EXCHANGE BENEFIT

Evening Post, Volume CXVI, Issue 27, 1 August 1933, Page 8

EXCHANGE BENEFIT

COMPANY GAINS £3120

DEALINGS WITH LONDON

(By Telegraph.) (Speoial to the "Evening Post.") NEW PLYMOUTH, This Day. How tho Hawera Dairy Company gained over £3000 through anticipating tho increase in the exchange rate was disclosed at the annual meeting of the company. The chairman (Mr. J. R. Corrigan) said that the company had taken advantage of its financial position in handling London funds to the best advantage. The auditor (Mr. T. E. MeKenzic), in his report, explained how the company had made an additional £3120. For some time prior to the increase in the rate of exchange in February the directors, in anticipation of the increase, adopted the policy of drawing only amounts varying from£l to £2 10s per crate on cheese shipments, in lieu of tho full drawing rates allowed by the agents. In addition, certain f.o.b. sales wore made, subject to payment in London. This change in policy resulted in a large accumulation of funds in London, bearing interest at the rate of 5 per cent., and necessitated additional, accommodation from the bankers in Now Zealand in order to finance the monthly butterfat payments. This accounted for an increase of £266 in interest. Immediately following the increase of 15 per cent, in the exchange rate, the London funds were remitted to New Zealand, tho company thus obtaining the full benefit of the higher rate. The actual net profit to the company on these exchange transactions, after making allowance for additional interest through short drawings,, was approximately £3120. In 1930 advantage was also taken by the directors of tho disparity between the Australian and New Zealand rates of exchange on London, and this resulted in a net profit of £2081. The secretary (Mr. Duncan) said that the present exchange was worth almost 3d per lb on butterfat with cheese at 50s. With tho exchange at par 50s was equivalent to a payout of 7.7 d, but with tho exchange it was 10.67 d.