CAPITAL REDUCTION

New Zealand Herald, Volume LXXII, Issue 22225, 27 September 1935, Page 12

CAPITAL REDUCTION

WAIRARAPA FARMERS ORDINARY SHARES SIXPENCE MEETING PAST LOSSES [BY TELEGRAPH —OWN CORRESPONDENT] WELLINGTON, Thuraday The report of the Wairarapa Farmers' Co-operative Association, Limited, for tho year ended July 31 states that after providing against possible bad debts in respect of mortgages and adding £IOOO to exchange adjustment reserve, there is a net profit of £70:18, against £27(58 earned last year. The appropriation account now shows a debit balance of £63,636. To July 31, 1 1935, there is contingent liability to preference shareholders for dividend in arrears, amounting to £82,500. The directors state that an adjustment in capital is required. In 1928 the ordinary capital was written down by two-thirds to 6s 8d a share, preference capital being retained intact. The ordinary shareholders are to bo asked to sanction a further reduction of the ordinary capital by £3c,201, by writing down ordinary shares to a nominal value of 6d a share. The amount written off is applied to the reduction of the debit balance in the appropriation account, which would then be reduced to £26,435. It is anticipated that tho profits of two or three succeeding years will suffice to liquidate that amount.

Holders of preference shares will he asked (1) to abandon their claims for dividend in arrears, of £82,500, and to forego their rights to further cumulative dividend until the appropriation account is in credit to the extent of at least £7500, being sufficient to pay one year's preference dividend at 3 per cent; and (2) to accept the right thereafter to a cumulative preferential dividend of 3 per cent per annum, with the preferential right in any year to such further dividend, not exceeding 3 per cent, as may be declared from tho profits of tho company.

The companv made heavy losses in 1931, 1932 and 1933, and the last dividend paid was the preference dividend of 6 per cent in 1930. The company has an issued capital of £'290,218 m 250,000 £1 preference shares, fully paid, and 120,653 ordinary shares of 6s 8d paid to £39,401.