In spite of a larger increase in the Standard Production the actual amount exportable was less, as stated, due to the percentage having been reduced on May 1 to 60 per cent, at which figure it has since remained. We have received telegraphic advice from the agents that the assessment of standard production for the current year has been fixed at 498,642 Ib., which is 122,770 Th, below that of last year and at 60 per cent. would give us an ex: portable figure of 299,185 1b, only. This is so far below what seems fair and reasonable, considering the proved capacity of the estate, that an objection has-been lodged which, we hope, will result in a more equitable' assessment. It is true that our actual output for the past year was only 366,880 Ib. but this! was merely because, with the stocks brought forward, we had sufficient to fill the limit of our permissible export. In fact, tapping was discontinued for three months during wintering and while necessary al-rerations to the factory and repairs to machinery were being undertaken. This accounts for the yield er acre being 275 Ib, against 648 1b, the year before, as also for cost of production being 5.71 cents or 1.644. F.C.B. higher. General charges were increased by automatic raising of the quit rent and by apporjoning 90 per cent, to revenue instead of 85 per cent. The digging of silt pits which has been found to be very beneficial was continued, 918 chains having been completed at a cost of $770.31. Changkolling round the trees in the immature areas was undertaken in one field and will be continued during the current year. The decline of dis-tease on the estate is a satisfactory feature; fomes still exists but to no alarming extent and with the removal and burning of jungle stumps, which is systematically proceeding, complete immunity from this disease "may be looked for. Roads were maintained in good repair and approximately 14 miles of the main outlet road was raised. With the exception of the manager's clerk's and dressers' bungalows, buildings generally are in a good state of preservation, but the former will call for attention in the near future and will entail considerable outlay.
The Accounts 'Turning now to the accounts the heading "Newlands increased by Tis, spent on development, the total vp to Tis 83,781.74. Buildings and furniture together show a slight increase of 'Ths. 600. Machinery, however, is tem that shows an' in-any importance. The amount in this case is Tls. 11,306 against Tls. 2,000 previously which is accounted for by the installation of new engines referred to on page 3 of the report and a thorough overhaul of the factory equipment.
Investments at cost are Ths 245,252.37 aguinst Tls. 247,342.77, Ce the' reduction being due to Tis, 2,006 Shanghai Club 6 per cent. debontures having been redeemed. You will, doubtless, have noted that the value of the invest-
408,09, that is Tls. 163,557 al cost. This is chiefly accounted for by the rise in the market value of the Wilkinson Process Rubber Co's shares from par to St. $140 and the rate of exchange being two points higher than last year. The ast in connection with the acquisi-ion of 52,500 Wilkinson shares, issued to the Ayer Tawah Ca. as vendors remains in the balance sheet at Tls. 1,500 but you will that the number is reduced to 39,500. 13,000 shares were sold during the year and realized "Tis, 17,445.04 which was placed to credit of profit and Joss account in full, it not being thought worth while to make any alteration in the nominal cost at which the allotment was acquired.
The profit for the year was Tls. 175,188.08 against Tls. 249,069.52 the previous year but 1 would point out that Tls. 17445.04 of this year's profit being in respect of the sale 13,000 Wilkinson shares, the true comparison of profits from the sales of Rubber is Ti. 157,737.99 against Tis, 249,096.52. Your directors, in considering what recommendation should be made as to the payment of a final dividend, decided, after careful thought, to carry forward intact the share profit and.deal only with the profit on rubber. After
an amount of Tis, 14,663.21 was brought in to the new account; adding this to this gear's profit of Tib. 175,183.03, we have a sum of Ts. 389,846.24 for disposal, Two interim-dividends of 15 per cent. each were paid on May 10 and August 15 respectively, leaving - Tis, 93,570.43, to be dealt with at this meeting and our recommendation is that you sanction a final dividend of 25 per cent, (making 55 per cent. for the year) absorbing Tls. 68,010.50 place io general reserve Tls. 5,000.00 and carry forward the balance of Tis.
185,223.14 of which Tls. 17,445.04 represents profit on shares as already mentioned and Tls. 17,778.10 Present the balance of profit on rubber.
I may mention here that, when comparing the profits and dividends of the two years 1925/6 and 1926/7, it must be borne in mind that the first and second interim dividends last year were paid on a capital of Tls. 218,790.00 and only the third interim and final dividend on the present capital of Tls. 272,042. The distribution, therefore, last year, was equivalent to 91.55 on the present capital compared with 65 per cent. this year out of a nett profit, of 583 per cent.
The Wilkinson Shares Since the closing of the accounts further sales of Wilkinson shares have been made at advancing prices and in addition to the 18,000 shares already accounted for, 19,500 shares have "been disposed of, making 32,500 altogether which have realized $47,614.50 or Tls. 43,385 leaving, 20,000 of the free allotment. still in our hands, in addition which the company retains intact the 225,000 shares subscribed at per share costing Tls. 176,091, The last year of 63,252 shares of the Ayer Tawah Company provided Ti, 169,766 of this amount and the Valance of Tis, 17,835 was taken from the general funds of the company. The position, therefore, today, is that we have Ts, 43,385 in cash; 20,000 shares which stand in our books at a nominal cost of Tis 1,500 but at che Inst price at which business was done are worth Tis, 20,000; and 226,000 shares on the same basis of valuation worth Tis, 346,500.
In deciding to sell some of the company's holding of Wilkinson shares, your directors felt that while the shares purchase which had been financed by an issue of Ayer Tawah shares specifically for that purchase should remain intact, the 52,500 shares issued free to Ayer Tawah, as one of the vendors, came under '2 different*category as they were given in respect of services rendered over a considerable period prior to the flotation of The Wilkinson company. The prices offered, varying from $1.40 "to $1.75 per share were, in the opinion of your directors, such as to justify them in securing for Ayer Tawah the very substantial and immediate benefit which the market offered, bearing in mind that the Wilkinson can hardly be expected to yield high percentage of profit in its initial stage. There was one other point which your directors had to consider and that was the holding of a controlling numnbor of shares for voting purposes, The original 277,500 shares represented 5045 per cent. of the whole issue; the 245,000 shares which Ayer Tawah still holds represents 44.54 per cent.; and if the balance of the free allotted shares were disposed of the percentage would be reduced to 40.91 per cent, It must be remembered, however, that a considerable number of Wilkinhon shares are held by Ayer Tawah shareholders whose interests. are identical with those of the Ayer Tawah Company and whose votes can therefore be counted upon. I may add that Ayer Tawah, being a rubber planting concern," its accumulated reserves if not employed in the extension of its rubber lands. should be invested is something less. speculative than in ordinary shares. Of a new manufacturing industry. are of opinion that it is very desirable that the interest in the new. company should be spread over a wide public on whose support its Prosperity largely depends and to cheek unduly the desire to obtain shares would be unwise. Lastly, s0 long as Ayer Tawah retains 200,000 shares its right to nominate two directors remains unaffected and
Text read from the printed page and cleaned; old type leaves the occasional error.