THE INVESTMENT EXECUTIVE TRUST OF NEW ZEALAND LIMITED.

Otago Daily Times, Issue 22064, 21 September 1933, Page 14

THE INVESTMENT EXECUTIVE TRUST OF NEW ZEALAND LIMITED.

REPORT TO SHAREHOLDERS AND DEBENTURE-HOLDERS. Your Directors take pleasure in presenting their Report for the eighteen months ended June SO, 1933, which is accompanied by the following Audited and Certified Accounts for the relative period:— 1 “A” Series Debenture Holders’ Balance Sheet and Revenue State- / nieut. . 2 “ B ” Series Debenture Holders Balance Sheet and Revenue Statement. 3. “ Second B ” Series Debenture Holders’ Balance Sheet and Revenue Statement. 4, Consolidated Balance Sheet and Revenue Account. In view of the Debenture Holders’ financial year ending on December 31, the Directors decided to fix the balancing date of the consolidated accounts at June 30 in each year. This procedure will enable the Trust to incorporate the distribution of Debenture Investment Income as at December 31 in each year in the Annual Consolidated Balance Sheet and Accoun.s. RATES OF INTEREST AND DIVIDENDS PAID. Since 1931 interest has been paid to Debenture Holders at the following rates: — 1931 Pc ‘l C. ent ' “ A ” Series .. . • • • 9-19 "B w Series .. •• •• 8-119 1932 “A” Series s£' “ B ” Series 9.25 1933 Interim — “A” Series .. .. .. 3-J . “ B " Series 2 “Second B ’’ Series .. 7 Preference Shareholders have received a regular dividend at the rate ot 8 per cent, per annum. The Directors recommend payment of dividends to Preference Shareholders at the rate of 8 per cent, per annum, and ask the Shareholders’ approval of this payment at the next Osneral to be held on Tuesday, October 3, 1933. BALANCE SHEET AND REVENUE ACCOUNT. The Consolidated Balance Sheet of the Trust shows that At 30, 1933, the total subscribed Debenture Capital was £355,020, and the total subscribed Shave Capital £30,030, making the total Subscribed Share and Debenture Capital £385,050, of which £369,081 3s was fully paid. Interest payments to Debenture Holders are apportioned according to the date on which subscriptions are received from Debenture Holders. Calculation of interest is not based on the total Subscribed Debenture Capital at the eud of the financial period, but on the amount subscribed from day to day. This method of calculating income must be kept in view when comparing income with Subscribed Debenture Capital. The Debenture Holders’ allocation in respect of Establishment, Records, and Statistics Account is £25,375 2s fid, equal to approximately 7 per cent, oh the Subscribed Debenture Capital, while £18,168 19s 8d under this .heading has been allocated to Shareholders’ Account. The Investments mortgaged to Debenture Holders have been purchased during the past two years. They are shown in . the Balance Sheet at cost. I The Contingent Liability on Bank and other Shares, totalling £70,293 ss, repre- I sents uncalled capital on such shares and statutory liability on Bank Shares. This contingent liability is spread over 38 companies and banks, so that the possibility i of any appreciable proportion of this amount being called up is very remote. In any event, even if the whole of the contingent liability were called up by all

the companies and banks simultaneously, the Trust would be in a position to meet it. Any payments, of course, which were made on this account should correspondingly increase the value of these Investments, ; : INTRODU CTION OF INVESTMENT TRUST SYSTEM. TO NEW ZEALAND. Although the Trust has been in existence for over four years, no Investments were purchased until 1031, when prices had reached low levels. ' The Investment Executive Trust of New Zealand, Ltd,, was responsible for the introduction to. the Dominion of the British Investment Trust method of spreading Capital over a large number of Investments—a system enabling the small investor to obtain a share in a large number - of sound securities which an individual investor would find impossible. Investment Trusts have long been established in Great Britain and the Continent. The securities of several of these Trusts now stand _on the London Stock Exchange at premiums of 100 per cent, and over. BUYING AND SELLING, While many Investments purchased during the depressed period of 1931 and 1932 were acquired at prices much below their value, and to-day, of course, show a marked appreciation on cost, the present reverse movement of soaring prices is of such a nature that the Directors feel a note of caution should be given to investors. Present quotations of some Investments on tile Stock Market are much above their. value, aud sooner or later must fall. INVESTORS’ CO-OPERATION, In conclusion, the Directors wish to record their appreciation of the loyal cooperation and support given them by Debenture Holders and Shareholders throughout the Dominion, which nave materially assisted in making the Trust such an outstanding success. W. A. PILKINGTON, Chairman. Auckland, September 1 9 . 1933. P.B.A. -