Your directors consider that this policy of expansion has been a wise one because it provides that distribu. tion of risks so fundamental to the life insurance business. It also increases the stability of the company by guaranteeing a steady flow of new insurance, For example, during the last year, Shanghai, where we normally expect to secure 15 per cent, of our new business, showed a decrease in production because of the depression seriously affecting that locality. This decrease was compensated for by a 30 per cent, increase in the production of the Philippine Islands where general economic conditions were considerably better.
Turning to the statement of opera tions, you will note that the premium income fof the year was $2,753,184.08.
increase of $200,000 over i034, The income from dividends and interest was $20,000 less than the previous year "despite the company's larger assets, reflecting the Influence of the depression on business generally, Except for some increase in surrenders, disbursements for the year Were normal. The operating profit was $301,622.08 a compared with {$370,035.04 in 1934, which, considering abnormal conditions, is satisfactory.
Because of the nationalization of silver in China and stabilization of exchange on November 4, the $109,000 set aside in 1934 for possible currency fluctuation was returned to surplus '$13,164.92, representing accident in-Surance and special reserves, released when the company reinsured the balance of its accident portfolio, was also transferred to surplus. These items added to the balance brought forward from 1934 and the profit earned during 1935 make a total of '$786,357.28, From this has been deducted $108,753.15, dividends paid to policyholders $19,500 for certain expenses not applicable to 1995 opera. tions and $400,311.23 losses sustained on investments, leaving a balance in the surplus account of $257,792.85.
The largest deduction in surplus was for writing off investments and adjust ing. the values of others. This abnormal loss was caused mainly by the sudden failure of certain institutions in Shanghai in which the company had investment interests and deposits. A small part of the invest ments written off may eventually recover some value, but pursuant to the company's usual policy your directors feel that no credit should be taken in our accounts at this time. We are sure that shareholders will approve this action as all such losses, were borne without impairment of polftyholders' reserves or the company's capital and without necessitate Ing any change in the schedule of policyholders' dividends, Your directors regret. however, that at this meet ing they cannot recommend any dividend to shareholders.
'This report marks the close of the company's fifteenth year of operation. From the policyholders' point of view the record should be eminently satisfactory—one of unusual service, unchanged dividends and proof of solid financial strength. The shareholders may likewise feel content that the small loss in surplus has been more than offset in goodwill and increased confidence following the company's clear demonstration of sound management and inherent This report is not complete without a word of appreciation for the fine work of the company's employees both in the Main Office and in Branch OMees. 'The sales force was severely tested during the year and its task in some territories was made doubly hard economic conditions which hampered the development of all business. In Shanghai the employees' faith in and loyalty to the Asia Lite Was undisturbed and their eMiciency tested by adversity actually increased. A vigorous and active life insurance organization is the company's most valuable asset and the efficiency of this organization as it has been developed through the year's experi-fence adds materially to the stability Jot the company.
Text read from the printed page and cleaned; old type leaves the occasional error.