KAIAPOI WOOLLEN COMPANY.

Press, Volume LXVI, Issue 20026, 6 September 1930, Page 16

KAIAPOI WOOLLEN COMPANY.

ANNUAL MEETING. A SATISFACTORY POSITION. ! The 52nd annual meeting of shareholders of the Kaiapoi Woollen Manufacturing Company, Ltd., was held yesterday, the chairman of directors, Mr A. McKellar, presiding. Chairman's Address. In his address the chairman said:— I have to apologise for the absence of one of our directors, Mr A. P. Carey, from the meeting to-day. Mr Carey, as you know, is visiting England, and while he is there is occupying part of Ms time in looking after our interests in the Old Country. Before the next annual meeting, we will have Mr Carey back with us and have the benefit of the experience he has gained whilst away. It has been a pleasure for the directors of this company each year for many years to have their solicitor, Mr George Harper, seated at the Board table. Mr Harper has always taken a very great personal interest in the company as well as official interest, and his shrewd common sense and extensive legal knowledge have been of immense benefit to the company. I am sorry to say Mr Harper has felt that the time has arrived for him to give up active business and for this reason he is not with lis to-day. Your directors have appointed Mr J. H. Upham to the position of solicitor to the company. The Accounts. On behalf of the Board it is again my privilege to place before you the annual statement of accounts covering the company's activities for the year ended July 19th, 1930, and, in view of the conditions which have prevailed in this Dominion and throughout other portions of the world for the greater portion of the period covered by the company's operations now under review, it is with some satisfaction that your directors are able to place before shareholders a balance-sheet showing a credit balance in the profit and loss account of £19,942 108 lid. This amount will allow for the reservation tof £SOOO for depreciation and will permit us to pay to shareholders a dividend of 6 per cent, on preference shares, which will absorb £3911 8s lid, and 4 per cent, dividend on ordinary shares, which will amount to £9692 7» sd, and, if approved by this meeting, will allow a carry-forward of £1339 0s 7d. This position has been drrived at after taking a conservative view of our stocks, having in mind the unsettled state of the wool jnarket, and also making what has been deemed adequate provision for bad and doubtful debts. It was considered unnecessary this year to add further to. .the reservation for land and income tax. This now stands in our books at £10,500, and the amount paid by the eompany on the past year's operations under this-head-ings namely, £3440 JOs lid, lias been charged out as an expense in this year's accounts.

. "While on the question of reservations I wish to state that it was thought advisable by your directors to transfer from accident and marine insurance to general reserve a sum of £5765 19s sd. ' : This will have the effect of bringing the general reserve up to £20,000, andleav-j ing accident and marine • insurance - at the figure of £5763 Is 8d and, if our past experience should be any guide to us for the future, the com- ' pany'si annual contribution to this fund will considerably more than exceed the demands made upon it. ' , Stocks. Realising that the . whole of the success of the company's operations is ' covered by the position in which- our stocks are taken I have no hesitation in making the statement that, in view of what is happening around us to-day, the general manager has taken a con- . servative view or the manufactured stocks. At balance date the stocks of greasy wool held by the company were a good deal heavier than last 'year. These were very largely the result of purchases niade towards the latter end of the last wool season or from recent ... sales when prices were, as must be generally admitted, very favourable to the - purchasers. This will have the effect of making the company very largely independent of the market conditions at the opening wool sales of the coining season. Taking into consideration the increased wool stock I am pleased to report that the -general stocks of the company show a reduction over last year of £21,955 10s Id. - Properties and Plant. During the year we purchased a warehouse property in Tennyson street, Napier, with, a frontage of 66ft * 7Oft, comprising a two-storey brick building, in excellent order, lately the property of 1 Arch. Olark and Sons, Ltd. This was purchased for £6700, representing, a considerable sum below the Government valuation. The balance of the amount, making the total increase under this heading of £12,558 12s 7d, is made' up of the purchases. of new plant to assist us in our production. Progress of Company. Your directors have reported that the- company has fully maintained its progressive position. I may be permitted to draw a comparison between : the years 1927 and the years 1929 and 1030. First of all 1 may say the assets atand at £1426 moie than in 1927. In 1927 the company owed its bankers and others £223,691. In 1929 this Hem was reduced to £208,832, a reduction of £19,859. In 1930 this item is £190,600, a further reduction of £lB,232, or a total reduction .of £38,091 of money owing to the bank and others in. three years. At the same time our reserved and balance of profit and loss account, which' stood at £17,687 in .1927, stood at £56,385 in 1929, an increase' of £38,698 and in 1930" they stand at £57,206, a further increase of £B2l, or a total increase of £39,519 in three vofir.«: Our financial position has , thus improved' some' £40,000 in three : .voara, and in addition We have paid out in ordinary dividends £17,184. Incidentally we have met the' position brQnght about by a serious-drop in prices of raw wool and manufactured goods, generally straightened out the quality of our stocks, and placed the company in a sound position to meet the future. Our turnover has improved, o\ir goods are sought after, our mills are working full time, our factories are fuljy manned. and working overtime, • and our percentage of expenses to gross < profit has been materially reduced. I t . think, therefore, your ' directors can fairly claim the; have maintained the . company's progressive position.

(CONTINUED.)

Tariff Protection and Taxation. In my last year's report mention was made of some of the disadvantages which we, aa Dominion manufacturers, labour under in meeting the world's productions in out markets, a great number of which are manufactured under labour conditions, very far removed from those enjoyed by our operatives and are mady, either wholly or in part, from re-manufacturcd fibres, and I regret to say that this competition has in no way diminished during the year now under review, and it is a cause for further regret, and not a little concern, that the "Government of the day" has not stepped out in its recent Budget proposals with a policy tlint would £ive anv acklitionnal worthwhile measure of assistance to manufacturers in this regard, but has rather viewed its responsibilities from the angle of revenue "for itself only, and the directors of this company view with further alarm the recent increases in taxation which have been placed on the Statute Book, and would point out that if the demands of the Government in this regard were more moderate, even with the balanee available last _venr, six per cent, could have been paid to ordinary shareholders instead of four per cent, as now proposed; however, with these remarks I leave it to shareholders to realise what effect the further and recent increases in taxation are likely to have on their annual accounts. In passing I should like to add that with the world generally in the grip adversity, there certainly is a limit as to what demands industry can stand at the hands of an insatiable Government, and we feel that it. certainly behoves the Government to make every effort to reduce its own cost of operation before the sitnation gets out of hand. I am more than pleased to be able to tell shareholders that our business during the year has again proved that the "Kaiapoi" brand hoTds its position as the standard of New Zealand Woollen Goods, and that the reception we have met with throughout the trade has been most encouraging. We are undotibtecllv 'indebted to the excellent staff we havo for these results. We have a loyal, industrious and efficient staff, always willing and anxious to improve the company's fortunes, and in speaking of the staff I include all the workers in our mills and factories as well as the managers, salesmen, and clerical staff in our mills, offices, and warehouses I may be excused in specially mentioning our secretary and general manager, Mr W. R. Carey, whose wide knowledge of the woollen trade and long experience in salesmanship and buying, as well as the management side, has contributed so largely in providing the results for our shareholders as well as piloting our'staff so successfully. On behalf of the directors I take this opportunity of thanking Mr Carey ajid the staff, and workers at all points for their services during the year. I also thank my co-directors for their assistance and loyal support during the year.

The Discussion. Mr Lewis, in seconding the motion, said the manufacturing units were operating on a very satisfactory basis, tfnd that the standard of efficiency had been fully maintained. The directors were keeping in close touch with the position, and additional machinery and plant had been authorised as required, particularly in connexion with , Kadley mills, where they had to meet the many varying changes of modern requirements. He joined with the chairman in offering congratulations to the general manager and the staff on the year's operations. Mr Tait drew attention to the fact that the stocky appeared to be high, and Mr J. H. Blackwell also urged that precaution should sbe taken in keeping stocks as low aB possible in .view of the wool market having so seriously receded. Mr BlackweU also expressed bis pleasure that; in spite of the difficult year, the results as shown by tfye balance-sheet v?ere as good. as those shown the year before. After Mr Barnett and other shareholders had 'spoken to the motion it was adopted. ' Election Cf Officers. There being no other nominations Mr A. MeKellar and Mr T. W. Lewis were re-elected to;the Board for a further term. , On' the motion of Mr F. 35, Jones, Mr W." 8. Newburgh was re-elected auditor for the ensuing year. , At this stage of the proceedings Mr Lewis read an extract of a speech made by Sir Otto Niemeyer recently in Australia, and concluded by moving the following motion, which was carried:— "That the shareholders of thiß company view with considerable alarm ~ the Budget proposals relating to increased company taxation, having in mind the fact that the present company taxation has made such Inroads into the earning capacity of -their capital, when invested in a large manufacturing undertaking such as the Kaiapoi Woollen Manufacturing Company, when even in declaring a small dividend 5s in the £ is deducted from its earnings under this heading; therefore the increase now agreed upon by the Government causes the shareholders the utmost coneern." 1 On the motion of Mr Tait, supported by Mr J. H. Black Well, a vote of thanks was passed to the directors and staff for their services during the past year. This motion was also spoken to and supported by Mr A. L. Gray-

[Extended report published by arrangement.]

INVESTMENT STOCKS FALLING.

SYDNEY, September o. Investment stocks on the Sydney Exchange have reached the lowest levels recorded since the depression began. Generally prices are down almost to tho levels ruling during and after the war depression of .1921. DAIRY PRODUCE. The National Mortgage and Agency Co. of N.Z., Ltd., have received the following cablegram from A. J. Mills, Ltd., London Butter —Market quiet. New Zealand finest 1265, New Zealand firsts 1245, Danish 144s to 1465, Australian 124s to 1265, finest New Zealand salted, exceptional 127s to 128s, finest New Zealand stored 1245. Cheese—Quiet. • New Zealand white 71s to 735, New Zealand coloured 75s to 775, Canadian white 78s to 80s, Canadian coloured 78s to 80s, Canadian c.i.f. white 70s, Canadian c.i.f. coloured 71s. Dalgety and Company, Ltd., have received the following cablegram from Samuel Page and Son, dated London, September 4th: Butter—Quotations nominal. Buyers holding off in expectation of lower prices." Quotations : Danish, 143s to 1455; finest New Zealand, 124s to 128s; finest Australian, urtsalted 124s to 'l26e, salted 122s to 1265; g.a.q., 118s to 120s. Cheese- -Market depressed. Quotations: Australian, white 70s to 71s. coloured 75s to 765; New Zealand.' white 71s to ■ 735, coloured 7Gs to 78s; Canadian, spot -white 74s to 78s coloured 76s to 80s; Canadian, c.i.f., 70s to 72« A. S. Paterson and .C 0... Ltd., have received the following cablegram from their Loi.don J., and J. Lonsdale and Co:. Ltd.:— ■ Butter—Continental market firmer. Danish 147 a. Colonial market weak. New Zealand 124p to 126s', Australian 1235. ' Cheese-'-Mnrket easier. White cheese 71s to 725, coloured cheese 74a to 7fi».