A "Most Disastrous Year"
The fourth ordinary meeting of the shareholders in the Ewo Cotton Mills, Ld., was held at the offices of Messrs. Jardine, Matheson & Ca., Ld., on Thursday. Mr. A. Brooke Smith presided, supported ay Messrs. C. Gordon Mackie, E. E. Clark, H. Martin Little, ford Cox, Zee Quan-yuen, Chi fong, Pan Ching-poo and Woo Ling-shu, (consulting committee); Mr. David Campbell, secretary; and shareholders representing The chairman sai Gentlemen—Following the usual custom and with your approval. propose to take the report and accounts as rea T regret that the pessimistic views expressed by me at our last meeting were fully justified, and we have to-dey to consider a most depressing report, the equal of which your consulting committee trust will not be their misfortune to present to you in future years.
The loss for the past year was $19,748.18, which, after deduct the amount brought forward from the previous account, leaves a debit of $16,491.48.
As you will see from the report 1 it is proposed that the sum of 3201 356.28 be withdrawn from.general reserve fund to liquidate the 2 verse balance and to provide for the which are necessars appropriations. land plant and machinery by $145, 900.54, which has the approval of Jour auditors, while the other sums to be written off, viz $2,000 off water supply, $1,364.26 off furniture and $600 off motor-car, do not leah for comment.
At the moment we have at the: credit of equalization of dividends fand a sum of $1,400,000 and in order that ordinary shareholders may receive some return it is re-Jcommended that $297,000 be taken from this fund to pay the usual dividend on preference shares at the rate of 8 per cent. per annum, absorbing $72,000, and a dividend of $0.25 per share on the ordinary sharc(, requiring $225,000.
Advantage of Building up Reserves.
It is in times such as the present that the advantage of our policy in the past of building up reserves is 63 seen, and Tam sure that a mat ter of gratification to all of us that, jin spite of a most disastrous year from the point of view, not only of cotton mills, but of most traders, are able to pay a dividend of 5 per cent, on the ordinary shares and still maintain our company in a very sound financial position.
If the withdrawals recommended have your approval the general reserve fund will stand at $82,000,000, Jwhile the equalization of dividends fund will be reduced to $1,103,000. We shall also have $500,000 at Jeredit of cotton fluctuations ac-
During the year we spent S14,- 818.13 on special. repairs and re-newels, and on December 31 the amount at credit of this fund was reduced to Tis, 20,745.24 which must necessarily restrict our expenditure, but I'am afraid it will be absolutely essential to spend more than that sum during 1925 in order to keep our machinery up to date.
'Additions to buildings and plant and machinery have been made where we considered it expedient, and although the outlook is discouraging it is the aim of your ge! feral manager to adopt impro' ments and additions which appear to.them desirable for the future yperity of the company.
Stocks of cotton at December 81 were taken in at cost in accordance with our usual practice—our holdings of Indians and Americans showed a potential loss of about $100,000 when we closed our accounts, but your consulting com: mittee did not consider it necessary to make any adjustment by withdrawing a r sum from our jeotton fluctuations account. How-jover, should the result at the end, lof the present year be disappointing may be suggested that a trai for be effected from this reserve, Recently Cotton has advanced and our prospective loss has been reduced considerably.
Stocks of manufactured goods, which were unsold on December 31 have practically all been disposed of at slightly more than inventory figures.
It is estimated that the amount credit of Chinese superannuat fund is ample to cover all known
Text read from the printed page and cleaned; old type leaves the occasional error.