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The company was incorporated on 29th July 1998 as a
private company registered in Malawi under the Companies
Act 1984, for the purpose of acquiring the assets, liabilities
and trade of the Electricity Supply Commission of Malawi.
On 30th November 1998, Parliament passed the Electricity
Supply Commission of Malawi (Repeal) Act, 1998 and on
8th December 1999 the Act received Presidential Assent
The Act required that any properties, assets funds,
liabilities, obligations and agreements be transferred
free of any fees or duties into the name of the company
and that the rights of employees should be continuous
from the date of their initial employment by the predecessors
body. Furthermore, any legal or similar proceedings
would continue in the company’s name.
The substance of the Act is therefore that the former
Electricity Supply Commission of Malawi should continue
as the Electricity Supply Corporation of Malawi Limited
as though the change was merely one of name except insofar
as the constitution of the body was necessarily amended
to bring it in line with the requirements of the Companies
Act.
The Electricity Supply Commission of Malawi therefore
did not prepare accounts as at the date of Presidential
Assent on the grounds that the financial statements
should report the effective continuity of operations
rather than the legal form of acquisition.
Accordingly it is appropriate to apply a true and fair
over-ride to the strict legal form under which the financial
statements are prepared. However, there remain certain
aspects of presentation which require acceptance of
the legal form. For this purpose, the Board of the company
have adopted as pre-incorporation contracts, all activities
and accountable transactions arising since 31 March
1998, the date at which the last financial statements
of the Commission were prepared and audited.
Accordingly the income and cash-flow statement for
the year ended 31 March 1999 are treated as that of
the company and the comparative figures for the year
ended 31 March 1998 are treated as relating to the Commission.
Because of the change of legal form, changes in accounting
policy between those applied by the Commission and those
adopted by the company are not applied to the Commission’s
1998 financial statements, which are presented here
as originally reported for the sake of comparison and
to demonstrate the effective continuity.
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