10 DECEMBER 1937, Page 51


NET INCOME £38,000 HIGHER THE tenth annual general meeting of Tobacco Securities Trust Company Limited was held on December 8, at the registered offices of the Company, Westminster House, Millbank, S.W.

The Rt. Hon. Lord Catto of Cairncatto, who presided, . said that at the annual general meeting of a year ago he had been chair- man for only a short period. On this present occasion he addressed the shareholders not only with more confidence, due to a far more intimate knowledge of the company's affairs, but in the happier circumstances of resuming dividends on the deferred stock. (Hear, hear.) In that connection he would point out, in view of the manner in which the distributable profits had to be applied, as was clearly shown on the front page of the report, the ordinary capital being about four and a-half times that of the deferred capital, it followed there was a formidable prior charge ahead of the latter which was therefore particularly vulnerable to variations in income. He would like accordingly to strike a note of warning that although a dividend had been resumed on the deferred capital, too great anticipations should not be indulged in. The board naturally hoped there would be continued improvement in the company's earnings, but those came almost entirely from dividends on investments mainly in tobacco companies which were liable to fluctuations inseparable from businesses of that type. He would call attention to the auditors' note at the foot of the balance-sheet, stating that the shares and other investments of their company possessed a value largely in excess of the figures shown in the balanc e-sheet ; that opinion was shared by the directors, and must be a matter of satisfaction to the stockholders.

Their net income amounted to £575,883 against £537,831 .last year. The increase of £38,052, though not large, fully justified the board in recommending that dividends be resumed on the deferred capital, a course they had been specially glad to take. in view of the patience stockholders had shown in face of the disappoint- ments of recent years. With regard to the shellac, there was no reason to anticipate any further loss on the stock still held, but the directors, should any further important depreciation take place, would treat that as an isolated loss to be met from the company's reserve fund, thus not affecting the distributable profits of the year. Generally he hoped that that meeting would be looked on as the beginning of more normal conditions in the future. The report and accounts were unanimously adopted and the .dividend recommendation approved, including the payment on die deferred capital of 4.5714 per cent.