'The foregoing facts account to a large extent for the unusually high cost of production shown in the accounts now before you. The immature coffee is reported to be growing well, all bad types have. been removed' and supplies planted in their stead. The factory and plant on Kali Glidik were given the necessary attention and are now in a position to deal with any crop that may be harvested.
Soepit Oerang Estate was affected by the same weather conditions as was Kali Glidik, weeks passed with little or no sunshine, heavy banks of cloud hung round' the mountain above the 2,500 ft. level, and, the weather being damp and chilly, prevented the ripening of the fruit) and, in some areas, part of it actually rotted on the trees. The development of fruit-bearing branch was, however, satisfactory and the. trees themselves benefitted from tke weather rather than otherwise. The wet weather had the further effect ing the growth of weeds, siderably more expensive. On the other hand, the dampness was yood for tea and we were able to harvest, 151,000 half kilos more than estimat-regards cinchona, it was estimated that we should have to. harvest 15,000 kilos of bark in order to secure our allowance of alkaloid, but the bark proved to be of much better quality than wa anticipated and it was only necessary to produce 7,700 Ib. _'The coffee bushes on Panawangas Estat continue to develop satisfactorily, and we shall harvest our first small crop this year. In the meantime, we have derived a satisfactory profit from the sale of the needs of the various green covers that are gro ing on the Estate. The supply of Inbour is ample, and, there being no competition in the neighbourhood of the estate, the rates of pay are very reasonable.
The Accounts:
Turning now to the accounts, you will notice that your directors have been able to make satisfactory arrangements for financing the com~ pany until Franawangan Estate Feaches full maturity. The loan is secured by the deposit of the shares. in the Dutch company and carries interest at the rate of 8 per cent. per annum. The accounts of tive Dutch company show a loss on the year's working of F.106,055.73, but, of this sum F. 98,199.33 represents. the appropriation to reserve for the amortization of leaseholds and the agency fee, selling commission ard interest due to the Shanghai company, so that the trading loss for the year was really only F. 12,856.
Capital expenditure during 1927 amounted to a total of F.118,02625, of which F.108,130.62 was spent upon the development and upkeep of the immature areas on the three properties. Every economy compa. tible with efficiency is being. exercised on the three properties, and I anticipate that capital expenditure will show a very materia} reduction in 1928,
Text read from the printed page and cleaned; old type leaves the occasional error.