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Waikato Times, Issue 12906, 29 June 1914, Page 4

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AUCTIONEERING CO. 100,000 NEW SHARES AUTHORISED

.. An extraordinary meeting of the shareholders of the "Waikato Co-opera-tive Auctioneering Co. was held at the company's head office, Hamilton, today, to consider increasing the capital _of the company to £300,000 by the creation and tsspe of 100,000 new shares at £1 each. Mr Hawkins presided over a good attendance. The proposal of th£ directors was, according to an official circular, to issue the above shares from time to time, and only in such numbers as they may consider expedient. For present requirements it was proposed that not more th.>n 25,000 shares should be dealt with. In raising additional capital as above, the money was required to meet the requirements of-a healthy and growing non-speculative business, caused by the rapid development of the Kawhia, RagInn, Waikato, Thames Valley, and King Country districts. The increase of stock and merchandise sales for the year ended January 31, 1914, as compared with the year ended January 31, 1910, was £"471,983. The increase ot paid-up capital for tho same period was £'86,028..-From the foregoing figures it would be seen that for the four years under review the paid-up capital of the company increased only £80,628, whereas the stock and merchandise sales showed the enormous growth of C 471.953. The business as a whole was a splendid one, and there could be no doubt that the company was one of the soundest and most successful co-opera- ! live organisations in the Dominion. The directors proposed to give preference in idi (tment to ordinary shareholders, and confidently hoped that the ordinary sliarcholders and others would avail themselves of this opportunity of securing a really good investment which these new shares Afforded, and that many shareholders would take advantage of the shares as a ready investment of their dividends and bonuses. The directors proposed in future to issue the remaining ordinary shares only to fanners and clients doing business with the company. Two shares would be the maximum number allotted to any one person.

The clciirman moved the following resolutions:—<a) That the capital of the 'company ho increased to £300,000 hy the ere ition ar.d issve of 100,000 new shares of LI each, to lie called "A" preference shares, and that such shares bo isued subject to the following provisions and conditions, namely :—(1) The said preference shares shall carry a fixed (•emulative preferential dividend at the rate of €(5 per cent, per annum on the amount for the time being paid up thereon, but the holders of such shares shall not bo entitled to receive any further shares in the profits of the company. (2) The said preference shares shall rank, both as Lo/lividends and as to capital, in priority to the ordinary shares for the time being of the company; but on a winding-up of the company the holders of such shares shall only he entitled to receive out of the "surplus assets" the amount of capital actually paid up on such shares at the conclusion of the winding-up. The term ' surplus assets" shall have the same meaning as is given to that term in article 14(5 of the company's articles. . (3) The holders of the said preference shares shall have no vote in respect or on account of such shares. Articles (>7 to 7o (both inclusive) of the company's articles of association shall not apply to such shares. (4) The holders of the said preference shares shall not be entitled, in respect of such shares, to rebate on commission or to any bonus.

(b) That, flip directors of the company be, and I hoy are hereby, authorised to offer, isuo and allot the said preference shares to such persms or classes of poisons, and on such terms as to payment for the same or otherwise, and on such conditions consistent with the special conditions attaching to such shares) as .they shall think fit. In speaking t:) the resolutions, Mr Hawkins s:iid conditio-! N > ! fixed and limited the rate of dividend payable on the. now sharer, at 0 pei cent., the rate being guaranteed above the net profits of the comon-iy. The words "cumulative preference dividends'' meant that if in any year the profits wore unable to meet that 6 per cent, or any part of it, the amount needed became the first charge on the profits of the next and succeeding year. Condition No. 2 defined the extent of the preference, the holders of the new shares, in the event of the winding up of the company, being entitled to receive out of the surplus assets the amount actually paid up. Subject to that claim the surplus assets belonged to the ordinary shareholders. The holders of ordinary shares might think that the creation of the ; preference shares would weaken their position. The directors, however, believed that the position would lie strengthened. If the company could raise capital at G per cent, and make 8 per cent, with it in the ordinary turnover of the business, the advantage telonged to the ordinary shareholder. Condition No. 3 referred to t the vote. Although they hoped and believed that a considerable mimber of these shares would"be taken up by farmers as an investment* for their s-irpJus. capital; yet the directors lveimised that it would probably be found Hjut * ho-farmers of Waikato had aofc sufficient capital to spare from 'ba»* own gether meet the requirements ofthe j company in the future,and therefore; ,they had endeavoured to,create a >class of shares which would be perfectly safe to offer tp the public, without jeopardising the-contra-of the farmers, and yet *hieh would be a perfectly safe and profrwMe inducement for the new share-' They believed that the voto would confer on these shareholer* no added security. Ail. they cotrid do

sent step.;, were that more capital was required to meet the steadily-increasing business of the d?strtot. The country «ras becom'ng more closely settled and the laud more productively worked each year. Tf the present rate of progress continued, there would be, within a few years, enough ,»afe and legitimate business to double the operations of tho company; Were 1 hey to accept this business or decline it PWhether they were to grow to the full height of their usefulness to the farmers of the district, or remain at the present level of development, was for the meeting to say. The resolutions were seconded by Mr John Gordon, who considered the step was an excellent one in the interests of the company. The preference shareholders would help the' ordinary shareholders, and vice versa.

Mr Booth asked if by the new arrangement it was not a fact that the preference shareholders would have a mortgage o\or the pi c-scnt shareholders. Mr Hawkins said that unless Mr Booth anticipated liquidation, the security of present shareholders was perfectly good. Mr F. Law sou (Wairamarama) asked, as pvcfeieneo shares did not entitle tho holder to a vote, whether he was eligible for the directorate. Mr Hawkins replied that preference shareholders would bo eligible for the Board. They would, of course, have to be elected by tho ordinary shareholders, and when they had I wen elected the difficulty of the vote would he got over by allottiug them two ordinary shares. Mr La.vson asked how many ordinary shares gave the holder eligibility as a director, and was told 25 £5 shares. Mr Lawson said there was any amount of capital awaiting the company between Hamilton and Auckland, ii only the conditions were suitable. The company would pick up much new capital if it extended its business out Wairamarama way, as the farmers preferred to get the full benefits of rebates ftnd bonuses when putting their money into the concern. A number of other questions were stskfd and satisfactorily answered by the chairman.

The resolutions were then put to the meeting and canicd unanimously. In thanking the shareholders, Mi-lieu-kins said ho was pleased to see the great interest taken in the company's affairs, and iic hojiel they would show still greater interest by taking up a few more shares.