12th November.
'THE affairs of this Company, whose creation as an international joint-stock industrial company under English laws we hailed so warmly at the time, are of such acute interest to a large section of the public in China, that our readers will, we are sure, be glad to have a precis of the series of able articles on the subject of the lately issued report and accounts which we reprint this morning, in recent issues of the " Peking and Tientsin Limes." Special attention is drawn to the auditors' certificate and report. The report) and accounts, says our contemporary, "will, we imagine, be received in a severely chastened spirit by the large and important section of the shareholders resident in China, both as regards the amount of information accorded in them, and the amount of the profit realised."
Our contemporary refers, of course, to the recent' meeting in Shanghai, and mentions the wide-spread opinion' "that there is much in the history of the flotation of this company which} needs explanation... We have even seen statements that an enormous! proportion of the £1,000,000 capital has been issued without! the company receiving adequate consideration for such issue, in! other words, that the burden of an enormous capital has been put upon' the company without the latter getting anything in return." There! is a deepening impression, it adds, that the time is at hand for stronger measures to be taken to put the affairs of the new corporation on a more equitable basis.
'The Profit and Loss Account shows a. gross profit of £114,422, but against' this only. the London and Brussels! expenses are shown. Why are the} very heavy expenses in China ignored? Evidently, gross is a mistake for net profit. "Considering the many hints of bad administration in China (administration, by the by, for which neither the late nor the present General Manager is in any way responsible), it is truly disappointing to note the utter absence of information as lo the management out here and its cost... Strange to say, neither report nor accounts give the quantity of coal mined during the year."
The gross profit, as has been said, is put at £114,422, though the" P. and T. Times" says that "it is a matter fairly familiar to the man in the street' that a profit approximating to £150,000 was shown as the result of the China account." Now at the London meeting of July 16th, 1901, the Chairman said that the profit for the first month was £5,200; for the second month £17,700; and for the third month £19,600, "Taking the two months from the 19th of March to.the 19th of May asa criterion," said the Chairman, "the profits amount to about £220,000 per annum. We are informed by cable that the production of the mines is now about 1,200 tons per day, and that it is steadily increasing. Looking at all the circumstances it would appear to be safe to take the present profits of the company in China at the rate of about £20,000 a month," No explanation is given in the report of the sad divergency between estimate and realisation. " There seeres to us," says our contemporary, "but one of two alternatives:—either these figures are wrong, or the rate of profit fell off markedly after May, 1901, If the latter be the case, surely so vital a matter called for remark in the report." Another complaint is then made that no particulars of flotation are given: "accounts are double-edged, they can elucidate and they can obfuscate; it is our personal confession that these wholly obfuscate."
Next our contemporary comes to the balance sheet. Capital is stated, he says, at £1,000,000 authorised and issued. Of this £375,000 was given to the old shareholders. The pre-pesterous bonus of £250,000 was given to those who took up the £500,000 debenture issue; that is, each man who took debentures to the amount of £100 had £50 given him in shares. This has never been properly explained; however we have thus £625,000 of the capita! accounted for. Our contemporary says There still remains the very large sum of £375,000 of the capital, which must stand for money or its equivalent, and it is here that the accounts as presented wholly fail, and leave all the share holders, whose views we are trying to express, completely befogged. On the same side of the account there is the de-venture issue of £172,562, which mu: necessity be cash. From this the liabilities of the old Company have presumably boon paid (seo the Chairman's speech on
Text read from the printed page and cleaned; old type leaves the occasional error.