KAIAPOI WOOLLEN CO.

Dominion, Volume 12, Issue 278, 20 August 1919, Page 10

KAIAPOI WOOLLEN CO.

PROPOSED SUBDIVISION OF SHARES. The jorty-first annual report of tho Kaiapoi Woollen Manufacturing Company states: "Nothing of special importance • to shareholders lias arisen out of tho trading operations of t.he conmany. The net earnings are slightly bettor than last year, but this difference arises out of t.he financial operations of the company—rather than the trading. In Hid previous report, the directors! on.lled tho attention of shareholders to tho fact that public demand for the company's' productions was at that, time for iii excess of tho maximum, output, n,nd • although even' effort had been made to meet the demand, it was still greater than the supply. Tlie position to-day is even more acute, but, the Government having given permission for the erection of the first section of the new mill which is now being erected at Woolston, when this is in operation it is anticipated it will to some extent relieve the situation. After the first section lias been finished, it is intended to proceed with another section, provided tWo is any reasonable prospect of sufficient labour being available to work it. During tho year, the attention of directors was drawn to a legal technicality which arose but of the prospectus 'issued in 1!>08 regarding tho issue of what a.ro known as preference shaves. These shares carry no preference whatever as against capital, in respect of which all classes of shareholders aro on identically tho same footing—all being equally liable in tho event of any loss. The preference is to dividend only, which is fully compensated to the ordinary share, holders by tho reduced rate which is paid ' to preference shareholders as against that paid to ordinary shareholders. Tho whole difficulty aroso through a few words lie,ing inadvertently omitted in tho prospectus referred to. Tho original intention is quite clear— •.viz., reduced dividends as per scale, but in all other respects, the preference shareholders were to share equally with ordinary shareholders in losses or profits which might occur in future. Tho liability of preference shareholders for their share of any loss of capital is without question; therefore, in common justice, being liable for losses, they should participate by way of bonuses in prosperity, their capital having, in common with that of the ordinary shareholders, contributed to tho success that lias been attained. Preference shareholders are now placed in a fair and proner position. "finance: During the year the balance of unallotted shares' has been called up. Reserve accounts, .Tune 30,« 1019, <£116,559; accretion of capital on issue of new shares, ,£8807; total, J2125.3GC. "Tho balance to credit for the year is .858,000 14s. 3d. . Of this, the directors recommend a dividend to ordinary shareholders of 8 per cent., and a bonus of 2 per cent., and to preference shareholders 7 per cent, and a bonus of 2 per cent., les3_ tho amount already paid os interim divideyd. Tho ' appropriation account is as follows:—

"Credit balance after payment of interim dividend, .£47.11!) 7s. Id. Dividend for venr, _£27,'Mi5 2s. lid.; less interim dividend paid, J!924t 7s. 2<1.—,C15,223 15s. yd.j general reserve fund. ,£5500; dividend equalisation reserve, .£3850; reeervo for new fund: Employees' Welfare Pnnd, .£1000; accident reserve, ,£528; reserve for income tax, .£10,000; carry forward, .£8317 lis. -id.; total, ,£17.'119 7s. Id. , "Directors: The retiring directors ai-j Messrs. .T. A. Frostick and J. 11. Blackwell, who submit themselves for re-elec-tion. , "It is proposed lo snbdivido both the .£5 preference and .£5 ordinary shares of Iho company into five .£1 preference anil live ,C 1 ordinary shares. "Further, the company proposes lo establish and support, or aid in the establishment and support of associations, institutions, funds, trusts, and conveniences calculated lo henetit employees or ex-employees of the company, or the dependants or connections of such persons, to grunt pensions anil allowances, anil to- make payments towards insurance, and to subscribe or Rtinranlee money for charitable and benevolent objects, or for any exhibition, or for any public, Reni er<il, or useful object,"