NEW ZEALAND SHIPPING COMPANY. LONDON DIRECTORS' REPORT.

Te Aroha News, Volume VI, Issue 341, 9 February 1889, Page 4

NEW ZEALAND SHIPPING COMPANY. LONDON DIRECTORS' REPORT.

The first report of the London Board of Directors of the New Zealand Shipping Company says : In presenting their first re" port, your directors regret to say that in a taking up the management of the Company' they found the whole business of the Company in a most unsatisfactory condition ; indeed, they were so dissatisfied with the accounts, that on advice they determined to send out to New Zealand an accountant to examine the books of the Company, so as to test the accuracy of the past balance sheets. The result of the examination of the Company's books in New Zealand, as embodied in the special report of Messrs Quilter, Welton, and Co. , particularly with reference to the cost of the Company's fleet and plant — convinces the London Board that the statement of capital account which appeared in the balance-sheets previously issued in the colony cannot be accepted as accurate. It appears that the cost of the sailing ships and steamers has been overstated by a sum of £72,000, chiefly by placing interest, commissions, and other charges to first cost;, after delivery of the ships and steamers. In addition to this, there does not appear to have been a sufficient allowance for depreciation on the steamers, which, in the opinion of the London Board, up to June last, should have been taken at £119,000, instead of the stated sum of £35,000, shown in the colonial account. The London Board in consequence of these serious deficits pointed out by the accourtants in their report, are of opinion that provision should be made lor the gradual extinction of these amounts out of the future earnings of the Company. The balance-sheet, in the opinion of your directors, shows the present position of the Company, taking the accounts for London to the 30th June last, and for Christchurch to the 31sl> May. In placing this document before you, the London Board have to say that in consequence of the change in the management here, the improyement in trade, the consequent rise in freights, and the arrangements they have made with the competing lines, there is every reason to believe that at the end of the financial year 1889 the country will be in a more prosperous condition than it has been for years past ; but for the reasons above stated they cannot legally pay a dividend out of the profits of the Company. The following is the balance-sheet at the 30th June, 1888, with colony accounts to 31st May, 1888, and shows the new basis upon which the directors have placed the affairs of the Company: — Dr. — Capital subscribed (59,689 shares at£loeach), £596,890 ; less uncalled and unpaid, £115,727 ; bills payable, £44,656 9s 2d ; balance due to builders by payments extending to 1889, and by debentures maturing 1889, 1891-2, £246,375 ; debentures extending to 1890 and loans secured, £119,487 lls 10s ; fixed deposits with accrued interest, £6,020 17s 9d ; sundry current accounts, £54,668 16s lid ; insurance account, £14,663 4s; ships and steamers onuncom* pleted voyages, £11,909 14s 2d ; profit and 038 account, £70,165 0s ]ld; less interest paid on debentures, loans, etc., £26,006 13s 8d; total, £1,024003 Is Id. Cr. — Company's sailing vessels, £185,132 2a 7d ; Company's steamships, £670,914 12s 6d ; less depreciation to June 30, 1888, £119,167 Is 5d ; less written off June 30, 1887, £35,000. Property— Stores at colony : hulks, leaseholds, office furniture, plant, &c, in colony according to valuations seno from Chrisbchurch, £27,169 16s 4d : ditto in London — stores at dock, wines, etc., afloat, office furniture, etc., £5,635 12s 8d ; sundry current accounts, £49,322 4s 4d ; amounts charged to first cost of steamships, bub which the London Board are advised ought to have been charged to revenue, £62,181 0s 8d ; ditto, ditto, sailing ships, £9,975 3s 8d ; depreciation on steamships as above, not fully written off, ±84,167 Is 5d ; less unappropriated profit (colony), £49 3s lOd ; cash at bankers (London and colony), £13,721 12s 2d : total, £1.024,003 Is Id.