reserves for the years ended December 31. 1975 and 1976 In pounds sterling Expressed in US dollars 26 26 Statement 01 changes in capital stock and premiums in excess of par value for the years ended December 31. 1975 and 197b In pounds sterling Expressed in US dollars 27 27 Notes to Financial States'-nts 28 Imperial Chemical Industries Limited (Parent Company: Statement of income Tor the years jR75 and 1976 In pounds sterling Expressed in US dollars ended December 31T jk 5^ Statement of financial position at December and 1976 In pounds sterling Expressed in US dollars 11, 1975 22 23 Statement of source and application of finds for the years ended December 31. 1975 and 1976 In pounds sterling Expressed in US dollars 56 ~ 56 9 REPORT OF INDEPENDENT ACCOUNTANTS To the Members of Imperial Cnemical Industries Limited We have examined the financial statements expressed in pounds sterling, as listed in the accompanying index,of Imperial Chemical Industries Limited and Imperial Chemical Industries Limited and its subsidiaries. Our examinations of these statements were made in a-.cordarce with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. We did not examine the financial statements of one operating division, certain consolidated subsidiaries and one principul associated company which reflect net assets constituting approximately 20 per cent of consolidated net assets at December 31, 1976 ar.d December 31, 1975 and sales constituting approximately 30 per cent of the related consol idated sales for each of the two years ended December 31. 1976. These statements were examined by other independent accountants whose reports thereon have been furnished to us and our opinion expressed herein, insofar as it relates to the amounts included for such division, subsidiaries and principal associated company, is based solely upon the reports of the other independent accountants. In our opinion, based on our examinations and the aforementioned reports of other independent accountants, the financial statements referred to in the first paragraph., which have been prepared under the historical cost convention as modified by the revaluation of certain assets, present fairly under that convention, the financial position of Imperial Chemical Industries Limited and of Imperial Chemical Industries Limited and its subsidiaries at December 31, 1976 and December 31, 1975 and the results of their operations and the changes in financial position for the years then ended, in conformity with accounting principles generally accepted in the United Kingdom which have been consistently applied, after restatement for the change, with which we concur, described in Note B of Notes to Financial State ments . Such principles vary in certain respects frort accounting principles generally accepted in the United States. The application of the latter would have affected the detenainaticn of consolidated net income for the two years ended December 31, 1976 to the extent indicated m Note B of Notes to Financial Statements, and would have affected the determination of the consolidated financial position at December 31, 1976 and at December 31, 1975 to the extent summarized in Note U of Notes to Financial Statements. PRICE WATERHOUSE & CO London, England March 3, 1977, except as in note 0, which is at June 13, 1977 12 THOMSON McLINTOCK & Co REPORT OP INDEPENDENT ACCOUNTANTS The Board of Directors, Imperial Metal Industries Limited, We have examined the Consolidated Balance Sheet of Imperial Metal Industries Limited (a 62.8 per cent subsidiary of Imperial Chemical Industries Limited) and its subsidiaries at December 31at, 1976 and 1975 and the related statements of income for the years then ended, which statements are not separately presented in this Form 20-K. Our examinations of these s atements were made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such otner auditing proce dures as wo considered necessary in the circumstances. Ve did not examine the financial statements for the aforementioned two years for the following consolidated subsi diary companies, IKI Refinery Holdings Limited, IXI Refiners Limited and Wolverhampton Metal Limited, which statements were examined by other independent accountants, whose reports thereon have been furnished to us. Our opinion, expressed on the consolidated statements in so far as it relates to the amounts included for such subsidiaries, is based solely.upon such reports. In our opinion, based upon our examination and the afore mentioned reports of the other independent accountants, the aforementioned consolidated financial statements present fairly the financial position of Imperial Metal Industries Limited and its subsidiaries at December 31si, 1976 and 1975 and the results of its operations for the years then ended in conformity with accounting principles generally accepted in the United Kingdom consistently applied during such two years. Birmingham, England February 18, 1977 PEAT, MARWICK, MITCHELL & CO. I IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENT Of INCOME (expressed in US dollars) Year ended December 21 Sales (* illion 5,319 7,029 amounts Cost of Sales, exclusive of depreciation Depreciation Selling, general an-, administrative expenses Gain on foreign currency translation Royalty Income Other income (net) 3,548 309 975 (49) (24) (32) 4.525 349 1.338 (99) (22) (43) Trading Profit In-estment Income (Note C) Interest Expense (Note D) Employees' prcf't-sharing bonus (Note E) Equity in earnings of principal associated companies before taxes Income before taxes, minority interests and extraordinary items Taxes cn income less grants (Note F) 4,727 592 66 ( 124) (29) 505 41 6,048 981 90 ( 158) (46) 867 51 546 213 918 364 Income before minority interests and extraordinary items Minority interests Income before extraordinary items Extraordinary items (Note G) Net income (Note B) 333 41 292 (2) 290 554 60 494 (78) 4i6 Per 1 Ordinary Stock outstanding (Notes B and J): Income before extraordinary items Extraordinary items Net income Dividend (Note H) Average Ordinary Stock units outstanding * (millions) adjusted to give effect to the bonus element in the rights issue made in 1976 19 f -59 % -93 - if -15) % -59 f .78 % .20 f .25 498 5 35 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENT Or FINANCIAL POSITION Current Assets: Cash Time deposits Short-term Investments, at co.it vhich approximates market Receivables (Note K) Inventories (Note L) At Deere.ber 31 IQ 75 1970 ~TlBillion) 51 266 29 7H 7*0 100 443 81 925 908 Total Current Assets Current Liabilities: Pavable to Banks (Note M) Other Short-term Borrowings (Note M) Accounts Payable and Accrued Expenses Taxes Payable (Note ?) Dividends Payable (Note N) Total Current Liabilities 1,8no 108 U2 523 97 ?4 794 2,457 125 JO 727 131 38 1,051 Net C'i'rent Assets Other Assets: Interest in Subsidiary not consolidated (Note Oi Other Non-cui rent Investaents <. Note P and Schedule III) Goodwill (Note A (5)) Prooerty, Plant and Equipment (Note Q and Schedules V and VI)(less accumulated depreciation of l,959m -1975) and l,743m (1976)) Assets Employed 1,006 57 245 15 i,4?5 2,748 1,406 59 306 15 1,733 3,519 Financed by: Long-term Debt (Note R) Deferred Taxes (Note ?) Deferred Liabilities (Note Y) Grants Deferred Equity of Minority Shareholders in Subsidiaries Capital and Reserves: Preference Stock ___ Ordinary Stock Premiums in Excess of Par Value of Ordinary Stock Income Retained and Other Reserves 810 212 80 194 1,296 9 494 117 832 1.452 2,748 1,034 308 26 35 2 3*t 1,687 9 559 258 1,006 1,832 3,519 Commitments and Contingent Liabilities (Notes S and T) 20 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Expressed in US dollars) Current Assets: Cash Time Deposits Short-term Investments, at cost which approximates market Receivables (Note X) Inventories (Note L) Tot-t C'trrmt /ssets At December 31 IS < b 1 % million) 67 452 49 1,209 1.263 3,060 170 753 138 1,572 1,544 4,177 Current liabilities: Payablf to Banks (Note M) Other Short-term Borrowings (Note M) Account.x Payable and Accrued Expenses Ttxes Payable vNote F) Dividends Payable (Note N) 184 71 889 165 41 Total Current Liabilities 1,350 Net Current Assets 1,710 Other Assets: Interest in Subsidiary not consolidated (Note 0) 97 Other Non-cunent Investments (Note ? and Schedule III) 417 Goodwill (Note A (5)) Property, Plant and Equipment (Note 0 and Schedule 26 V and VT)(ler.s accumulated depreciation of ?2,480ra (1975) and 22,963m (1976)) 2,422 Assets Employed 4,672 212 51 1,2 36 223 65 1,737 2,390 100 520 26 2,946 5,982 Financed by: Long-te.m Debt (Note R) Deferred Taxes (Note F) . Deferred Liabilities (Note Y) Grants Deferred Equity of Minority ShareViolaers in Subsidiaries 1,377 360 _ 136 330 2,203 Capital and Reserves: Preference Stock Ordinary Stock Premiums in Excess of Par Value of Ordinary Stock 15 840 199 Income Retained and Other Reserves 1,415 2,469 Commitments and Contingent Liabilities (Notes S and T) 4,672 CO ON r~\ l, 753 524 44 144 2,868 15 950 439 1,710 3,U4 - 5,982 IMPERIAL CHEMICAL INDUSTRIES LIMITED STATEMENT OF FINANCIAL POSITION - PARENT COMPANY Current Assets: Cash Short-term Investments, approximates market Receivables (Note K) Inventories (Note L) at cost which Total Current Assets Current Liabilities: Payable to Banks (Note M) Accounts Payable and Accrued Expenses Taxes Payable (Note F) Dividends Payable (Note N) Total Current Liabilities Net Current Assets Other Assets: Interests in Subsidiaries (Note 0) Other Non-current Investments (Note P and Schedule III) Property, Plant and Equipment(Note Q and Schedules V and VI) (less accumulated depreciation of 904m ( 1975) and 988m (1976)) Assets Employed At December 31 1975 197? ( million) 22 22 51 314 389 65 56 387 510 49 218 38 29 329 60 725 73 779 1.637 43 290 45 38 42 1 89 947 88 902 2,026 Financed by: Long-term Debt (Note Deferred Taxes (Note Deferred Liabilities Grantj Deferred R) F) (Note Y) Capital and Reserves: Preference Stock Ordinary Stock Premiums in Excess of Par value of Income Retained and Other Reserves Ordinary Stock 309 l64 _ 76 549 9 494 117 473 1.093 1.637 327 237 26 82 672 9 559 258 528 1.354 2,026 Commitments and Contingent Liabilities (Notes S and T) 22 IMPERIAL CHEMICAL INDUSTRIES LIMITED STATEMENT OF FINANCIAL POSITION - PARENT COMPANY (Expressed in U5 Dollars) Current Assets: Cash Short-term Investments, at cost which approximates market Receivables (Note K) Inventories (Note L) Total Current Assets At December 31 1975 197b ($ millionir~ 3 37 87 534 3 111 95 658 661 86' Current Liabilities: Payable to Banks (Note M) Accounts Payable and Acc ued Expenses Taxes Payable (Note?) Dividends Payable (Note N) S3 371 64 41 Total Current Liabilities Net Current Assets 559 102 Other Assets: Interests in Subsidiaries (Note 0) Other Non-current Investments (Note P and Schedule III) Property, Plant and Equipment (Note Q and Schedules V and VI)(less accumulated depreciation of ?l,537m (1975) and ?1,680m (1976)) 1,233 124 1,324 Assets Employed 2,783 82 493 76 65 716 151 1,610 150 1,533 3,444 Financed by: Long-term Debt (Note Deferred Taxes (Note Deferred Liabilities Grants Deferred R) F) (Note Y) 517 279 129 925 Capital and Reserves: Preference Stock Ordinary Stock Premiums in Excess of Par Income Retained and Other Value of Reserves Ordinary Stock 15 840 199 804 1,358 Coumitments and Contingent Liabilities (Notes S and T) 2,783 556 403 44 139 1,142 15 950 439 898 2,302 3,444 23 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SOURCE AND APPLICATION OF FUNDS Year ended December 31 nn i97b ( million) Source of funds: Income before extraordinary items Add/{Deduct) - Items not affecting funds: Amount applicable to minority interests Depreciation charged Current and deferred tax movements Government grant movements Equity in undistributed earnings of principal associated companies Other Total funds provided by operations 172 24 182 7 3 (9) 8 387 291 35 205 126 5 (k) 13 671 Funds provided by extraordinary items Issues of Ordinary Stock Long-term debt issued Increase in minority interests in subsidiaries Deferred liabilities 9 15 125 - 536 - 206 124 10 26 1,037 Application of funds: Dividend.*: ICL shareholders Minority Shireholders Additions to property, plant and equipment Repayments of long-term debt Other investments, including amounts applicable to purchased subsidiaries 59 11 332 26 38 83 lk 438 12 62 Increase in Working Capital 466 70 609 428 Composition of increase in Working Capital: Net liquid resources: Cash Time deposits Short-term investments Short-term borrowings Inventories Receivables Payables 2 17 11 (3D ( l) 67 58 (54) 70 49 177 52 (5) 273 159 206 (210) 428 24 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SOURCE AND APPLICATION OF FUNDS (Expressed in US dollars) Year ended December 31 1976 {$ million) Source of funds: Income before extraordinary items Add/(Deduct) - Items not affecting funds: Amount applicable to uiincri ty-interests Depreciation charged Current and deferred tax movements Government grant movements Equity in undistributed earnings of principal associated companies Other Total funds provided by operations Funds provided by extraordinary items Issues of Ordinary Stock Long-term debt issued 272 41 309 12 5 (15) 14 658 15 26 212 495 60 349 214 8 (7) 22 1, l4l - 350 211 Increase in minority interests in subsidiaries Deferred liabilities 9U 17 44 1,763 Application of funds: Dividends: ICI shareholders Minority shareholders Additions to property, plant and equipment Repayments of long-term debt Other investments, including amounts applicable to purchased subsidiaries 100 19 564 44 65 Increase in Working Capital Composition of increase in Working Capital: Net liquid resources : 792 119 -- Cash Time deposits Short-term investments Short-term borrowings 3 29 19 (53) Inventories Receivables Payables (2) 114 99 (92) 119 l4l 24 745 20 105 1,035 728 -------' 83 301 88 (8) 464 271 350 (357) 728 25 IMPERIAL CHEMICAL INDUSTRIES LIMITED STATEMENT OF CHANGES IN CAPITAL STOCK AND PREMIUMS IN EXCESS OF PAR VALUE Authorised Share Capital of ICI at December Tl, 197*i was 522 million (#887 million). Effective April 2, 1975) it was increased to 575 million (978 million). It consisted of issued Ordinary and Prefer ence Stock (l units) as set out below, the unissued balance at any time being unclassified. lasued Stock: Balance at December 30 197*4 Issuance of Ordinary Stock in connection with: Emplovees' Profit-Sharing Plan Share Prem? urn no Issued Capital Preference Stock 5S Ordinary (now 3.5% Stock plus tax credit) cumulative ( million) 06 9 78 Balance at December 31) 1975 Issuance of Ordinary Stock in connection with: Rights Issue of 1 Stock unit for every eight units held Employees' Profit-Sharing Plan Balance at December 31) 1976 117 135 6 258 0*4 62 3 559 9 - _L_ 9 ( million) Issued Stock: Balance at December 3I1 197** Issuance of Ordinary Stock in connection with: Employees' Profit-Sharing Plan Balance at December 31> 1975 Issuance of Ordinary Stock in connection with: Rights Issue of 1 Stock unit for every eight units held Employees' Profit-Sharing Plan Balance at December 311 1S76 187 12 I99 2 30 10 *09 826 It* H5o 105 5 950 15 - ~iT - 15 There are no options, warrants or rights outstanding in respect of unissued shares. In the event of liquidation, the Preference Stock is repayable at par plus unpaid dividends accrued. 27 i IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMFERIAL CHEMICAL INDUSTRIES uIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS As used in the Financial Stitenents and related Notes, the terms "ICI" and "Parent Company" refer to Imperial Chemical Industries Limited; the term "Group" refers to ICI and its Consolidated Subsidiaries but not to associated companies (see Note A(l))or to Carrington V'iyella Limited, a subsidiary company which is not included in the consolidated financial statements (see Note 0). Note A - Accounting Policies The following paragraphs describe the significant accounting policies used in preparing the financial statements. Legislation or local usage precludes some overseas subsidiaries from conforming with certain of these policies and therefore, where appropriate, adjustments have been made on consolidation in order that the Group accounts are presented on a consistant basis. ( 1) Associated Companies and other Trade Investments An associated company is defined as a company, not being a subsidiary, in which the Group has a substantial interest and on whose commercial and financial policy decisions the Group exercises significant influence. The Group's share of the earnings of the principal associated companies is included in the Consolidated Statement of Income. The earnings so included relate to periods ending not earlier than June 30 and are calculated from the latest available audited accounts adjusted, where the accounting dates are before June 30, by reference to the unaudited results for more recent periods. Earnings of other companies in which the Group has trade investments, including the smaller associated companies, are included only to the extent of dividends received. 28 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) The Group's share of the post-acquisition retained earning.) and reserves of the principal, associated companies is included in the hook values of the invest ments in the Group balance sheet. The retained earnings of other companies in which the Group has trade investments are included in the book values only to the extent of certain of the amounts of post-acquicition retained earnings capitalized by such companies; such amounts are credited to income retained and other reserves. (2) Composition of the Group The Group accounts consolidate the accounts of ICI and 517 subsidiaries. The only signifies. exclusions are Carrington Viyeila Ltd and its subsidiaries (see Note 0). Owing to seasonal trade or local conditions and to avoid undue delay in the presentation of the Group accounts, the accounts of many subsidiaries (229 in 1976) are consolidated as of dates earlier than December 31. but not earlier than September 30Comparative income statement figures for 1975 have been restated to include, of. a calendar year basis, the results of those subsidiaries whose accounting date changed in 1975 from 3 September to 31 December. Income before extraordinary items and the cnarge for extraordinary items have each been reduced by 3 million; net income is not affected. The accounts of subsidiaries acquired during any year are included in Group figures from the effective datea of acquisition. All material inter-company transactions are eliminated on consolidation. (3) Deferred Taxes Deferred taxes are provided fcr the difference between tax depreciation calculated at normal rates and actual tax depreciation claimed, the latter including amounts calculated on accelerated bases. 29 B / IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) Thus , an adjustment is made each year so that the aaiount charged in the accounts for UK tax represents the figure which would have applied had there been no accelerated tax depreciation deductions. No deferred taxes are provided in respect of the difference between normal tar depreciation and depreciation charged in the accounts.' Adjustment is also made for taxes _n respect of income and expenditure dealt with for taxation purposes in a different year from that in which it is included for accounting purposes, including relief for the increased value of inventories (see Note F). Adjustments of a siirilar nature are made in the accounts of certain overseas subsidiaries. (k) Depreciation The Group's policy is to write off the book value cf each fixed asset evenly ever its estimated remaining useful life; annual reviews are made of the residual lives of all productive assets, taking account of ccmmerciol and technical obsolescence as well as norma1 wear and tear. The preliminary results of the review of the residual lives of assets, which is in progress as part of the Company's consideration of the current cost basis of accounting, indicate that such lives may be longer than those at present adopted in the historical cost accounts (see Note X). Depreciation on assets qualifying for investment grants or regional development grants is calculated on their full cost. Gains and losses on disposal of fixed assets are recognized in income. The cost of oil concessions ra capitalized and written off over the expected period of exploration; expenditure on exploration is capitalized and written off iamediately. Development expenditure is capitalized and depreciated over the productive life of the field. 30 6 ! ! IMPERIAL CHEMICAL INDUSTRIES LIMITED A.VD IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) For tax purposes, depreciation is calculated on the cost of eligible assets less related investment grants. Investment grants with respect to each year's qualifying capital expenditure were deferred and are being credited to income as a deduction from the charge for taxes over a period of ten years, the estimatec average life of the relevant fixed assets. The pranr.s shown in the balance sheets include the total investment grants received to date less the amounts so far credited to income. Invest ment grants were withdrawn as from fotober 26, 1570 except for qualifying capital expenditur.* incurred after that date under contracts already placed. (8) Maintenance and Repairs Maintenantt vd toairs are expensed in the year incurred. Major replacements and betterments are capitalized. (9) Pensions Thu Group has a number of pension plans covering the majority of employees. The Group's policy with respect to the principal plans is to fund pension cost accrued. Prior service costs have been fully amortized and funded for the principal UK plans. The principal overseas plans are being funded on varying bases dependent on local conditions; neither the unfunded pant service costs nor the excess of vested benefits over assets in those funis at the latest actuarial valuation dates was material in relation to the Group- (10) Regional Development Grants The regional development grant , introduced in 1972 by the UK Government to stimulate industrial investment, represents a cash grant with respect to qualifying capital expenditure in certain areas of the UK. In contrast to investment grants these grants do not affect depreciation allowable for tax purposes. The accounting treatment is the same as that described in (7) above for investment grants. 32 [ I IMPERIAL CHEMICAL INDUSTRIES LIMITED V-D i IMPERIAL CHEMICAL INDUSTRIES LIMITED AVD SUBSIDIARIES NOILS TO ?' I \ANC ' AL 5TA rCME M i '.continued) (11) Research and, Development I Researen and Dc\ e ; oprr.ei' t expenditure is in general expensed ir. tl'c ye nr ir *.!*. icn it is incurred although I mi ,i l ! .iir.mui?* art* c.i|* i t;i i i 7.cd a part of the cost of r.' u p \. \ \ \ i . I (12) 1 r.ini !.ir iutt of Foreign Curr^'icies Ir.co.tc >iat oir.crit.* u< foroi;n currencies are rra ;>laicd 1 into sti'riin: r. tin* av 'v.'.cc- rate.*? applicable tc 'he respective ucccuni ir,: per ion*. Assets, and liabilities i are translated into rterli -t at the rates cf ccch:n;r i;v efii'c; .:i t;*e date* ot ihe respective bal.rvc ?i.ccts. D i f C *'T ; v e;wis;n: ;'ro:r changes in exchange rites are 1 included m nicore uhrrt* relate n current .<.<'; s and l *. a hi L i t i c - : net differences arising; on t rails la x .on I of long term a>sots ami 1 l 11 i os . including. in *.hv parent company '.idiiKO sheer, <ljus tner.t 5 to the hook 1 valuer of outs'.ms subs t ci iar i as , are taken directly to incone retained and other reserves. 1 \otc H - Net Income; ! K and Account m? Principles The fin.anri.il siaiemeuis included in this report arc B prepared i : a c c **ar c o ''it!', accounting pri.ici; les generally accepted m the United Kingdom. However, in I preparing such financial statements for the purpose of this report, certain changes in presentation have locr. made to the accounts previously presented to Shareholders* I There are some ail Terences between accounting principles genera 1ly accepted in the United Kingdom and' those'generally e accepted ir. the United States. The application of U.S- accountinc standards would not have materially affected net a income, except for the foreign currency translation method establisned in Statement Kusier 8 of the (U.2.) financial i Accounting Standards Doart. Adoption of this method would have reeveed 1976 income before extraordinary items by 85 million trillion), extraordinary iier.s by 11 million i {$? million), and net income by ?^ million (.? 126 million). Tr.e reduction to net income in 1975 was 25 million i (tf'iS million). (See also N'ote G for treatment of extraordinary items ana Note U for the principal effects cn consolidated i capital and reserves). jj IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued' In the financial statements submitted to the Securities and Exchange Commission in respect of the year ended December 31, 1975, re statement of net income previously reported to shareholders was necessary to give effect to the United Kingdom accounting standard relating to the treatment of regional development grants. In the financial statements now submitted for the two years ended December 31, 1976, no such restatement has been made as the above-aentioned accounting standard has been complied with ir. arriving at net income reported to shareholders. Note C - Investment Income Investment income comprises: Inter:.-t, principally on short-term investments Dividends, including amounts from Carrington Viyella Ltd (see Note 0) Vote D - Interest Expense 1975 1976 (i mill 10P.) 1975 1976 $ million) 30 42 51 71 9 -- 39 -. 11 -- 53 1 '' " 15 ---- 66 ' 19 -- 90 Interest expenses is a$ follows: 1979 1976 ( million) 1975 1976 million) Long-term debt Short-term borrowing 37 16 -- 73 = 75 97 18 -- 27 ---- 93 124 ------- 127 31 - 158 3^ IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued; Note E - Employees' Profit-Sharing Borua The employees of ICI and certain UK subsidiaries are covered by profit-sharing plans under which they may receive an annual bonus. The bonus, which is at the discretion of the Dord oi Directors, is declared as a percentage of each employee's earnings for the year. Employees receive their bonuses largely in the form of Ordinary Stock of ICI, the amount of stock issued being determined on the basis of the average market price. The rate of bonus under the main plan was 5^ for 1975 and 7% for 1976. Note F - Income Taxes Taxes on income, less grants, charged to earnings were as follows: 1975 1976 (million; 1975 1976 (%million) United Kingdom: Corporation tax Foreign tax credits Deferred taxes due to: Accelerated tax depreciation Ralief for inventories Other timing differences Overseas: 45 (1M 50 9 11 -- 101 93 (25) 60 51 (9) ' - - 170 77 (24) 85 15 19 ---- 172 158 (43) 102 87 (15) -- 239 Overseas taxes Deferred taxes 35 48 59 82 6 5 10 8 Principal associated companies Taxes before UK grants Less: UK grants Investment grants Regional development grants 142 6 ---- 148 (18) (5) -- 125 223 13 - 236 (l4) (8) -- 241 10 --.. 251 (3d (8) -- 2X3 same 379 22 -- 401 (2M (13) -- 364 35 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) UK and overseas taxation has been provided cn the profits earned for the periods covered by the accounts. UK corporation tax is provided each year at estimated rates, the provision being adjusted in the following year in the light of the actual rate payable which normally is set by the UK Government subsequent to the time the Group accounts are closed. The table below relates the current UK corporation tax rate of 52% to the effective rates obtained by computing the tax charge as a percentage of income before taxes. For the purpose of this reconciliation, grants have been included in income before tax and excluded from income tax expense. UK corporation tax rate Excess of tax depreciation over book depreciation Losses not yet relieved Difference in tax rates of overseas companies Gains on foreign currency translation not taxable Under/(Over)-provision of prior years Other Tax charged as percentage of income before taxes after adjusting for grants 1975 52.0% 1976 52.0% (6-2) 3.1 (4.4) .2 (1.5) (.3) (4.3) - 43.1% (5.2) (.5) .2 42.0% Under the UK Finance Act of 1972, advance corporation tax, which is paid to the Inland Revc: ue in respect of dividends (see Note H) , can bfs credited against future tax liabilities. Accordingly, in the statement of financial position, advance corporation tax on dividends payable is included as an addition to current taxes payable and as a reduction of deferred taxes. 36 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) The following tables summarize the deferred taxes included in the statements of financial position: UK corporation tax payable January 1, 1977 Deferments due to: Accelerated tax depreciation Relief for inventories Other timing differences Advance corporation tax recoverable UK corporation tax payable January 1, 1978 Deferments due to: Accelerated tax depreciation Relief for inventories Other timing differences Advance corporation tax recoverable December 31, 1975 Group ICI Group ICI ( million) ($ million) 12 1 20 2 159 70 (7) (22) 212 136 54 (14) (13) 164 270 119 (12) (37) 360 231 92 (24) (22) 279 December 31, 1976 Group ICI Group ICI ( million) (5 million) 12 2 20 3 231 122 (28) (29) 303 194 92 (31) (20) 227 393 208 (48) (49) 524 330 157 (53) (34) 403 The amount shown in each year above for deferments due to accelerated tax depreciation is, in the case of ICI, the sum of the UK adjustments made each year at the tax rates applicable to those years; the amount shown for the Group includes the sum of the overseas adjustments. Part of the liability for UK Corporation Tax on 1975 and 1976 income is treated as deferred under the provisions of the 1976 Finance Act which granted relief in respect of the increased value of inventories as a result of inflation. The relief is based on the increase in the value of inventories during the period, reduced by 15% of taxable trading income (after deduction of capital allowance 37 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) Note K - Receivables Receivables at December 31, 1975 and 1976 are sunup:'rized as follows:- Qroup 1975 1976 ( million! ICI 1975 1976 ( million) Trade accounts Less : Amounts set aside for doubtful accounts 596 (22) 787 (29) 10* - k* - Loan; to employees Prepaid expenses. 0:her receivables 57s 758 10 k 22 - - ik 19 6 a 102 128 30 37 Due from principal associated companies 692 907 46 k9 19 18 5 7 711 925 51 56 Group 1973 '976 (2 iuiil-on) Trade accounts 1,013 1.338 Less: Amounts set aside for doubtful accounts (37) (49) ICI 1975 1976 (2 million) 17- 7* Loans to employees Prepaid expenses Other receivables 976 1,289 17 ( 33 -2k TO 10 13 173 2 IB 51 o3 Due from principal associated companies 1,176 1,5k2 78 83 33 30 9 12 1,209 1,572 87 95 Included in the Group 1976 column above are trade and other accounts maturing more than one year after December 31, 1976 which amounted to 33 million (256 million). Corr esponding figures at December 31, 1975 wre 16 million * As the result of a factoring agreement entered into With a wholly-owned consolidated UK subsidiary by the parent company and certain other wholly-owned consolidated UK subsidiaries, trade accounts of 207 million (2352 million) at December 311 1975 and 273 million (2k6k million) at December 31. 1976, which have been transferred to that subsidiary are included with "Interest in Subsidiaries" in the parent company statement of financial position. *10 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) To the extent that dividends from overseas subsidiaries and principal associated companies are expected to result in additional taxes, appropriate amounts have been provided. No taxes have been provided for unremitted earnings since such amounts are considered permanently re-invested by subsidiaries and in the case of principal associated companies the taxes would net be material. Cumulative unremitted earnings of overseas subsidiaries, totalled approximately 385 million (#655 million) at December 31, 1976; the remittance of these amounts would incur tax at substantially lower than normal rates after giving effect to foreign tax credits. NOTE G - Extraordinary Items Tha amounts shown in the table below have been classified as extraordinary items. Under DS generally accepted accounting principles the items so classified would have been included in income before extraordinary items. 1975 1976 ( million) Gooh/ill written off new subsidiaries Provisions against investments Provisions for restructuring of Fibres business in UK and Continental Western Europe Profit on disposal of properties (8) (5) (1) (5) (36) 5 Profit after taxation of certain subsidiaries, mainly in Europe and USA, for the three months to December 31. 1974, dealt with as an extraordinary item following change in accounting datel 4 Other (1) 1975 1976 (5 million) (14) (2) (8) (8) (62) 9 7 (2) (1) (46) (2) _ (78) 38 IMPERIAL CHEMICAL INDUSTRIES LIFTED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TC FINANCIAL STATEMENTS (continued) Note H - Dividends As a result of the United Kingdom Finance Act of 1972, income tax has not been wit held from dividends paid after April 5. 1973- However, the shareholder, when receiving a dividend, receives an imputed tax credit against his personal tax liability. The equivalent gross rates of ICI's Ordinary dividends were 18. 1912p (31c ) in 1975 end 22.739p (39c ) in 1976- Dividends have been and continue to be subject, to limitation under UK counter-inflation legislation- Note I - Pension Expense Pension expense (charged in arriving at trading profit) for the years ended December 31, 1975 and 1976 was 70 million (?119 million) and 77 million (2131 million) respectively, including a contribution of 10 million (217 million) in 1975 to a pension fund for senior employees which was set up in 1973- Note J - Earnings per l Oral ary stock Net income and extraordinary items per l unit of Ordinary stock have been calculated by dividing amounts applicable to Ordinary shareholders (after deducting dividends on Preference stock of -3 million (2-5 million)) by the weighted average number of Ordinary stock units outstanding for each year adjusted to give affect to the bonus element, arising from the fact that the issue price was less than the market price, in the rights issue made in 1976. 39 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continjec! Note L - Inventories Inventories at December 31, 1975 and 1976 were as follows: Finished goods Raw materials a,id others Finished goods Raw materials and others Group 1975 1976 < million) ICI 1975 1976 (I million) 409 334 495 413 166 148 202 185 743 908 314 387 (2 million) 695 842 965 702 l.lh) 1,544 (2 mi llion) 232 343 252 315 534 658 Certain inventories previously classified as finished Koods are now reclassified as raw materials and other inventories. The value of these inventories was 29 million at December 31, 1975, and comparative figures have been amended accord ingly. Inventories used in computation of cost of sales in the Consolidated Statement of Income were as follows: December December December 31, 31, 31, 1974 197 3 1976 ( million) 676 743 908 (g million) 1,149 1,263 1,544 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED ADD SUBSIDIARIES NOTES TO FINANCIAL SIRTFHE3T3 (continued) Note M - Shcrt-tejra Narrowings Of the 125 million ($212 million) payable to banks at December 31, 1976, 15 million ($26 million' was secured by property ar-.u plant (see Note R) . Secured borrowings payable to banks at December 31, 1975 were 12 million ($20 million) out of 108 million ($1B4 million) . Banks Other The average interest rates at December 31, 1975 and 1976 or. short-term borrowings were as follows.- Group 975 1976 11.5% 14.1% 6.9% 11.4% 11 1975 1976 11.8% 15.0% The maximum amount of short-term borrowings outstanding during 1576 was 211 million ($355 million) (Group) and 60 million ($102 million) (ICI); the average aggregate, based on ronth-end figures, was 168 million ($286 million) (Group) and 47 million ($80 million) (ICI) at a weighted average interest rate of 12.2% (Group) and 12.7% (ICI) . In 1975 the maximum outstanding was 179 million ($304 million) (Grcup) and 51 million ($87 million) (ICI) ; the average aggregrate was 155 million ($264 million) (Group) and ?9 million ($66 million) (ICI) at a weighted average interest rate of 11.5% (Group) and 11.0% (ICI). Unused lines of credit at December 31, 1976 amounted to approximately 357 million (S607 .lillion) (Group) and 5 million ($9 million) (ICI) . Corresponding figures at December 31, 1975 were 369 million ($627 million) (Group) and 5 million ($9 million) (ICI) . Commitment fees ranging from )s% to 1*5% were payable on about 7% of lines outstanding at December 31, 1976. 42 .IMPERIAL CHEMICAL INDUSTRIES LIMITED AMD IMPERIAL CHEMICAL IHDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) Note N - Accounts payable and accrued expenses At December 31. 1975 and 1976, accounts payable and accrued expenses were ccspriseu as follows: Trade accounts Accrued salaries and wages Accrued interest Other Due to principal associated companies Group 1975 1976 ( million) 309 33 21 154 403 43 29 246 517 721 66 523 727 ICI 1975 1976 ( million) 131 16 8 58 168 15 9 96 213 288 52 218 290 Trade accounts Accrued salaries and wages Accrued interest Other Due to principal associated companies (5 *i llion) 525 56 36 262 685 73 49 419 879 1,226 10 10 889 1,236 (S Mill ion) 223 27 U 98 2P6 26 15 163 362 490 93 371 493 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) Note 0 - Interest in Subsidiaries Subsidiary net consolidated - Carrington Viyel.'a Ltd. In /iew of c.n undertaking givsn by ICI to the JX Government in 1970 that it would not exercise more votes in Carrington Viyella Ltd thau it would if its holding were 35 per cent (holding at December , 1976 was 63*. subsequently reduced tc i*9r4 on May 9, 1977). the accounts of Carrington Viyella Ltd and its subsidiaries have not been consolidated in the Group accounts of ICI. The Group's interest in Carrington. Viyella Ltd at December 31, 1976 amounted to 59 million i?100 million), comprising cost of shares 56 million (395 million) and net indebtedness 3 million (35 million). The net tangible assets attributable to such shareholding amounted to approximately ^1 million (370 million) at December 31, 1976 and the market value of the shares based on Stock Exchange quotation in London at the same date was 19 million (332 million). Corresponding figures at December 31, 1975 were Group interest 57 million (397 million) comprising cost of snares 55 million (39^ million), and net indebtedness 2 million (33 million), net tangible assets approximately 33 million (356 million) and market value 27 million (3^6 million). Summarized financial information relating to Carrington Viyella Ltd and its subsidiaries is as follows: Sales Net income Group's equity in net Dividends received by income Group 233 2 1 1 278 5 3 2 396 3 2 2 ^73 8 5 3 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (sontlnufd) Net current assets Property, plant and equipment Long-term debt Deferred tuxes and grants Less: Minority interest Preference shares (none held by ICI Croup) Net tangible assets applicable to holders of Ordinary stock ICI Group's equity therein December 51 1975 1976 nr min ion) 60 58 (36) (18) 63 69 (39) (22) 64 (2) ?6 (3) Uecembe - 31 1976 (7*"ail lion) id 9.- (6 .) (3D 116 117 (66) 33) 109 (3) 129 (5) (10) (ic) (17) (17) 52 63 89 107 33 s 1 56 7C Interests in subsidiaries - Parent Company In ICI's accounts investments in Subsidiaries re carried at cost (adjusted for exchaige rate move ments) less allowance for losses where appropriate and comprir.e: Shares ut adjusted cost less allowances Capitalized post-acquisition retained earnings recognized in ICI's accounts Booh value of shares Amounts owed by subsidiaries Amounts owed to subsidiaries Total book value of investments per ICI balance sheet 1975 1976 (Imillion) 1Q75 1976 294 *t49 500 18 312 679 (266) 25 31 474 907 (434) 531 1,154 (452: 4: 806 1,542 (738) 725 947 1,233 1,610 Note P - Other iior.-carrent Investments Included in other non-current investments are: CROUP 1975 1976 (i. million) Principal associated companies Other investments 245 306 ICI 1975 1976 ( million) 36 45 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) GROUP 1975 1976 ~TTmillion) ICI 1975 1976 (fmillion) Principal associated companies Other investments 276 379 5k 66 lk 1 :4l 70 84 417 `- - 520 12k 150 - Summarised combined financial information relating to the principal associated companies, which are accounted for on the equity method, is given below; this is based on the latent available information which in most cases is as of dates earlier than December 31. Se les Income before taxes Group's equity in income before taxes Net income Group's equity in net income Dividends received by Group 1975 1976 ( million) 935 60 1,172 78 2k 30 k5 kk 18 17 8 14 1975 1976 (? million) 1,589 102 i,9?2 133 41 51 77 75 31 29 14 24 Net current assets Property, plant and equipment Other assets Long- term debt Other lon;5-tera liabilities Net assets Group 's equity in net arsets December 31 1975 1976 ( million) 219 489 52 (236) (81) 226 566 49 (256) (103) 443 482 176 192 December 31 1975 1976 {$ million) 372 831 89 (401) (138) 304 962 83 (435) (175) 753 819 299 326 At December 31, 1976 income retained and other reserves of the Group included 117million (?199 million) applicable to principal associated companies; the correspording figure at December 31, 1975 was 90 million (JS153 million). 46 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) Note Q - Property, plant and equipment The major classifications of property, plant and equipment are as follows: Land Buildings Plant and equipment GROUP 1971 _l76 ( mi llionT 9*4 m 2,316 137 57*4 2,765 ICI 1975 1976 .(EmillionT 9 200 1 ,*47*4 9 211 1,670 At cost or as revalued Less: Accumulated depreciation: Buildings Plant and equipment 2,884 3,**76 1,683 1,890 ( 193) (257) ( 1,261) (1, *486) (103) (801 4 ( 1 12) (876) Net book value 1, *t25 1,733 779 902 Land Buildings Plant and equipment At cost or as revalued Less: Accumulated depreciation: Buildings Plant and Equipment Net book value (2 million) l6o 806 3.937 233 976 *4,700 *4,903 5,909 ( million) 15 3*40 2.506 15 359 2,839 2,86l 3,213 ( 337) (*437 ) (175) (191) (2,1*4*4) (2,526) (1,362) (l,*489 ) 2, *422 2,9*46 1,32*4 1,533 Assets are stated at cost or where appropriate at revalued amounts. ICI revalued the major part of its assets in 1958. The basis of that revaluation was an estimate of what it would then have cost to erect the plants or otherwise replace their productive capacity. This gross value was then reduced to take into account the expired lives of the assets and their estimated future working lives, due allowance being given to the technical and commercial factors likely to influence future use of the assets. There have also been from time to time revaluations by various subsidiaries, including in 197*4 an upward valuation by some of ICI's Australian subsidiaries of approximately *40 million (.68 million). At December 31, 1976 the net book value of assets :o revalued was as follows: <47 IMPERIAL CHEMICAL IMH'STJUES LPIJTED A\0 IMPERIAL CHEMICAL INOtSlULES LIML1ED A\D SUBSIDIARIES NOTES TO FINANCIAL STA1 MENT5 (continued) Intangible asacta "u h .ia pa t * n * in<( trade murk* arc- included in ol ant and eu*i i pc.cut a: net Look vjIui? and .ire not material m .iT.ouru . Note K - Lon:tcrin Debt Lonj-term debt including cun e::i maturities *as as follows at December 31 i t *) ~ 5 and 1276: In f ere* t Hate Descncuon Mu ujntic.' Secured Loans 3 ' wj to 2'. i. * to 5'i to li'-. ITi i i od Sin ;dcm Australia 0 tb.er ci*-j nines i,:77/-i>0 l i""7/2oo-- i >77/ . Tocal Securcd Loa i: a P 10 75 ; 97b i sillioni 1-77 10"c 1 - mil lion 1 l1 t b 7c !' f ' n ,, _ Lu 100 _ ' _ Unsecured Loans Inn rd K_Lntdom l_l 1 r ) Loan Stoc .< La f i St jCki 7 Loa n ^ 1 U .V U 0 Loan StOCk 10/, Loan Stock 3 j Loan Stock 5C to 1-Vo Other Loar-s *') 77 1'U. 1 3 i" ^ *. dot* V lo77/dCOn 13 i7 > AS 7 l 7 l 59 .-M 10 10 - - bO bO nO -C t 3 '< J '* 3 ", 2b 2o 2b 2 f*j 20 lo o 6 Overseas t) ij; E 'M c^ * c. C:j < ''> :t to 10b 6 >- 7 -9 9.0 5* 6.7i io 12*S 7 `if* to 73* 5;ei to 7 `9 5?^ to 9ri 2' to \5i`l Euro^ilo 1 lar bonds Deutsche Mark bonds Dcu t s- c .i c v!ar!; Loud.Slot* iinc/Ueutsche .Mark bonds Deutsche Mark bonds Deutsche Mark l.c 'ds Swiss Franc loans Deutsche Mark bonds Euro-collar bones l' Dollar bonds .Xus tralia Canada Ho Iland USA Others v;"'}/; :2 ' 7 - /<-,, 1-177/1200 1277/ i i')/i/ i <>-;>/ 127o/l')')2 19 7b/ 1977/1255 1977/ 1989 ls77/ 12io 1977/ l'lSL 1977/1990 1977/1989 Total Unsecured Loans Total Long-term Deb c -- 2'il - -- 13 tB i;> 15 to 2 'i 25 23 \=i - 7 - 05 ou 100 '.9 2 5 -" o-- 4 9 5^ 10 i i -5 55 29 04 90 105 7H 102 58 1 093 72 9 9 35 810 1,034 ZZZZ AJ I O Jr- 1 207 ------- 13 _ _ - 53 _ _ 39 97 30-'t 20" -- IS - - - 55 _ _ _ _ _ 17 120 307 307 -- ^9 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) Summerv of table above, expressed in U.S. dollars Secured Lcins United Kingdom Overseas GROUP 1975. 1976 (*million) 2 199 2 168 ICI 1975 1976 l* million) -- -- Total Secured Loans 196 170 - - Unsecured Loans United Kingdom Overseas Total Unsecured Loans Total Long-term Debt 913 8l8 1,231 1,177 '*10 1 . 178 1.588 1,758 352 165 517 517 352 209 >56 556 These debts and the secured short-term borrowings referred to in Note M were secured by buildings, plant, etc.. with a net book value at December 311 1976 of 559 million (*950 million) and at December 31, 1975 of 983 million (*821 million). The maturities to 1980 and thereafter are as follows : GROUP ICI GROUP ICI ( million) ( * mi llion) 1977 1978 1979 1980 1981 Therafter 65 30 1 36 82 780 39 2 3 2 47 239 111 51 70 61 139 1,326 58 3 5 3 80 907 1,039 327 1.758 556 Note S - Leases Leise payments for the years ended 31 December 1975 and 1976 were 9l million. (*70 million) and 51 million (87 million) respectively. At December 31, 1976 the Group was committed to various non-cancellable leases of buildings, plant and equipment, including transportation equipment, which require aggregate rental payments as follows:- IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) Years ending December 11 NonCapi . ali ted F inancmg Leases Other Leases (1 million) Total NonCapitali zed Finaneing Leases Other Leases a mi1lion) Total 1977 1978 1979 198O 1981 1082 - 1986 1987 - 1991 1992 - 1996 remainder l4 10 10 6 6 26 *" 12 h5 11 25 24 9 19 17 b 16 17 Sr 11 10 4 10 10 s 34 kk 4 21 29 3 15 20 4 49 77 19 43 15 *> *) 10 27 8 18 7 17 14 53 7 36 5 25 7 84 cubstantially all of the above relates to ICI The impact on net income of treating non-capitalized financing leases as investments in fixed assets and debt would be less than 3^ of the average net income for the three years ended December 31. 197b. Note T - Commitments and ~ i.tingent Liabilities Contracts placed for future capital expenditure on fixed assets GROUP 1975 -976 IE million) 202 190 Commitments to acquire share and loan capital in subsidiary and other companies --0 ej 2 227 192 ICI 1975 1976 l million) 160 140 r% | r` 183 4 144 <* mi 1lion) Contracts placed for fufu'e capital expenditure on fixed assets 343 323 Coonitments to acquire share and loan capital m subsidiary and other companies 43 3 386 326 (% million) 272 238 39 311 7 245 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) In addition to '-he above commitments, future capital expenditures had been authorized at December 31, 1976 in amounts of 463 million ($ 821 million) (Group) and 239 million ($491 million) (ICI) for which contracts had not be;n signed. Corresponding figures at December 31, 1975 were 393 million ($668 million) (Group) and 272 million ($462 million) (ICI). Contingent liabilities existed at December 31. 1975 and 1976 in connection with (a) guarantees and uncalled capital relating to subsidiary and other companies, the maximum liability in respect of which at December 31, 1976 would be 67 million ($114 million) for the Group and 587 million ($998 million) for ICI (of which 525 million (S893 million) relates to borrowings by subsidiaries). At December 31, 1975 corresponding figure; were 31 million ($S3 million) for the Group and 419 million ($712 million) for ICI (of which 398 million ($677 million) related to borrowings by subsidiaries), (b) guarantees relating to the solvency of Pension Funds and (c' other guarantees and contingencies arising in the ordinary course of business. Note U - Differences between UK and US Accounting Principles Further to Note B above, the following are the principal effects on consolidated capital and reserves at December 31, 1975 and 1976 of the application of accounting principles generally accepted in the US. 52 / IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) So.e V - Supplementary Income Statement Information The following amounts were charged to costs and expenses in the Consolidated Statement of Income: Year ended December 31 1975 1?76 ( million) Year ended December 31 1975 1976 ($ million) Maintenance and repairs Research and development Taxes, other than income costs taxes 207 111 78 248 137 104 352 (89 133 422 233 17/ Depreciation and amortisation of intangible assets, adv*rtising costs and royalty expense were each less than lS'of total sales. Note V - Parent Company Statements of Income. Income Retained and Other Reserves, and Source and Application of Funds STATEMENT OF INCOME - PARENT COMPANY Year ended December 31 1976 li million) Y ear ended December 31 1975 1976 i$ million) Sales 1,529 2,012 2,599 3.421 Cost of sales, exclusive of depreciation Depreciation Selling, general and administrative expenses Royalty income Other income 1 .let) 970 108 1,254 107 1,649 184 2,132 182 338 (15) (10) 437 (21) (13) 574 (26) (17) 743 (36) (22) 1,391 1,764 2,364 2,999 Trading profit Investment in'.ome Interest expense Employees' profit-sLaring bonus Income before taxes on income and extraordinary items Taxes on income, less grants 138 75 (22) (15) 176 4V 248 103 (27) (24) 235 127 (37) (2D) 300 100 299 80 422 175 (46) (41) 510 170 Income before extraordinary items Extraordinary items 129 (6) 200 (93) 219 (10) 340 (158) Net income 123 107 209 182 Investment income consists principally of dividends and interest from consolidated subsidiaries. The low effective tax rate results principally from investment grants and regional develop ment gran.s being reflected as a reduction of the charge for taxes on income. 54 AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued. Extraordinary items coasritcd tue following: Provisions against investments including subsidiaries Other provisions Year ended Dcabr 31 1975 1976 (1 million) Tear ended December 51 1975 1976 ($aillion) (6) (6) (66) (7) (93) ( 10) ( 10) (146) ( 12) (158) STATEMENT OF INCOME RETAINED AND OTHr. RESERVES -- PARENT COMPANY Balance at beginning of year Net income Less dividend' Income retained Exchange adjustments - net Other movements Balance at end of year Year ended December 31 1975 1976 ( million) 395 473 123 59 107 83 64 24 13 29 1O 473 528 Year ended December 31 1975 1976 ($Billion) 671 804 209 IOO 182 141 109 -9 41 49 4 804 398 55 < IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) STATEMENT OF 5CUP.CE ANC APPLICATION OF FUNDS - TARENT COMPANY Source of funds: Ir.co before extraordinary items Aad/(deduct) items not affecting funds: Depreciation charged Current and deferred tax movements Coverneent grant movements Others fttr ecd<d December 31 1975 1976 trillion) 119 200 lv3 :b 3 (=) 1C7 80 6 ? Total funds provided by operations Issues of Ordinary stock Long-terra debt issued Deferred liabilities 299 15 25 - i02 :.o6 - 659 Year ended December 31 197S 1976 2 lb i89 95 5 (3) 500 2b 92 - 568 3^0 132 `06 10 lo 689 350 99 1,076 131 Application of funds: Dividends Additions to property, plant and equipment Repayment uf long-term debt Other investments, including investments 1/1 subsidiaii es Increase in working capital 5> 219 1 (9) 275 59 83 297 " 266 59b 33 100 373 "> (7) .68 100 19 1 920 9 52 l.Oi; 65 Composition of increase iu working capital: Net liquid resources Cash Time deposits (2) (6) Short-term investments 7 Short-term borrowings ( 17) Iavmitorlaa Receivable* Payable* (18) 30 (6) 53 59 - 93 1 n9 5 (86) 38 (9) ( 10 > 12 (29) (3D 51 ( 10) 90 100 - 73 75 128 8 ( 196) 65 56 IMPERIAL CHEMJ'.AL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO rIKANCIAL STATEMENTS (continued) Note X - Replacement Coat Data Unaudited) The replacement cost information contained in th. note is pt _vid- J in compliance with the rules of the Secuiities and Exchange Comn-iss i>m. The information cove s the world*!'!- interests of Imperial Chemical Industries 1's;*. ;>1 and its consolidated subsidiaries. Depreciation expense and coat of sales in foreign currencies are translated into sterling at the average rates applicable to the respective accounting periods. Assets are translated into sterling at the rates of exchange in effect at the dates of the respective balance sheets. 1 Buildings. Plant and Equipment The table below snows a compans.-'. between the gross book value of Buildings, Plsrt inri Equipment all as contained ir. . ,t balance sheet of the Company and its consolidated subsiuianes at December 31. 1976. or.d the approxi.mat s . cost of replacing chese assets at the prirrs existing at this date. Construction in process has Laen indexed from the respective dates of expenditure. Also shown is the related accumulated depreciation provided on the book value of the assets compared with the accumulated depreciation that would have been provided had it been based on such '[placement costs. Accumulated depreciation on a replacement cost basis was estimated for the puruse cf this dis closure by determining the percentage of historic!1 cost accumulated depreciation i -> historical cost gross values. This percentage was aoplied to the gross values, on a replacement cost basis, it December 31. 1976. Historical Rep lacement Cost ______ Cast Dross values as at ( million) i ir.i 1 lion) December 31. 1976 Buildings Plant and Equipment 2 76o 1.500 ,r oo Less: Accumulated depreciation Net values as at December 31. 1576 3-339 1.733 1.601 Gross values as at December 31. 1976 Bui1 dings Plant and Equipment ( % million) 976 e ,700 Less: Accumulated depreciation Net values as at December 31- 1976 5,676 2,95** 2,7U2 7,700 !f . 000 3,720 .? million) 2,350 10,590 13,090 6,300 6,290 The replacement costs shown above have been estimated ou the following basis: Buildings. Building' which, due to location and construction have a readily ascertainable open market value, have been shown on this basis Buildings on works sites, special purpose buildings, end other buildings which do not have- a readily ascertainable market value r:a\ e been treated on the same basis ns plant (see below). Plant anti Equipment. Replacement costs have been estimated 0.1 the basis of -op lacing plant and equipment to serve the same purpose or 57 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (continued) give the same output. Replacement costs include allowances for changes in technology and some rationalisation of plants and sites. The technology adopted is proven and meets with current environmental and safety requirements. Any rationalisation assumed is practicable, realisable, economic and in accord with the approved policy of the Company or subsidiary, as the case may be. Certain minor assets which the Group does not int:nd to replace have been included at net realizable values. Depreciation expense The following figures compare tne depreciation expense as shown in the income--statement of the Company and its consolidated subsidiaries for the year ended December 31, 19/6, with the depreciation expense computed on tne replacement costs shown in 1 above. Depreciation expense on 3 replacement cost basis was estimated for the purpose of ch's disclosure ay determining the percentage of historical cost depreciation to historical cost gross values. This percentage was applied to the average of the gross values, on a replacement cost basis, at the beginning and end of the year. _ D-preciation expense - for year ended December 31, 1976 Historical Cost ( million; (2 million) 205 348 Replacement Cost ( million) . % million) 425 722 Asset lives For the purpose of an exposure draft for a UK accounting standard published on November 30> 1976 the total and remaining lives of all assets are being re-assessed taking into account technical and commercial obsolescence and physical condition. Normal main tenance is t-eing assumed and consideration given to raw materials, ma-ket safety and the environment. The preliminary results of this re-assesjment indicate tn.it the lives may be longer than those currently adopted m the historical cost accounts, but it is considered that it would be premature at this stage for these longer lives to be used for the purpose of accumulated depreciation and annual depreciation expense in the above replacement cost disclosures. The management has not yet examined the results in detail, but preliminary estimates given to shareholders in the report for the year ended December 31, 1976 showed that, if the extended asset lives indicated by the re-assessment referred to above were applied to the replacement cost . shown in 1 above, the net values at December 31, 1976 on a replacement cost basis would be approximately 4,000 million (?6,800 million) and depreciation expense for the year ended December 311 1976 on a replacement cost, basis would be approximately 333 million (?570 million). 4. Inventories The replacement cost of inventories as at December 31, 1976, has been calculated on the basis of costs and prices existing at the end of tht accounting period. Replacement cost depreciation has been included where appropriate. In the case of finished goods, net realizable value has been included in the inventory where this value is lower than replacement cost. 58 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS Icmtinued) _ Inventories - as at December 1976 31. Historical Replacement Cost_________________________________ Cost ( million) ($ million/ ( million) 1$ million) 908 1,54*1 960 1,632 Cost of sales The cost of sales (excluding depreciation), 03 appearing in the consolidated statement of income, has been recalculated to show the replacement cost at the time of- sale. For the majority of items in the inventory, the calculation to convert cost of sales to a replacement cost basis recognize* specific price movements. Minor items are converted using prices indices. Historical . Replacement Co 31Cost ( million) (? million.- ( million) (JJ million) : ost of sales (excluding depreciation) - for the year ended December 31, 1976 2,662 4,525 2,730 4,641 General This note in no vay implies that the Group has present plans to replace the assets for which replacement costs have been presented or that future replacement would the place in the form and manner assumed in these estimates. Replacement can only take place over a period of years at prices then ruling; these could be significantly different from the prices embodied in these estimates. Differences between the historical costs and the replacement costs of assets indicate the additional capital that would have to be invested if the assets in question were to be replaced at December 31, 1976-- they must not be taken as representing an increment to the value of The Company's Ordinarystock. The replacement cost information presented in this document, is confined to inventories, buildings, plant and equipment. It is not require 1 to reflect all the effects of inflation and other economi: factors on the current costs of operating the business. This information cannot therefore be used alone to impute the total effect of inflation on net income as reported. It should also be noted that the effect on net income of any operating savings arising from the utilisation of the most up-to-date technology in plant design and operation and the rationalisation in location assumed in the fixed asset replacements have not been assessed. The following table reconciles the historical cost amounts for which replacement costs are provided with the related totals shown in the consolidated financial statements. "\ * i 4 a ZXPtRXAL GfDGCAL IXDCSTHItS LXXXTtD - F4RIXT COKSAITT 175 iAhalula III joaxcu xn-ixYtiTxrsTs is. iquitt is tARariscs or. ajd oxvxotras acxrvto raon axilla to axd othm mscss it nil'**] Balanca l bo|tiUA| of porto Addition* I --j*-u-ab17o1r of trr iMr* or ua ta Priacipal IXaM of l4IUr nd Joacriptioo of li.r*trMti MOuat of bond* rad not** f jitor-ot t> XCZ f:nMc* SubitdiTH* Ltd 100% 1,000.000 Karoo of I" ICI latorMtionol i finance Led JC3S 12,090 thoroi of I CS#1 I Imperial Hot*l ladutn** Ltd 6o.8l% *3.562.*97 (Karoo f 2)p 135) 5' Adal* .r.oal Zqulty ICI I Ko 1 din ga* L t a 100% 3.150 horoa 10 of }2 Advesi* 2 Ooutache ( Cmtt ICI 90.51% D* 229.500.000 of atocli *9 Loan Capitalized 8 AdVM* 11 Currency r*lu- itlM 3 OaOuc tlorn Adtraac* Advuca Prowlaloa &*Um at nd of pariad D; n<*d * rocoirod Atrtai cho pariod fron ia**fUoat* Mt ccoat*d for by t># *duity Mthod So chanfo fron B( tl 9)7 So CAtft|* fron B(1) U57) 2 62.79% >0 101.773.SOB >Karaa of 25p * So change fron 1 l; 39 1 91.96% DW57,500,000 of atock 110 ;c: MolAAAd BY 200% 36 7.',000 aKtraa of Cuildora U-OO IICI Autrili* 5*.5f>% 39.040. }t>0 52 tKoroc of LSI 22 Currmmey re-ralaatioo Ad*anca 1 Additional Equity Admac* Cu-roacy rrrlu atlw 3 1 5 ' 2 So c (waive a fron B( 1) 62. 39^9 91.333.692 Kara# of Af 1 37 61 ICI Sorch IOC* 75 Adnaca Aoric Ltd 100 atw-r "4 of 9 7 - - So cKanga fron 0(1) 1 Other* - 33 --27 _ -- '.V ana far Iron Advaac a 60 akaldlarl** Sadanptlon of Carrana7 revalue . Prefer nc* tioa 9 Additional Equity 3 Sow Vcbaldlariaa 9 Stack Dlrldonda aKaraa bra<l*lat 2 1 -- Capitalized 1 ; Capitalized 9 . 27 ^^_. n 90 ^nt*r*t la Otbar tad Currwt Irreeatnonta n IVu *1 aloft* rmlu< 2 99 _--, 725 75 Stock DlrlkMd CapAtalinod 1 Additional lnilty 1 Tranofor fro* nkaldldrl** 2 Colm* CC1) I aro *S0SX', h 0(1) t&a vr* to wtLich baeo on111od Schedule V IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES | SCHEDULE V - PROPERTY , PLANT AND ECLIPSENT ( mi Hi oil) I it!-C---O---L--U---M---N------A--------------------------- COLUMN 9 COLUMN C COLUMN b COLUMN E COLUMN f BaJance Additions January 1 st cost Retireasents Other Balance Changer(a)Jecember 31 1976 Land ................................................................. BSuildings ................................................ Plant and Equipment............... 94 474 2,31$ I TOTAL ........................................ 2,884 33 44 36l 436 2 10 (45) ( 33) & 46 133 187 07 574 2,765 3,L7b 1975 Land ................................................................. jfeuildings................................................... Plant and Equipment .... s TOTAL 8* 424 1,997 2,505 34 29 3 332 (2) 18) (45) (55) 7 24 71 102 94 474 2,316 2,624 .^COLUMN A IMPERIAL CHEMICAL INDUSTRIES LIMITED - PARENT COMPANY SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT ( million) COLUMN 3 COLUMN C COLUMN D COLUMN E COLUMN / Balanco Additions Retire Other Balance ! January 1 at cost ments Changes)a )December 31 A976 ll-and .................................................... Buildings ................................. Plant 6 and Equipment ______ TOTAL .......................... 1,474 s 1975 Land ................................................... Buildings ...................... Plant and Equipment ______ 1 TOTAL........................................ 1,291 1,485 14 233 247 - (2) (38) (40) ( 1' - 1 - V 21 1,670 1,890 1 13 204 218 - 1 (21) (20) _ 10 - 199 1,474 - 1,683 (a) Other changes represent exchange movements 66 Schedule V7 1 IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES SCHEDULE VI - / ICTI-'.'.a .ZD DEPRECIATION, DEPLETION AND AMORTIZATION Of PROPERTY, PLANT AND EQUIPMENT fOLUMN A I |5?6 ( million) COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F Balance January 1 Additions charged to costs and Retire- Other Balance expenses ments________Changes________December 3 1 Buildings ................................. .Plant and Equipment (36) 257 1,486 TOTAL ...................... 205 (34) 113 (a) 1,743 i- Buildings ............................................ SPlant a.id Equipment.... . . 1 TOTAL ...................... 1,100 I 22 160 182 (4) ( 34) (33) 8 35 43 (b) 198 1,261 1.459 1 _ iH 1 9 COLOIN A 1 B 1 I *976 IMPERIAL CHEMICAL INDUSTRIES LI MITED - PARENT COMPANY SCHEDULE VT - ACCUMULATED DEPRE CIATION, DEPLETION A ND amortization of PROPERTY, PLANT AND EQUIPMENT ( million) COLUMN B COLUMN C COLUMN D COLUMN E COLUMN r Balance January 1 Addi `.ions charged to cos i and Retiree3cx> er.a e a sent s Other Chancres Balance December 3 1 I ^Buildings ................................ I BPlant and Equipment ... I 1 TOTAL......................... I 1975 I ^Buildings .......................................... ! Plant and Equipment .. I TOTAL ................... 103 724 11 96 107 (2) (25) (27) 8 100 106 - (23) (23) - 4 4 (c) 112 876 988 - 103 801 - 904 II 1 (a) Includes 27 million charged as an extraordinary item 11 and 86 million for exchange movements. I (b) Includes 5 million charged as an extraordinary item due to the change in accounting dates. The balance of 38 million represents exchange movements. (c) Includes 4 million charged as an extraordinary ite 67 4 SCHEDULE XII IMPERIAL CHEMICAL INDUSTRIES LIMITED and IMPERIAL CHEMICAL INDUSTRIES LIMITED AND SUBSIDIARIES SCHEDULE XII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES ( million) IccJuMN A COLUMN B COLUMN C COLUMN D COLUMN E Additions charged to 9 Balance at Cost and Other Balance at 1 January 1 Expenses Accounts Deductions December 3*| .1 Li ni t ad i llowance for ccounta doubtful Allowance for losses ft deducted from invest Rents ) ^9 I ^9 iriea 'I Limited and SubsidiJ Lllowance for doubtful Siccounts 22 t 11owanee for losses deducted from invest ments ) 17 39 1ST5 (I Limited Allowance for doubtful ccounts Illowance (deducted for losses from invest ments ) 1 k2 `O ries Allowance for doubtful Recounts is Allowance for losses ^deducted from invest ments ) 13 31 93 93 7 k7 7 7 7 k 11 - - - - - 1A2 - ____ I 1 28 - 6'i 1 92 1 - <*9 1 u-9 3 22 - 17 3 39 69