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For the descendents of Richard Dearie and his son John Russell


The Straits Times, 24 March 1939, Page 12
 COLLIERIES’ 1938 PROFIT. $551,000 Made In Difficult Year By the Straits Times Financial Correspondent. MALAYAN Collieries Ltd., the only company of its kind in Malaya, earned more than half a million dollars last year. The report and accounts were issued this morning and show that the net profit was $551,139, which, although a reduction on the preceding year’s figure of $659,949, is satisfactory when it is recalled that 1938 was a difficult year for Malayan Trade generally. In spite of this decline in profit, the directors recommend a final dividend of 6 per cent. which with the interims paid during the year, makes a total of 15 per cent for the year and only 1 per cent less than paid for 1937. Decrease In Sales. The directors report that the quantity of coal sold during 1938 showed a substantial decrease and the 1937 figure and sales in the subsidiary sections were similarly affected by the general restriction in trade. The general managers report that labour conditions in all sections were satisfactory and the tri-monthly system of individual payments was extended to all employees. The company produces coal, bricks, plywood for making packing cases, and has a wood distillation plant. 


The Straits Times, 25 March 1939, Page 7
 MALAYAN COLLIERIES LTD. EARNS $551,139. Final Dividend Of 6 Per Cent Making 15 For Year. $127,934 ROYALTIES PAID TO F.M.S. GOVERNMENT. A NET profit $551,139 was earned by Malayan Collieries Ltd. in the year ended Dec. 31 last. This compares with $656,949 in the preceding year. Three interim dividends of 3 per cent each were paid and absorbed $309,006 and the directors propose a final dividend of 6 per cent. which, if approved, will require $206,004. The divided paid for 1937 was 16 per cent. The amount brought forward from 1937 was $363,414 and it is proposed to carry forward $379,544 to 1939 if the dividend proposals are approved and after charging $20,000 for directors’ fees. The report of the directors sates that the quantity of coal sold during the year showed a substantial decrease on the figure for 1937 and sales in the subsidiary sections were similarly affected by the general restriction in trade. Capital expenditure during the year was of a general nature the principal item being mining equipment, mostly associated with mechanised working. The Board consists of Messrs. H.H. Robbins, chairman, F. Cunningham, W. H. Martin, A. W. Delamore and J. Drysdale. Messrs. Delamore and Drysdale retire but offer themselves for re-election and Evatt and Co. offer themselves for reappointment as auditors. The annual meeting is to be held in Kuala Lumpur on Friday. Balance Sheet. The balance sheet shows the nominal capital at $4,000,000 in shares of $10 each of which 343.340 have been issued and fully-paid. Other liabilities at the end of the year were: - dividends unclaimed $12,122; sundry creditors and credit balances, $138,775; general reserve, $1,200,000; and amortisation fund, $981, 250. The assets at Dec. 31 were: - property, leasehold, $1,100,000; buildings, $632,495; general plant, colliery and subsidiary undertakings, $2,827,505; operating stores, spares and trading stocks, $1,034,458; sundry debtors and debit balances, $200,453; investments (nature not shown) at cost, $157, 830, market value at Dec. 31, $168,970 and cash $418,354. The profit and loss account shows the total revenue for the year was $3,717,288. Working expenditure, rail freight, delivery and prospecting expenditure totalled $2,721,621; Government royalties totalled $127,934; amortisation charged is $50,000 and depreciation charged totalled $266,593, leaving a net profit of $551,139.

 

THE MALAY MAIL, FRIDAY, MARCH 31, 1939

LABOUR POSITION AT MALAYAN COLLIERIES

COMPLICATED BY SURPLUS LAST YEAR

Chairman’s Review At Annual Meeting This Morning

QUIET CONFIDENCE AS DISTINCT FROM OPTIMISM

INTERESTING references to the revision of conditions of employment of labour employed at Malayan Collieries were made by Mr. H. H. Robbins (chairman), at the annual general meeting of the company held in Kuala Lumpur this morning.  Mr. Robbins pointed out that the maximum possible force had been retained by restricting the number of working days per individual to the number necessary to provide him with something more than sufficient to satisfy his actual needs.

Mr. Robbins said that they had succeeded in placing the general body of the labour force in a position of absolute freedom as regards earnings, but this had not always been attended by a proper regard for thrift.  A very marked improvement in the sex ration amongst the Chinese bade well to solve the problem by providing facilities for the assumption of home and family ties and the development of that good husbandry which was so traditional a characteristic of the Chinese.

“I am pleased to welcome you to this the 25th annual general meeting of this company, and to be able to report on what I trust you will regard as a successful year.  The report and accounts have been in your hands for the prescribed period, and with your permission I will take them as read.

“It will be seen that the capital remained unaltered at the figure of $3,433,400.00 to which it was increased during 1937.

“Dividends unclaimed at $12,122.47 are about normal.  Sundry creditors and credit balances at $138,775.39 are very substantially down, due to the smaller turnover and to the curtailment of purchases during the last quarter of the year.  The general reserve remains unaltered.  The Amortisation Fund is higher by the $50,000 provided in respect of the year under review.

“On the Assets side, leasehold property at $1,200.000 is less by the $100,000 sanctioned at the last general meeting.

Buildings were added to by the expenditure of $55,783.79 on erections of a permanent nature and the total figure, after depreciation amounting to $33,289.19 is $632,494.60.  The major part of the programme for the replacement of temporary buildings has now been carried out, and the work remaining will be put in hand as and when funds are conveniently available.

COLLIERY PLANT

“General plant of the colliery and subsidiary undertakings was added to by the expenditure of $453,761.91 which after depreciation amounting to $233,304.11, leaves a total figure of $2,827,505.40.  The plant installed was again almost entirely in respect of the colliery undertaking and in continuation of the previous year’s programme.

“Operating stores and spares and trading stocks at $1,034,457.62 was only $24,159.89 less than the figure for the previous year, the high figure being due to the advisability under present world conditions of carrying very full stocks of spares and of not readily obtainable stores, which include manufacturing materials for the plywood section,

Sundry debtors and debit balances at $200,452.93 is less by $137,585.06, this again being due to the smaller turnover.

“Investments at $157,829.86 remain unchanged, the market value at $168.970 being rather less than at the end of the previous year.  Cash at bankers and in hand at $418.354.33 was down by $296,436.12 as a result of the expenditure, on capital works, of the balance derived from the 1937 issue of shares.

PROFIT AND LOSS ACCOUNT

“The Profit and Loss and Trading Account shows a profit of $551,139.43, a figure lower than the previous year by $105,809.32, but in conformity with my hope when last addressing you, that we should achieve a somewhat reduced ratio of expenditure to profit on a smaller volume of sales.

“The year opened with hopes that the improvement in world trade enjoyed during 1937 might continue, but as the months passed it became evident that this was not to be and, at the close, the average percentage of releases under tin and rubber control were lower than during any year since 1934.  Adjustment to the fluctuating economic conditions is one of the major problems of those responsible for the conduct of the industry in this country and the year under review called for considerable adjustment.  It was, however, a year of progress and development.

LABOUR POSITION

“The labour position generally during the year was complicated, but this time by a surplus of labour, especially surface labour, of which there was much more available than required.  While a considerable reduction in the number employed was inevitable, the maximum possible force has been retained by restricting the number of working days per individual to the number necessary to provide him with something more than sufficient to satisfy his actual needs.  The revision of the conditions of employment of labour mentioned last year was continued, and with the elimination of the last of the contractors of any consequence, and the extension of the system of trimonthly individual payment to practically all concerned, the re-organisation commenced in the previous year was continued and the system in many ways improved.

“Notwithstanding progress with mechanisation, we continue to rank among the more important employers of labour in the country, so that any question affecting labour is of primary importance to us, and any step that we can take to further its interests, a matter of fundamental policy.  Though much has been done to benefit the lot of individual workmen by breaking away from age old practice, much remains to be done, and it is only by constant vigilance and close observance of the results of changes, that the perfect system can ultimately be evolved.

“We have succeeded in placing the general body of our labour force in a position of absolute freedom as regards earnings, but this has not always been attended by a proper regard for thrift, especially on the part of the average workman living alone.  The facilities offered by the Government Savings Bank are not greatly availed of, nor have offers by the company to create deposit accounts in the interests of individual frugality, been enthusiastically received.  Further efforts are to be made, but meantime the very marked improvement of the sex ratio amongst our Chinese labour force bids well to solve the problem, by providing facilities for the assumption of home and family ties and the development of that good husbandry which is so traditional a characteristic of the Chinese.  This is having a beneficial effect upon the degree of self-sufficiency in the matter of foodstuffs which is being attained at Batu Arang.  To augment this, and as a safeguard against an unhappy outcome of the present strained international position, stocks of rice, sufficient for our labour force and their direct dependents for several months, have been provided for.

COAL DEMAND DECLINING

“With the falling off of prosperity, especially in the tin mining industry, and the consequent heavy decline in the demand for our coal, it became apparent that the high wages and piecework rates agreed during the short-lived prosperity of 1937 could not be maintained, and ways and means of adjusting these without depriving the labour of the advantages gained were sought.  The fortunes of this company being a very fair barometer of the condition of the country generally, it was decided to adopt the sales of coal and the wages and piecework rates in force at the peak of 1937 prosperity, as the basis of a sliding scale for payment.

“All earnings are calculated on this basis and made subject to a percentage increase or decrease, according to whether the tonnage sold over the immediately preceding month is higher or lower than during the peak month of 1937.  This has the advantage of eliminating the personal factor in the adjustment of rates to conditions, and so any suggestion of a time lag, intentional or otherwise, in the restoration of cuts; a factor which has been held responsible, the world over, for much industrial unrest.

ADJUSTMENT OF PAY RATES

“The scale adopted in this method of adjustment does not restore to us anything like former rates and conditions, and in addition we have the extra heavy cost of administering the revised system of labour control.  These factors must inevitably be accepted, and in any case it would seem that too much attention is being given in industry to rates of wages paid per day or per hour, instead of the amount of work done per man per day or per hour, which is ultimately the determining factor in the basic cost of production.  It is by a revision of methods and the introduction of mechanical aids to increase the capacity per man, that we hope to counteract, partially at least, the increased labour cost per ton of coal produced.  Given an economical demand, this, we feel, can be achieved; but with the severe falling of in demand incidental to the present low releases under the Tin and Rubber Restriction Enactments, the problem of keeping surplus labour employed and of spreading fixed charges, looms large.  This position is of particular interest because the increased costs have had to be met without any corresponding increases under some of our larger contracts to supply coal at very keenly negotiated prices, the result being an unbalance of the ratio of profit to turnover on colliery account.  Nowadays we work on comparatively fine margins and there is no doubt of our ability in due course, to rectify this anomaly without in any way impairing our highly competitive position.

UNDERGROUND DEVELOPMENT

“Development underground in terms of footage was satisfactory but owing to one of the periodical occurrences of faults in the seams, some of the working places so developed have not provided quite the conditions for mechanical extraction which they would otherwise have done.  However the position is only less satisfactory than it might have been as distinct from unsatisfactory, making somewhat difficult the intensive concentration of production necessary for the most economical possible winning of the present small demand.

“The stripping programme progressed satisfactorily with the result that our stripped reserves are once again restored to a safe and suitable tonnage.

THE PLYWOOD SECTION

“The plywood section of our undertaking had a satisfactory year and it is gratifying to be able to report that sales were extended in a way to suggest that at last we have succeeded in breaking down that conservatism which for so long resisted our sales endeavour.  A large remaining part of the local demand for chests is associated with vested interests which we hardly hope to penetrate; this being unfortunate, both from the point of view of this company and of the country generally.  If the principle of support to local industry in normal times is regarded by some as controversial, there can be no argument about the usefulness of a local product in time of war.

“The brickmaking plant and wood distillation plant worked intermittently to supply the demand for their products and on this basis the performance and outcome of these sections of our undertaking may be regarded as satisfactory.  The sale of so heavy and low priced an article as brick is largely controlled by the cost of transport.  This does not apply to such as wood preservative, and while our MalAsote is really a first class article it is just characteristic of the regard with in local products are held that it cannot be sold in anything like the quantities which the markets could absorb.  Progress, though slow, is, we feel, sure, and I hope it will not be long before MalAsote in its sphere is held in the regard that MalAply now enjoys.

“The position regarding the proposed installation of a cement manufacturing plant here in the F. M. S., in conjunction with experienced British interests, is still unfinalised.  While having regard to the trend of political developments, the establishment of a plant to render Malaya self-sufficient in the matter of its cement supplies must be of immense advantage to the country, that same trend may or may not enhance the value of the proposed undertaking as an investment, and the position will call for very careful review before any definite step is taken.

SUB-DIVISION OF SHARES

“When last addressing you, reference was made to the revival of the idea of sub-dividing the $10 shares of the company into shares of a smaller denomination and the views of shareholders were sought.  Some shareholders were good enough to respond but it was felt by the board that the views expressed were not sufficiently definite to justify the convening of meetings for consideration of a hard and fast resolution.  So that a decision might be arrived at one way or another, shareholders were circularised in February and as a result 322 shareholders, representing 151,889 shares have recorded their views. 100,056 for the sub-division into $2 shares and 42,903 against such sub-division, the majority in favour thus being 57,153.  Twelve shareholders representing 8,930 expressed themselves as neither for or against and in favour of whatever course the board may adopt, and added to this, the board and the interests represented by members thereof, have refrained from voting.  The board are quite prepared to be guided by shareholders in the matter of their interests, the view being held that, whilst the proposed sub-division may interest in the company’s shares a class of investor that may now regard the shares as too bulky for its portfolio, and so broaden the market to the benefit of shareholders, the fortunes of the company cannot be adversely affected.  This being so, the board feel that opportunity should be provided to put the matter to a vote, and the necessary resolutions will be prepared and the meetings convened in due course.

“In concluding at this time last year, I felt justified in weaving a thread of optimism into my remarks having a bearing upon the outcome of the then current year.  That was before the eventful fortnight in September, and now with the outlook again obscured by international perplexities of the first order, one is tempted to take the view that the best that may be safely hoped for during the coming year is some stimulation of our primary industries and, through them, the demand for coal, as a result of the feverish intensification of rearmament the world over.  Some consolation perhaps is that we are passing through times of rapid changes, and that such changes cannot always be against the best interests of the peoples of the world.  Be that as it may, optimism to-day would seem to have little justification as a general outlook upon the immediate future.  As far as our particular business is concerned, however, we are in a position to achieve the very best possible results from such demand as we may be favoured with for our products.  This being so, I look forward with quiet confidence as distinct from optimism to our next meeting.

“While on this note I should like, once again, to record the high opinion which my colleagues and I hold of the ability and keenness of the staff in general and also of the loyalty and interest of the vast majority of our labour force.

Mr. Lim Cheng Law, supporting the adoption of the report and accounts said:

“We have listened with great interest to your remarks about the splitting of shares into a smaller denomination.  It will be remembered that it was I who brought up this subject at the last annual general meeting and I am still of the opinion that it would be of real advantage to the shareholders.  The merit of conversion is that it opens a wider field for dealings in the shares.

“Units of two dollar shares would give a much larger list of shareholders and consequently more potential customers.  It would also mean considerably more dealings in the shares, with a much more active and liquid market, and they would become more and more popular and their market value would appreciate.  Moreover, they can be purchased in such small units that there is no obstacle to the acquiring of shares by anyone who has a limited margin of income over his essential needs.

The report and accounts were adopted.

FINAL DIVIDEND

The chairman proposed that a final dividend of 6 per cent. be declared in respect of the profits for the year 1938, payable to-day.  Mr. Martin seconded and the motion was carried.

The chairman proposed that the sum of $20,000 be voted as directors’ fees in respect of the year 1938.  Mr. D. Sear seconded and the motion was carried.

The chairman:  “Under the provisions of the Articles of Association Mr. A. W. Delamore and Mr. J. Drysdale retire and I have pleasure in proposing that they be re-elected as directors.

Mr. Lim Cheng Law seconded and the motion as carried.

Messrs. Evatt and Co. were re-elected as auditors.

Before the meeting concluded Mr. Lim Cheng Law said:  “I do not think we should disperse without voicing the unanimous desire of the shareholders in professing to the board of directors—and in particular to the general managers and secretaries—and to those able colleagues who have worked in collaboration with them—our congratulations on the excellence of the results achieved as evidenced by the accounts with which we are again presented.

“I also desire to express to the staff—whose excellence of service and loyalty are traditional—our deep sense of gratitude at their efforts which have contributed so materially to the eminently satisfactory position displayed in the accounts which are submitted for adoption to-day.

“The growth and progress of the Malayan Collieries has been associated closely with the tin mining industry of this country.  I have been a shareholder of this company since its formation twenty-five years ago.  Now we shall be celebrating the Silver Jubilee of the Company and during the whole of that time the stock of the Malayan Collieries has always been looked upon as one of the safest investments anyone could desire to have.  I am sure the miners particularly fully appreciate the reliable service we provide for them.

Malayan Collieries Report, Accounts and A.G.M.1939