It Is extremely gratifying to be able to report that, for the frst time years, your Hongkong branch has shown a'proflt, amounting to $4,916.05. Now that business in the South is Improving, your directors feel that. even better results may be expected during the current year. The branch under the mai agement of Miss Elma Kelly, to whose ability and un-liring energy alone are to be attri buted the excellent Fesults obtained Hongkong.
Turning to the abilities of the] balance sheet, you will see that a reserve has been opened for home Teave expenses, This stands $2,195.46 and has been created order to obviate having again to meet In one year, as has been the ease in 1996, all the expenses of those members of the staff entitled to home-eave under the terms of their employment, Sundry creditors stand of $7320049 and, already pointed out, are $11,000 lower than on the correspond ing date last year. They have since been entirely liquidated, An examination of your assets will disclose an interesting fact referred to in the director's report—namely, the revaluation of your plant, machinery and type, which (based on a conservative estimate) has shown a surplus of $11,749.16 over the book value at December 31, 1935. This surplus does not arise from any theoretical revaluation of your print-'His ing department assets, "nor from placing increased values on individual pieces of equipment. On the contrary, it is due solely to the fact that previous inventories were incomplete particularly in regard to the rataer expensive item of type-setting metal. ealaden Asset"
'A. very careful inventory disclosed that our stock of metal, by actual weight, was far in excess of the Salue shown previously; so much 50, that, after full allowances for depretion, "Type and Metal" now stands ft $90,4040 a8 against $26,38026 in the preceding balance sheet, Actually, the excess value is still greater, since actual stocks have been brought into the books well below the current market prices, As an example: linotype metal now costs delivered at our Works $1,050 a ton, whereas we have Valued our stock at only $607 a ton, representing the average cost for the two year period 1994/1995. Thus, in addition to the surplus disclosed, there is also—at current market prices laden asset" of some $12,000) under this heading. Conservative valuation 4s, prefer ab) however, be-use of fluctuations in the metal markets, Our auditors have been given certificates from outside sources '88 {0 the values placed on our stocks and have salisfed themselves that the surplus disclosed has a sound foundation in fact.
It fs to be particularly noted that we have not treated this surplus as fan addition to assets but have utilized it {o adjust certain other valuations of fixed assets, particularly furniture, Axtures and fittings, which item, it will be noted, hag been written down by $11,149.16," As the box-making department is no longer operated, advantage was also taken of the opportunity to write down the remain-Ing equipment to a nominal value of Further drawing upon the sui pls, your photo-engraving equip. ment was written down from $7,814.10 to. $0,000, Your directors are satisfied that!
Text read from the printed page and cleaned; old type leaves the occasional error.