In spite of some difficulties your plant at Yan; lepoo has been maintained in itsfüsual good order and although fourjincendiary aerial bombs fell in the north compound and some shells of small calibre exploded on the property no damage of consequence was sustain We are indebted to His Consul As regards extra-agreement and shipping consumers' account we have o net profit of $88,304.35 as against $90,073.17 last year. Adding the amount of $3,876.36 carried forward from 1936 there is available for d tribution the sum of $92,180.71.
General for his to His Majesty's forces both naval and mil tary from which armed guards have been continuously provided and to the' members and officials of the municipal council who have been ready at all times to ce-operate and render assistance when required.
Changes in Capital I should like especially to refer to Last year, I referred to changes in loan capital which, although affecting the 1936 accounts, had taken place before I addressed you. Those changes are reflected in the balance sheet by the appearance of the 5% per cent issue of $2,000,000 debentures and the elimination of the 6's yer cent issue of £100,000 sterling notes, In view of the exchange position today we may congratulate ourselves in thus having divested ourselves of this sterling liability. In June of last year we took the opportunity of replacing the old 6 per cent issue of Tls. 300,000 1925 debentures which were due for redemption by the issue of $725,000 debentures bearing interest wt the rate of 5 per cent per annum, Details of these operations are set out in your directors' report.
In reviewing the year's working, by far the most important factor is, is I have already mentioned, the ino-Japanese hostilities. You will recollect that by arrangement with the Municipal Council the rebate was decreased from 25 per cent. to 20 per cent, as from February 1, 1937. "his increase in our charges, together with an increase in demand resulting from rapidly improving cal conditions generally, gave pro~ mise of a revenue for the year of approximately $5,200,000, that is sufficient ordinarily to have resulted in a net profit capable of taking care st least of all dividend requirements.
In fact, this expected -revenue figure has been reduced to $4,728,000. "This reduction is a direct result of the hostilities. The outbreak of hos-Ajlities. in August caught the residents of the areas north of the Soochow Creek comparatively unaware and although there was, just prior io August 13, a more or less complete evacuation of the more distant northern areas, yet in the settlement itself there remained at the outbreak 2 considerable proportion of the population, Although the question of a systematic isolation of mains in the affected areas in order to prevent wastage was considered, we regarded it more especially in a time of such emergency, as the first duty of the company to do all in its power to maintain a supply of water so long a* there remained consumers who reeded it. In this I am happy to say we were entirely successful. At all times, even during the height of the....ing in the settlement itself, an adequate supply of water at normal pressure was maintained in the mains of your company. This of course could not be done without wastage occurring and at times it was heavy. However. we were fortunate in that the larger mains in the area sustained no damage, such bursts that did occur being Confined to mains of comparatively small diameter.
Text read from the printed page and cleaned; old type leaves the occasional error.