THE GUTHRIE COMPANIES.

Otago Daily Times, Issue 11301, 20 December 1898, Page 7

THE GUTHRIE COMPANIES.

REPORT OF THE LIQUIDATOR,

The report of the'official liquidator? of Wal■ter,:Guthrie and Co.. and-'allied .companies was.filedm the Supreme Court on the 24th •ult., also lengthy answering "■ affidavits by the direo.tovs vof the ■ companies; nnd experts, the <whoie being equal to about 40 columns of tba Daily Times.-.• .■!." '■■■■■■. ■■-•:-.

"WALTER GUTHRIE AND CO. : v .-'■', !;' (LIMITED).,;; ? .

The liciuidator' states that this, company was registered 6a: February 3, 1590,' the. ■ capit-al being £100,000. in £l shares. On April 1, 1890, the' indebtedness, to the Bank of New Zealand of the firm. of Walter . Guthrio and Co., whoso business. the. conipaily acquired,' was £70,657.3s 6d, but by a.deed.of July .25 this. was, reduced by - £10,000 Written' off .by the.bank, which alsq.accepted 10,000 Bl'-inlly-paid-up preference shares, .-thus-further reduc-: ing the direct indebtedness. The company atarteel with liabilities, amounting, to '£92,35 d 9s Id, including £50,657 3s 6d due to the.bank, and assets amounting to £112,471 16s lOd, of ■which property, represented £30,294, slock £66,485, and book debts £15,693. -The balance of £20,121 7s 9d was provided for by the issue of 20,121 fully paid-up shares to Mr Walter Guthrie, of which 10,000.were handed by him to. the bank in terms of the, agreement. The books.of ; the company for...t!ie year ending March'2l, 1891, showed that the operations ■resulted in. a loss of £5452 13s lid. This was partially, cancelled by. .the' appreciation !pf stock, by adding 3 1-5 per cent, cost of shelving, indenting, etc:, £1774;'145' Id,".by adding 5 per cent: to partially covei interest, insurances, rentals'ab's°rbed.in stock, faSSS'Ss Id, by Pine Company's" concession as special allowance £1107, by Walter..'Guthrie'soonces-: Eion paid-up shares £1500.. V This made a total of £7139 16s 2d, which, less the loss of £5452 13s lid, left .a net profit of £-1757; Is 3oy put of. which the company paid a 7 per ceijt'.- dividend, £1413 155,!.t carrying - forward £373 7s 3d. Nothing,wae written off the stock for '"depreciation; ■ on- the contrary,' atl' infla-'. tion of £4652 16s 2d was made; ~ By this manipulation Mr Walter Gathrie-was enabled to draw £491-12s additional .salary at 1 per cent.on, the net profits, besides £60.0 for services as managing! directori Ai this, ilato .the. capital ■wag £22,263 10s, including 20,121 shares..iß?ued to! vendors, less 1500 surrendered by Mr Guth: tie:." ■'■' " •■,:.'-:'. '": ■■ ." " "•' ... '",. .- -';'

. The bdlance-sb'eet for 1592 showed .an ap:' •p'arent-prontof'£2sß2.l7s 10d, but, according to the books, there .was a loss on the year's working of £584$' 4s: Bd. Thisrwas concealed ■»s follows:—Special allowance Pine Company £4000, .Walter Gutbrio allowanoe dividend .. £447. 14s:-sd,Walter Gutlirie salary £400, Bank-of New Zealand and Estates Company £3200,—total £8047'Ws'Ejd. . Deducting the. loss and' adding the balance from the previous ■ - /ear's. profit and' loss,'"the net profit' available was £2582 17b, out" of w'hioh a 7 per cent, dividend -absorbed )£1674;85, 3d, leaving £903 Bs. 9d'to'carry forward.' Again there was no allowance for^ depreciation) Hiut.the inflation instituted in. the previous year, was continued. The Pine Opmpauyjs allowance;was in consideration .of Walter Guthrie ; and ; Co. (Limited) undertaking to; indent goods from America and England out of the firm's established credits.. The arrangement was: appsA reritly for an indefinite period ahel, iti'accordftn.ee with-it, the Pino Company handed over Ibree promissory note for £1333 6s 8d; These liacl a currency of' two, Cthree, and four years, but the >yhole: amount;wae-taken into prpfit and; loss account,)' March 31, 1892. , In ; thedirectors' report, attached to the : balance: sheet, was* mention of a cash offer'by the Colonial .Hardware, ' Woodware, and Implement Company for-the woodware factory and foundry at book value'but the Colonial Com- ■ panjrwas'nbt formed jintilMay 3, 1892, and. the books; of Guthrie and' Co. were kept open' '■'.. to include thisi sale,'•• amounting to £18,165.15: Id;'for which were received 16 bills at.from.. : 12 t0~96 months, and not cash:as.stated. ~.-;,,,■,; . The working for 1832-3 resulted in a loss' of; . £9523 ss. Id. .: Nothing' was written ..offj for depreciation.. The lo3s* ( ?was concealed as *01-. lows:—Pine Company profits, March, 1893, . £1934-125.10 d; Pine Company,'portion bonus' on:purchase,. £4500; Walter Guthrie, allow-' \ ance on salary,-£400; >Waltor Guthrie, diyi-: . dpn'd; £4.47.145; Bunk !of New/Zealand and.. Estates Company, allowance. interest,; £3200 ;■■ credit for dividend on 15f)0 shares,, surrendered, ■ £105 : ;^-total, l £13,587 ; .7s;..3d r from which, the. deduction of trade lps? left an apparent profit^ of £4064 2s 2d,' to which was-added the balahcri from tlie-previous year,'£9,oS 8s 9d, making an. .-. " available-net balance of '£4972 ;10s lid,, and' fr&m, which'a 7 per cent, dividend, £1831Ll4s" 2d,;: left a balance to carry forward of• £3140 . ' 163-9 d.-- This balance-sheet-embraced; transactions of debenture negotiations;', which were > . riot"eoncluded-.iiirSeptemberll, 1893,-a meet-. "ing-of directors, on : September .22, resolving to;add the- purchase, of the Pine Company's shares (purchased,for;£Bo,ooo, payable .in dobontures} \'and agreements in'.connectiori'there-. ■'" v/ith to,1 the .balance-sheet of! March 31.'; TlnSj transactipn, though uncompleted,. had been" agreed tb'fefol-e thenj and also to-Taliievfh'©; purchase'!'df;'slmres.at'£9o,ooo' this"bsinj(' at loast:-£60,d00 below'the valuation put; in-by; ■ Messrs M'Leod'nnd You.ngv.i^'1::: :; .'- ''. «■" Qft.this.inflationrbfvfilO.OOO, the,liquidator, stateß~that;..the-dir.ectbr3 appropriated ;£4500 f or,;icredit -,p{ •, profit and ..loss..', At a this, date;. thej,item,'' interest;: in, other.1 companies. ;.and, businesses "'was^-Colonfal'.,Hardware 'Company, £20,485 Sa 6d;;'Pine. Company;'fiihded account; £Z8,933 fss 4&'; -Tine' Company,!prq- ' ■perty;aCGoant ) .:£9o,"odo;—totals' £139,418 103- ---.•■ !od. .-■■'. ■:', -'■ • , ;--'■ .■■■■ .-;■;:;<■■.:•; ■:.^: .< Thfe trade loss for the 18934 working:waa £7407.r6s 9d. - Tliis was provided: for:—By! lhe"Pine Optnpany bonus pn.burchase,. £5500 ;.i Walter Guthrie allowance,,£73o 5s lid; City Sawmillin'g Company dividend,- £195;? Bank of-'New Zealand and Estates'' Company con-. .-.•cession;'£933',6s. 6d.'; Dutftdin Timber,, arid.j :•'• Hardware Company' iiividfend t £s2'r3s Id; Gore Timber 'Hardwire Company profit, „ £5662:5s'sr^tdtalr£13,-388 12s-'4d; '-leas tradeloss, £7407'6s 9d ;-■ apparent profit, £5981 ssi ' 7d;;'-iin addition.tOiTvhich,iby.balance forvmrdj' £3140 16s=.9d, ; made:-£9122' 2s ,4d available., Duti-of this.-,was(Provided a ;; 7 per.-^cen.t. diyi^ Jend,',£l^B2'4.7s"ld; written dff^reliminaryi ' Itcpehses, £776 5s ,8d;, credited to dppreciaJlon reserve, £500: ' and balance carried forward, £5862 19a 7d.: Nothing -rtas written off, • for depreciation "of stoofej;and ; the;system of . appreciation; by-' 3-l-sth per' i cent.; " atld; 15 iS^per >!: cent;.' •,was v- continued; The £5500;.fr0m ■itKeiPine. Company. \r>* the. . baiancW^pfifthe ;-£IO,OOO - I :.inflatiori: .-:.pre:i viously,Teferred,,to. r ,.Tlie Item"''."interest iii\ ether companies " stood in, the balance-sheet a^aifasset;,;£lso,4sf-,16s '113;.. On December. L8,';i896, "ade'ed of covenMnt wai macle between ' the-fiank'ot New = Zealand, the Bank Estates Co.inpahy.^Sir ■;&;"■ Stoutj'-W.'.Gutlirie, 'G. . .Mondy,i'W. A.^Shn, and the:-Walter Guthrie Company; (Limited)-, .whereby the'Guthrie Cqinpany; was; released .from,pliability to pay' • '. interestV:. on.-/'.tlie: •■.- for. '■ the; r.i^&rii'.ending, September;.,* 30, .'1895; -..■an^v.itXj'^as".,,provided;; that.,! the , com- ; paßy.'.snpiiid:; npt, declare,.. tip. dividend for.. thqjrear ending March 31; 1895, and that none; : of "t^e allied companies, except the Pine Conir. • pany, should'declare'aflividend for thelast •/.year Vrespectivelyj the Pine Company only '•!■ doing.'so tp;enable.the Guthrie;Company to' Rbsorb: the;-Pine 'Company's, profits'for the year;v;and ( further),that the.profits of the Guthrie Cqmpany.for the last financial.year, and. for. ;trie year, ending on : .the; following. March 31, resultjn g from waiver of., interost t .- ahould hot'be shown jin the ' balance-shoet|, but; be 'exhausted 'by writing do^vii assets.' I'he debenture interest 'conceded ambiinted to £5946. The trade loss for the year was £5701; 3s 2d," and thiß-was covered as follows:^- rv Pine Company^ profit;.,. ; r "* '£3313 43 Lefa,written aft-stock ...<■, ~;£<)000 . .-■ .- - . ;.:-. Minus allowance debenture ' , .... ■"• interest.^./ ... .i. ~''... g916 . . SJ, 0..0" Plfls loss on Goie company ,-,'; ••'■ 263 S C Tdtai-" .;■ '';.,. .-;' ''■~..','' ,','Jr,■■'"'.-: 3049 lf|..fl.' Amount forward ",.,.';.," "; ,58(i2 19 .0. '-Xtotal:>'-/ -/iiv-i'.i.. '--J .■..:'/;'-ni ■•'■■ ■':>.-■:'•■ SSlS'lfflO' less trade loss .ii «* v^;;s :-; 5701 B>2 ■ Anjount carried forward;,, ..I: \ * >t ..£3211 J 0 : ' .'■ The'system df-ihflatiqn of..slock- was c"on; tinued. "The, interest;in other companies was ;' increased to, £179,790:12s 4d.?. The inlerest in the pjitiedm Timber and Hardware Conipany,: •n'hiblij'y'iii.' the 1894 ;bi(lahce 2sheet; stood; at". . CISOO, had now increased:by-:£8500, .of wh<?ih ■"■ .£SOO ropresohted a call on' December -J,-1894','' ftnd £8000 was the value of 8000 shai-esiti the" . Ciipital v :.thatcpmpa;hy,-::accepted',in.sati9fac>- v oftipn,'iprp tantp, of the debt,'to ,the,;.GuthrieCompany,;., The interest in the.City Sawniilling.'dpjnpany, shown;inVlß94;,.at £?QO," had similarly Been increased by, £5500. .•,':""- ; .'." i The iief.'lpssfor the year, was £1028'i4s;6d. which :wiis.paftially]cohcealed as"follows:— .'. Fin'erCompiny's profit:.." : ■.■...■••"..■." £3079"5 11' U-iJanco written off stock last year, ■'■■'■ ■-'■ ■■_■■■' biit:tMs.yearreyerged. ~ ~i. ;■ .... -:-;f^ 00 Totai:;j^':': ■:;."'■.;;' f':^ "».■ !•;3133 ; s if tics? Gore company loss ;.. ...,;'■'■ 232. i 0 ■ Total %:/-'..,;.■'.■■•.',.„. ■ ...:..-.-.(: /.28SI lvJi; balance^ forward ~ . ..../..;., ....-.: 32U ,7 ;i 0 . .'.Grand'Hotalii.' iii; ;.'. ::..:"££s£■ [9.0 The net,loss' fpr the year was £1928 l4s od; During_ the year the £6000 written: off the previous• year's stock, including:<j35946 ,con-1 teded by the debenture holders, wasrecharged 1 against stock, and the latter amount credited to.depreciation reserve account,"along.witiy a 1 similar, amount conceded on this yearns interostj'making:.the,total of £11,892.in.the.reserve account frpin. this source. r ;.The stpek, as.per, ptdck list, was: £45,858.155.1 d, .which .was in:; fiated in the iisual manner by £3833.15s 7dj: and book'debts'stood at £15,979,;,i2s Id, including AVaddel's estatei '£415 18s Id; But . in October, 1894, boofc/diabts'in'this estate, impuriting to £824 23,4' d, ;were purchased fdr" 1 £281; and iii Marchi :1895j the accbunt; being thep in debit. £81,17s IDA. was further debited ■with £407 Is : sd, tlien, siill considered good, ant}.' thisi last,,amount- \v-a6" .cf.editod.'to, goods ncc6uiit.'''TlieadvpVt:si)ip anil'nWn.;>«.-a;i.v.t > 'Svi*-'-'■ :- ■■.''■■„-■"■■;■ ;'■ '.;-'--.■ ■■;■'■- "' ..."' vt'"'- ■-■ '.■ ■ ;

stood at £694 17s; bills receivable1 were £20;521 2s" sd,i: comprisingI:;Pine".Cbjhp"a.ny (three bill's).. £12,056 15s 2d, Dunedin Timber and Hardware Cpmpany £3199. 19s. 3d,,, City Sawmilling Company £3231"4s 9d, customers £2033, 2s 9d. . The company's bills were taken' in :1894, 1895, arid 1896 for its "apparent', profits, shares stood at ■£665.2,, representing 1500. sliares concodejl'.'.tq Mr, GiHhrie.in .1891 .and 5052 handed'to'.the: company in full satisfaction of tho guarantee of ,the qld firm's, property account appearing in previous balance-sheets.