THE NEW ZEALAND FARMERS’ CO-OPERATIVE ASSOCIATION

Press, Volume CVI, Issue 31196, 21 October 1966, Page 14

THE NEW ZEALAND FARMERS’ CO-OPERATIVE ASSOCIATION

OF CANTERBURY, LTD. Eighty-fifth Annual General Meeting October 18,1966 The eighty-fifth Annual General Meeting of Shareholders of The New Zealand Farmers’ Co-operative Association of Canterbury Limited was held today in the Chamber of Commerce Hall, Christchurch. Mr G. Gibson, Chairman of Directors, presided.

The Chairman, on moving the adoption of the eighty-fifth Annual Report and Balance Sheet, gave the following Address—

CHAIRMAN'S SPEECH Ladies and Gentlemen, | You will have noted with , pleasure the reference in our 1 printed Annual Report to our friend and colleague Mr C. G. Jarman, who achieved his 50th Anniversary as a member of our Board of Directors during the year. I am sure that Shareholders would wish to express their thanks and goodwill to Mr Jarman for his outstanding service to the Association.— Ladies and gentlemen, I am very pleased to submit to you the 85th Annual Report and Balance Sheet of the Association, copies of which are in the hands of all Shareholders. The Association’s Net Profit for the year ended 31st July, 1966, was £153,094 after provision for taxation and all known contingencies. The Consolidated Net Profit of the Association and its subsidiaries was £153,145 as compared with £156,372 in the previous year, a decrease of £3227. Dividends paid by the subsidiary companies to the Association were the same as in the previous year, £llOO. In the light of all the known circumstances this result, although a small decrease on the previous year, is better than may have been anticipated and is viewed with some satisfaction by your Directors. I would call to your attention that the Association’s new venture at Riccarton Mall was opened on the 3rd November, 1965. This was a major investment towards preserving the Association’s strength in the retail field for the years ahead, but experience has proven throughout New Zealand, and indeed overseas, that such new projects may well take a year or two to develop to a fully economic level and to make a satisfactory contribution to Profit and Loss Accounts. Our Blenheim Branch underwent a major expansion and renovation programme throughout the year, involving substantial revenue as well as capital expenditure. We are confident on current trends that this investment will prove to have been a wise one. Our Export business in pasture seeds and allied lines is developing very well, and making a good contribution to our profitability. However, to keep abreast of modern trends it has been necessary in the past year for the Association to make a major investment in new plant and facilities for the handling of pasture seeds in bulk, to ensure that our competitive position is sustained. This step gave rise to heavy depreciation charges in the past year and which will recur in the current year. Accordingly whilst our gross earnings from trading and commissions increased by £lOB,OBl, this major increase in gross earnings was offset by an increase of £89,248 in general trading expenses and by £21,949 in depreciation charges. There was a minor increase in Directors expenses arising from essential travelling costs and a taxation saving from Investment Allowances, and Export Incentives. Operating costs, other than in respect to the development of new ventures, did not increase materially. I am pleased to report that the Stock and Station Division of the Association’s activities is in good heart and made an improved contribution to the Association’s Profit and Loss Account 4000 bales more wool was handled during the past season, and Live-stock tallies increased in all categories despite the retention of increased numbers of stock by farmer clients, in view of the excellent feed conditions obtaining. An adverse factor in the year’s operation was a major reduction in the number of new motor vehicles received for sale, a circumstance over which the Association has no control. THE BALANCE SHEET Our Balance Sheet now totals £5,195,047 —an increase over the previous year of £396,702. This increase is represented on the Assets side of the Balance Sheet by an increase of £130,587 in Land, Buildings and Plant, and by an increase of £309,861 in Current Assets, offset by a decrease of £43,746 in outside investments. The decrease in Investments arises in the

main from Government Stock, a parcel of £150,000 having matured during the year, and a new investment of £73,135 in Endowment Assurance Policies—in the main single premium policies which will mature at spread dates from 1981 onwards —to assist development in future years to protect the Association’s liquidity in the meantime. The increase of £396,702 in the Balance Sheet total is represented on the Liabilities side of the balance Sheet by increases in Shareholders funds £211,968, in Term Liabilities £87,000 (all represented by mortgages on freehold and leasehold properties), and by Current Liabilities £97,734. You will note from the comparative statement which has now been introduced to our printed Balance Sheet that our liquidity ratio at 1.81 to 1 represents a small improvement on the previous year, and in the view of your Directors is satisfactory. RECOMMENDATIONS Your Directors recommend the payment of a dividend for the year at the rate of 9% per annum on the Paid-up Capital of £1,100.000. This Capital includes the Cash Issue of 400,000 5s Shares at a premium of 2s per Share made in October 1965, on the basis that this Issue would qualify for a full year’s dividend. The dividend amounts in total to £99,000. Your Directors further advise that the sum of £50,000 has been transferred to the General Reserve which now stands at £600,000. The position of the Consolidated Profit and Loss Account, subject to your approval of payment of the dividend recommended, will then be as follows; Net profit for the year .. .. £153,145 Less dividend recomcommended. .. 99,000 Surplus for the year 54,145 Add amount brought forward from last year. .. .. 204,684 and unclaimed dividends forfeited. .. 652 259,481 Less the transfer to General Reserve 50,000 Leaving a balance to be carried forward of £209,481 Shareholders will have noted that the balance carried forward in the Profit and Loss Appropriation Account of £209,481 is in excess of two years dividend at the current rate of 9%. BOARD OF DIRECTORS The retiring Directors this year are Dr. M. K. Gray, Mr W. G. Macartney and Mr D. C. Richardson; these Directors being eligible offer themselves for re-election. MATTERS OF CURRENT INTEREST IN THE ASSOCIATIONS AFFAIRS Export Development. I reported to this Meeting last year that we at that time had our Export Manager in South America, exploring the potential market there for export of New Zealand pasture seeds. I am pleased to report that this venture has proven to be a good one, the extensive contacts made having led to the development of substantial export sales, which we believe will increase in the years ahead. With a view to achieving further development in this phase of the Association’s activities, our Export Manager will be making a more extensive overseas tour in 1967. Over the next few months we will be taking further steps in the development of our facilities for the bulk handling of pasture seeds, steps which are proving of material benefit to our farmer clients but which nonetheless short term are costly to the Association.

Motor Division. The used car business is of major and increasing importance in this Division of our activities. During the past year used car outlets were opened on Fitzgerald Avenue and at New Brighton, in each case on well sited properties owned by the Association. Both of these ventures have proven successful, and within the next few months a further outlet will

be provided on the North Road frontage of our Papanui land. In furtherance of our objective of providing a progressively improved coverage and service to the farming community a new mercantile store will in the near future be built at Methven, and we also hope within the ensuing twelve months to commence the erection of a new retail store in Ashburton, where demand fully justifies an increased investment in retail trade. During the year our new truck workshop on our Fitzgerald Avenue land was completed and is already operating to full capacity. The introduction of shift work at this unit is currently under consideration. A second stage in the development of this East Belt area, towards the ultimate complete transference of our Motor Division to this site, will be commenced in the ensuing year, subject to a favourable decision from the Building Controller. Our Stock and Station Division is developing well and the proportion of primary products which the Association handles from the areas which we service is increasing. THE FUTURE I cannot but sound a cautionary note in respect to the ensuing year’s trading in view of the weakness of the United Kingdom’s financial position at the present time, the stress on international liquidity generally and the likely effects of current financial and other restrictions obtaining within New Zealand. Indeed these effects are already reflected in a downturn in volume of land sales arising from limitations in the availability of mortgage finance, and some degree of uncertainty as to what the future may hold. Concurrently in view of the upward revision of most Awards under which the Association works, with a cost of living bonus likely to be superimposed on present salary and wage levels, cost increases under this heading are likely to be substantial in the ensuing year. Given normal seasonal conditions both Wool and Live-stock production may be expected to reflect a substantial increase, but with market uncertainties the net realisation earned from disposals may well not reflect this increase. In view of the cut in import licensing some shortages in supply will develop during the course of the year with, in particular, an accentuation of the difficult position in respect to motor vehicles. CONCLUSION I would extend to my colleagues on the Board of Directors my very sincere thanks and appreciation for their loyalty and assistance throughout the past year. May I also express on behalf of the Board—and I believe also that I may add on your behalf —our thanks and appreciation to the 'General Manager, senior officers and indeed the whole staff of the Association for their loyalty, enthusiasm and hard work throughout the year. I now formally move the adoption of the Report and Balance Sheet and will invite our Vice-Chairman, Mr T. A. McKellar, to second the motion following which it will be open for discussion and questions.

Mr T. A. McKellar, ViceChairman of Directors, seconded the motion for the adoption of the Report and Balance Sheet which, on being put to the meeting, was carried. The retiring Directors—Dr. M. K. Gray, Mr W. G. Macartney and Mr D. C. Richardson—were re-elected. Messrs Pickles, Perkins and Hadlee were appointed Auditors. This Firm have been Auditors of the Company since 1954, the fresh appointment being required because of the operation of Section 163 (2) of the Companies Act, 1955. Following the Annual General Meeting an Extraordinary General Meeting of Shareholders was held at which new Articles of Association, required to meet the changes in Company Law and in Stock Exchange Listing Requirements, were adopted. —P.B.A.