BIG INCREASE

Evening Post, Volume CXXX, Issue 6, 6 July 1940, Page 14

BIG INCREASE

YEAR'S BUSINESS

DOMINION BREWERIES, LTD.

GROSS PROFIT UP £77,267

A substantial increase in the -business of the company waj reported by Mr. L. J. Stevens, chairman of directors of Dominion Breweries, Ltd., at the tenth annual general meeting of shareholders of the company on Wednesday.' The i consistent progress of past years had, he said, been fully maintained, resulting in a gross profit on this occasion of £329,705—£77,267 more than the previous year. "This result is the best evidence of the consolidation of the company and its strong financial position," he said. "All departments contributed in full measure to the results obtained. Even now, in spite of economic difficulties arising from war conditions, opportunity of expansion and progress is not lacking. Many areas of New Zealand still offer substantial markets for the company's products. At the same time due allowance has to be made, of course, for greatly changed conditions. "The provision of necessary buildings, plant, and equipment have, hitherto, been a controlling factor in our trade expansion. The company is now in an unrivalled position not only to maintain the high quality of its products, but to meet. markets awaiting development. . NEW FORM OF ACCOUNTING. ' "It will be seen from the statement of accounts that on this occasion the accounts are presented in accordance with modern principles of accountancy, so as to show separate ' groupings of fixed assets and floating assets, and similarly to show in separate totals shareholders' funds, secured liabilities and trade creditors, and open accounts. In adopting accounts in this modern form we are merely following the well- ! known policy of this company to lead in enterprise and to give the fullest information to its shareholders and to the public generally. Our action in this respect has. already been most favourably received. "Shareholders will note that the accounts balance at the large sum ■of £958,836. The same relative figure in the previous year's accounts, if presented in the same form as this year's accounts, would have been £887,920. The principal alteration is under the heading of lands and buildings. Purchases made during the year, and expenditure on building after allowance for depreciation increased the value of lands and buildings by £40,000. Plant and machinery increased by £25,000; stocks by £9661; sundry debtors by £17,594; while value of hotel leases and investments has been reduced by £4068. '"On the liabilities side of the bal-ance-sheet shareholders' funds are shown as £501,428, comprising capital £350,000, general reserve £106,250, and appropriation account £45,178. ' The amount owing under mortgages over lands and buildings is' £256,014, a reduction compared with the previous year of £2280. The amount due to bankers is £12,367 against which cash on the assets side of £9657 is a set-off leaving the net indebtedness at the! [nominal sum of £2710. This sum com-!

pares most favourably with a net.indebtedness to our bankers at March 31, 1939, of £41i084. The remaining figure, "trade creditors," including provision for taxes and staff bonus amounts to the" large sum of £189,027. | The relevant figure in the previous ] year's accounts amounted to £ 138,186. IMPORTANCE TO COUNTRY. "It may be unnecessary for me to say that the increase in the provisions made in the accounts under review, is bound up in the. one word 'Taxes,' and i the apparent discrepancy in the rela--1 tive position of gross and net profits covering the last two years is due to the reservation made for taxation. "The 'Trade Creditors' portion of the grouping is actually a lower sum than the relevant total in the previous year accounts. The provision relates to taxes and does not take into account

Mr. J. L. Stevens,

the, large sums' paid by the company from week to week in excise on beer, Customs duty, arid sales tax. ■ "The -importance of the company in the,economy of New Zealand will be exemplified by a few figures which the secretary has prepared for me. I asked our secretary if it was possible to give me a statement showing just how each £1 of, the company's turnover from its wholesale business' is disbursed. This, he has been able to do, and here are the figures:— In £ £ s. d. Taxes 0 9 6 Goods and materials ...., 0 5 10 Wages and expenses 0 3 5 Shareholders' dividends 0 0 10 Reserves o*o 5 ■ ' ■ [ £ 1 0 0 "This calculation is made in terms of, turnover, and does not relate in any way to considerations of profit. PERIOD OF WAR BURDEN. "Under present circumstances," said Mr. Stevens, "we recognise our responsibilities, and no one of us must complain at being called upon to bear burdens in accordance with our capacity to pay. At the. same time it may not be out of place to suggest to those responsible for our government not to overlook the fact that burdens on industry and taxpayers must not continue one day .longer than the present emergency conditions require. "Progress and development are indissolubly combined with maintenance in theJiands of large industrial organisations of substantial' sums to cover costs of enterprise. ' Without enterprise the condition, of. the country will become static, and then deterioration will set in. • "DYNAMIC OUTLOOK NEEDED." "We must maintain a dynamic outlook if enterprise is.to. continue,, and for enterprise to continue funds must be available. The soundest and best principle is to leave available in1 the hand of industry a sufficient sum to provide this enterprise.. "In view of the tax liability it is gratifying ■ that your directors are able to recommend a dividend at an unchanged rate. The profit under the circumstances is reasonable and the transfer of further sums to the company's reserve fund will assure shareholders that the value-of their investment in the company-is being 'maintained and increased.^ . ■ ■ ■, ■■■.■••.•■

"Asds usual, the- managing • director has given ,to ;the company's numerous

employees full credit for the results achieved. No doubt Mr. Kelliher will refer to his recommendations in respect of staff bonus, and also'payment to members of the staff on active service."