At our last meeting, I referred to the necessity of having to increase our bad debts reserve to $17,000. Of this sum approximately $10,000 has already been applied against uncollectable accounts and it has been considered desirable to provide a further $3,000 odd this year in order to round off the reserve to $10,000
This latter figure is, in my opinion, sufficient to provide for all doubtful accounts outstanding as at December 31, 1937, a number of which have arisen from those of our customers who were forced to evacuate from the eastern and northern areas of the Settlement.
During the period of the hostilities and owing to my absence in England, Mr. Gibson was in full control of the working of the dairy and I cannot let this opportunity pass without an expression of appreciation of the manner in which. he carried out his duties during a time of extreme stress.
Considerable difficulty was and is being experienced in' obtaining the necessary supplies of cattle food ang this has had the effect of reducing our milk production with the consequence that for a short period we could not take on any new customers, We were also forced to evacuate our premises at Minghong and the occupation of that area by the Chinese and Japanese troops in turn has resulted in a certain amount of damage to our buildings which however, is not very serious, and it may be possible to formulate claims at a later date.
In consequence of my doctor's advice that I should leave this country, I have tendered my resignation as managing director of this company with effect as at June 30, 1938. In view of this and in the interest of the shareholders, your directors have had under consideration a scheme for the reorganisation of the company, which has been submitted by Messrs. Keylock and Pratt, With a large amount of my capital invested in the company, and as your principal shareholder, I may that the scheme, which is at present in draft form, has my approval, and also the approval of the other directors.
Text read from the printed page and cleaned; old type leaves the occasional error.