ASSOCIATED MOTORISTS

Evening Star, Issue 23699, 5 October 1940, Page 15

ASSOCIATED MOTORISTS

DISTRIBUTION OF PROFIT ORDINARY SHARES INCREASED The Associated Motorists Petrol Company Ltd. showed a surplus of £63,530 in its accounts for the year ended March 31, 1940. This figure included the total amount of the slocks reserve, after provision for income tax, the directors pointing out that alterations in the income tax regulations have required that stocks reserve, built up through the years, shall now be brought into account for the purposes of income lax assessment. The surplus, therefore, was in excess of the actual trading prolit, which was not disclosed in the directors’ report to shareholders. The company’s profit lasi year was £51,014 and in the previous year £23,493. Including £7,422 brought into the accounts, the amount avaliable for distribution was £70,952 The directors proposed a diviid mi preference shares at the unchanged rale of 10 per cent., the dividend to be less social security tax. Payment would require £12,345.

The directors’ report then proceeded as follows: “ In view of the uncertain times ahead and the greatly-increased capital requirement of the company to finance large stocks at high prices, aud in this period of cmer gency to meet the Government’s request to carry ample reserve stocks, the directors feel that no cash dividend should be paid on the ordinary shares, but that the profit which otherwise would be paid to ordinary shareholders should be capitalised and thus remain in the company to strengthen its position further The'directors therefore recommend (hat the company sanction the passing on or before August 31, 1940, by the directors of a resolution in the following terms:— “ ‘ That the sum of £50,000, being an amount in the hands of the company representing accumulated profits of the company available for dividend, bo distributed among the ordinary shareholders on the basis (hat they become entitled thereto as capital, and •i; the said capital sum bo applied on behalf of the persons who, on May 30, 1940, were the holders of ordinary shares of the company, in payment in full for 50,000 ordinary shares of the company of £1 each, ami that such ordinary shares credited as fully paid be accordingly allotted to and among such persons in proportion to the ordinary shares held by them respectively, and that the shares so distributed shall be treated for all purposes ns an increase of the nominal capital of the company held by each such shareholder, and not as income.’ ”

The directors then recommended that the balance of profit, £8,607, be carried forward! Ordinary shareholders last year received a dividend of 150 per cent., and in the previous year 25 per cent. Ordinary share capital is' £25,000. having been increased in iQvs.yn from £5,000. Preference capital is £130,000