PROFITS AND DIVIDENDS
Lecture At The University
The following is the third and non was whether or not the loas Anal instalment of" "Profits and was in respect of a fixed or was Dividends" the lecture given by ing asset or in respect of a floating Mr. T. A. Martin at the University asset. It was decided that the nines were (or has been whilst on Monday night:--
they were effective floating assets. the learned Judge commenting as
|
Having arrived at the requisite total figure for depreciation on
Axed
Suppose the Company had "bought enormous stocks of ore suficient to last for ten years, It could hardly be said "that
the true value
"much of this as remained
assets, and making due follows: allowance, if any, for loss in re- valuing floating assets, the result- ing charge is regarded as part of. / and is included with, the current
expenditure which
set of against current income, the mur plus then being the profit for the period under review. This is in principle the commercial method of arriving at profits and for a considérable time it appeared to coincide with the legal view also, then what has come to be known as the Lee y Neuchatel series of decisions handed down by the Court of Appeal has indicated very different methods which a limited company might legally adopt in arriving at its profts. Let me give you a summary of some of the decisions:-
A Company empowered to do so by its Articles of Association, may distribute dividends without making good the depreciation of wasting assets,
A Company may
declare a dividend out of current profits without necessarily making good loss of capital,
2
HONG KONG DAILY PRESS, SATURDAY, APRIL 13, 1935.
THE CHARITY BALL
A Great Success
SLAVES TO USE OF DRUGS
Severe Sentences Announced
SECOND LAND CONFERENCE
Many Resolutions Adopted
¡Special to the Hong Kong: Daily Fress" (Copyright).I
The Charity Ball held under the distinguished patronage of H[Special to the "Hong Kong Dally E. Sir William "Peel-K.C.M.G., K.
PressTM (Copyright)} BF and the Hon. Presidency of Sir Shou-son Chow, Kt, LLd. on
Hahkow, April 5.
Nanking, Apr. 2. Those who still find themselves | A puniber of important reaplu- the 30th March at Hotel Cecil for raising funds in aid of the Chil- slaves to the use of narcotic drugs clons were adopted at the second the second annual ren's Hospital and Curic, Kolono, or morphine injection after two meeting of has turned out to be a success, anouncement of the rules, that is held here yesterday morning.
of warning through an- | Land years
Administration Conference sum of over $800 belig raise.
for gifts and donations.
Many
individual
For the success sincere and grateful thanks were due to: Sir William Feel; Sir Shou-son Chow: Messrs Tse Yung Kwong and R. "from time to time qught not CH. Lim; Miss Grace Au Feung; "' to be brought into the Hotel Cecil, Messrs, Gande Price "Balance Sheet, and I can see. A. 8. Watson & Co. Ltd, "no difference, for the purpose Tsang Fook Piano Co.. The Dairy "of the account between ore Farm Ice and Cold Storage Co. in situ and ore so bought in Ltd, the Victoria Printing Press "advance". Sometimes a Company sells a portion of its fixed assets and the question then arises as to whether or not the resulting balance, if it is a profit, may be included in the profits available for dividend. consideration - of "cases From a decided on this point it may be said that capital profits are avail- able for dividend if the Articles of Association permit such distribu" tion, the surplus is a realised one. and such surplus remains' after a proper valuation of the assets has been fairly taken
the net
those who are found guilty of such offenses beginning as from the year 1937 shall be given the death penalty or life imprison ment, according to the additional regulations issued by the Gen- eralissimo's Headquarters supple- mentary to the Anti-Narcotic-Drug Regulations promulgated on May 11. 1834
The supplementary regulations governing the suppression of nar- cotic drugs in China, which con-
A statement showing the re- sist of 13 Articles was made public ceipts, payments and proceeds, made out by the Joint bere yesterday Six of the 12 Hon. Treasurers. Miss Maisie Chul Articles relate to methods and and Mr. Kwan Yim Chor is set degrees of punishment for offen-
out below:-
Receipts To Sale of 271 Tirkets at
$3.50 To Programme Advertise- ments (net receipts)... To Sundry Sales.... To Mr. Tse Yung Kwong's
donation
We may therefore say that, sub-To Mr. and Mrs. R. C. H. ject to the Company's regulations,
Lim donation Subject to its Articles, a Trust the "divisible" proûts of a limited To Sir Robert Ho Tung Company may, distribute a divi-company may be defined as the
doration dend out of the excess of current excess of current income' over
To Mr. F. Loseby Income over current expenditure current expenditure, after making
donation depreciation without making good loss of good
on floating To Mr. K. C. Chen capital.
and retaining sufficient To Mr. and Mrs. Kwan assets funds to pay liabilities, but with-
Yim Chor donation out necessarily in all cases taking To Hon. Mr. T. N. Chau into account depreciation of fixed
donation assets; plus profts, if any, from realisations of fixed assets, provided such profits remain after making good any capital losses. That Rë- venue losses must be made good To Miss A. before profits can be distributed,
tion
followed some
To Mr. Tam Tik Fong
donation
To Mr. "Andrew Cheurg
doration
tion
$948.50
159.00 62.90
100.00
25.00
10.00
10,00 10.00
7.00
ders.
Members of the meeting show- ea keen interest in the fixing of '
Alter a land policy for China.
lengthy discussions. It was agreed that the land policy of China should be a policy of equalization" or landownership as advocated by the late Party Leader, Dr. Sun In the execution of Yat Sen." such policy, the meeting pointed out that the following | salient points should be borne in mind: (1) fixation of land values and tax on the increment. of land values; (2) fixation of land rent
in accordance with land value and readjustment of relations be- tween landlords and tenants; (3) the establishment of financial agents for the development of
and enterprises; and
the (4) execution of a reclamation policy for the cultivation of waste land "ahd the even distribution of po- pulation throughout the country..
Officials' Included According to Article 4 those who manufacture, trame in and sell narcotic drugs" shall be punished by death, and those who assist in any way in this offense shall be given from 5 to 12 years imrpison ment or life term according to the
Regarding the revision of land degree of seriousness of the nc-
taxes, it was decided that' an aer- corspilées' part in the offense fal survey of all lands and the However, if the accomplice hap-registration of land values should pens to be a public functionary be done as a preliminary step to he is to be punished by death
wards such revision. The house ** premises in which L. the drugs are manufactured is to confiscated. From 20 to 40 per cent, of the proceeds from the con- fiscation of the properties of the manufacturers or transporters of narcotics will be given as. reward, to the informant or opium-sup-
The meeting yesterday also de- cided to recommend to the Gov- ernment the establishment of a Ministry of Land Administration of land banks,
China United Press (by mail).
pression official responsible for the ancials, military, staff men, and detection of the crime. But begin-students, Articio 9 states that they ning 1937 both the principals and shall be given a time. Umft,foz accomplices in manufacture and voluntary registration," and who- 'traffic in narcotic drugs shall get ever found violating this rule shall
without the same penalty, death.
excuse be given death Regarding drug addicts among sentence.
administrative | China United Prés (by. Mail). members.
5.00
5.00
5.00
Chan donde
3.50
3.00
Party
5.00
Total' $1,352.90
$180.00
A Company can declare dividend out of current profits, without making good deprecla- tion of fixed assets. These decisions were, however, by time "later another case which went to the House of Lords and, although they were not required to give a decl- sion on the subject, remarks were and capital losses must be made To Mr. J. M. Alves (Bal- made by more than one of the good before "Capitą) profits can be
ance from tickets) learned Lords which clearly show-distributed, but Capital losses need To Mr. M. K. Le dona- ed that they were not at all in-not necessarily be made good clined to agree with the deductions before revenue profits are distri- drawn in the Court of Appeal from buted. That it is not necessarily the Leev Neuchatel and other illegal for dividends to be paid"
Expenses cases, and consequently doubts out of current prófits without have been cast upon the anality of making good existing deficiencies By Fee for Orchestra .... By Payment of Dinner... those decisions. At all events, as in paid up capital or without one authority has said, a salutary writing off a debit on the Com-By Stationery & Printing By Cost of Decoration .... caution has been administered to pany's Profits and Losa Account
By Souvenirs for Ladies those who desire to act on that occasioned by loss in previous
By Cost of Sweets series of decisions. Further cases years. which have since been decided. it seems impossible to formulate By Miscellaneous Exper- below the House of Lords, have a definition that will cover the brought out the following:-
+
requirements of every limited com
That it is not necessarily illegal | Dany, and one is forced to the for Director of a Company to pay conclusion that the interpretation dividends out of the profits of the of divisible profits depends on the Company during a current year circumstances of each particular without making good existing de- case. Lord Halsbury had the fol- Aciencies in' paid-up Capital, or lowing to say in the House of without writing off a debit to the Lords touching on this problem-- Company's Profit and Loss Account "What are proats and what is occasioned by losses in previous capital may be a difficult and
years.
1
ገሞ
ses
Receipts Expenses
175.00
40.20 47 93
23.80 9.00
35.22
Total $520,95
$1,352.90
$ 820.95
NOW
ON
SALE
Net Proceeds $831.8
PASSENGERS
3.S. "HAKONE MARU" The following passengers
ar-
sometimes an. almost impossible That a Company is not preclud- problem to solve-When the time ed from paying dividends out of comes that these questions come current profits where debit before us in a concrete case we balance on Prod; and Loss Account must deal with them, but until rived on the ss. Hakone Maru has been written off by the res- they do. I, for one, decline to exyesterday:- toration of goodwill ng an asset at press an opinion not called for by Mr. Hanri E Ferriez, Mrs. R ав agreed fair value, goodwill the particular facts before us, and M. L Rey, Mrs. Mary Lynch having previously been complétely I am the more averse to doing so Gronert, Master Lynch Gronert, written off out of profits. It will because I foresee that many mat- Miss Rit Gronert, Dr. F. Waller, be noted therefore that whilst the ters will have to be considered by Mrs. T. Daly, Mrs. J. N factor of depreciation should al- men of business which are not Oliphant," Miss In Oliphant," "Mr. ways be reckoned with from a altogether familiar to a Court of 1. J. DuMez, Miss Florence May business point of view, yet it is hot | Law"..
Taylor, Miss Petricia Ker Cooper, Mr. M. A. Imes, Miss Lizzie Greer, Mr. D. Iopez Alénse.
ARRIVALS AND DEPARTURES
-་
"
1:
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thousands of women experience such pain and weakness.
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The use of Kalzana, the mineral food, for a few weeks provides the whole system with the indispensable minerals needed to establish that care-free, vigorous health that Nature intended you to enjoy.
But it must be Kalzana, as only in this scientific form (a combination of sodium- lactate and calcium-lactate) will the mineral salts be taken up and retained by your body. Lose your dread-re-establish the functions on a normal basis by starting a course Kalzana to-day.
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DIRECTORY & CHRONICLE
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necessarlly illegal in every case for Some Companies make a pre- a Uhalted company to ignore the tice of paying interim dividends 1set that capital has been lost during the course of their financial. before ascertaining its divisible year, for which purpose of course profts. "Such a proceeding may profits must have been earned. be very imprudentas one Judge This interim is usually at a lower has said" but a proceeding may rate, than the final to avold an be perfectly legal and may yet be unfavourable reaction in the mar- opposed to sound commercial prin-ket value of the Company's shares, ciples"
We may
say therefore when the results for the year are
The arrivals and departures that what is legally required of a known. Further, such an interim during the period under review Hmited company is that depre. is really only a payment pr
were:- clation of Floating Assets must be account for the whole year, coinse- made good before the payment of quently if an interim is declared a dividend and that depreciation out of profits earned during a por on Fixed "or Wasting Rasets need tion of the year, and during the Lot necessarily be made good remainder of the year a loss is before the payment of a dividend, made, resulting in a Toss on the although sufficient assets must be whole year, the interim dividend retained to pay Habilities; but as will in efect have been paid out to whether such provision is neces-¡of capital.
sary or not is a question of fact “As I have previously indicated. to be determined by the Court, the Directors of a Company usual- having regard to the circumstances ly have absolute discretion as to of each particular cale and the the amount which they consider Memorandum and Articles or the may be distributed in dividend, Company concerned.... "
** || having regard to the actual profts
British
American...
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Japanes Chinese
Total
SHIPPING MOVEMENT
The steam ship” “"Takida"
It might be mentioned here that and their power to reserve any sometimes it is difficult to say amount they may think necessary into which group a particular for specific purposes or generally asset should be classed-fixed or for strengthening the position of Singapore for this port on floating. I have in mind the case the Company. One form or re- 11th instant, and is due here. of gamelting company which serve, where the profits fluctuate the 16th instant: possessed mines in order to supply considerably from year to year is
themselves with their own are by way of a fund for the equalisa-
The mines were drowned out and tion of dividends, profits being g
s the cost of pumbhig them out transferred thereto in good years priations have
was prohibitive, the company aur and withdrawn in bar years to serve, and to rendered the lessen, so there was maintain an average rate of divi form
a considerable loss, and the ques-dend. What is left after ADOZO- and 1
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