Hikurangi Dairy Co’s Annual Meeting; A Successful Year

Northern Advocate, 8 July 1938, Page 2

Hikurangi Dairy Co’s Annual Meeting; A Successful Year

rVHE ANNUAL MEETING OF THE HIKUHANGI CO-OPERATIVE DAIRY 1 COMPANY, LTD.. WAS HELD YESTERDAY. THE CHAIRMAN OF DIRECTORS, MR FRANK ELLIOTT, PRESIDED, AND THE ATTENDANCE REPRESENTED ABOUT 30 PER CENT OF THE SUPPLIERS. In his annual report, which was adopted by the meeting, Mr Elliott referred to various aspects of the company’s activities during the 1937-38 season, particularly outlining the financial position under the new legis-

lation, “There has been a decrease of 138 uv the number of suppliers.” said Mr Elliott. “Though a certain portion of this decrease can be attributed to the difficulties with which farmers are confronted in obtaining labour, the larger part of the decrease is caused through the decision of the zoning committee of the Executive Commission of Agriculture. Although the number of supplying shareholders has decreased, the output is very little down on last year. “The amount of butter manufactured was 2,081 tons 3 cwt. 1 qr. 27 lbs., a decrease of 40 tons 18 cwt. on the output of the previous year. The decrease was accentuated, to some extent, by the unfavourable spring, pastures being very backward.

Financial Position.

"The surplus of easily realisable assets (such as debtors, stocks and | cash' over liabilities (such as credi-1 tors, bank overdraft, payments to j suppliers for May butterfat and deterred payments to be made on July 20.1 is £4,398, 12s lid. This means that the Bank of New Zealand is not only amply secured against loss on their overdraft accommodation of £8.392 Is lOd as at May 31. 1938, but, in addition, our bankers have security in the very conservative value of our buildings, factory and lorry plant. “The issued capital of £31,848 shows a decrease of £3,788. During the year, 4781 shares wore repurchased from suppliers transferred to other companies and GB7 shares were forfeited for failure to meet calls due, while IGBO shares were allotted to new suppliers of the company or to others qualifying for extra shareholding through over-supply. As the authorised capital of the company is £40,000. the unissued capital of £8,152 should bo sufficient for the requirements of the company for some years ahead.

Large Percentage Second Grade,

“In view of the inauguration of the seven-day-a-week collection service, the quality of the cream did not reach the high standard anticipated. However, after taking into consideration the exceptionally hot summer which we experienced this, no doubt, adversely affected the quality, I understand, however, that practically the same conditions prevailed right through North Auckland and tho percentage of finest cream paid for by the company compares very favourably with other companies. The percentage of secondary quality cream is certainly on the high side, but the climatic conditions wore the chief cause of tho high percentage of this grade of cream. “The Government continues lo pay premiums for high, grading butter under tho guaranteed price scheme, and it is in your own interests lo strive for a still better quality. The average gross price received for the company’s produce during the season under review was 13.237 d per lb. As the basic guaranteed price for finest butter is 13.25 d per lb., it will be seen that owing to tho fact that 49 per cent of tho company’s produce scored quality finest grading points, the average price received for the company’s output is practically a finest price. The Year’s Export.

“The amount received from share calls during the year was £1594 17s 7d. This increase of £142 over last season may bo accounted for by the larger amount of shares allotted during the year with a consequent increase in receipts from share application fees.

Deferred Payments. “The nett surplus in the income and expenditure account of the company's farm is £143 9s 6d and this is the balance left over after the farm has paid full interest on capital and maintenance costs, etc. This surplus has been transferred to the appropriation account for payment to suppliers. The book value of the farm stands at a price below the Government valuation. The buildings on the property have been reduced by depreciation to a very conservative level and owing to the low value, very little depreciation is now necessary.

“Shareholders are no doubt aware that the Government has stated that a deferred payment of .41 d per lb. butter is being made on all butter made after August 1, 1937. Consequently, with the over-run added, an approximate additional ad per lb. butterfat is due to be paid to supplying shareholders,. This payment will have the effect of increasing the all grades average payout of 14,315 d to 14,815 d per lb. butterfat. Suppliers of finest cream, however, will receive a total pay-out for the year of 15.125 d per lb. butterfat, lower grades of cream suffering the usual deductions. It would appear from a statement made by the Minister of Marketing that the basic guaranteed price for at least a portion of the ensuing year will be 13.66 d per lb. butter. Surplus Payment.

“During the year, 69,708 boxes of blitter were graded for export, the average grade being 93.438 per cent compared with 93.440 per cent for tho previous season. Of the total quantity. . exported, 81,94 per cent graded finest and 18,06 per cent graded first grade. Value of Produce,

“The gross value of the company’s produce for the year under review, together with other income of the company from dividends and suppliers’ trading, is £258,193 5s 7d. Out of these gross proceeds, £31,339 Os 7d covers cream collection costs, manufacturing and marketing costs, in fact all expenses from, the cream stand to placing your produce on ocean steamer. The balance of £226.854 5s represents the year’s monthly advances to suppliers plus deferred payments recommended for distribution on July 20. The cash payout for the year, namely, £226,854 ss, exceeds that of last year by £B,BOO. This increase is solely due to the increased guaranteed price for dairy produce together with the savings made in working costs, the actual increased payout for the current year over that of last season being equal to ,754 d per lb., this figure being a shade over ;»d per lb. butterfat. The total cost of handling the company’s produce from the farm gate io placing on ocean steamer was 1.976 d per lb. butterfat. It will be seen that costs have remained practically stationary and have only increased 1.594 jjer cent. Savings Effected. “There are substantial decreases in freezing and storage charges duo to the fact that the directors considered it wise to sell as much butter as possible on the local market in Auckland. even though the nett return to the company for local sales is now based almost on export parity. Increased Costs. “Certain savings accrued to the company by this procedure, one of which was a distinct saving in freezing and storage charges caused through butter ?sont to Auckland being t:iken delivery by the? purchaser for.. Auckland, thus incurring no freezing and storage charges. Butter boxes show an increase of 4.G per cent and manufacturing materials show an increase of 26.4 per com. Those costs, | of course, are beyond the control of j directors*. During the year, a new j award increased the wages rates and j these increases wore coupled with a reduction in working hours. In addi-] ticiii. the factory was run on Sundays in the flush months', and these factors bad the effect of increasing factory i wages costs by a sum of £970. or ’ll j per cent.

“It would appear that the guar an > teed price will be increased as from July 1 by a sum which will enable us to increase our monthly advances by approximately Jd. I understand the staff will be able to make payment of the surplus which the Government is distributing on the 20th of the month following the month of receipt. No advice has come to hand as to when this money is likely to be received by the company. For the information of shareholders, our company’s share of the surplus will enable approximately £7500 to be paid to supplying shareholders.”

2he directors have endeavoured, wherever practicable, to keep costs as low ns possible consistent with efficiency. 1 am confident that our costs r rorn farm gate to f.o.b. arc competitve with other companies in Northland.