COMPANY NEWS

Press, Volume LXXVI, Issue 23131, 21 September 1940, Page 11

COMPANY NEWS

KAIAPOI WOOLLEN

CHAIRMAN’S REVIEW OF YEAR

“Our company has been called upon to take its full share in the production of supplies and equipment for the armed forces. Shift work has been introduced and much overtime has been worked in the company’s various production units,” said Mr T. W. Lewis, chairman of directors of the Kaiapoi Woollen Company, Ltd., at the annual meeting yesterday. “The demands made upon the company for supplies, and, in some cases, at very short call, for the army and the air divisions have precluded the company from making available to its general clients the extended output it had hoped for under the policy of import selection. However, although some inconvenience may have been caused to the company's general clients by the substantial demands made on us by the Government, destined for the armed forces, I am sure that, in viewing the matter impartially, and having in mind that the destiny of all concerned in this Dominion is so closely associated with the success of the Empire’s war effort, clients generally will accept the position, and we can only trust that during the coming year more latitude will occur, and we will bo able again to take up an increased quota of civil work.” Discussing items in the balancesheet, Mr Lewis said that in 1939 the company owed the bank £100,854 on current account. This year the debit had disappeared and at July 19 the account was in credit, but it was advisable to take this figure in conjunction with the item deposits, and the cash position was as follows:

1939. 1910. Dr. Credit. £ £ Bank of New Zealand 100,854 1.207 Deposits .. .. 73,516 £0,062

174,370 89,755 A decrease of £84,615 on those two accounts. Sundry creditors showed an increase of £10,157. This was explained by heavier purchasing, in view of likely shortages in supplies and general increase in turnover brought about by ordnance orders. Reserves were increased by £1132 in the accident insurance and the murine insurance accounts, and it was proposed to appropriate to the reserve account £15,000 (£13,000 to taxation reserve and £2OOO to general reserve). The profit and loss appropriation account was increased by £17,455, from £14,269 in 1939 to £31,724 in 1940,

On the assets side the properties and plant had increased by £10,446. Sundry debtors were £BBI2 less, and stocks had decreased by £36,424. Gross profit last year was £85,076 and was increased by £31,394 this year to £116,470. Depreciation this year had been increased to £20,000, against £7OOO in 1939. The increase was very substantial, but the directors felt that the general manager’s request in this matter, was reasonable in view of the fact that almost double the number of operatives have worked at Kaiapol during this year compared with previous years, and that the mill time worked had been increased by almost two and a half times. Then there has been a night shift at work during the whole year. There had been a third shift operating for part of the year and, in many divisions, where the third shift had not been worked, there had been much overtime worked. Although shift work had not been necessary at Radley, extended hours had been worked there and the staff had been almost doubled. Having these circumstances in mind the directors felt that £20.000 depreciation was justified. General expenses, less land and income tax and social security tax. wore £57,118 in 1939 and £55.917 in 1940, a decrease of £l2Ol for 1940. Land and income tax and social security tax were £10.704 this year against £8682 in 1939. an increase of £2022. A comparison of the liquid PUjj't lo ” of the company for the years 1939 and 1940 was;— Credit 1939. 1940. £ £ Sundry debtors ■ • 69,938 61,125 Bills receivable and cash -- 8M 1,511 Stocks 200.2d1 217,u80 320.053 280,022 Debit Deposits including 11om7 share calls .. 95.171 112.017 Bank of N.Z. -- 100,854 - Qnnrfrv creditors •. 10,339 Jd,401 Balance -- 114.689 141.924 326.053 280,022 An excess of £27,235 in 1940 over 1939. Costs and Prices “Fcom a general point of view stabilisation of costs ?nd prices of course, highly desirable neriods of emergency such as mose associated with war when considerable wastage occurs, and new channels ha to be explored for supplies, and fresh sets of conditions enco «[^ t o Conrnatter becomes more difficult to con tool and to achieve this it would seem that an increased volume of mo duction is a necessary factor to balance up the Position, and maintain an even ctnnrHrd It IS ObVIOUS. Mf IjGWIS said, “that there are many nroduction, the prices rf which aie beyond the control of the Dominion, andin so far as the proportion us ®d J Dominion production is concerned, the cost structure is affected. „ , “We have recently been C9lle , d „ u P°” to meet a wage increase to all om operatives working under awards. This pronouncement came from the Court of Arbitration as an increase undei the heading of a Cost of , Ll^ Bonus,” and, while we do not Ron the Court’s decision, we are of the opinion that if costs are to • stabilised extra production IS , le ‘ auired The position could have been met at this point by expanding the working week to say, a . n P e " t^° U J of five days ot the week for the duia tion of the war at standard rates. If information that, comes to us is reliable evidence is not lacking of the lengthy hours that are being worked by the countries who are at present waging war against us, and we ha an example of what is at present boms nerformed by workers engaged m all fndustries affected by the war m Great Britain. Company Taxation “Before concluding my remarks 1 think I should be failing in my duty to shareholders if I did not icfer to the incidence of company taxation as it now stands in New Zealand. Owing to the size of our capital to pay even a 24 per cent, dividend to shareholdexs makes our company qualify for the highest scale of taxation, which with National and Social now reaches the astounding figure-ol 12s Id in the £. Some of it, we quite appreciate, is • emergency taxation brought about to meet, as far as possible, the Government “pay as you go policy for the war, and this position of course is accepted with good grace, but, added as it is to the previous heavy increases, the incidence of taxation is becoming such a burde; that it will have the effect of crucifying companies if it continues. T lnder lts operation enterprise will be stultified and endeavour diminished.’’ A The report and balance-sheet were adopted and tha retiring directors, Messrs Lewis and Denys Hoare, were re-elected.

[Extended Report Published By Arrangement.]