N.Z. FARMERS’ CO-OP ASSOCIATION

Ashburton Guardian, Volume 55, Issue 297, 28 September 1935, Page 6

N.Z. FARMERS’ CO-OP ASSOCIATION

♦ ANNUAL MEETING TO-DAY. IMPROVED POSITION REVEALED. SHAREHOLDERS’ APPRECIATION. (Special to the “Guardian.”) CHRISTCHURCH, This Day. The annual meeting of shareholders in the New Zealand Farmers’ Co-opera-tive Association of Canterbury, Ltd., was held to-day, the chairman of directors {Mr Arnnud McKellar) presiding. The meeting was one of the smallest for years. In moving the adoption of the report and balance-sheet (published on Saturday, September 7) the chairman said: New Zealand’s export year which has just closed did not quite fulfil the fair promise of its predecessor. Our export income fell by four and a half million pounds, mainly because our national wool cheque was cut in half. This was a serious matter for many customers of l this Association who are woolgrowers, but the effect of the reasonably good prices of the previous year still helped them to carry on, and indeed it has continued to provide a steady stimulus to our business and to the whole general trading of the Dominion; and this quietly persistent uplift resulting from our 50 million pound export income in 1933-34 is still continuing its beneficial effects. We have felt this benefit in all our trading during the past year, and throughout our many departments have only suffered in a greatly reduced wool commissions account, and consequently decreased earnings in our land sales department owing to the reviving inquiry for farm properties haying been rudely nipped in the bud by the succeeding. setback in wool returns. However, during the last four months wool prices have been tending to firm again and for fine wools there has already been a recovery of about 20 per cent, which it is to be hoped will lift to some extent the prices of New Zealand’s'cross-bred wools.

Our meat prices have been appreciably better during the past season, although the lower average killing weight of the Dominion’s lambs by lslbs, in consequence of a dry summer and autumn in many parts, has taken away some of the benefit of these prices. We can now happily look forward to the coming year free from the dread of having to pay a levy in order to get our meat on to the British market, and what might be worse-—to see the British market swamped with meat from everywhere—gaining entrance by paying a levy sooner than stay out. I hope that this temporary agreement with Great Britain will be crystallised into a permanent arrangement for our mutual benefit. The Outlook for Wheat. Of wheat we shall probably not have a surplus bushel in the Dominion when our next harvest is due, although many countries are perplexed with huge surpluses for export v'hich they cannot sell. The butter position and prospects appear to be growing more satisfactory. In fact, although markets are not now yielding the big prices we have sometimes enjoyed, they are better than Ave have known by bitter experience over the greater part of the last five years; and as the present seasonal conditions are encouraging, it seems reasonable to assume that the coming year may be fairly approached in a spirit of cautious optimism. On many occasions the Chairman of this Association has referred in his annual address to the importance of farm costs, not only to the fanner but to the whole Dominion, and I mention it again this year because this Association has been able to do its part by reducing rates of interest charged to customers on their seasonal borrowings from us. Our average rate of interest is now 25 per cent, less than it was a few years ago. In comparison with this large reduction it may interest you to hear the Government Statistician’s figures of reductions in New Zealand basic prices in June, 1935, compared with the year 1926, —

Retail prices lower by 17.2 per cent. Wholesale prices lower by 10 per cent. Import prices lower by 24 per cent. Industrial wages lower by 11 i per cent. This lowering of interest rates is therefore probably the most important factor in helping to meet the lower average prices of all groups of our exports which now stand at 30 1 per cent, toss than the average prices obtained in the year 1926. Turning to our own statement of accounts you will notice our gross profits have increased by nearly £7,500 and' our nett profits by close upon £5,000. Revision of Articles. You will remember that last year I tol'dl you we had) sufficiently put our house in order to venture to forecast sufficient profits to enable us to pay at least some dividends this year, and the machinery for doing so would be placed before our preference shareholders and secured deposit stockholders during the year in the form of certain proposals for their approval/ A great deal of time and consideration have been devoted! by your directors and executive staff to these matters for’ several months. The meetings have been held and we are deeply gratified, as I think you must be, by tlie almost unanimous acceptance of our propositions by all those concerned. At a later meeting to-day you will be asked to incorporate these decisions of various classes of shareholders in our revised Articles of Association. This revision of our articles has been rendered necessary by the new Companies Act of 1933, and the alterations proposed have been clearly set out m a circular sent to each shareholder. These alterations are in the main quite formal, but there is one to which I wish to especially draw your attention. It is the alteration of £he provision m Article 79 designed to increase the remuneration which may he divided amongst your directors from £I,OOO, a year to a maximum of £2,000 a year.

Work of the Directors. You have 15 directors ; and it cannot be said that their remuneration for controlling this great business, as £IOOO all told, is adequate; for when you recollect that they have not only controlled it in its normal working, but had the task nine years ago of lifting it from the grave condition to which it had drifted, and before it was scarcely convalescent, found themselves in 1930 struggling with the effects of the depression on its enfeebled constitution—you will probably realise that you would then have been willing to pay many times this .£2,000 to be sure of bringing the organisation to the level to whicto it has now been raised.

After nine years of constant and anxious ivork—now rewarded with success, it is but simple justice to your directors that this matter " should have your attention.

You will notice our general expenses have increased by £3,900. This is due to the partial restoration of some salaries and Avages and the payment of special bonuses to members of our staff Avho have increased our turnover.

We are still finding it necessary to nurse certain, weak advances accounts, but these accounts .generally are improving, and our newer business in lending is sound and healthy. Therefore Ave have not taken into profit, but have reserved, the interest on all our Aveak accounts, some of Avhich are being worked under the Mortgagors’ and Tenants’ Relief Act, and some under voluntary pooling schemes. The liabilities side of our balancesheet shews little change. Our capital account has increased by £25 by calls paid. Fixed deposits are nearly £5,000 less, and credits to customers’ accounts less by £14,000, both due to customers Avishing to use the money, some, alas, to make up reduced wool incomes. On the assets side freehold and leasehold property stands at £1,230 more than last year. This is due to our having paid off a small mortgage of £6OO and also the cost of building a house for our stock agent at Cheviot, on a section which the Association has owned for many years. Our plant and machinery, etc., stands at . a lower figure this year by £3OO, although Ave have replaced with new vehicles some of our large fleet of motor vans, and have installed electric refrigerators at head office and branches for the purpose of shoAving provisions under modern hygienic con-

ditions. Increase in Stocks. Our stocks have increased by over £24,000, but this is all good merchandise, necessary for our turnover and proportionate to it. Our very satisfactory trade tumoyer in all merchandise departments both at head office and branches is a tribute to the good quality and sound value of the AVide variety of goods av© sell. Our advances to farmer customers have increased by £25,000, but these are all soundly secured and the increase represents healthy business. Our goods, auction and motor accounts outstanding sheAV a satisfactory decrease of £15,500. You will notice that our accumulated reserves against these accounts have now reached a figure of £261,000, a prudent and necessary provision against some losses which are inevitable and. some which may eventuate. You will notice a large item of short date investments amounting to £134,615. This is all liquid money which is earning the best interest possible consistent with immediate availability. Its use enables us to keep a small credit balance with our bankers, and at the same time meet the seasonal requirements of our customers during the period of the year Avhen there is no farm income, although farm Avorking expenses are regularly going out, and advances are required to meet them.

Last year this item, together Avith the credit at our" bankers, totalled £152,895. This year it is £6,755 less. It is something new for the Association to have such large liquid resources of its own money. This is partly a sign of the times, and partly a deliberate policy. New conditions in the future, iiowever, and expanding business may cause us to employ this money oyer longer dated business, and we may find it profitable to alter, our present policy to meet changing times. The distant future, hoAvever, is too obscure for the formulation of any forward policies involving the use of expensive borrowed money Avlnle the probable returns are less certain than the costs.

Changes in the Directorate. During the past year Ave have suffered the loss by death of two of our directors—Mr "William Shipley and Mr F. W. Ruddenklau. Both Avere experienced farmers Avho have for many years given good -service to the Association. Mr Shipley joined the .Board in 1918 and Mr Ruddenklau four years later. YVe shall miss them very much. It is a great pleasure to welcome here to-day Mr James Bland., of Winchmore, Avhose nomination as a director fills one of the vacancies. Mr Bland is an old customer and friend of this

Association, whose father and grandfather before him farmed the same property in the same capable manner; and we shall look to him for great assistance in. our organisation. The other vacancy is filled by tlie nomination of Mr Thomas Stevenson, of Spotswood, a. brother ol our late, chairman. Mr Thomas Stevenson is away in England just now on a farmers’ tour. We shall look forward to his return and to his valuable help, particularly in the Cheviot district where we have not had a resident director lor many years. During the year the important meetings of the bondholders and various classes of shareholders have had to be prepared for and carried’ through. Also the work entailed in preparation of tlie amended Articles of Association has had to be carried through. These responsible matters have had to be undertaken in addition to the work of a difficult year. I know 1 am voicing the

opinion of all, the directors when I express our thanks to .all those who have been engaged on this work as well as their ordinary duties. The directors desire to thank Mr Machin for his services in these matters, and especially for .wliat he lias done in the interests of the Association and to congratulate him on having brought the Association again to the position ol' a dividend) paying concern, I also wish to thank all members of the staff at Christchurch and the branches for their successful efforts. The staff is a good one, and their work is appreciated by us all. I also wish to thank my co-clirectors for their help and assistance throughout the year. . . I have pleasure in moving the adoption of the report and balance-sheet. After very little discussion the report and balance-sheet were, adopted. The following resolution was carried unanimously on the motion of Mr I. N. Gibbs, seconded by Mr F. \V. Compton : “That this meeting of shareholders of the New Zealand Farmers’ Co-opera-

tive Association desires to express its deep appreciation to tlie directors, and also to tlie association’s general manager (Mr W. Machin), for their services during the past trying years, and congratulates them on the sound position into which the affairs of the association have been brought through their untiring efforts.” Mr James Bland ('Winclimore) and Thomas Stevenson were elected directors to fill vacancies caused by the deaths of Mr F. W. lUiddenklau and Mr William Shipley. The retiring directors, Messrs F. E. Jones, W. Stalker and 0. G. Jarman, were reelected unopposed. A proposal that the remuneration of directors he £IOOO a year instead of £2OOO was lost by a large majority.

Messrs Best and ‘Wilkinson were reappointed auditors. After the, annual meeting an extraordinary general meeting of shareholders was held, at which amendments and additions to the articles of association, as circularised to shareholders, were adopted.