1938-04-01 — Page 11

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GENERAL.

INDO-CHINA S.N. COMPANY MEETING |

TONNAGE NEEDED

Now new tonnage was contracted for during the year but further steamers are badly needed to re- place old vessels and maintain im- portant connections. The problem is a very pressing one. As you are aware, we have had to charter other people's ships to carry on and I need not tell you the disadvan- tages of this.

When the ships were written down at the end of 1934 they were |given a deânite economic life. It is necessary, you will agree, when-

to live up ever possible

to the schedule then laid down and de- preclate annually. Lack of profits. and depletion of general reserve. which were almost used up in 1934, prevented" us doing anything for the year 1935. We are able to make this provision in 1937. Had this and money not gone to depreciation for and 1935 it must have been transferred

to General Reserve.

HAVE TO BORROW Depreciation is really intended to provide for replacement of wast- ing assets, in our case ships, bulks etc. We have today no liquid re- serves to meet those replacements and have to borrow from the Bank.

1935 had the Company been able sent by a firm of Stock Brokers re- to meet depreciation in that year. presenting a hundred of cur share- (Continued from Page 2)

Once again the Directors have holder. It is no exaggeration to say that walved their fees of £1,500 per without the whole hearted co-annum and this money will not be operation of His Majesty's Govern-held in suspense. ment and His Majesty's Navy, I Coming to the Balance Sheet would have been impossible to have there is a slight reduction of £8.000 qperated our river and coastal ser- in the Book Value of Steamships, vices. Again and again both came Hulks, etc, compared with 1936, the to our help in these delicate situa-write-off being greater by that tions which arise in times of stress amount than the additions to the and on the Yangtse in particular leet which include the instalments This Company stands greatly infinanced by, the Bank during the their debt.

year on the three new ships.

Sundry Debtors in China London, Agents Balances, C Stores ali show slight increaser due to the greater turnover, and the higher cost of coal, etc., but all the amounts owing to the

Company have been accounted for.

LIABILITIES With regard to the Liabilities, General Reserve has been increased by £120,000 by the transfer from Revenue Account. There is a small reduction in Underwriting Account

Without further evidence I can- due to sundry äccidents not covered by Insurance, while Special Repairs not suppose that this telegram im- a dividend. request for and Renewals remain practically plies a

However. unchanged.

the Company has no Sunday Creditors in Chins and money to pay dividends and would,

now appear at £105.in fact, have to borrow to do so. London !667.2.1d: as compared with £218, I now propose that the Report |852.14.5. In 1936, the overdraft due and Statement of Accounts as pre- to the General Managers of sented, be adopted. that £130,000 128,826.15.5c. having been paid be transferred to General Reserve

item of on. The

£88,646.16.50 and that £9,568,4.1id. be carried shows a slight decrease and has forward to the year 1935. since been paid while the sum of $19.220.5.88. appearing in the name of the Hong Kong, and Shanghai Banking Corporation re- presents the balance of the Loan Account outstanding at the close

In December the charters of the three Vikens, which the Company has been operating for the past seven years. explred but as owners wanted more than we could pay, for longer periods than we could afford to risk, they were not re- newed and we have chartered other ships for short periods.

NEW VESSELS

As I said at our last meeting orders were placed. In 1936 for two coasters of the Taksang type and A small upper river steamer. But for the difficulty in obtaining steel a three would have been in com mission by now. As it is, the river steamer Liwo is about to be taken

over wille the two coasters should

be ready in mid-summer.

The construction of all three was, is you know. finanned by 3 loan with the Hong Kong and Shanghal Banking Corporation. I am glad that during the year it was possible to make substantial payments towards the reduction of this account. though at December 31 à sum of approximately £150. 000. still remained to be financed. Today It is £125,000. But even with these additions the fleet is still below normal requirements and expansiori is essential.

OUTLOOK NOT CHEERFUL I am going to make no attempt We now to forecast the future. must all admit that the immediate outlook is certainly not cheerful with China and Japan engaged in: 5 bitter struggle: Our deepest sympathies go out to all those who have suffered. But trade has re- markable recuperative powers here in the Far East and there will be much to do when once again it takes its normal and unhampered

course.

So far, 1938 has begun quite well. but I hope outside, shipping may not be unduly attracted to these parts as happened after the Russo- Japanese and Great Wars. Their owners will find as they did before that they chase a chimera.

ACCOUNTS

Turning to the Statement of Accounts, the items debited to Revenue amount to £142,998.8.5d. and include the balance brought forward from 1936 Account E12,368.8.11d.. General Charges 7,940.18.9d.. Depreciation for 1935 and 1987 £105,733.0.0d., Floating Staff Pensions £10.791.17.94. and Interest £6,164.3.0d.

On the credit side of this ac- count the higher earnings of the Company are reflected in the Net Balance of Steamers Working Ac- court which stands at £270.817.15. 4d., Transfer Fees £40.7.8d, and Ex- change Adjustment £1,708.10.4d., due chiefly to a gain in exchange on remittances to meet Sterling liabilities, the rates obtained dur- ing the year being more favourable than the closing rate on December

31.

NO DISTRIBUTION

After allowing for all these there remains a credit of £129,658.4.11d.. of which £120,000 has been trans- ferred to General Reserve and £9,588.411d. carried forward to the year 1938.

It is to be regretted there are no funds available for distribution to shareholders as the profits of the year have been utilised to liquidate the overdraft due to the General Managers which on December 31, 1036 amounted to £128,828.15.5d. and to repay to the Hong Kong and Shanghai Banking Corporation

part of the sum advanced by them during the year on account of new sonnage.

£19,220.5,8d. is shewn as due to the Bank on December 31, 1937 and while this has since been paid off. there remains today a Hability of

£125,000.

DEPRECIATION ·

In the circumstances your Direc=" tors considered it advisable, in addition to providing normal de- preciation for 1937, to write down further the, value of the fleet by the amount which in the ordinary way would have been applied to

The extent of this borrowing you know and you now know too that more ships are required.

OPINION ENDORSED Hon. Mr. M. T. Johnson seconded carried

the proposal, which was

unanimously.

the Chairman's remarks concern- Mr. W. E. Kirby endorsed the

of the year.

ing the splendid work rendered by The contingent lability for the shore and floating staffs, and cumulative preferred dividends for said also that the General Mana- 12 years amounts to £178.520.8.0d.

gers commanded great respect and In June the restoration of the loyalty because they had always 10 per cent reduction in salaries had more than a business regard made during the learner years was for their employees, agreed to and with it pay was drawn at current rates of ex- change.

LONDON PROTEST Before I leave the subject of ac-

Proposed by Mr. F. C. Hall and seconded by Mr. M. H, Lo, Sir Ro- bert Ho Tung was re-elected to the Poard of Directors.

Messrs. H. W. M. Dulley and N. L.

counts I want to read to you a H Raiiton proposed and seconded telegram the General Managers the re-election of Messrs. John have received this morning.

Fleming and E M. Bryden as "On behalf of over 100 customers Auditors, which was also carried holding Preferred and Deferred unanimously.

7

we protest against depreciation A vote of thanks to the Chair- charge tallowing 1934 writedown | inan. proposed by Mr. Kirby. -Emorharoo London"

brought the meeting to This telegram is supposed to be clusion.

58306

a con-

FRIDAY, APRIL 1, 1938.-PAGE 11

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