GOOD YEAR.

Auckland Star, Volume LXV, Issue 150, 27 June 1934, Page 9

GOOD YEAR.

FARMERS' TRADING CO.

ANNUAL MEETING HELD.

SUCCESSFUL OPERATIONS

The annual meeting of shareholders of the Farmers' Trading Company, Ltd., was held this morning at the Chamber of Commerce, when there was a good attendance. In moving the adoption of the report and balance-sheet the chairman of directors, Mr. A. A. Ross, said: — "In considering the present report and balance-sheet, shareholders will, I feel sure, be pleased to note that the tendency shown at the last balance period towards a recovery in conditions, has become more pronounced, and that the forecast then made of better times in the near future has been realised. We are now able to present a balancesheet which records a satisfactory improvement and to feel confident that if the present trend continues wo should presently have again reached normal conditions. "An important part of the result is due to the energetic sales policy of the company, which has pushed the sales up by £82,000 compared with the previous twelve months, and increased the gross profit by close on £14,000. At the same time, by a continuation of the closest scrutiny of costs, the general expenses, which at last balance showed a reduction of £7(54:i on the previous year, are further reduced by £3043, notwithstanding the increased sales. "But in addition to our own efforts, there has been a decided improvement in conditions generally, which has also been an important factor in bringing about the result. It is to be regretted that the dairying industry is etill in a depressed conditiou, and this has caused restricted sales of various lines of farm requisites. In other branches of farming, however, a marked improvement has been experienced. Sheep farming, with higher values of wool, mutton and lamb, is approaching something liko normal conditions, while the outlook for the grazier is very much improved. Also we appear to be on the eve of important developments in the processing and handling of dairy produce and beef, which bid fair to be successful, and if this eventuates it cannot fail to have a.good effect on the whole situation.

Conserving Resources. "It may be considered that with prospects as they are we would have been justified in paying a higher . divi lend on ordinary shares than the 3 pnr cent recommended," continued Mr. Ross. "On the other hand, we have to recognise that we are not quite out of the wood yet. The world of politics contains nothing but uncertainty. Untoward events may happen at any time with their inevitable repercussions in the world of industry and commerce, and it is a wiso precaution at the present moment to be careful in the conserving of resources. In pursuance of this idea all the estimates and valuations are conservatively done, and a close scrutiny of the figures will show that the estimated income tax and the dividends recommended will absorb most of the net profit, leaving only a small increase in the carry forward. "In the balance-sheet of liabilities and assets, it will be noticed that the totals have not altered materially, but that there has been considerable movement in some of the items. On the liability side the total of deposits fixed and current has increased by £45,506, in spite of the fact that we are declining all short term deposits. This is duo no doubt partly to an increase in the money available for deposit, but partly also to increasing confidence in the stability of the company. The item sundry creditors is up by close on £32,000, which is merely an ordinary fluctuation due to some extra recent replenishment of stock. "On the assets side the stocks are reduced by £28,381 to £214,857. This is accounted for partly by close* attention being paid to slow-moving stocks, and partly by a reluctance to stock fully while the exchange is in such an uncertain position. The item sundry debtors is down by close on £20,000, due mainly to successful liquidation of overdue accounts, and also to a continuation of close supervision of credit. "Tho effects of all these changes are reflected in our account with the Bank of New Zealand, which, from a debit shown last year of £121,207, has become a credit of £27,256, a change-over of £148,523. Company's Shares. "At this stage I would like to say a word to shareholders with regard to the value of the company's shares," added Mr. Ross. "They have for some time been quoted in the market reports at prices well below their real value. Taking into consideration the net assets of the company, which, after all, are what the shares represent, we find that after deducting sufficient to allow in full for all preference shares, the balance represents 10/1 for each 8/ ordinary share. We appear to be approaching the time when there will be a resumption of the payment of a reasonable dividend on all classes of shares, and I would advise shareholders not to part with their holdings unless at a price in conformity with their real value.

"With regard to the money we have on fixed deposit, and which, as I mentioned at last annual meeting, the depositors had agreed to leave with us until November, 1937, the company is now in such a strong Financial position that there is no longer any necessity to hold strictly to the agreement, and where the money is urgently required we are willing to consider any applications for immediate refund that may be submitted. This will indicate to shareholders the change that has come about in a comparatively short space of time. It is only a little over 18 months ago since withdrawals were in much greater volume than was desirable. Now the position is completely reversed, and we have found it necessary, as I have already mentioned, to impose restrictions on deposits. Continued Confidence. "Once again I have pleasure in complimenting my fellow directors on the close and consistent attention they have given to their duties, and I also congratulate them on the greatly improved results of their labours," concluded Mr. Ross. "I also take this opportunity on behalf of the retiring directors, Mr. Makgill, Mr. Macky and myseif, of thanking shareholders for their continued confidence as shown by the fact that the election has been unopposed, and of assuring them of a continuation of our best efforts in the interests of the company." , t Tho report and balance-sheet (previously published) was adopted without discussion. The retiring directors. Messrs. A. A. Ross, J. B. Makgill and A. N. Macky, were declared re-elected. Messrs. Hutchison, Elliffc and Cameron were re-elected auditors.