1.—7

110

4. One quarterly interim dividend of 1J per cent, has been paid for the half-year, and it is now proposed to distribute another of like amount on the 29th instant, making, with the interim dividends paid for the first half-year, a total dividend of 5 per cent. It is also proposed to pay a bonus of 4s. per share, or 2 per cent., making a total distribution of 7 per cent, for the year 1896, leaving £93,798 2s. Id., of which £75,000 has been transferred to the General Reserve Fund, and the balance of £18,798 2s. Id. is carried forward. 5. In accordance with the provisions of the trust deed dated the 10th May, 1879, 429 of the company's 5-per-cent. Australian Government subsidy debentures, amounting to £42,900, were drawn by lot on the sth instant for payment at par on the Ist July next. The numbers of the drawn debentures are given at the end of this report. 6. An arrangement has been concluded with the Spanish Government for extending, on a subsidy basis, the company's system in the Philippine Islands, by the laying of three short cables between Luzon, Panay, Negros, and Cebu. As these cables will bring Iloilo (second only in commercial importance to Manila) into telegraphic communication with the rest of the world, it is expected that while proving of great advantage to the Government they will become feeders to the company's system. 7. A contract has also been entered into with the Dutch Government for the manufacture and laying on account of the Government of two short cables in Netherlands-India. 8. Your directors regret to have to record the death, on the 16th January last, of their esteemed colleague, George Garden Nicol, Esq., who has been connected with the company from its formation. The Hon. George Peel has been appointed to the vacant seat at the Board. 9. In accordance with the articles of association two of the directors, the Hon. George Peel and Francis Augustus Bevan, Esq., retire by rotation at this meeting, and, being eligible, offer themselves for re-election. 10. The auditors, Messrs. Deloitte, Dever, Griffiths and Co. and Messrs. Welton, Jones and Co. also retire and offer themselves for re-election. Tweeddale, Chairman. F. E. Hesse, Manager and Secretary. Winchester House, 50, Old Broad Street, London, E.C., 14th April, 1897.

Ebvbnue Account fob the Half-yeae ended 31st Decembee, 1896. Dr. & s. d. Or. £ a. d. To General expenses in London (see By Message and other receipts .. .. 301,595 6 4 Abstract A) .. .. .. 7,302 0 6 Australian duplicate cable subsidies .. 16,200 0 0 General expenses at stations (see Tasmanian cable subsidy .. .. 2,100 0 0 Abstract B) .. .. .. 50,918 1 8j Tonquin cable subsidy .. .. 5,252 16 2 Use of patents .. .. .. 9010 j Malacca cable subsidy .. .. 200 0 0 Electrician's consulting-fee .. .. 50 0 0 Transfer fees .. .. .. 57 10 0 Directors'remuneration .. .. 2,000 0 0 Auditors' fees ■ .. .. .. 100 0 0 Staff endowment assurance .. .. 871 12 10 Staff Pension Fund.. .. .. 835 17 9 Expenses in connection with Australian, Chinese, and Spanish negotiations, &c. .. .. .. .. 3,593 11 0 Repairs to cables (see Abstract 0) .. 36,055 19 0 Japanese Belief Fund .. .. 50 0 0 Expenses in connection with Budapesth Conference .. .. .. 984 6 0 Maintenance-ships'reserve .. .. 3,500 0 0 Income-tax .. .. .. 4,177 7 6 Fire Insurance Fund .. .. 10,000 0 0 Interest and sinking fund on account of 5-per-cent. Australian subsidy debentures.. .. .. .. 25,495 0 0 Interest on 4-per-cent. mortgage debenture stock .. .. .. 6,400 0 0 Balance .. .. .. .. 173,062 15 5 £325,405 12 6 £325,405 12 6 Third interim dividend of 1896, 2s. 6d. per share, paid 15th January, 1897.. 31,250 0 0 Balance down .. .. .. 173,062 15 5 Proposed final dividend of 2s. 6d. per Balance of Revenue, 30th June, 1896.. 33,235 6 8 share for 1896, payable 29th April, 1897 .. .. .. .. 31,250 0 0 Proposed bonus of 4s. per share, payable 29th April, 1897 .. .. .. 50,000 0 0 Amount carried to General Reserve Fund .. .. .. .. 75,000 0 0 Balance carried forward .. .. 18,798 2 1 £206,298 2 1 £206,298 2 1