AUCKLAND ELECTRIC TRAMWAYS COMPANY.

Otago Daily Times, Issue 18746, 27 December 1922, Page 6

AUCKLAND ELECTRIC TRAMWAYS COMPANY.

ANNUAL MEETING IN LONDON. PROCESS OF LIQUIDATION^ (From Ode Own Correspondent.), LONDON, November 10. Presiding at the general meeting of the Auckland Electric Tramways Company yesterday, Mr C. G. Tegetmeier announced the directors’ intention of taking a favourable opportunity of realising the assets and distributing the proceeds. Other directors present were Mr C. Shorreff Hilton and Mr h. M. Myers. In proposing the adoption of the report and statement of accounts, the Chairman said that the revenue of the company—which, with the exception of one or two small items, was derived from the interest upon the Auckland Corporation- debentures, and the interest earned upon liquid funds—amounted to £52,085. The charges against the revenue consisted of the three items of administration and general expenses, income tax and corporation profits tax, . and debenture stock interest. Administration and general expenses, which amounted to £2336 as compared with £3798 in the preceding year, covered directors’ fees and the expenses incidental to the maintenance of the company’s offices and staff in London and in Auckland. The expanses had been reduced to a minimum, and the directors had drawn only a portion of the fees to which they were entitled under the articles of association. The charge for income tax and corporation profits tax was £l7lß, owing to sundry adjustments which had been brought in resulting' from negotiations with the Inland Revenue authorities which were still being carried on, the amount compared with £13,077 in the preceding year. Debenture stock interest was £11,821, compared with £14,598, the lessoned amount being, of course, due to the purchase and cancellation of the stock. The net result shown by the revenue account was that, after payment of the dividend on the preference shares, they were able to pay the same dividend as in the preceding year of 5i per cent, free of income tax on the ordinary shares, and to carry forward £9074 ns compared with £8491 brought into the account. BALANCE SHEET. With regard to the balance sheet, the directors had purchased and cancelled £15,353 of debenture stock on advantageous terms, and had sold £BIOO of tbo corporation 5i per cent., debentures. The item £19,924, under the heading of sundry creditors and credit balances, was mainly in respect of the company’s liability for British income tax and corporation profits tax. A final settlement had not yet been arrived at with the Revenue authorities, but he thought the amount taken into the account represented a very full measure of their ultimate liability. The point in the balance sheet which would most closely concern the shareholders was the surplus subject to realisation of assets. This was’ shown as £142,328, and was a little more than in the preceding year’s balance sheet. This surplus was arrived at by' taking the liability in respect of debenture stock at the amount of trie stock and the asset of tile corporation 51 per cent, and 6 per cent, debentures at their face value. GRADUAL LIQUIDATION. The policy pursued by the board since the sale of the company's tramway undertaking to the Auckland City Council at June 30 1919, had been the gradual liquidation of the company at the time and in the manner likely to produce the best results to the 'shareholders. The accounts showed the progress that had been made up to June 30 last, and during the three years that this process of liquidation had been carried on the shareholders had received a return upon their shares which was certainly not less than might have been anticipated if the tramway undertaking had continued to be owned and worked by the company. Since June 30 further substantial progress had been made in the d-reetkm of liquidation. An offer was made to the debenture stock holders to exchange their debenture stock for 51 per cent. Corporation debentures on terms which, while advantageous to the company, approximated to , the company’s power of compulsory redemption at 105 per cent. Holders of stock to the extent of £134,936 accepted tho offer, and the amount of stock now outstanding had been reduced to £104,483, which was a reduction of £270,000 on the amount outstanding at tho date of the sale of tho undertaking. In view of the reduced amount of the company's liabilities and also of the improved marketable value of the assets, tho directors were of opinion that the time had come to consider tho winding up of the company, and they proposed to take a favourable opportunity of realising tlre assets with a view to tho liquidation of the company and the distribution of tho proceeds. The distribution of the Corporation debentures among the shareholders was not practicable, and even if it were practicable there was reason to believe that a distribution in cash would, in the present circumstances. bo perferablo to the large majority of shareholders. The directors had not yet decided upon any definite procedure with regard to tho sale of the Corporat on debentures. They wore In a position to take their own time over the matter, and to deal with them in the manner that they thought would bring the best results to tho shareholders. “Shareholders will expect me to express some opinion ns to what tho results arS likely to be to tho ordinary shareholders,” the Chairman concluded. “This, of course, depends entirely upon the realir.clion f the Corporation debentures, and ar. estimate of the liquidation return to tho ordinary shareholders can only be based upon an estimate of tho price the debentures will teteh when we come to realise them. I think, however, I can say that the present position indicate* that it is not taking a too sanguine' view to look forward to a return of -u-t less than the par value of the shares.” The report, and statement of accounts were adopted, and Mr C. Sherrod Hilton was reelected a director.