I shall now give you a brief outline of the position in regard to our developed properties—Capable management, plus the excellent food served in "Medhurst" continue to fill the building to capacity, fully justifying the investment made in this enterprise. Our shops, however, are not showing the return previously received and we shall have to await some improvement in business ger erally before we can expect a return of normal income from this source.
Rent collections in the International Settlement, the Western District and the French Concession were higher than for several years past, our properties in these areas continuing to give a satisfactory return. The increased cost of maintenance has necessitated our passing on some of the burden to our tenants who have expressed their appreciation of the Company's fairness in this respect.
Our developed properties in Hongkong are all filled at higher rentals than obtainable previously. We sold some of our vacant land at a loss of Hk.$670.91, which is shown in the accounts as C.N.$1,182.22. Plans for the further development of our holdings in Hongkong have been postponed indefinitely, pending the clarin fication of the present situation in South China.
This is the first occasion in the history of the Company that your Directors and General Managers have placed before you a Profit & Los Account showing a loss on the year's operations. The amounts written off against direct and indirect effects of Sino-Japanese hostilities account for most of the total deficit. The Company ran at an actual operating loss for only the first four months of the past financial year. You will be pleased to hear that our earnings continue to improve each month.
The amount brought forward from last year $113,892.41, less this year's loss of $56,257.29, leaves a total of $57,635.12. Your Directors and General Managers recommend that this sum be carried forward.
Sir Robert Calder-Marshall and Mr. O. Okamoto retire by rotation from the Board of Directors and being eligible offer themselves for re-election.
Messrs. Thomson & Company retire as the Company's Auditors and offer themselves for re-election.
Hongkong Figures The Resolutions Turning to the Balance Sheet, the increase of both liabilities and assets is due to the exchange rate on Hongkong. On the liabilities side, a further sum of $28,865.16, assessed according to the formula. of our Auditors, has been added to "Building Depreciation Reserve" The Company's borrowings against properties "were made almost entirely in Hongkong, thus the figure for "Loans Secured on Company's Properties" automatically increases on account of exchange this year. On the assets side, the value of Shanghai properties increased by $58,509.21, due to our taking over an income-producing property which was previously mort-"gaged to us. This property has since been sold at a profit, "Furniture Fittings Equipment and Motor Car" have all been written down. "Mortgage Loans" and "Mortgages Discounted" have' actually been reduced, but again Hongkong figures, entered "into our books at the prevailing exchange rate, practically doubled There being no questions, the following resolutions were put to the meeting and carried unanimously:— seconded by Sir Robert Calder-Marshall:
sed by Mr. F. R. Smith and Sihat the Directors' Report and Audited Statement of Accounts as presented for the year ended September 30, 1659. be and they are hereby received, approved and adopted.
Proposed by Mr. F. R. Smith and seconded by Mr. C. V. Starr:—That the balance at credit of the Profit & Loss Account as presented, $57,635.12, be cerned forward to the following year.
Proposed by Mr. W. A. Hale and seconded by Mr. M. Freeman:—That Sir Robert Calder-Marshal and Mr. O. Okamoto, the retiring Directors, be re-elected Directors of the Company.
Proposed by Mr. Yusen Yeo and seconded by "Mr. O. Okamoto:—That Messrs. Thomson & Company be and they are hereby re-elected Auditors of the Company at a remuneration to be arranged by the General Managers.
Text read from the printed page and cleaned; old type leaves the occasional error.