One of the most important items in the balance sheet is that under the heading of "Purchase Price of Gen-feral Managers' Agreement less amount written off. As you are aware, the [company was originally formed by a
able to supply the company with ex-troup of insurance men who, were Perienced personnel and a large. volume of seasoned business. This group formed a company to act teneral managers of our company, under the control of the board directors, at an agreed remuneration, For the first few years of our com: any's existence there is no question that it would have been dificult make any progress without the selected business and the experienced [personnel which the general managers gave to the company, However, during the past few years, the company has gradually succeeded in establish ing its own branches and/or agents through the Far East from which it now receives a good proportion of business. On. the other hand," the remuneration of the general managers, being based upon the volume of business and the profits arising out of the company's activities, showed signs of reaching very large figures in future years and it was considered {in the company's interests to approach the general managers with a view to purchasing their' agreement. Our auditors approved a scheme whereby the agreement was valued on a basis of five years purchase and, with the ce-operation and goodwill of the general managers, this was agreed tupan in June last and provision made the accounts accordingly.
Despite the changed conditions since the agreement was purchased, your board considers the purchase a satisfactory one, particularly as the business controlled by the organizing group has been retained. On behalf of the company, your board wishes! to take this opportunity to express its appreciation of the help given by the group in building up the company organization to a point where it can now stand firmly on its own feat.
On the liabilities "side of "the balance sheet, you will note that we have eliminated our, "Reserve for Fluctuation of Investments and EXchange" and retained the "General Reserve" accounts which, if recom: mendations put before you today are approved, will stand at the figure of £20,000. In view of the drastic writing down and the improvement In the value of the company's assets since the end of the year, we consider that the reserves for eventualities are more than adequate.
Text read from the printed page and cleaned; old type leaves the occasional error.