MOUNT IDA PASTORAL COMPANY.

Mount Ida Chronicle, Volume VII, Issue 369, 31 March 1876, Page 3

MOUNT IDA PASTORAL COMPANY.

(To the Editor of the Mount Ida Cheoniole.) Sib, An extraordinary meeting of shareholders in tho Mount Ida Pastoral Investment Company Limited was held at tho registered office of tho Company on the evening of tho 25th. Tho meeting was summoned to consider tho adoption of a recommendation made by tho Directors that a dividend of 15 per cent, should ho declared. As a shareholder, personally interested in tho welfare of tho Company, and also as specially representing several oth'cr shareholders, I attended, and submitted a"statement drawn with some little care, which I hoped would enable the shareholders present to easily master their real financial position when 'considering the various proposals likely to to be made. I hoped that in tho absence of a clearer statement, or of any statement at all, the Chairman (Mr. W. Newman) would have placed the meeting in possession of the collated facts I submitted. This ho refused to do. With an ex cathedra statement that the Directors had calculated tho amount of dividend they recommended upon the manager's accounts, which shewed a profit of £3260, he hurried through tho business, without giving any sufficient explanation as to the financial position of tlio Company. It was in vain that, as manager, I explained that the station accounts certainly showed such n profit, but that tho realisation upon surplus stock—which at the end of the first year had been valued at £IOOO, and reckoned in the first declared dividend—was slivwn to credit in this year's station accounts. This sum had, I considered, no right to bo added to divisable profits, but was due to capital account; at least, if' not repaid, tho capital account must be reduced by that amount. Tho Chairman, however, said ho knew nothing about tho £IOOO. A resolution was then proposed, and duly seconded—" That a dividend of 15 per cent, bo declared." Perceiving that tho Company's real position was not understood, and being firmly persuaded that tho shareholders present were allowing themselves to bo unconsciously rnis- - led, I moved, by way of amendment— That, before declaring a dividend, the / Company's accounts bo oxamined." Such a course should have commended itself I think to the good sense of the meeting, more especially as so many shareholders who have taken strong interest in the management wcro away. Clause 53 of the Joint Stock Companies Act confers such power of examination or inspection by inspector h appointed by a general meeting, and the rosult, if adopted, would, I think, have been found to bo far more satisfactory than if one-fift.li in number and value of tho shareholders woro to express subsequent dissatisfaction by putting in force clause 50 of the same Act. As soon as my ampjirin.ent was seconded a shareholder addressed the meeting to tho effect that, considering tho valuo put upon tho station property last year, sheep

bought, and improvements put on since' the Company's property should bo worth as much now' as it was then, if it had not in other respects depreciated in value. This hypothetical conjecture, although attended by that little word if, was accepted as a sound reason for declaring a dividend which no one present knew positively could bo justified. The amendment having lapsed for want of a seconder, a show of hands was takon for tho original motion, which was carried, another and myself alone dissenting. So ended the mooting, after having only lasted a few minutes. As no explanation of any kind was afforded, many shareholders will not unnaturally view my action with suspicion. A little consideration should show that I could have had no motive for wishing to give them a small divide) .d, other than for the good of the Company as a whole. To show this, and with a faint hope that tho directors will yet see fit not to use the authority they have obtained until thoroughly satisfied that they are doing right, I must ask you to publish the accompanying statement, which I failed to obtain any consideration for at the general meeting.—l am, &c., Geo. Oliveb. TO THE CHAIBMAN OF BHABEIIOLDEBS' MEETING, PASTOEAL COMPANY, TO BE HELD ON 25TH INSTANT :

Sie, —As this meeting is called for the purpose of considering the advisability or otherwise of declaring a dividend, as recommended by the directors, I think it is necessary, before doing so, to consider at least approximately tho financial position of tho Company. The paid up capital of tho Company is now £21,070. Of this £16,333 6s. Bd. has been paid off in liquidation of liabilities, leaving £4736 13s. 4d. in hand, belonging to capital account. When this is deducted from the total cash in hand there will be left £2260. Tho station account for the past year shows a profit of £3260; but in reality it is £IOOO less, because £IOOO worth of surplus stock sold during that period was considered to belong to, and was reckoned in, the Company's first year's dividends —or, in other words, £IOOO from capital account was last year considered profit, and the £IOOO worth of surplus stock then on tho run was to cover it. Now the Company should pay back to capital account the £IOOO derived from said surplus. If the E rices of wool and sheep had ruled as igh as last year there would have been a profit of at least £3500, after deducting the £IOOO above alluded to; but, as affairs now stand, the clear profit for the past year can only give a dividend of 10 Eer cent, and, taking this year with the ist, the speculation has been very good—giving 25 per cent, for each year. If the Company declare 15 per cent. 5 per cent, of it must como from paid up capital, and then the 2107 shares cannot be worth £lO each —they will simply bo worth 5 Eer cent. less. Now I think it is the eight of folly for any shareholder to go in for tho extra 5 per cent, when so doing must have tho effect of lowering the value of his shares, and it must be remembered that the fall m the value of station produce is a corresponding fall in station property, so that the Company's property now hardly represents the amount of paid up capital. Besides, as I read the Act, "No dividend shall bo payable except out of the profits arising Irom the business of tho Company." It will be asked how 40 por cent, was given last year if only 10 per cent, can be given this. The reason is, that last year a dividend had to bo declared on only about 1000 shares—the number then taken up—whereas this year a dividend has to be declared on 2107 shares, which lessons tho per centage ovor one-half. Then the fall in station produce is equal to a loss of 10 per cent, and so reduces the only truo dividend the Company can give this year to 10 per cent. With the £4736 13s. 4d. in hand belonging to paid up capital I would recommend its going towards paying off liabilities. With the rebate that would be allowed, the only liability then remaining would bo about £OOO, which the Company may safely let stand over till next year. According to present prices of station produce, it could be paid off, and a dividend of 10 per cent, be given besides. I therefore suggest — Ist. That a dividend of 10 per cent, be declared. 2nd. That the £4736 13s. 4d. in hand, belonging to paid up capital, be paid towards liquidating the liabilities of the Company. I am, &c., Geo. Oiivee.