"
THE CHINA MAIL, MARCH 20, 1941.
A.K. ELECTRIC COMPANY MEETING
CHAIRMAN ON DIVIDENDS, BONUS SHARES AND NEW SUPPLY RATES
vestment, and in the case of a contemporary utility company in this Colony, Government bas
holders to a dividend exceeding
viously.
I would also point out that the charges to our consumers are
PROPOSALS TO capitalise the Com-ecognised the right of its share- pany's reserve of $3,000,000 and to issue the percentage I mentioned pre- bonus shares to that amount, and to raise a further $3,000,000 as new capital to be in-extremely reasonable and to ang vested in British Government war funds, were approved by shareholders of the Hong Kong Electric Company, Limited, whose annual meeting was held this morning with Mr. L. J. Davies in the chair.
who attempt to query this would refer them tu similar undertakings which have an out-
put approximately the same as ours in India, the Far East, and trouble to do this will find that
elsewhere. Those who take the|
our rates compare more than favourably and it must
not be forgatten That a portion of our
cutta a 3,000 mile haul - and
Bay
a 500 mile haul.
The increased charges to consumers recul has to be carried from Cal- cently announced were explained as necessi- the remainder comes from Hon- tated by the rising cost of coal, and it was pointed out that this was the Company's first increase in 52 years.
to
in
The Chalfman said: The net wise shareholder will desire profit after providing for Debre- query it. cation is $2,290,186 VI, a tall af: Bad Debts at $812 48, though nearly $400,000 compared. with higher than in 1939 mainly due the year 1939; with $594.480.39 to unpaid accounts by enemy brought forward tro 1939 We
aliens, is very satisfactory when have $2,884,607.30 for appropria- the size of our turnover is re- tion. On September 9th we paid membered.
side Interest an interim dividend of $100 per On the Credit share on1 the old shares which shows an appreciable increase. absorbed $600,000 and with the The item Sale of Property re- balance we propose: To pay afers to No 8 Queen's Road Cen- final dividend of $1,20 on the old trai which was purchased share; absorbing $720,000); To pay 1937 as a site for a sub-station, a dividend of $1.10 on the new but when a buyer offered a more shares sorbing $330,000.
Street To suitable site Duddell
to place to Reserve $600.000: Send at a lower cost we decided to the South China Morinng Post purchase same and to dispose of Bomber Fund a second Donation the Queen's Road site which re- of $50,000; To carry forward to sulted in a profit. next account $584,667 30, which
Sheet, Turning to the Balance hope will meet with your ap-Capital Expenditure during proval
year amounted to $806,926.59; the this You will notes that the amount 'principal items covered by we presume to pay VRIL 15
divi-expenditure are five new feeder of were laid out diend
cableg which da t
$300,000 kw tham
20th unt
the
yem: but you will loerve Bhat North Point Power Station, te* Ferler now Beterafing Station
་།"
the Lighly the have ...d to find & War Taxa-, Switch, Morrison 1 Substation tion 1 feel stile you will ap-
and its equipment and a Mercury prove te additional ontribution: Vapour Reiher which had 1-
come necessary to enable cope with the increasing require -
to the Bomber Fund.
US to
The carry forward is still veryments of our triends the Hong
the
uncertain times through. which we are passing 1 am convinced that a Cautious policy
desirable than ever before 1 an
Be
and
Confident shareholders will agree with this view.
Coal Prices
Kong Tramways united
Output Increases
01
The output from the Generat-
Station ing
during
was 1940 78,385,102 units-an increase Over 6 million units, or 17101 than 8 per cent, compared with 1939
The falling off in Profit on Meters connected show a fur- Working is almost entirely duether increase of 1,687 to 50,843. to the increased cost of freight on
It may interest you to know coal and to War Taxation, which
that since the outbreak of
sales or current.
the
re-
are partially offset by increased wilr our orders to Britain 1or materials and machinery have Cual cost us approximately continued to be filled with $7.60 per ton more than in 1939 gularity and efficiency and SO and $13.40 per ton more than far we have suffered only three in 1936. It is unticipated that losses due to enemy action: com- during 1941 the average cost ofpared with the losses sustained coal compared with 1940 will during the war of 1914-1918 we show a
further increase of about are so far exceedingly fortunate; $16.00 per ton.
In view of these this is only one of the miany large increases in the cost of coal debts we owe to the Royal Navy I feel sure that our consumers and the Mercantile Marine.
will consider the recently un- I now come to the proposed nounced increased charges are new issues of capital details of reasonable.
which have appeared in the news-
have
This is the first time during papers. the history of the Company it As you all know the present has been necessary to increase satisfactory financial position of prices; since the Company was this Company is largely due to Inaugurated 52 years ago the the careful and farsighted policy rates charged to consumers of our predecessors but it is ad- steadily fallen from visable to keep the issued Capital 35 cents. per unit to 15 cents. within a reasonable ratio of the per unit for Light and from intrinsic value of the undertaking. 20 cents per unit to 5 cents per The share market values this unit for Power.
Company at the present time at It is all the more regrettable approximately 36 million dollars. that this increase should come at Far be it from me to query the a time when the costs of living sagacity of the share market in are rising, but your Directors felt this valuation, but let us be a that they had no alternative; I little more conservative and for can only express the hope that present purposes assess the value the time will soon come when of our undertaking at say $30,000,- your Directors will be able
to 000,
revise the rates in a more agree-
able direction.
Donations show a considerable
Dividend Ratios
Increase this is accounted for Assuming our proposed alloca- by the contribution to the Bom- tion of profits meets with your ber Fund which was made last June,
War Taxation and Air Raid Precautions cost us $285,188.41;
7
approval, our total distribution In the form of dividends for the year 1940 will be $1,850,000 or 5.5 per cent on a very conservative valuation of our undertaking.
The same distribution on the cambindď prement and proposed 'new capital would be 11 per
cent.
High Depreciation Depreciation at $808,072 is the highest in the annals of the Com- pany but it is -computed on 巍 In many cases of franchiseS scale which is recognised os fair granted in the-United States 8 and, proper in the interests of per cent. for "fair value" has both shareholders and sound fin- | been laid' down as a reasonable ance," and "I feel confidentno | return on the shareholders' in-
Share Capital
In order
the issued to bring Capital more into line with the actual value of your Company, your Directors have decided, in the first place and subject to your approval, to capitalise the 30 lacs which will be in Reserve it! shareholders agree to
the DIO- posals I am going to submit to them in a few minutes.
As a second step we propose to offer to them 300,000 new shares at $10 each in the proportion of one share for every 3 shares held :
(Continued on Page 13)
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