PUBLIC RECORD OFFICE
Reference:
C.O. 882
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
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the Company from agreeing the terms of the draft agreement for submission should it be possible so to du.
We have, &c., SUTTON, OMMANNEY, AND RENDALL.
Enclosure in No. 340.
To the Right Honourable Viscount ST. ALDWYN, P.C., &c., &c.; Sir EDWARD COURTENAY BOYLE, Bart., K.C., M.P.; JAMES CHARLES INGLIS, Esq.; the Umpire and Arbitrators appointed under the provisions of Ordinance No. 7 of 1905 of the Colony of the Straits Settlements.
We beg respectfully to intimate to the Court that in addition to the questions argued in the main arbitration in reference to the assessment of the compensation to be paid to the Company for the taking over of the undertaking certain subsidiary questions have arisen between the parties under Section 6 of the Tanjong Pagar Ordinance 1905. By Section 6 it is provided that
C
The accounts and balance sheets of the Company up to the appointed date shall be made up and audited in like manner and with the like incidents and consequences as nearly as may be as if this Ordinance had not been passed but as soon as possible after the appointed date and the balance shown on the certified accounts representing profits available for immediate distribution as dividend and legally distributable as such shall be paid over to the Company. In determining the com- pensation for the transfer of the undertaking of the Company the sum payable to the Company under this section shall not be valued as forming part of the undertaking."
The accounts and balance sheet of the Company up to the 30th day of June 1905 being the appointed date were in due course made up and submitted for audit to the Auditors agreed on between the parties and the following note and reports were signed by the Auditors at the foot of the accounts after such audit
We have examined the foregoing balance sheet and the profit and loss account pertaining thereto and subject to our appended reports relative to depreciation certify that they are correct and that in our opinion the balance sheet is a full and fair one properly drawn up as required by the regulations of The Companies Ordinance 1889 and that it ex- hibits a true and correct view of the state of the Company's affairs.
LYALL AND Evatt,
Auditors. G. A. DERRICK,
We report to the shareholders that we consider a charge should have been made in the profit and loss account in respect of depreciation of plant and machinery before arriving at the profit. In view however of the very large sums charged for depreciation in former years and the fact that the whole cost of maintenance repairs and replacements has been debited to the profit and loss account for this half year we do not consider that the amount of this charge should be deducted from the assets on the balance sheet.
LYALL AND EVATT,
Auditors.d
I have to report that no provisions having been made for depreciation either in the Singapore or Penang accounts the balance of profit and loss account for the half year is thereby considerably enhanced In past years a considerable sum has been annually provided for depreciation and in my opinion the ordinary practice should have been fol- lowed in closing this half-year's accounts more particularly in view of the provisions of Section 6 of "The Tanjong Pagar Dock Ordinance 1905."
G. A. DERRICK,
Auditor.
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On the 14th October 1905 the Company forwarded to the Government the said balance sheet which they alleged was a duly audited statement of the Company's accounts for the half-year ending 30th June 1905 and requested the Government to pay over to the Company the sum of $891,675 2c. as being the balance shown on the said accounts representing profits available for distribution as dividend and legally distributable as such and in answer thereto on the 17th October 1905 the Government declined to pay the dividend on the ground that the balance sheets then presented had not been made up in the manner prescribed no allowance having been made for depreciation or carrying forward a sufficient sum for working capital.
An interview took place between the representatives of the Government and representatives of the Company at which the position was discussed and on the 3rd November 1905 the Colonial Secretary on behalf of the Government wrote to the Company a letter of which the material parts are as follows:-
"Referring to the interview which the representatives of your Directors had with His Excellency on the 28th ultimo on the subject of the claim of the Tanjong Pagar Dock Company against the Government for $391,675.02 alleged to be the amount available for distribution as divi- dend for the half-year ended the 30th June last I am directed to forward to you for the information of the Board copies of statements prepared by Mr. G. A. Derrick at His Excellency's request.
"(2) After making deductions according to these statements the amount due by the Government to the Company without taking into considera- tion any other deductions which may hereafter be claimed by the Government is considerably less than the amount required to pay a dividend of 6 per cent. for the half-year ended 30th June 1905. "(3) His Excellency is however ready as he has already intimated to the representatives of the Company to pay to the Company the amount required to pay a 6 per cent. dividend. Such payment will be made without prejudice to any questions of principle or amount which are to be decided by the Court of Arbitration in London. "(4) The decision of the Court must be obtained on a formal submission in writing signed by both parties and the submission should contain a clause providing that the question of the costs in connection with the hearing and decision of these questions shall be left to the discretion of the Tribunal,
"(5) On hearing from you that the Company is prepared to accept these conditions His Excellency will at once order the amount of $222,000 to be paid over to you for distribution to the shareholders."
to which the Secretary of the Company on the 8th November 1905 replied as follows:-
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I have the honour to acknowledge the receipt of your letter (Misc. 8763/05) forwarding copies of statements prepared by Mr. Derrick at His Excel- lency's request as to the amount allowed by the Government to be due to the Tanjong Pagar Dock Company Limited and stating that His Excellency is willing to pay to the Company the amount required to pay a 6 per cent. dividend on the Company formally agreeing to refer the questions of principle and amount in difference to the Court of Arbitration who are to have power to deal with the question of
costs.
'(2) This letter was considered by the Directors of the Company yesterday and they have decided to recommend the members of the Company to accept the conditions therein referred and a meeting of the Coni- pany will accordingly be called for Saturday the 18th of November at which resolutions will be proposed to authorise the Directors to enter into an agreement to the above effect. The Directors are advised that they could not safely enter into the agreement without such a resolution.
*(3) In order that time may be saved it is desirable that the form of agree- ment of reference should be settled before the meeting is held. Will