i62 
THE  TROPICAL  AGRICULTURIST. 
[Sept,  i,  1896. 
A brief  study  of  this  table  soon  enables  one  to 
distinguish  between  the  two  classes  of  Boards.  A 
glance  at  the  amount  spent  on  ordinary  dividend, 
and  its  relation  to  the  profit  obtained,  generally 
settles  the  matter.  And  it  is  an  astonishing  fact 
that  if  one  looks  back  to  the  preceding  table  it  will  be 
found  to  be  precisely  those  Companies  which  poss- 
ess the  best  reserves  that  still  continue  to  add 
thereto.  Companies  like  the  Panawal,  Bandarapola, 
and  Sunnygama  may  pay  high  dividends,  brrt  they 
will  never  reach  the  solidity  of  the  Ceylon  lea 
Plantations  or  the  Standard  Tea  Company  unless 
they  change  their  methods.  To  pay  dividends  is, 
of  course,  good,  but  to  pay  dividends  and  provide  for 
the  contingencies  of  the  future  is  far  better. 
in  this  respect  we  should  like  to  point  out  a rather 
unique  feature  amongst  Ceylon  Tea  Companies. 
tables  contain  the  names  of  the  Ceylon  and  Oriental EiS- 
tates,  Eastern  Produce  and  Estates,  New  Dimbula,  and 
Scottish  Trust  and  Loan  Companies  which  repre- 
sent the  revivification  of  a group  of  coffee  and  cinchona 
growing  companies.  When  coffee  and  cinchona 
growing  were  ruined  in  Ceylon,  these  companies 
fell  into  difficulties,  and  only  by  resort  to  tea-grow- 
ing have  they  got  into  a better  financial  condition. 
Tne  change  from  one  class  of  produce  to  another 
was  costly,  and  took  a long  time,  so  that  for  years 
the  majority  of  these  companies  paid  little  or  no 
dividends,  any  profits  that  were  obtained  being 
required  for  interest  upon  and  redemption  of 
debentures,  or  to  pay  cuinulative  interest  upon 
ference  Shares.  I^atient  work  in  this  direction  has 
at  last  effected  its  object,  and  all  of  these  companies 
have,  within  the  last  year  or  two,  worked  their  way 
into  a financial  position  of  ease.  To  demonstrate 
their  methods  all  the  more  clearly,  we  give  a resume 
of  the  working  of  four  companies  of  this  type  in  the 
Company  Notes  included  in  this  number.  Now  that 
these  old  companies  have  cast  off  the  burden  of  former 
troubles,  their  revenue  will  be  all  the  more  available 
for  dividend-paying  purposes,  and  consequently  their 
shares  offer  a fair  medium  for  investment,  especially  as 
they  often  stand  at  moderate  prices.  As  will  be  seen 
in  the  following  table,  the  yield  in  their  cases,  un- 
der present  conditions,  is  not  high  ; but  without  taking 
too  sanguine  a view,  it  may  easily  be  assumed  that 
dividends  in  the  future  will  certainly  be  higher, 
unless  the  Ceylon  tea  industry  suffers  one  of  those 
calamities  which  now  and  then  befall  a planting 
industry.  Of  such  an  event  there  is,  however,  no 
sign  at  present.  We  append  a table  of  dividends 
for  the  past  five  years,  with  the  price  of  the 
shares,  and  the  return  on  an  investment  based  upon 
the  distribution  for  the  ffast  twelve  months’  working 
of  each  Company  ; — 
<u 
p. 
Dividends.  ^ 
‘3 
.g 
1C 
o > 
Ip 
Companies. 
rH 
05 
CC 
C: 
CO 
CO 
CO 
1-^ 
rH 
rH 
% 
Bandarapola 
o/ 
/o 
% 
6 
Ceylon  and 
Oriental  Es- 
tates 
4 
30 
Ceylon  Land 
and  Produce  10 
15 
20 
Ceylon  Tea 
Plantations  15 
15 
15 
Eastern  Produce 
and  Estates  IJ 
2i 
3 
Kelani  Associa- 
tion  20 
15 
15 
Nahalma  Estate.. 
. • 
8 
New  Dim-  ) A 8 
8 
8 
bula  ( B 6 
12 
14 
Panawal 
6 
8 
Scottish  Ceylon  15 
15 
18 
Scottish  Trust 
and  Loan  10 
10 
10 
Standard  Tea  10 
10 
10 
P8  ■ 
^4 
S'? 
1894. 
1395. 
C n 
p c3 
o 
gm 
<0 
V 
2 § 
.i: 
<1 
PM 
% 
o/ 
/o 
£ 
£ 
.£  s.  d. 
10 
G 
10 
14 
00 
5 
8 
5 
7 
5 
4 
0 
15 
20 
5 
14 
7 
2 
10 
15 
15 
10 
30 
5 
0 
0 
3 
5 
5 
H 
4 
1 
7 
15 
10 
25 
6 
0 
0 
8 
8 
1 
1-i 
6 
8 
0 
8 
10 
10 
21 
4 
15 
3 
22 
18 
10 
22 
9 
0 
0 
8 
10 
10 
144 
6 
17 
7 
15 
1.5 
10 
24 
6 
5 
0 
5 
10 
3 
4 
7 
10 
0 
124 
15 
10 
26 
5 
15 
0 
The  New  Dimbue.4  Company. — Originally  a coffee 
and  cinchona  growing  concern,  this  Company  was 
foi’ced  to  resort  to  tea-planting,  and  after  a hard 
struggle  seems  to  have  reached  smoother  water.  For- 
tunately it  had  no  debentures,  or  it  is  hard  to  say 
what  fate  would  have  befallen  it ; but  the  cumula- 
tive dividend  upon  the  ‘‘B”  Shares  at  one  time 
was  as  much  as  .£22,281  in  arrears.  Five  years 
ago  some  efforts  were  made  to  revive  the  coffee 
and  cinchona  business,  but  matters  went  from  bad 
to  worse,  so  that  the  cinchona  trees  have  died  off, 
while  all  hope  of  revenue  from  coffee  has  been  given 
up.  The  Company  has  therefore  become  a tea-plant- 
ing concern  pure  and  simple,  and  seems  to  have 
pretty  well  attained  its  full  development.  Of  the  total 
area  of  2193  acres  planted  with  tea,  1921  acres  were 
in  full  bearing  last  season,  and  the  remaining  272 
acres  come  to  maturity  in  1895-9(5.  The  change  from 
one  form  of  industry  to  another  naturally  led  to  some 
outlay',  and  this  was  provided  out  of  revenue.  Two 
accounts — the  factory  and  machinery  and  the  tea  exten- 
sion accounts— were  established,  and  these,  during  the 
period  of  earlier  planting,  increased,  although  deduc- 
tions were  made  from  revenue  each  yefar  ; but  as  the 
p)lanted  acreage  came  more  and  more  into  bearing, 
the  deductions  from  revenue  became  larger,  and  last 
year  both  accounts  were  extinguished.  During  the 
past  five  years  the  amounts  written  off  revenue  were 
.t'5,0o9  for  tea  extension,”  and  .t‘8,531  for  factory 
and  machinery.  At  the  same  time,  the  increasing 
profits  permitted  the  paying  'off  of  the  divi- 
dend arrears  upon  the  ‘‘  B ” Shares,  and  the 
whole  £22,281  due  upon  those  shares  has  been  wiped 
out.  The  record  of  the  Company  in  these  five  years 
is  given  in  the  following  table : — 
t3C 
a 
iS 
a 
0)  . 
.C 
o5 
P 
a 
(U 
> 
OJ 
Ps 
£ 
1891..  19,809 
’9-2..  24, 611 
.24,110 
’94.  .29,932 
’95.  .29,842 
a 
CD 
ft 
« 
bO 
a 
£ 
12,067 
11,657 
11,851 
12,129 
11,190 
£ 
1.000  1,900 
2.000  2,157 
1,500  1,224 
500  1,500 
69  1,750 
p 
(5 
(2; 
£ 
1901 
8,824 
9,834 
15,802 
15,731 
I O) 
nD  Qi 
T Vh 
.C 
035 
2 a 
d o 
a a 
£ 
21,169 
22,218 
20,055 
14,484 
6,685 
In  addition  to  finally  wiping  out  the  factory  and  tea 
extension  accounts,  last  year  a reserve  fund  was  com- 
nienoed  with  the  setting  aside  of  .£3000.  If  the  price  of 
tea  does  not  fall,  and  the  rupee  exchange  keeps  steady, 
the  Company  should  see  some  further  increase  in  its 
profits,  but  no  new  planting  seems  to  be  in  pro- 
gress. Its  financial  position  is  an  easy  one,  for  the 
last  balance-sheet  show'ed  £18,552  of  cash,  and  .£6875 
of  produce  in  hand,  w'ith  creditors  to  the  amount  of 
only  £8515.  The  share  capital  paid  up  is  £22,080  of 
“A”  Shares,  £55,710  of  “B”  Shares,  and  .£8110  of 
“C”  Shares.  The  “A”  and“B”  Shares  receive 
8 per  cent  dividend  before  the  “ C ” obtain  any- 
thing, the  distributions  upon  the  “B”  being  cumu- 
lative. After  the  “ A ” and  “ B ” have  received  8 per 
cent  the  “ C ” receives  6 per  cent  and  then  an  ad- 
ditional distribution  is  made  at  the  same  rate  upon 
each  class  of  shares,  so  that  when  profits  are  good 
the  “ C ” Shares  will  always  receive  2 per  cent  less 
than  the  others.  Last  year,  although  8 per  cent  of 
arrears  had  to  be  paid  off  the  ‘‘B  ” Shares,  the  Com- 
pany distributed  an  additional  dividend  of  2 per 
cent  upon  the  whole  capital,  so  that  the  ‘‘A”  Shares 
received  10  per  ceno  the  “B”  18  per  cent  (includ- 
ing the  8 per  cent  of  arrears),  and  the  ” C ” ■ 
per  cent.  Now  that  the  old  legacies  are  written 
off,  and  supposing  profits  for  tiiis  year  were  equal 
to  those  of  last,  it  would  be  possible  for  the 
Company  to  pay  12  per  cent  on  the  “A”  and 
”B”  Shares,  and  10  per  cent  on  the  “C” 
Shares,  and  then  place  .£5000  to  reserve,  which 
fund,  by  the  bye,  ought  to  be  invested  outside  the 
bufiuoss. 
