An extraordinary general meeting lof shareholders in the Shanghai Waterworks Ca, Ld, was held fon Thursday at the head office, 69 Kinngse Road, to consider the advertised proposals of the directors regarding the distribution of new shares. Mr. H. Martin Little.presided and there also were present Messrs, A. W. Burkill, L. E, Canning, H. V. Wilkinson (directors).
'D. "Pearson (engineer-in-chief and manager), W. R. Walter! (secretary) anda number of shareholders, 16,872 shares being repre-serted altogether.
After the notice convening the meeting had been read, the Chairman. said:
As you will have learnt from the! lcircalar letter of September 30, the negotiations that have been taking place with the Municipal Council thave at length culminated in the signature of a preliminary agreement between the Council and the sparly, setting forth the principles fo be observed in arriving at a new! Jagreement to take the place of that of July 1, 1905. Copies of this preliminary agreement were sent to) Jail shareholders and I trust that it meets with your approval. It represents the result of negotiations Jwhich started so long ago as 1917 Jand have gone on intermittently since that time. Perueal of the records of negotiations which have been sent to you from time to time with the annual reports and accounts will have shown you the many difficulties that have cropped up and I think we may congratulate Jocrselves that these have at length been surmounted, The New Agreement The original agreement with the Council, of 1880 provided for! restriction of dividends, but no Limit was placed upon the' water rates: for Chinese houses and for nondomestic purposes. The 1905 agreement removed the restriction on dividends but placed a limit on the water rates to be charged for the! supply to both foreign and Chinese houses and for non-domestic purposes. The preliminary agreement! we have now entered into re-imposes a restriction on dividends so {far as they are derived from profits arising from the supply to intraagreement consumers and provider for periodical revision of water! rates.
The question may have occured to you whether we were justified {in giving up the right to unrestricted dividends. I will endeavour to explain briefly to you the position as!
presented itself to us. The 1995) agreement was quite satisfactory from the shareholders' point of view, until the great enhancement! of costs of materials and labour occurred in recent years, more especially as a result of the Grest: War. This increase, as you know, hit us very badly, for we were precluded by our agreement with the Gouneil from raising the water rates to meet it, with the result] that dividends were for a peri seriously curtailed. 'True, we have recovered to a considerable extent, but, as you know, there are many' eventualities thst' might seriously] affect our dividend-carsing capacity. T have no need to detail them, they fare obvious to all of you. Orered as_we were by the pi Aercement stability of dividends 1 fair rate, we had, in your directors' opinion, no course but to accept. That our action has met with the general approval of shareholders is, I venture to think, evinced by the large number of proxies we have! received for these extraordinary general meetings.
With the aid of the circular letter of September 30, you have sequainted the provisions of doubt made yourselves fully!
the preliminary agreement and) [ttle further explanation from one! is, I think, necessary. The limite tion in, regard to dividends applies only to those derived from. the profits arising from the supply intro-agreement consumers. In aidition, shareholders of all classes, will participate in any extra: dividgnd The preliminary agroemert brings us into considerably closer reMtionship with the Municipal Counci, The books, financial records" anc Pa minutes are to be open to the fspeetion of accountants nominated the Council, we are to submit quarterly reports covering such in. {formation regarding the company's activities as may reasonably required by the Council, having regard to the terms of the agrecment, and the Council is to nominate two directors on the board, The tariff of charges, together with each periodical revision, is to Ibe agreed with the Council and, the interests of shareholders being sat jgvarded by the terms of the agrecment, I do not, think any difficulty in regard to this need be antici od. We shall be working for a com-[mon object, viz, to a tariff of water rates which will pay for an efficient supply of water and provide. for the return on capital provided under the terms of the agreement, T am unable at present. to. so what the effect of the naw agree ment will be upon the water rates, but, if some increase is. found be necessary, I would ask consumers remember that the rates they late at present paying were fixed in 1906, some 21 years ago, at a time when conditions were vastly differ-fent to what they are now.
Text read from the printed page and cleaned; old type leaves the occasional error.