SOUTH BRITISH INSURANCE COMPANY.

New Zealand Herald, Volume XLIII, Issue 13306, 12 October 1906, Page 7

SOUTH BRITISH INSURANCE COMPANY.

■ m ! THE ANNUAL MEETING. A SUCCESSFUL YEAR. The annual meeting of shareholders of the South British Insurance Company was held at the company's offices. Queen-street, yesterday morning. The chairman of directors (Mr. T. Peacock) presided, and there was a full attendance of directors and about 30 shareholders were present. Tho shares represented by shareholders and proxy totalled 33,900. REPORT AND BALANCE-SHEET. The annual report and balance-sheet was presented to shareholders as follows: — The directors have pleasure in submitting to the shareholders the statement of accounts lor the year ended August 31, 1906. £. s. d. The net revenue for the year amounts to ... 346,654 6 1 After the provision made for losses outstanding:,, and adding £10,000 to the reinsurance fund, there is it surplus in the revenue account of ■ 64,833 2 6 To which has to be added the balance , from 1905 £43,302 10 7 Less dividend paid in October, 1906 ... 12,500 0 0 — 30,802 10 V taking the amount at credit of profit and loss account ... 95,635 13 1 This has been dealt with in the following m,inner: — Interim dividend paid in April, 1906, at the rate of 2s 6d per • share £12,500 0 0 Transferred to reserve fund .. 40,000 0 0 ■ Sinking fundAuckland leasehold ... ... ... 75 0 0 Sinking fund— Johannesburg . leasehold - ...... 60 0 0 Sinking fund- . . London leasehold ... 225 0 0 Amount written off office furniture ... 496 0 8 Contribution to officers' superannuation and provident funds... 1,873 12 1 55,229 12 9 40,406 0 4 The directors now recommend the payment of a dividend of 3s per share tor the half-year ended August 31,. 1906 (making the total distribution for the year 5s 6d per share), which Will absorb .... ... 15.000 0 0 Leaving to be carried to the new account £25,406 0 4 Mr. 0. 0 McMillan having retired from the directorate in March last, your directors appointed Mr. W. R. Wilson to fill the vacancy. In accordance with the extended powers agreed to by shareholders at the extraordinary general meetings held last year, the necessary arrangements have been made for the - transaction of accident business in all its branches throughout Australia and New Zealand. Four months' business in Australia and eight months' business in New Zealand is incorporated in the balance-sheet herewith presented. At the conclusion of the annual meeting an extraordinary general meeting will be held, due notice of which has been given, for the purpose of making some alterations in the articles of association, in accordance with the recommendation of the Company's solicitors. The retiring directors are Messrs. Thomas Peacock tend J. H. Upton, who, being eligible, offer themselves for re-election. Messrs. G. S. Kissling and W. B. A. Morrison, the retiring auditors, offer themselves for re-election. STATEMENT OF ACCOUNTS FOR THE YEAR ENDED AUGUST 31. 1906. REVENUE ACCOUNT. Dk. '• ~'■., £ " 8 " d. To fire, marine, and accident losses paid and outstanding ... 186,102 5 11 Agents' commissions, salaries. and other expenses ... ... 66,512 13 11 Advertising, printing, stationery 9,131 3 1 Contributions to Underwriters' Associations and fire brigades 3,812 17 1 Government licenses and rates and taxes ... ... ... ... 5,638 17 5 • Bad debt* written-off- ... ... >,*23~6„2 Amount required to reinsure current risks. August 31. 1906... 125,000 0 0 Balance carried to profit and loss account ... ... ••• 64,83 a 2 6 • V ' ' £461,654 6 1 08. ■'"• £• S. d. Bv amount required to reinsure current risks, August 31, 1905 ... 115,000 0 0 Fire, marine, and accident premiums (less reinsurances) ... 319,433 11 6 Interest received and accrued ... 27,220 14 ,7 £461,654 6 1 PROFIT AND LOSS ACCOUNT. DR. . ■ £ s. d. To dividend . paid October. 1905 ... £12,500 0 0 Dividend paid April, 1906 ... 12,500 0 0 25,000 0 0 Sinking fund—Auckland leasehold 75 0 0 Sinking fund — Johannesburg leasehold 60 0 0 Sinking fund—London leasehold 225 0 0 Amount written off office furniture ... ... 496 0 8 Amount transferred to reserve fund ... ... ~. ... ... 40,000 0 0 Contribution to officers' superannuation and provident funds 1,873 12 1 Balance carried to balance-sheet 40,406 0 4 £108,135 13 1 08. £ s. d. By balance from August, 1905... 43,302 10 7 Balance brought down from revenue account 64,833 2 6 £108,135 13 1 BALANCE-SHEET. Liabilities— To authorised capii tal—loo,ooo shares i at £19 each ... £1,900,000 0 0 Subscribed capital —100,000 shares at i £19 each 1,900,000 0 8 Less uncalled capital—loo,ooo shares at £18 each ... 1,800,000 0 0 - Capital' paid up 100,000 0 0 Reserve fund ... 260,000 0 0 , Re-insurance reserve fund ... 125,000 0 0 Reserve for outstanding losses ... 58,399 0 0 , Investment fluctuation reserve • , fund . .;. ... 3,713 u q . Auckland leasehold sinking fund 1,618 12 11 Johannesburg leasehold sinking , fund •■■ , •;, .'. 318 11 0 London leasehold sinking fund 456 15 0 Bills payable and sundry creditors for open accounts 15,554 16 4 ji Balance brought down from ' profit and'loss account 40,406 0 4 £605,467 6 7 Assets By landed property £184,537 7 5 Loans on mortgage 132,765 0 0 v Fixed deposits 62,000 0 0 Btocksjfljid debentures 6,771 15 2 1 Municipal and Harbour Hoard , debentures as under—Auckland City Council 4 per cent*.', > £15,000; Auckland City Council, 6 per cents-. £100; Auck--5 land Harbour Board * per ; cents., £8000; Dunedin Munici- , pal 5 per cents.. £4600; Dune--1 din City and Suburban Tram--5 ways 4} per cents., £10,000; Borough of New Ph mouth 4J per cents., £10,000; Wellington City 4 per cents., £5000; Wel- , lington City 6 per cents., £900; Wellington Harbour Board 4'. 1 per cents.. £1800; Wellington Water Works 6 per cents.. . £2000 •• 57,400 0 0 , Government securities as under— Cape of Good Hope 3i per cents.. £9872 Os 7d; Japanese Imperial 5 per cents., £10,154 7s I 0d; New South Wales 34 per cents-.. £9967 18s 4d; South Australian 31 per cents., £6041 ss; Victorian 3* per cents.. £7876 13s 4d- West Australian 3 per cents £2835; West Australian 4 per' cents., £5000 51,747 4 8 ' Cash in banks and bills of exI change in transitu 27.192 7 3 - Balances at branches and agen- Gqmns ' tinia receivable' '"■ '•'•'• •'•'• '«» 19 2 • Sundry debtors for open accounts 8.449 14 8 Furniture at offices 4,464 & '_ £605,467 6 7 CHAIRMAN'S ADDRESS. ' The Chairman, in moving the adoption of the report and balance-sheet, said be had ■ much pleasure in congratulating the share- ■ holders on tho results of the year's opera- ' tions, which were of a very satisfactory • character. It would bo seen on looking at I the credit side of the revenue account that the net premium revenue amounted to ! £319,433, which, compared with last year, showed an increase of .£21,612. • The inter- ' est received for the same period had been 1 £27 220, as against £25,325, an increase of £1895. On the debit side the fire, marine, - and accident losses were £186,102, or £6093 in excess of last year, but the loss ratio for

the year was the favourable one of 58.26 per cent., an against 60.44 per cent. The item agents' commissions and other expenses was £66,512, an-increase of £747; but the expense ratio worked out at less, being 26.63 per cent., compared with 27.05 per cent, the previous year. Owing to these improved features the result of the underwriting had been a gain of 15.11 per cent., against 12.06 per cent, in the former statement. After adding £10,000 to the reinsurance fund there was a balance brought down to the credit of profit and loss account of £64,833. This, added to the amount brought forward, £43,300, gave a total of £108,135. The directors, under the power conferred upon them by the articles, had carried the substantial sum of £40,000 to tho reserve fund, which now stood at £260,000. They believed that the shareholders recognised how necessary it was that they should have strong f reserves, and felt confident they would heartily approve of this step. Coming to the credit side of the balancesheet, the item landed property, £184,557, had increased by £13,195. In this connection he might state that the handsome and substantial building they had been erecting on their freehold property in Calcutta had now been taken over, and the portions of the building not occupied by the company had been very well let. The final payment of £2000 on this account would be included in next year's statement. Of the. other items in the balance-sheet loans on mortgage have increased by £16,585, fixed deposits by £10,000, and City of Auckland four per cent, debentures by £5000. It would bo found on taking out the.paid up capital, the .reserve funds, and the undivided profits that they amounted to the handsome sum of £514,119. ■ To those who during the last 16 years of its existence had been actively connected with the company, or as shareholders had watched its steady •growth, this fact must be specially gratifying. It would be seen from the report that tho directors, had recommended that the dividend bo increased from , 2s 6d to 3s per •share for the half-year. This they felt amply justified in doing from the prosperous condition of the finances and the fact that the amount required for dividends—in this case as in the pastwas practically mot by the interest received from investments. The whole of the investments had, as usual, boon passed in review, and shareholders might rest assured that the values were thoroughly up to the amounts in the books of the company. In regard to the business of the year the various branches had all round contributed to the excellent results which they were now discussing, but if an exception were to be made to this general remark it would be in connection with the fire business in the colony of New Zealand, where they might reasonably have expected tho best result*. The entrance of the Government into the domain, of private enterprise, as _ they all | knew, had had the effect of disturbing rates, and in the struggle to maintain their business the insurance companies had been led to make reductions in rates to '. much below what was paid in other countries for similar risks or what would in ordinary-, circumstances l*c considered safe or prudent. For the second year in succession the result of their New Zealand fire, business had been unsatisfactory. The appalling fir© disasters in San Francisco and Valparaiso, following on the recent earthquakes in those places, which had involved so many companies in prodigious losses, were events of too striking a character to bo overlooked on an occasion like this. They all heartily sympathised with the companies interested at this time of adversity, but there were important lessons to be learned by all from these occurrences. Amongst others they brought into special prominence the folly of those among the public who were in the habit of thinking that insurance companies should be satisfied with a bare margin of profit, and who grudged the additions made from time to time to their reservo funds, forgetting all the while that the ample strength of these funds was the best guarantee to the insuring public for prompt payment of losses in the event of such serious conflagrations taking place. At the last general meeting of the company they had adopted special resolutions altering the memorandum of association in order to enlarge the field of operations, embracing the various kinds of accident insurance. No time had been lost in giving effect to the same. The inauguration of this new department necessarily involved a large amount of work, and naturally the major portion fell on the general manager. This work he had performed in a most efficient manner, and the department was now in full working order. It was somewhat early to express very decided opinions on this business: suffice it to say that so far as it had gone it. had quite come up to the expectations of the* directors. As doubt, had been expressed in some quarters as to" whether the memorandum of association, as altered, fully met what, was intended in regard to one phase of the business, it was thought better, under the advice of the solicitors, to enlarge the scope of tho memorandum and express some points more definitely, . and thus obviate any possible difficulty. This would be treated in the ' special meeting afterwards to be held. Tho hoard had to inform shareholders that during the year steps were taken to resume fire business through the chief office in London. As it was well known that they had previously withdrawn from fire business in England this step required some explanation. On reconsideration of this business it was found that the principal losses when formerly conducted were outside of London, and arose chiefly from the indiscriminate manner in which the business had been selected; and. in fact, the business of the London fire branch proper was found to be most satisfactory. Further, as they had a very efficient staff and excellent office accommodation in London, they could carry on a restricted fire business at very little additional expense. The directors in deciding to enter that field had had fully in view the necessity of cultivating not so much a large business as a thoroughly sound one. This, of course, would receive, close attention at the hands of the resident secretary and his staff in London, and be subjected to very keen scrutiny at the head office, so that good results might reasonably be expected. As the work at tho head office had been growing, and -as- it was desirable in the interests of the company that the general manager should have adequate assistance, and that on the occasion of his making visits of inspection to some of the more distant branches someone in touch with the general business should be able to act in his absence, the board had considered that the time had arrived for the appointment of a permanent secretary. As this office required .someone having ability and extended insurance experience the board had appointed Mr. R. M. Clark, who had been for a long time manager at Dunedin, and believed that ho would fulfil the requirements of the office. ... In conclusion they all recognised how much the prosperity 'they had attained had been owing to the ability, the energy, and tho tact displayed by their numerous staff, from the general manager downwards, through all tho branches of their large business. He was sure they would all agree with the directors when 'they expressed their i high appreciation of the work performed from year to year by the various officers in the service. Their thanks were also due to those gentlemen who at certain of the company's branches performed the duties of local directors, and who by their wise counsel and ripe experience had materially assisted in the promotion of their business. Now that they had enlarged the scope of their operations in the accident department, which touched the interests of everyone and brought into play features of benefit alike to shareholders and the public, might they not reasonably hope that in this connection, as well as in tho fire and marine, they should have the assistance of their numerous friends and shareholders towards further increasing the volume of the South British business? He moved the adoption of the report and balance-sheet. Mr. d. H. Upton seconded the motion, which was carried unanimously, and without discussion. ELECTION OF DIRECTORS. Messrs. T. Peacock and J. 11. Upton, who 1 retired from the directorate by rotation, were eligible and offered themselves for reelection. Mr. Peacock's re-election was moved by Colonel Burton and seconded by Mr. .1. MeLachlan, and Mr. Upton's was moved by Mr. Harcus and seconded by Mr. .Tamos. Both gentlemen were unanimously reelected. I The Chairman said he had to thank the shareholders for their renewed confidence i in him. and he could only say that he would in the future, as in the past, give his best \ attention to the interests of the company. \ (Applause.) , , • , , i Mr. Upton said'that as the chairman had . remarked the company had just turned the ' corner and the reserve fund had just got into the second quarter of the million. He hoped that when they met next year they i would have to write the first figure of the i reserve a "5." when they had half a million to credit. Messrs. 11. S. Kissli.ilg and W. B. A. Morrison were unanimously reappointed audi- : tors, at the remuneration of £50 each. \ VOTES OF THANKS. Mr. T. Allen moved that a hearty vote of • thanks be tendered the chairman, the direci tors, general manager, and staff for their f faithful and efficient services during the , verv successful year.,' He said it must be ' very gratifying to all to find that £40,000 : had been added to reserve. Shareholders

were all gratified at receiving the extra dm- _ dend of 33 per share instead of 2s 6d, while at the same time the reserve had been increased. That was most satisfactory. ; But _ if that extra dividend would have inter- J fered with the reserve fund he thought shareholders would rather have foregone it. All those who had been in the company for long must be greatly satisfied with the steady growth of the reserve fund, which was the strength of the company. It was very pleasing to note that the full dividend was paid out of interest, and every £40,0UU added to reserve would mean a surplus above the dividend payments, and ho noticed that the two just about balanced now. If the- company had a reserve of half a million as suggested by Mr. Upton it would be almost, difficult for shareholders to know i what to do with their dividends. (Laughter.) The shareholders were well satisfied with the action of the directors, the work of the manager, and the energy and ability he had shown in the company s business ever since he had been in that position. In conclusion the speaker expressed his* pleasure at seeing Mr. K. Maris Clark back in Auckland and in the position of general secretary. . Mr. Lovett seconded the motion, which was carried with applause. . The Chairman, replying on behalf of himself and co-directors, said it was a very great pleasure to meet the shareholders with such a favourable balance-sheet. The directors fully appreciated the good opinion of the shareholders, and would endeavour to fully merit it. ..;■■■ The manager, Mr. J. J. Kirkcr, also returned thanks on behalf of himself and the staff, and said the vote would be conveyed to the staff in due course. It was almost like a repetition each year. In previous' years he had told the shareholders the staff - would always endeavour to do their best, and ho could only say the staff would continue doing that. If in the future the staff were able to present a balance-sheet of the kind it had been giving for some years back . it would feel that its efforts had been accomplished. Of course, the staff were very pleased to see the company's business grow- ; ing, but they had still greater aspirations, j and hoped to see still bettor balance-sheets. 1 « - SPECIAL MEETING. The meeting then resolved itself into a special meeting for the purpose- of considering a resolution amending the articles of association with reference to the undertaking of fidelity guarantee business, the carrying on of any kind of guarantee business,': the acquirement of other businesses, etc., as already advertised. ' The Chairman, in moving the resolution, said that with the exception of making one clause more definite in form the whole of the amendments had Iwen carried at the previous annual meeting and subsequently '. confirmed. They were, however, disallowed by a Supreme Court judge on the ground that, they had not been sufficiently advertised. That had now been done, and the shareholders were now asked to repeat the resolution passed last year. Mr. Carr seconded the motion, which was carried unanimously, and will come up for confirmation at a special meeting on October 30.