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Title: Annual Report 1930
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 Material Information
Title: Annual Report 1930
Series Title: Braga Brothers Collection
Physical Description: Book
Creator: Cuba Cane Sugar Corporation
 Record Information
Bibliographic ID: UF00003610
Volume ID: VID00001
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Resource Identifier: ltqf - AAA4990

Table of Contents
    Front Cover
        Front Cover 1
        Front Cover 2
    Auditor's certificate
        Page i
        Page ii
    Main
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
Full Text















CUBAN CANE PRODUCTS CO., INC.












ANNUAL REPORT

1930
















FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1930


---~


~























AUDITOR'S CERTIFICATE


49 WALL STREET,
NEW YORK, DECEMBER 2, 1930.

BOARD OF DIRECTORS,
Cuban Cane Products Co., Inc.
New York, N. Y.

DEAR SIRS:

We have audited the books and records of the Cuban Cane Products Co.,
Inc., and the Eastern Cuba Sugar Corporation as at September 30, 1930 in New
York and in Cuba and subject to the observations in the Directors' report as to
asset and property values and advances to colonos we certify that, in our opinion,
the attached Consolidated Balance Sheet and the accompanying statement of
Consolidated Profit and Loss correctly set forth the consolidated financial position
of the companies as at September 30, 1930 and the results of the operations for
the period February 16 to September 30, 1930.

Yours very truly,

DELOITTE, PLENDER, GRIFFITHS & Co.,
Auditors.











CUBAN CANE PRODUCTS CO., INC.
63 WALL STREET
NEW YORK

DECEMBER 12, 1930.

TO THE STOCKHOLDERS:
Your Board of Directors submits herewith the Consolidated Balance Sheet
of Cuban Cane Products Co., Inc., and its wholly owned subsidiary, Eastern Cuba
Sugar Corporation, as of September 30, 1930, the end of the last fiscal year.
There is also submitted Consolidated Profit and Loss Statement for the same
Corporations.
Cuban Cane Products Co., Inc., acquired on February 16, 1930 the properties
and assets of the predecessor Corporation, Cuba Cane Sugar Corporation. As
the new Corporation took over at cost the sugar produced by the predecessor
Corporation, the loss shown in the attached statement may be regarded,
for practical purposes, as that of a full operating year, except for the fact that
depreciation has been set up against the properties owned by the new Corporation
for the period of its ownership of said properties, namely, seven and one half
months, instead of twelve months. As the properties of the Cuba Cane Sugar
Corporation were transferred to the new Corporation on February 16, 1930, and set
up on the latter's books on that date at $19,839,803.81, instead of $64,097,398.61,
at which they were carried on the books of the old Corporation, your Directors
feel that depreciation should be set up only from date of acquisition.
As Eastern Cuba Sugar Corporation, all of whose stock is owned by Cuban
Cane Products Co., Inc., was not affected by the reorganization, depreciation for
that Corporation has been taken for the full twelve months period. In the case of
both Corporations, depreciation has been set up to the full extent of the rates
allowed by Cuban tax laws.
The Profit and Loss Statement shows an operating loss for the year of
$1,617,933.48, and, after taking into account interest charges, taxes and depre-
ciation, a total loss of $3,111,774.91. Corresponding figures have been as follows
for the past five years:
Operating Interest and
Profit Other Charges Depreciation Net Profit
1929/30 .... $1,617,933.48* $715,836.18 $778,005.25 $3,111,774.91*
1928/29 ...... 3,649,435.44 2,705,267.14 1,750,000.00 805,831.70*
1927/28 ...... 4,366,554.50 2,402,285.31 1,750,000.00 214,269.19
1926/27 ...... 5,275,599.30 2,583,472.34 1,750,000.00 942,126.96
1925/26 ...... 2,330,071.26 2,562,151.03 1,750,000.00 1,982,079.77*
Loss
The foregoing figures omit exceptional reserves set up in 1927/28 against
advances to Colonos.
The loss for the year ended September 30, 1930 resulted from the fact that
during the year Cuban raw sugar sold at a much lower average price than ever
previously in the recorded history of the sugar industry. The sugar we produced
cost us 1.584 cents per pound f. o. b. Cuban ports. The average price received
for our sugar was 1.309 cents per pound f. o. b. Cuban ports.
The following tabulation shows our comparative cost per pound for producing
sugar during the last five years and the comparative prices received for this sugar.
Although the total "Cost of Manufacturing and Delivering" raw sugar was about
1/10th of a cent per pound higher in 1929/30 than in 1928/29, the cost in our
factories of extracting sugar from cane was actually lower. The increase in the
total cost shown in the following tabulation was due to the fact that certain
charges, such as dead season expenses and other overhead items, were absorbed









by a production that was about 715,000 bags smaller than in the previous year.
Since the sugar we produced was sold at a loss, the Corporation's policy of reduc-
ing production below that of the previous year was justified even though it
resulted in a slight increase in total cost of manufacture. And, of course, since
most of the cane we grind is paid for in accordance with arrangements based on
the selling price of raw sugar, the cost of our cane fell to the lowest point in our
history.
Cost of
Cost of Manufacturing Total Cost Sale Price
Cane and Delivering f. o. b. Cuba f. o. b. Cuba
1929/30 ........ .6174 .9670 1.5840 1.3090
1928/29 ........ .794 .870 1.664 1.832
1927/28 ........ 1.156 .993 2.149 2.470
1926/27 ........ 1.415 1.078 2.493 2.843
1925/26 ........ 1.080 1.074 2.154 2.289

The foregoing comparison of average sale prices have to do with sales of raw
sugar only. In addition to the income from sugar, the Corporation received
during the fiscal year ended September 30, 1930, $1,412,483.26 from sales of
molasses and $186,328.33 from miscellaneous sources. This additional income,
if applied to the average sale price f. o. b. Cuba per pound of sugar during the
year ended September 30, 1930, would increase such average from 1.309 cents per
pound as shown in the foregoing, to 1.460 cents per pound.
The total production of the Corporation, reckoned in bags of 325 pounds each,
has been as follows during the past five crops:
Total
Our Production Cuban Production Our %o
1929/30 .......... 3,251,362 32,195,761 10.1
1928/29 .......... 3,965,275 35,538,909 11.2
1927/28 .......... 3,232,007 27,829,987 11.6
1926/27 .......... 3,425,904 31,074,162 11.0
1925/26 .......... 4,273,766 33,666,566 12.7

Of the 3,251,362 bags we produced in the last crop, the last 653,326 bags have
been acquired by the National Sugar Export Corporation of Cuba, a corporation
organized in Cuba under the Sugar Stabilization Law dated November 15, 1930.
That Corporation is to acquire and hold a total of 1,500,000 tons of Cuban raw
sugar for the purpose of selling the same as it can be disposed of in an orderly
manner under reasonably satisfactory market conditions. The law provides that
for this sugar we shall shortly receive from the National Sugar Export Corpora-
tion Cuban Government bonds at the rate of $4.00 face value of bonds per bag
of sugar f. o. b. Cuban ports. Said bonds are to be secured by the sugar acquired
by the National Sugar Export Corporation and will have as additional security the
proceeds of a special tax on all sugar produced in Cuba. In computing the average
sale price of 1.309 cents per pound f. o. b. Cuba for our sugars of the last crop,
we have taken into account, at par value, the bonds we shall receive for the 653,326
bags of our sugar acquired by the Export Corporation.
The Balance Sheet shows Reserves of $7,157,418.24 against Advances to
Colonos. No additional reserves have been established against these advances
since the organization of Cuban Cane Products Co., Inc., in February, 1930, as your
Directors are of opinion that having regard to the nature of these advances no
useful purpose can be served by further revision of the estimated value of the
cane and other assets of the Colonos, against which your Corporation has liens,
until such time as the world sugar situation shall have become better stabilized.
Serious and intelligent efforts are now in progress among the principal sugar pro-
ducing nations of the world to effect a satisfactory adjustment of production and,
if these efforts succeed in reasonable degree, a gradual price improvement up to
the point where costs will be covered and some profit realized may be anticipated
and, in this event, advances to Colonos can be liquidated in regular course.
As previously stated, values of the properties of Cuban Cane Products Co., Inc.,
were acquired and set up on its books at the time of organization at $19,839,803.81,









this being $44,257,594.80 less than the same properties had been carried on the
books of the predecessor Corporation. The sugar mills owned by the new Corpora-
tion and its wholly owned subsidiary have a total capacity of at least 5,000,000
bags per annum and its cane lands owned and leased can, if fully planted, produce
more than enough cane to operate the mills to capacity. While the prices we have
received for our sugars during the past two years have been too low to permit the
Corporation to show any net profit after interest, taxes and depreciation, your atten-
tion is called to the fact that the combined Properties, Plants and Equipment of
Cuban Cane Products Co., Inc., and its wholly owned subsidiary, Eastern Cuba
Sugar Corporation, having a total capacity of 5,000,000 bags per year, are carried
on the Consolidated Balance Sheet at a net valuation of less than $35,000,000., or
less than $7.00 per bag of productive capacity. This is a very low valuation for
properties of this character.
Our sugar mills have been well maintained, and, as is shown by our steadily
decreasing costs of manufacture, are being operated with improved efficiency each
year. Our cane supply is in excellent condition and expenditures for planting and
cultivation have been carefully controlled so as to keep the investment in cane in
correct relation to planned production of raw sugar. If an international agreement
is reached providing for world wide reduction of raw sugar production, Cuba will
undoubtedly participate in the agreement and your Corporation will share pro rata
with the other sugar producers in crop curtailment. Failing this, present indications
are that our cane supply will be adequate for the production of a crop in 1931 sub-
stantially equal to that of 1930.
The liability shown in the Balance Sheet for United States Federal Income
taxes results from a settlement made with the Government for additional taxes
claimed for the years 1916-20. The amounts shown as due are payable in a series
of deferred installments.
As of the date of this report your Corporation owns and holds in its Treasury
$200,000. par value of Eastern Cuba Sugar Corporation Bonds.
The average percentage of weight of sugar yielded from weight of cane ground
in our mills has been as follows for the past five years:
1929-30 1928-29 1927-28 1926-27 1925-26
12.39% 12.23% 11.56% 11.23% 11.56%

Average factory efficiency is reflected in the following comparison of losses
in manufacturing:
1929-30 1928-29 1927-28 1926-27 1925-26
1.54% 1.80% 1.91% 1.81% 1.74%

Your Corporation owns in fee 470,474 acres of land, and holds under lease
355,276 acres. Total lands owned and leased are therefore 825,750 acres. It
owns and operates for the transportation of its cane, products and supplies 990
miles of railroad, of which 802 miles are standard gauge and 188 miles narrow
gauge; together with equipment consisting of 138 locomotives and 4,065 cane
and other cars.
It gives the Board of Directors much pleasure to acknowledge the very loyal
cooperation of employees during the year.
Respectfully submitted,
By order of the Board of Directors,
JOHN R. SIMPSON,
President.











CUBAN CANE
AND
EASTERN CUBA


COMPARATIVE CONSOLIDATED


----February 16, 1930-----

$36,656,909.98
1,656,909.98
$35,000,000.00
106,000.00


ASSETS


PROPERTIES, PLANT AND EQUIPMENT. $36,796,848.84
Less: Reserve for Depreciation........... 2,415,691.64
ROLLING STOCK ACQUIRED UNDER
LEASE PURCHASE CONTRACT.......
(Liability included, per contra)


454,674.00 SECURITIES OF THE CORPORATIONS...

CURRENT ASSETS, ADVANCES TO COLO-
NOS, GROWING CANE AND PREPAID
EXPENSES CROP 1930-1931:
Cash .. ...............................
Due upon delivery for sugars sold..........
Sugars on hand at prices subsequently real-
ized including sugars reserved for National
Sugar Export Corporation of Cuba at $4.00
per bag.................... ........
Accounts Receivable.......... $717,991.04
Bills Receivable .............. 167,164.80

$885,155.84
Less: Reserve.............. 527,499.06


$4,528,559.00
824,072.69


5,087,657.09
$2,385,150.98
5,000.00
$2,390,150.98
527,499.06
$1,862,651.92
1,841,512.09
$12,800,755.89
7,157,418.24
$5,643,337.65
120,541.72


19,908,332.16


$2,531,927.49
1,940,674.79


4,806,214.79




357,656.78


Materials and Supplies.................... 1,818,597.87
Advances to Colonos.......... $14,698,755.95
Less: Reserve.............. 7,157,418.24

$7,541,337.71
Growing Cane................ 218,032.37


Prepaid Expenses Crop 1930-
1931 ..... ........ ...... .


290,771.04


MORTGAGES RECEIVABLE, LESS RE-
633,382.10 SERVE ..........................
... ADVANCE TO ASSOCIATED COMPANY...
CASH PAID ON OUR OPTION TO PUR-
345,419.48 CHASE LANDS ........... ..........
CASH AND U. S. TREASURY BONDS:
For redemption of Liens and Censos, per
295,606.57 contra ...... .. ....................
UNITED STATES 392% LIBERTY BONDS
DEPOSITED WITH GUARANTY
TRUST COMPANY AS GUARANTEE
IN RESPECT OF LIABILITY IN CON-
NECTION WITH CUBA CANE SUGAR
CORPORATION BONDS NOT DE-
POSITED IN ACCORDANCE WITH
THE PLAN OF REORGANIZATION
(Liability, per contra) ......................
DEFERRED DEBITS:
Insurance, Rent, Taxes, etc., paid in advance.
Other Deferred Debits......................


8,050,141.12


$791,312.31
146,788.58


Forward ................. ..


----September 30,1930--,


$34,381,157.20
106,000.00

119,937.75


19,505,212.84
631,542.16
257,115.21

378,919.48


295,606.57







100,968.75



938,100.89
$56,714,560.85


1186113bz.gb
$58,6042-767.27


I











PRODUCTS


CO., INC.


SUGAR CORPORATION

BALANCE SHEET-SEPTEMBER 30, 1930


e-- February 16, 1930-----


$25,000,000.00


8,500,000.00


337,000.00
$33,837,000.00


LIABILITIES


FUNDED DEBT:
Twenty Year Gold Debenture Bonds of the
Cuban Cane Products Co., Inc., due 1950..
Less: In hands of Trustee.............
These bonds may be issued in accordance
with the plan of reorganization and if
issued will discharge the liability
marked **
Fifteen Year 7Y21o (Closed) Mortgage Sink-
ing Fund Gold Bonds of the Eastern Cuba
Sugar Corporation, due 1937..............
First Mortgage Bonds of the Violet Sugar
Company, payable in annual instalments to
1935 .................. ..... .....


----September 30, 1930----



$25,000,000.00
292,600.00
$24,707,400.00


8,000,000.00


280,000.00


$32,987,400.00


DEFERRED INSTALMENTS ON LAND
45,166.70 PURCHASES ......................


1,200,000.00


10,525,026.33


UNITED STATES FEDERAL INCOME
TAXES, ADDITIONAL ASSESSMENTS
FOR YEARS 1916 TO 1920:
Due in instalments, December 31, 1931 to
June 30, 1932 ..........................

CURRENT LIABILITIES:
Bank Loans ............. ....... .......
Notes Payable ...... ......... .........
Accounts Payable......... ...........
Instalments due for rolling stock acquired
under lease purchase contract (per contra).
United States Federal Income Taxes,
Additional Assessments for years 1916 to
1920:
Due December 31, 1930 and June 30,
1931 .. ........................
Accrued Charges ............ .........
Accrued Interest on Bonds...............


DEFERRED CREDITS:
...... Rents collected in advance ................
...... Other Deferred Credits.....................

295,606.57 LIENS AND CENSOS ON PROPERTIES....
(see item of Cash and U. S. Treasury Bonds,
per contra)


$45,902,799.60


$11,000,000.00
524,580.74
405,383.06
51,000.00



350,000.00
521,680.95
54,900.03



$97,003.46
132,295.20


CUBA CANE SUGAR CORPORATION:
**Account of Convertible Debenture Bonds,
not exchanged in accordance with the
plan of reorganization ................
Forward ......................


$5,000,000.00
184,161.64
2,533,662.44
64,750.00



300,000.00
1,184,560.48
1,257,891.77


1,000,000.00


12,907,544.78


229,298.66
295,606.57


66,240.79
$47,486,090.80










CUBAN CANE
AND
EASTERN CUBA


COMPARATIVE CONSOLIDATED


e--February 16, 1930---
$58,604,767.27


ASSETS
Forward ..................


F---September 30, 1930-----
$56,714,560.85


$58,604,767.27


$56,714,560.85


6











PRODUCTS CO., INC.


SUGAR CORPORATION

BALANCE SHEET-SEPTEMBER 30, 1930 (Cont'd)



--- February 16, 1930-- LIABILITIES ,---September 30, 1930-----
$45,902,799.60 Forward .................. $47,486,090.80

1,925,000.00 GENERAL RESERVE......................... 243,305.49

STATED CAPITAL:
Cuban Cane Products Co., Inc.
997,151 shares of Common Stock without
nominal or par value-Stated Value
792,580.00 $1.00 per share........................ 997,151.00
(Out of the authorized issue of 3,500,000
shares, there are reserved unissued
shares against the exercise at any time
prior to January 1, 1940, of Option
Warrants to purchase the shares at
$20.00 per share.)
The entire issue of the Capital Stock of
the Eastern Cuba Sugar Corporation,
viz: 48,000 shares of $100.00 each par
value, is owned by Cuban Cane
Products Co., Inc.

CONSOLIDATED SURPLUS:
Paid in:
Arising from exchanges of bonds and
issuance of stock in accordance with
plan of reorganization, etc. during
period February 16, to September 30,
$7,581,868.15 1930 ....... ......................... $8,581,391.45
Earned:
Balance, February 16, 1930.. $2,402,519.52
Discount on bonds purchased
and retired.............. 115,877.50

$2,518,397.02
Loss for period February 16,
to September 30, 1930.... 3,111,774.91

2,402,519.52 Balance, September 30, 1930 (Deficit)... 593,377.89
9,984,387.67 7,988,013.56
CONTINGENT LIABILITY:
In respect of bank loans to Associated Com-
pany $198,576.50, guaranteed jointly and in-
dividually by Eastern Cuba Sugar Corpora-
tion and Baragua Sugar Company.


$58,604,767.27 $56,714,560.85



















CUBAN CANE PRODUCTS CO., INC.
AND
EASTERN CUBA SUGAR CORPORATION

STATEMENT OF CONSOLIDATED PROFIT AND LOSS
Period February 16 to September 30, 1930



OPERATING LOSS FOR THE PERIOD.............................. $1,617,933.48


Add:
INTEREST ON EASTERN CUBA SUGAR CORPORATION
FIFTEEN YEAR (CLOSED) MORTGAGE SINKING
FUND GOLD BONDS ........................
INTEREST ON FIRST MORTGAGE BONDS OF VIOLET
SUGAR COMPANY ............. ........


INTEREST ON BANK LOANS....................



Less:
MISCELLANEOUS INCOME (NET) ...............


TAX ON TAX FREE COVENANT BONDS OF THE EAST-
ERN CUBA SUGAR CORPORATION.......... .


$383,558.12


13,746.26

$397,304.38
385,273.55

$782,577.93


80,191.75

$702,386.18

13.450.00


LOSS FOR THE PERIOD BEFORE PROVIDING FOR DEPRECIATION......
RESERVE FOR DEPRECIATION.................................

LOSS FOR THE PERIOD AFTER PROVIDING FOR DEPRECIATION ........


715,836.18

$2,333,769.66
778,005.25

$3,111,774.91




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