Big Reserves

STC Has Big Profits and Big Reserves

TAVING added the profit (£92,999) for *■ -*■ the year ended July 31 to the balance irought forward, the Directors of Stcam ihip Trading Co., Ltd., Port Moresby, bund themselves 'with £163,153 for dis ribution. After paying a dividend of [0 per cent. of their £50,000 of •references, and IStfc per cent, on the £ 408,449 of Ordinaries, they have carried m into next year’s accounts a total of £107,097.

The annual balance-sheet shows assets f £1,533,416. These are financed by ssued capital of £453,449; over £lOO,OOO n the P/L account; £128,931 of bank verdraft; about £lOO,OOO of trade reditors; and no less than £684,070 of eserves. As the Directors indicate in heir report, some of these reserves are ow regarded as unnecessary, and some nbstantial bonus issues have been fore ast.

This company might be wise to be autious. For years, Australian Govern lent funds of from £5 to £7 millions nnuaUy have been poured lavishly into apua-New Guinea, and the oil search tpenditure takes another million or so ito the country; with the result that all sneral traders have been “sitting pretty”, at Australia may at any time tell apua-N. Guinea to spend within its irned income, or the oil search people ay toss in the sponge. Any trading stitutions then will need all the reserves can command to cushion the blow.

Later: The company proposes to make bonus issue of 1 for 4, and to offer new tares, for cash, on a 1 for 4, basis.