N.Z. FARMERS’ CO-OP ASSOCIATION.

Ashburton Guardian, Volume 59, Issue 299, 30 September 1939, Page 10

N.Z. FARMERS’ CO-OP ASSOCIATION.

annual meeting to-day. INCREASE IN NET PROFIT. STRONG POSITION SHOWN. (Special to the “Guardian.”) CHRISTCHURCH, This Day. The annual meeting of shareholders in the New Zealand Farmers’ Co-opera-tive Association of New Zealand was held to-day v. The chairman of directors (Mr Arnaud McKellar) presided. Speaking to the annual report Mr McKellar added that the increases in tajcatioh announced last Tuesday by the Minister of Finance meant that the Association. would have to reserve out ot its profit a further sum of £3lOl, which would increase the taxation provision to £23,770 and reduce the amount reserved for the reduction of profit and loss account deficiency. The chairman continued:' v ; It is not my intention to make a lengthy speech to-day! Under present conditions forecasts are impossible. The internal economy of New Zealand is in such a state that it will require all the skill and ability of our best minds to bring it back again to sound and healthy balance. The dreadful events .in Europe, in which the British Empire is deeply involved, must cause us much anxiety, and make people realise that just as it is truo that no man can live unto himself, so it is even more true that no Nation can live unto itself, and in isolation, insulation, or self-sufficiency develop independently of the great world outside. I can therefore merely sayi that as I recount to you the position and progress of this Association as shown by its accounts for the past twelve months; you must judge how well equipped it now is in trading skill, — prudence,—strength and general commercial ability in its Board of Directors, Management, and Staff to meet tlife unknown conditions of the disturbed period in front of us, which I pray may be mercifully short. Never So Strong.

I can say this, however, with confidence ; in our financial and liquid cash position we were never so. strong. In the soundness of our advances accounts to our customers, we have not been so happily placed for over 20 years. Ip the freshness and value of our" merchandise stocks the figures in ouft’ Balance Sheet are more than o.ne hundred per cent, sound on present day prices and values. In our turnover of goods both wholesale and retail our business is excellent —thanks to the loyalty of our many customers and t their appreciation of the service, and value we give; and in the personnel of our staff both at Head Office and branches we can esteem ourselves fortunate. You will see by the Profit and Loss Account, that out nett profit for the year is £54,760 or £1,120 greater than it was last year. This is despite the, much-reduced commissions wo earned oil wool and livestock because of their lower prices. The drop in wool prices by nearly 30s per bale as against the previous year, and (nearly £lO per bale as against two years ago, has been a serious matter for our sheep farmers ancl indeed for all the voolgrowers in New Zealand; and our loss of commission is unimportant -against their heavy loss of income. Moreover the poor season in Canterbury and Marlborough has reduced sheep prices disastrously and many of our customers have suffered. This leads me to say again what I was able to put on record in the depression years of 1930 to- 1933, that no farmer customer, whose income has been insufficient to meet his expenses, and who lias been honest with the Association has been refused a pooling scheme in order to tide him over his difficulties. Increase in Property Account. You will notice our capital lias slightly increased during the year by £26 through this amount of arrears of calls having been paid. Also that our Secured Deposit Stock (happily reduced last year by £235,210) has again been reduced by £4,738 through purchases at market price from our Stock* holders who offered the stock to us. We •havfr also paid off the last of our fixed deposits amounting to £7OO. You will observe that Sundry Creditors increased by £8,462 but this is merely incidental to .our large business and has no significance. In our General Reserve we have, a small increase 'of nearly £I,OOO, bringing it up to £34,466. Taking the assets of the balancesheet, you will have noted that our properties show an increase of £8;,322. This is due to progress payments on account of our new Ashburton branch premises amounting to £13,322 but is lessened by the usual yearly depreciation of £5,000 which we have put aside for the past 10 years. We had the pleasure of opening our new premises at Ashburton last Monday. They are commodious and well-equipped, and are now. right in the centre of the main street and its business activity.

New Ashburton Premises. After many years of waiting for a suitable site and premises—in which our customers and clients have cheerfully walked across the railway hue to do their business with us —we hone this new enterprise will be regarded as an expression of our confidence in the future of the Ashburton County and Town, and our appreciation of the business of our numerous clients in the district. Our merchandise stocks are rather high at £281,376 although they are £16,745 less than they were last year. They are fresh and well bought, and we do not regret their standing at this figure under present circumstances. The policy of this Association in giving the fullest support to Dominion Industries is well-known, therefore, while the import regulations have been troublesome and have caused us some., loss, they have not seriously injured our business; An item ...which will interest you is the reduction of. £132,539 in our ad-vahceA-to ••customers-. You must read in connection with this figure the decrease of £95,689 in the figures of the reserves we hold against these accounts. This means that we have written off from these accounts as bad debts nearly £IOO,OOO during the past year.

This money was lost years ago, and with many struggles we have in past years provided for these losses. Most of this writing-off has been done bv voluntary negotiation witli our clients and their other creditors; and some of it by order of the Court of Review under the Mortgage Relief Legislation. It will interest you to know that since yo\v new Directors and General Manager took office in 1925-6, we lia.vo written off from customers’ accounts : in principal and interest the astonishing sum of £1,013.293. Where has this money come from to fill up this huge hole? You will remember you wrote off in 1926, from the Association’s capital the sum of £35(1074 and in this year’s balance-sheet (after the distribution of the profit) the debit balance to the Profit and Loss Account will be* £188,168. This leaves a sum of £424,196 which required to bo found after taking into account reserves which were in the books in 1926 of £50,855. Now money does not drop from the skies! It requires to be earned! and this was a very large sum which had to he earned to replace the money which had been lost. Its size is indicative of the strenuous anxieties of your Directors and Management i'n their early years of office. Current Accounts Reduced. The balance of £36,850 by which the current accounts have been reduced represents several large old accounts which have been closed and the properties disposed of. This means a. small loss of current business to the Association, but a larger saving in interest, and the end of several unsatisfactory business relationships which had their commencement many years ago. And this is reflected in the liquid position of the Association’s funds;, which in cash and short term investments stand at the sum of £166,976 or £82,149 more than last year. , The contingent liabilities of the Association in the form of guarantees stand at £4OOO. This is an old guarantee of a. customer’s banking account dating back to 1918. It is amply covered by a stock mortgage, and there is little likelihood of any liability falling on the Association. The liability uncalled on shares in other Companies held by the Association is this year reduced by £7OO. This is in connection with Cash Order Purchases, Ltd., a new form of trading concern which has grown up in recent years. * It was thought to he more desirable in the interests of sound trading that the retailers of Christchurch should form a 'Company amongst themselves rather than that a foreign Company should enter this field in a class of business which appeared to have come to stay. The officers of this Association had much to do with organising the new Concern, the results of Avhicli up to the present have been satisfactory. • ' ! The Social Security Tax. You will not fail to notice the drain on our profits of the new Social Security Tax in addition to increased Income Tax. Our Land Tax takes £3OOO a year, and local rates, licence duties, etc., are mounting up year by year. We trust that the. recommendations of your Directors in the Rejiort, concerning the disposal of the profit will have your approval. And now I must conclude my last speech as Chairman of the Board. My health of late has not been good, and after 14 years as Vice-Chairman and Chairman (during which we have navigated troubled seas, but have now a tight well-found.ship capable of riding out any storm) —I 'feel entitled to hand over tile* wheel. If you wish’ it I will however, retain a seat on. the Board meantime.

• I am sorry we are losing our General Manager, who some time ago decided that lie Avould like to retire on October 31st next. He has carried out what was a, stupendous task with conspicuous skill and ability and though his actions were not at times popular in certain quarters they were conspicuously just and fair. We have to one and all express our sincerest thanks to him for the .sound and prosperous state of the Association to-day, accomplished not without, I regret to say, some toll on liis health. The motion for the adoption of the report and accounts was seconded by the vice-chairman (Mr C. P. Agar). Several shareholders spoke to the motion, which was carried unanimously on the declaration of the chairman. Retiring Directors Re-elected. The following retiring directors were re-elected: Messrs W. J. Anderson, S. P. Godfrey, H. FI. Holland, G. Mangels and James Tait. The chairman also declared the election of Mr C. G. C. Harper to fill a vacancy on the Board. Appreciation of Services. Tributes to the chairman of directors and to the general manager, both 'of whom are relinquishing their positions, were paid by shareholders. Mr T. N. Gibbs moved resolutions placing on record appreciation of shareholders of the services given by Mr Arnaud McKellar as chairman, and by Mr William Machin, as general manager.

The resolutions were seconded by F. W. Compton, and carried with acclamation. The resolutions were as follow: “That the shareholders of New Zealand Farmers Co-operative Association place on record their high appreciation of the services rendered to* the Association by Mr Machin, who is relinquishing the position of General Manager so ably filled by him over a period of 131 years (1926-1939). He undertook a formidable task in 1926 in view of the then grevious condition of the Association’s affairs, but largely due to his efforts, energy and outstanding ability they have been brought into a sound and healthy state. In this achievement he has raised a monument to his services which is widely recognised beyond the Association, and which speaks more effectively than mere words. The Association is greatly in his debt and will ever honour bis place in its history. The directors are requested to convey this resolution to Mr Machin in some tangible and permanent form and with it best wishes and regards of shareholders, and also -to place his portrait in the hoard-room with a plate incorporating the terms of this resolution .

“That the shareholders of tho New Zealand Farmers Co-operative Association place on record their high appreciation of tho services rendered to the Association by Mr. Arnaud McKellar over a period of 14 years, during nine of which ho was vice-chairman and the latter five years Chairman of Directors. Tho Association is greatly in liis debt for his leadership in tho effort involved in rehabilitating its affairs. The excellent condition in which ho

leaves the same on relinquishing the chair is cause for great satisfaction to the shareholders and he has every reason for pride and satisfaction in the outstanding part ho has played. His is unquestionably the reward of a job well done. The directors are requested to convey this resolution to Mr McKellar in some tangible form, together with best .wishes for bis good 'health and many more years of service to the Association.” A vote of thanks to tho staff was moved by Mr Agar, seconded by Mr F. E. Jones and carried.