'The annual general meeting on tion brought about by the grave de-'Thursday of the New' Engineer-pression in the shipping industry ing & Shipbuilding Works, Ltd generally, that we shall be able to which Mfr. L. Soyka had ap: obtain better prices for our work pealed to shareholders to attend when the shipping companies force, attracted between forty and themselves in an improved condition.
filly, representing, with proxies, 1 look upon the retention of our 155,989 shares. Mr. HE. Ahold [connections as of the utmost import-resided, supported by Messrs. A. W. ance, because, as I have told you on Burkill and F. R. Davey (directors), Previous occasions, there is a pro-C..A. Member (director and secre hounced tendency' now. for many tary), John MeNeill (legal adviser). shipowners to cut their repairs down and W.CD. Bowen (secretary to the fo a minimum, owing to the difficulty meeting). they experience in financing the cost; The Chairman said:—thereof. In many cases, vessels are When addressing you last year I neglected, and, with s return to referred to the disappointing results more normal conditions, repair work of our operations during 1993 and [should show a pronounced tendency. to increase in volume. In this con-warned you then that we had to be nection, I would also mention that prepared for another disappointing year ahead of us. My fears at that construction work is practically stagnant, ogum because of the depres-Lime have, unfortunately. turned out sion, Dut, as replacements must to be only too true and, as you see sooner of later take place, especially in the figures before you, our profit ]s0 far as we are concerned, of all and joss account for the first time in classes of small craft used in local the history of the Company shows a waters, I think, in retaining our debit balance of some $80.000. Your [present connections, we can con @irectors have been watching the dently anticipate' orders being. situation closely throughout the year and 1 have no hesitation whatsoever laced with us at no very alstant telling you that this ance has been brought Loss on Trading marily by the continued depression {nthe shipbuilding industry. which 1 will now deal with the figures. reflects directly upon our own trade.
The loss on trading "for the year and, secondly, by the continued cut-mounted to $116,761.49, from which is deducted the carry-forward from throat competition existing between 1933, leaving a debit balance on us and the only other British dock Profit and loss account of $83,573.31. company in Shanghai, a particularly provision has been made for de-Unfortunate state of affairs. having. redation, it being considered unnecessary, owing to the existence of companies have 10 face from regard to the keen competition both source depreciation fund of nearly four Tanks.
Throughout this period, On the asset side of the balance tons sheet, land and docks stand at the ourselves game figure as. last year. Stocks on with a view to bringing thand, in transit, and works In promerger of the two concerns, gress, less instalments on account, which I first mentioned to you two show an increase of approximately. '$120,000, brought about by heavier: stocks, "resulting "from a general which might thus be effected, sufl-{alling-away in trade owing to the elent in themselves to pay an apdepression and by material ordered preciable dividend on the combined in anticipation of contracts it was capitals of both concerns, and that expected to obtain and which did there would be no likelihood of our not eventuate, but for which good prices rising following such a merger, use should be found in due course. in view of the competition - which JSundry debtors appear slightly lower existed from other yards in Shanghai. than "last year, whilst mortgages [stand at $44,358, as compared with A Serious Obstacle }$139.282, the result of repayments, Investments appear at $11,578, a re-Our deliberations have been pre+ Jduction of some $13,000, brought tracted for various reasons, and be-about by the liquidation of shares cause of many difficulties which had we held in a Norwegian shipping to be and were more of less over company. 'The investment in a sub-come, until we found ourselves considiary company remains unchanged, fronted by one for which no solution whilst loans to the same company' appeared possible for the time being, show a reduction of some $90,000. view the liquidation of the New Engineering Works Preference Share Increased Stocks {ssue, This was explained to you in circular issued jointly by both com-On the Liability side, there is ttle Dantes under date of March 22. The to comment upon beyond the reduc: resent condition of the money mar-lon in dividend equalisation fund of $79,728, the amount appro-ket in Shanghai makes it impossible consider the raising of funds to priated last year to enable the ay-ment of the preference dividend 10, redeem these preference shares at be made in respect of the year 1033. the present time, but the matter will Sundry creditors appear at $562,131 receive your directors' attention as as compared with $46,477, caused oon as an improvement in condi largely by drafts in respect of the tions sets in, increase in stocks to which 1 have Personally, I am pessimistic re-referred, which figure is steadily garding any improvement in the near future, and, unless there is a Overdratts at the Bank show some! radical change in the adverse condi crease, namely £900 on Sterling tions which we are now facing. it account, and in currency approxi-would appear unlikely that our. premately 'a debit of $101,000 as com ference shareholders can expect any pared with a credit "last year of dividend for some time to come. '$76,000. This differences ie brought Under these circumstances, #t is hoped. about partly by increased stocks, Cly. that they may consent to exchange the loss in trading, and the payment Preference Shares for Ordinary in of the last preference dividend. an amalgamated company, and a scheme on these lines is being ex-I would, in closing, say that the plored which I hope it will be pos-valuations of the land, buildings, and sible in due course to submit' to docks by experts employed in con-them, If this were accomplished, it nection with the amalgamation ne-Gotiations, together with the debtors, might be the means of overcoming mortgages, and other items appear-the last diMeulty standing in the way. ing on the balance sheet, reveal that of the merger. I cannot help but the present value of these assets feel that, it the situation were put frankly before this group. they would nearly $10,000.00, so you need have no qualms regarding the small over-_ readily exchange their Preference draft existing against this large Shares, with the privileges attached figure. thereto, for Ordinary shares in. the} new company, from which one might Staff Complimentea be reasonably certain that dividends T have tried to put the situation would be paid from the outset, hav-before you and donot think it ing regard to the large economies would be right to offer you any which should result from the merger. more encouragement than I id when speaking to you last year. Your! Board has full confidence in its stof There is little more for me to say in regard to this matter, except that the management of the works has made every effort 10 combat the present unfortunate situation; over: head charges have. again been considerably reduced, largely by economies in salaries and plant maintenance—the latter without any neglect of upkeep—and I am confident that speaking generally, we are retaining our connections. "Your. two docks have been well occupied throughout year with vessels of all classes, and T think we can confidently hope, if we can weather the present poalresent situation, but they cannot obtain work unless they compete with other companies and organiza-_ tions who are offering service figures at which it 1s impossible to maintain any margin of profit.
As you will have gathered from }the report, your directors cannot recommend the payment of the pref-
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