The third annual general meeting of the Shanghai Cotton Manufacturing Ca, was held on Thursday afternoon at the office of the company, Mr. M. Nodaira presiding. The other directors present were Messrs. K. Otani, W. J. N. Dyer and H. E. Morriss, and there was an attendance representing 46,897 shares.
The notice convening the mecting, and the auditors' report, having been read, The Chairman said:—The report and accounts for the year ended June 30, 1923, having been in your hands for some days, with your permission, I will take them as_read.
The result of the year's working, to' our regret, has been very disappointing; the deplorable state of affairs in this country, in addition to the economical depression throughout the world, is directly responsible. As stated in the report, hardly any spinners, under present circumstances, could derive any reward from their enterprise. While we have had to be content with such poor showing. it is earnestly hoped that conflict and disturbances such as we are recently so accustomed to, should cease at an early date, and once again to be able to -enjoy everlasting peace and prosperity.
Opening prospect of the next financial year is not at all promising and unless speedy relief is forthcoming, I am afraid, there might see many crashes among this enterprise.
In order to get through these trying conditions and to avoid inevitable loss to the Company, your Directors have been and are doing everything utmost possible in their power. Expenses have been cut down as much as could possible bear, and outlet of your stocks have been sought and shipped out, not only in this country but all over Asia.
In spite of this adverse state, your mill properties with regard to their up-keep have received most careful] "attention, and having been spent Tls. 179,035.13 (charged to working account)' for _renewal and repair, conditions at mills are very satisfactory, and you can rest assured that when once again a boom arrives, most desirable result would be anticipated.
In connexion with the suggested allocation for depreciation, out of available profit, I may be allowed to make a few remarks on the proposed amount. No doubt, you have noticed that these figures when compared to those of the two preceding years, are much below and might be taken as not quite adequate, but if your perusal is given on the list of the Company's General Inventory, you will agree with me that the book value of your assets is well written down, and far below the actual value. It your Directors' standing whenever possible, to write off your assets as much as they conld_ during - prosperous years, and accordingly the amount—allocated for depreciation during the last preceding years was very generous and liberal one.
However, with such year of unusual] result, it hardly justifies to follow previous example, and' as I explained just now regarding book value of your property, your Directors considered it quite safe to depart from their usual policy and recommend you to sanction the proposed amount which they consider quite reasonable. Your Auditor has been consulted and he had concurred in' your Director's view.
Now, Gentlemen, coming to to-day's special business, i.e. "Inevease of Comypany's Capital and—Shares,' I may permitted - te explain the, reason why such procedure became necessary. There are two facts, firstly, in consequence of various improvement and addition made to your mills, including a new weaving mill which cost over one million, and purchase of a piece -of land at 3 million, ete., as reported. but have never asked for any increase of capital before, with the oxpectation that another prosperous year may find it unnecessary to take such steps. Secondly, big accus mulation of both raw cotton and manufactured goods, cause of which was stated in the report. The effect of these has been felt very severely, as the Company's ready fund having been entirely tied up by those above stated and the working capital has been quite exhausted and had to get short loans from time to time, not not without inconvenience and at a high rate of interest.
As you have noticed in the account before you, there are by the end of the financial year, about eight lakhs of overdraft on your Agents, and also the sum of Tls. 72,714.11 was paid as interest. At present, though it is considered as of a temporary nature, this embarrassing state of affairs with regards to the Company's finance is further intensified owing to the fact that the present season neces-sitares to provide a large fund for raw cotton until the new crops are forthcoming on the market.
Under such circumstances, your Directors came to the '¢onclusion that there is no way out, but to appeal to the shareholders to ipcrease the. Company's capital so as to be able to utilize such funds, for the present, te meet acute call of working capital and later when more normal condition of the market revives and the Company becomes financially stronger, such surplus fund be allocated toward your mill's further exten-
Text read from the printed page and cleaned; old type leaves the occasional error.