FARMERS’ CO-OP. SOCIETY.

Hawera Star, Volume XLVIII, 24 June 1924, Page 9

FARMERS’ CO-OP. SOCIETY.

ANNUAL MEETING OF SHAREHOLDERS. The annual general meeting of shareholders of the Farmers’ Co-operative Organisation Society of N.Z., Ltd., was held in the- Foresters’ Hall at Hawera to-day, Mr. A. Hunter (chairman of directors) presiding over an attendance of about 35. THE LATE MR.. HOBBS. Before' the business of the meeting was commenced, the chairman moved a vote of condolence with the relatives of the late Mr. J. C. Hobbs. Mr. Hobbs, who had been head of the society’s stock department lor a considerable time, bad been a most efficient officer, his knowledge of the people and district having been of great benefit to the society. Probably there was not a better known man in Taranaki than the late Mr. Hobbs, who was also thoroughly well liked and respected by the whole of the community.—The motion was carried in the usuai manner.

DIRECTORS’ REPORT.

The directors’ report was as follow . The profit and loss account shows that, after providing for current expenses, depreciation on working plant, and bad and doubtful debts, the net profit for the year amounts to £1238 Is Id. The directors regret the profit is not sufficient to recommend the payment of a dividend, but feel certain .shareholders will recognise the society has passed through a very difficult period. The business of the society has materially increased during the year. Stocks and book debts are clean, and your directors confidently look forward to> better results in the future. The- retiring directors are Messrs. Alexander Alexander, Robert Bremer, C. D. Dickie. Alfred Corkill and Fredk. Sarten, who have been nominated for re-election. As no other nominations have been received for the office of director, an election is unnecessary. In accordance with the Articles of the Society, the auditors, Messrs. Burdekin and Walkley, retire, but again offer thenservices.

CHAIRMAN’S REPORT. The chairman's, annual report stated, inter alia, as follow: The past year has been one of falling prices and uncertainty as regards the dairy industry, and has consequently been a somewhat difficult one for this society. It has meant that many farmers have found it difficult to carry ou, while many others have had a great struggle to make ends’meet. There will probably be a considerable amount of adjustment to- do yet. The money market has hardened, and besides this, financial institutions are shy of advancing money ou Taranaki lands, and are willing to accept lower rates of interest for loans on South Island securities than on North. Taranaki, and the North Island generally, suffered more from inflated values than the South, because of the rapid development that has taken place, but the inflation dias not all been in the North, neither have all the farmer bankruptcies. However; time will right the balance in these matters. In the meantime economy and hard work are essential. The boom times created false ideas of values, and begat a spirit of extravagance, and there are few of us who have not to plead guilty in this respect. It has been said that our riches consist not so much in -what we have, as in what we can do without. If in these times we refuse to- “do without,” there will surely come a time when we will not “have.” ly mutton and lamb have been remunerative to the graziers, while wool has been the star item. This has saved the hill country farmers, while the increased amount brought into the country from these sources has helped tremendously to- ease the situation. We probably have never realised until the effects of tlie slump became apparent, how. much the industries of New Zealand, and I do not except the dairy industry, depend for finance on the wool revenue. The year’s working shows a small profit, and though perhaps it might have been better to have‘written off that amount in further depreciation. In my opinion it will, lie wise for the society to continue to; reinstate the losses made during the slump, and so build up the stability of the edneern, and bring the shareholders’ capital hack to par. "When this is achieved it will be safe to pay a dividend. There has been some adverse criticism because of the calls made over the £5 on share capital. We have, however, other shareholders who-, although they are as little pleased as any to have to meet share calls, do not hesitate to say that the course taken is the only sane one to pursue, and there is nothing more certain than the fact that if the society does not prepare to depend more on iL own and less on borrowed capital it will not be able to assist farmers to the same extent a,s in the past. Uncalled capital is a, provision against times, of stringency, and I presume no one will deny that that has eventuated. 1 will now proceed to deal more particularly with the balance-sheet and profit and loss account. Liabilities.—Paid up capital : 1924, £147,134; 1923, £136.897; 1922, £122,957; increase for twelve months, £lO,237. Called up capital : 1924. £lsß'428; 1923, £143,776; 1922, £116.422; increase. £14,652. Paid in advance of calls: 1924, £10,527; 1923, £11,684; £1157. Calls unpaid: 1924, £2l 821 ; 1923, £18,563; £3258. Calls paid: £10,237. Total : £14,652. The calls unpaid—£2l,B2l—is high. Shareholders during the siump years have asked for time, which in the' majority of cases has been granted by the board. This year calls unpaid will be pressed for, and >a. large amount should come in. Owing to the slump, however, a number of farmers have been compelled to leave their farms, and some have been forced into bankruptcy. 11l these cases the shares will he forfeited and the calls paid transferred to “Forfeited Shares Reserve Account.’ However, included in this amount is a fairly large sum due by those who can afford to pay, but who have failed to do so. I would point out. to these shareholders that the attitude they adopt is unfair to those who have paid' and they leave your directors no option but to press for the amount. 'To save this unpleasant proceeding, 1 would ask you all to pay up your overdue calls promptly. You will see the urgent necessity of getting in these calls, as later in mv address 1 will inlorm yon dial; the sum of £11,950 falls due on mortgage during Hus and the next year, and llmi the .sum of £31.000 on fixed deposit is due and payable during the same period. Depositors have had such confidence in us during the past- that a large -proportion of deposits coming duo. have been renewed. We should not. however, rely upon sums being renewed. -and should work mto the'position of being able to meet all these amounts as they fall due. A grave danger exists here which can only be met by regular calls on capital and tlie prompt payment of these calk The uncalled capital, £108,451 ; less calls paid in advance, £10,527 • £97901 is spread over 4500 names. Mortgages on freehold Properties 1924, £15,450; 1923, C 15,750; 1922,

216,150; decrease, £3OO. The amount is spread as under : £2500, Ist November, 1924; £4OO, Ist April, 1925 • £4400 25th May. 1925; £3OOO, Ist October] 1925; £IOSO, 18th November, 1925; £SOO, 27th February, 1927 ; £3OOO, 10th September, 1927; total £15,450. 8ank.—1924, £78,320, less cash at branches and in transit £1268, £77,0o 9 ; 1923, £50.819, less £2222, £48,597: 1922, £77.262. less £837, £70,425; increase, £28,455. During the year we have been compelled to lean to a large extent upon the bank to enable us to help clients through their financial difficulties. This increase is spread over a large number of shareholders. Fixed Deposits.—l 924, £60,278- 1923, £84.30.3; 1922, £90,950,- ’"decrease] £18.025. The amount is spread as follow,s: £22,588, due 1924; £BSO, due !920; £.30,990, due 1926; £2200, due 1927 ; £2OOO, clue 1928; total, £66,278. Lt is expected that a large portion of the amount coining due will be renewed. Sundry Creditors.—l 924, £37 497 • 1923, £22,239; 1922, £23,831; increase. £15,188. This amount is made up as follows: Amount at credit current account £28,967, sundry creditors £3387 trade creditors £5073; total £37,427. Oi the sum of £28,937, £2744 represents interest in suspense held to meet probable bad debts; £5500 is deposited by the directors of the Patea Co-opera-tive Freezing Co., Ltd., to cover advances during the year for the purchase of stock on account of the Freezing Co. Advances to make these purchases made made through the society, the security being the deposits of the directors supported by stole warrants covering frozen meat’, etc. The balance mainly represents transactions for live stock, payment for which was not due until after the balance date. Sundry creditors £3387 represents interest accrued on deposits, mortgages, etc. Trade. creditors £5073 represents merchandise trade balances March 20, and not oavable untiHApril 20. * ' 1 Assets.—Freehold and leasehold properties. etc..- 1924, £70,489; 1923, £66,263; 1922, £67,348; increase. £4226. During the year we purchased a half interest in the N.Z. Loan and Mercantile Agency Co.’s yards at Kakaramea and a half interest in the yards of Messrs Newton King Ltd., at Stony River and Urenui. We also extended our garage accommodation by building over the vacant section at the rear of the garage. A share in the above yards was purchased to fulfil a long-standing promise to shareholders from whom we had accepted share calls that business woijld be started in their area., .Extra garage-accommodation was essential, we not having sufficient room ill which to economically carry on tlie work of the department.’ Our buildings and stuck yards are in good order. Plant Account.—l 924, £U 675- 1993 £12.149; 1922. £14,90!> : decrease,' £474. 1 he sum of £1456 lias this balance date been written off in depreciation. During the year we installed ledger posting machines at Hawera and (Stratford, and this has resulted in a considerable saving .in salaries.

Stock on Hand.—l 924, £62,480; 1923, £57,250; 1922, £74,309; increase. £5230. Stocks held are at a minimum. The stocks are clean and shown at replacement values. Sundry Debtors.—l 924, £174,523; 1923, £146,821; 1922, £149,298; increase, £27,702. This amount is spread over 2126 names. Sundry debtors receive careful attention. £98,161 is sequred and £76,361 unsecured.n The unsecured accounts are mainly of short duration, and those of any size are reported safe by bankers. An examination of sundry debtors as at balance date has recently been made by a committee appointed from the board. YVe consider the debts are reasonably safe, with the exception of about £3OOO to £4OOO, which looks doubtful, and part of which may prove bad. Owing to the depressing period through which we are passing we have been compelled to strain our resources to assist shareholders through their financial troubles. No doubt .many shareholders would have gone under without this assistance. I would like to point out to these that it is their duty to assist us by hard work and an earnest endeavour to get- back on to a solid foundation as quickly as possible. War Loan and Shares in Other Companies.—l 924, £5546; 1:923, £4966; 1922, £3380; increase, £SBO. The increase is accounted for by payment of calls. The canital invested in these companies is believed to he safe. Profit and Loss Account Gross Re-ceipts.-—Merchandise, motors, etc., 1924 £29,265, 1923 £24,906, 1922 £11.285; stock commissions, £13,426 £14,188, £13,200; wool, skins and hides, £1436, £995, £1063: laud, insurance and other commissions, £1855. £4637, £2908; interest received, £ll,obl, £11,576, £11,262; totals, £57,313. £03,302, £39,7l6—increase £4Oll i n£ 0f !-i^ l,ditu r e -1924, £56,075 ; |_9-_3j £o2)<6/ 1922, £62,902; increase. £4/ 16. The profit and loss account snows, after providing for current expenses, depreciation on working plant, and had and doubtful debts, a net profit or £1238. Our expenses are very nearly down to a minimum, and it only now requires an increase in the volume of our business to nlaee us on a good profit-earning basis. The turnover for the year amounted to £637,774 as compared with £549,799 last year, an increase of £96,975. During the last few years we have found the machinery and hardware departments have not been profitable. A large amount in stocks has been tied up in this department. Owing to the lease of the premises in which these departments are housed having fallen due your directors have decided to relinquisn the lease at an early moment and distribute the stocks ' over the bianchos. This should reduce overhead expenses considerably, and release a tail- sum of money for more profitable business. Oaing to the fact that shareholders appear to lie receiving no benefit from V-rr S0( -’ ,e L v some are inclined to he indifferent as to where they do their business. Tins is a fatal mistake, as it non only requires increased business to give us increased orofits. ] would therefore urge you all to place all your business iiith your own concern, as it is only bv all puffing together that we can make a rapid recovery from the results of the .slump through which we nave passed. Certainly no wizardrv of finance will achieve that result, 'and "hy delay it by wif hholdiiig vour support y “ ' ‘ It is a pleasure to express our thanks to Lie general manager ibr bis able and assiduous work m the interests of the ■loeiefy, and also for his unfailing conrfes V at all times to myself and to tbe board. J „ iUst also extend our thanks to the staff for their loyalty to tlie soeiefy and interest in its operations. r now close by formally inovine the adoption oi the report and balancesheet. Mr J. S. Tosland seconded the adoption of tlm report and balance-sheet. .it j ji in^s tixnressed the: opinion that the loss oi £2325 shown on tlie sale oi ears was very large. Mr Taylor explained that the loss nas due to the tact that last year tlie society had an accumulation of about —0 ons, and with the drop in values these cars were written down to about the extent of the loss. The policy of

!>ei.iing Ciirs had now been altered, and all but Hupmobile cars were sold on consignment. Mr Taylor further stated that the motor department was not a white elephant, as had been stated by some, bin had shown a good profit every year. A shareholder, in drawing attention to the fact that- the society was supposed to be a cash trading concern, asked why the “sundry debtors” amounted to £70,000. ft was explained that of the total turnover of £037,000 the sundry debtors’ total only represented' about six weeks trading. "Payment for the sales not always be collected immediately. and the debts were supposed to be all of short duration. it was decided that the directors and chairman’s remuneration be the same as previously. A vote of thanks was carried by acclamation in appreciatin of the courteous attention given to their duties by the general manager (Mr T. Taylor) and staff. The meeting concluded with a vote of thanks to the chairman.