Mr. A. J. Welch at Alma Estates Meeting Gives the Relative Figures: How Exchange Counts Reference to letters in the press with regard {0 the alleged excessive fees paid to the directors and sceretaries of the Alma Eslates, Ltd,, was made at the annual meeting of the Company held at 63, Canton Road on Monday, Dec. 23, Mr. A. J. Welch was in the chair supported by Messrs.
E. Canning and H. Kadoorie, Mr. C.F, Shackleton, (secretary). "total of 10.919 shares were represented, In hhis speech, the chairman said:
The accounts disclose a profit of Shal $47,115.83 compared with a profit for the preceding year of Shai $05.- 620.41, The decrease in prompt is attributable to the facts that owing to the operation of the Restriction of Output Ordinance the output for the year under review was 7.985 Ib. smaller and that the cost of produc: tion was nine tenth of a penny per pound higher, offset to. a certain extent by the nett proceeds of sales realizing a halfpenny per pound higher than they did during the previous. year.
The {otal expenditure in the Straits currency. shows an Increase of Straits. $1376.33, The main items of expenditure where increases are shown are as follows in Straits Dollars, not Shanghai Dollars. Super~ Intendence shows an increase of {$2,400.42 accounted for by the fact that in 1934 the manager was on Jeave and his salary for six months was charged up to the reserve for eave pay during this time, the acting, manager drew a smaller salary than Mr. Sparke now receives, this ae-counts for $2,180.53 of the increase. The. salaries of the clarke and the conductors were raised from the slump time level involving an extra payment. of $005.80 and leave pay Feserve, being assessed on the higher ity ald to the manager, increased by $088.14. On the other hand there was a small saving of $10.95 contribution to the provident fund, General charges are higher by $2,008.95. Of" this the agents Penang received $400.57 as in August 1034 their fee reverted to the pre-slump level. The upkeep of the estate motor ear and. the manage ear allowance account for another 491.29, recruiting and assessment showed an increase of $847.74 while medical expenses were higher by $500.03, mainly owing to the cleric being in hospital for several months.
Upkeep of gardens shows an me crease of $1,497.27 due to higher wages and more work being taken hand, an extra $859.00 being spent on weeding and §50131 on drains, During the slump" years everything that could be left undone without endangering the well being of the estate was shelved and mate ters have now been brought up 10 date.
"The only other large items expenditure was the sum of $2.1% 72 paid for duly, being the Gov. ernment cess on the output of rubber.
The fixed Shanghai charges remain practically unchanged but the heading bonus and "commission shows a decrease of Shanghai $620°09 owing to the smaller profit that was earned. The total sum the manager and the estate stof receive Shai $2,007.40 and the secretaries $063.29. In. the balance sheet the only two items of capital "expenditure were the $2,590.98 spent on the upkeep of the "immature area and $5,045.80 spent on. the erection of a new smoke house.
Finanelally the company ix in a very satisfactory position and if you ass the dividend now recommended the company will start the New Year with a surplus of Liquid assets amounting to about $56,000 or in other Words the reserve fund and the bal-nee carried forward in profit and {oss account are fully covered by the liquid assets, Turning now to planting matters, the young area of 454 acres is reported to have come along well during the twelve months and the bulk of it will be brought into tapping during the current year order to give a rest to some of the old areas.
The replanted area of sixteen acres has been cul out. The failure of this experiment Is not surprising as it Was probably the poorest patch of sell on the estate but, now that a cover crop has been established and fil erosion of soil stopped, it should be worth while planting again in the future when this part of the Estate becomes due for rejuvenation. conclusion, I would like to mak:
few remarks about the correspon dence that has appeared in the local Dress anent the alleged excessive fees! ald to directors and secretaries of 'Shangkal rubber companies. 1 can assure you that neither your directors! [nor seerelaries wish to receive any= thing' but the fair market price for their services, but in the frst place they must Fave tangible proof pit before them that their fees really are excessive. 2 bare assertion effect without supporting data Is In-JsuMicient and unconvincing. "At the moment, stter making exhaustive enquiries, we maintain that the fees! now pald are cassonable and" not excessive for the services rendered and in support of this statement 1 have here a summary of the fees paid the directors and secretaries of 28 London rubber companies. The planted area involved is 88:35 acres Bnd. the directors fees, taking' exchange at 1/21, average Sthai $0378. per company and the secretarial fees, $7,862 per company, 'The respect fees for Alma are' $3,146.85 and $1 676557. if the secretaries "commission fg included, which T do not think it produce Mgures to controvert the fore-fung. the beard" are quite. prepared fo give them their vars"ul considers tion.
"As for o8 the costs for the year under review are concerned "fy may Interest you to know *hat estate super Intendence coat 320 Stratis cents per ound, secretaries fee and commission o4'cénis. rectors foes 49 cent and Straits agency feo Si cents making 2 {olat of 554 cenis, tad it been per missile to produce the full standard Broduetion these fees would have beer Feduced to superiniondence 254 cents secretaries "#2 cent. directors fees 33 cent and Siralts agency 04. com, making ® {otal of 433 cents: Further: more had the present rate of exehanze Fuled during the year under review he skanghal fees' would have been stil further reduced to aecrotaries 71 fent-and directors 39 cent, or a (ola) of 104 cent for the aelual output and 'H2 cent per' pound of full standard One correspondent "Cambium veriting on November 1 intimates that the rate of exchange docs not enter into the question. Perhaps it dace not to any great extent from the point of view, eithoush they have commitments in sterling 10 meet, but it most assuredly does {ror the company's view point.
All the earnings of a rubber com: pany are either in Strails dollars guilders and according 19 the rate at exchange ruling it takes a larger smaller number of dollars st filers to cover the Shanghai collec expenditure.
From the accounts now before you you wil! see that the three headings, Shanghai ofice expensen, directors fees and auditors fee, total $11.397.% The tate of exchange tied wna 65'2, so that it required Straits $7410.68 (9 fever this exbendture: tovday the rate Steal 85.7738" to" mest the "sams El, so. that it will only. require
expenditure. "A clear saving: to the company of over Straits $1,04259, 'The chairman, Mer. Welch, after formally opening the' resolution for discussion, vacated. the chait to Mr. [Canning because, a8 he explained, he was a member of the frm of seer In the course of the meeting, ques tions relating to the management of the company were asked by Messrs. [Soyka and SINES. Gubbay. Mr. Soyka said that ho was obliged to criticize the Shanghai management for having, Jmade no endeavour to reduce the heavy expenses of the visiting sents, minimize the Shanjhal ofice expenses which amounted to. over $7,000, oF Feduico the directors' fees." He also tasked whether Wallie & Ca. or any of the directors, were shareholders or partners in the firm of Kennedy: and Burkill, "This was admitted. Mr. Soyke then went on to ask whether: there tad been any endeavour to. jsccure competitive bids for the services of visiting agents, so due the heavy fees.
In a rubber company which had developed and was working cerates, the duties of directors were purely nominal, and they were elected to comply" with Hongkong Ordinances, Inence their fees should be en 3 minimum basis, and he considered that $200 per director per annum was more enough for what they did.
The tapping is reported to be nigh standard and the reserves of parke to. be satisfactory.
The mew smoke Louse which was brought into use In May 1935 has proved highly satisfactory since the Tubber is now properly smoked in four days against eight days in the old building and the fuel consumption has been halved. Speaking generally the estate is in first class condition.
Mr. Gubbay proposed that amendment {o the effect that the accounts and balance sheet be received [but not adopted, that a committee be appointed to look Into them and re-Jport, and that the meeting be ad-Journed, Mr. Soyka, who seconded, manded that the' directors who were involved and their nominees should abstain from voting. This amendment was lost.
Text read from the printed page and cleaned; old type leaves the occasional error.