The notice convening the Meeting and the Auditors' Report having been read, the Chairman addressed the Meeting as follows:—Gentlemen:—The Report and Accounts having been in your hands for some days, I shall with your consent take them as read.
The net profit for the year, after the segregation of Debenture Interest, adequate allowance for depreciation of buildings and equipment, and reserves against doubtful items, amounted to the sum of $405.63. In July, we anticipated a larger profit in 1937 than that of 1936, but the loss of revenue in the Eastern and Northern districts since then, and the allocation of liberal reserves and allowances against probable noncollection of outstanding rents in these areas has considerably reduced our net earnings.
Making a comparison with the previous financial year, our "General Expenses" were reduced by $5,770.35 and "Salaries and Wages" by $1 472.71. The items under these headings cover the running expenses of our offices in Shanghai and Hongkong, catering for the requirements of our own properties (totalling over Five Million Dollars) and many other properties managed on behalf of clients. "Interest Paid" shows a reduction of $5,849.23, due to our having paid off some of our mortgage obligations during the period. "Ex penses on Company's Propertie show an increase of $3,432.36, due to the, increased cost of upkeep. The other items, comprising "Depreciation on Company's Furniture, Motor Car, Fixtures, etc" and the "Annual Charge io Building Depreciation Re-merely emphasize the pruent policy of your Directors and General Managers in writing down perishable assets and allocating adequate funds'to maintain our buildings firet class condition.
Our earnings from "Commissions and Fees" were $36,565.95, approximately $3,000.00 lower than last year, there being practically no pures, sales, or mortgages negotiated for clients during the year. "Rent and Interest Earned" amounted to $316,909.87, the drop of approximately $27,000.00 being due to the complete "loss of revenue from the Eastern and Northern districts from the beginning of hostilities, and the elimination of interest earnings ai mortgages paid off during the yea; Again making a comparison with the preceding year, we note that the Liabilities have been decreased.
"Loans secured on Company's Properties" were reduced by $90,244.58 out of current cash accumulation.
The saving of interest to the Company by this reduction has ready been mentioned. "Building Depreciation Reserve" has been increased by a further $26,760.00, assessed according to the formula of our Auditors. The remaining items show a shrinkage of $19,787.23 in the Company's liability under these headings.
Text read from the printed page and cleaned; old type leaves the occasional error.