AUCKLAND FIERE COMPANY.

New Zealand Herald, Volume XXII, Issue 7340, 29 May 1885, Page 6

AUCKLAND FIERE COMPANY.

1 ANNUAL MEETING. Thß annual meeting of shareholder* of the Auckland Fibre -Manufacturing Company waa held at, the company's office, Stanley, •treefc, oa Thursday, at noon, Mr. J. M. Clark (Chairman of directors) presiding. : : ; The Man be,; -. Mr. William Johnston, read the report; and balance-sheet, as follows :—; : "' '.';■:: ::■ ; ,'- ; ■■■:'.:■ -J :.-i;:4 . Iα submitting their report for the put rear your directors regret t-at circumstance* over Which they bid no control render the results of the put years trading leee ail>faclory than they had hoped for.. The very large diminution in the acreage under wheat in the South, together with an expected importation of binder t«lne, caused onr ■ le« of th«t article to be leu by one-halt than the quantity we had arcaneed to produce, and lor which we hart imported the necessary raw material The supply being thus largely in excess of the requirements of the tra> e, prices (ell tally £6 per ton below those of the previous year. Owing to oatalde competition, we fonnd it necessary to reduce the price of our Manilla rope.although the hemp from which it Is made cost on the avenge the. pi ices previously ruling. By the account* now submitted y..u will perceive that the stocks are very heavy, bat these hare been taken at cost, and the whole of the l»r,je amount of Interest paid during the year, say £1621, has been cbargel to the production sola till date. The net profit thus amount* to £677 11s 2<J, and this we recommend »e oirried forward, inak the balance a credit of.pruflt and lots account £1197 18s Id. One of your directors, Mr. James Battle, has resigned his seat at the Board, in conformity with the Articles of AiSJcUticn two directors now retire, namely, Mr. J. M. Clark and Mr. C. B. Stone, but both are eligible, and offer themselves for M-election. Your auditor, Mr. John Milne, now also retires, but seeks re-election. — M. Clakk, Chairman. . • Bii.Asci-enK t TO 30TH April, 1885.

>SB«ts.—Dr.: Cost of land, buildings end machinery, £29,413 17s 6<l; sundry dtbtor , £5 14 14s 9d ; bills receivable, £27218s ; ►took in hand, and In process of manufacture, £21,0«5 17s 3d; stock of stores, oil, coal, tallow, «•., £803 Is 10d; cash in band, £27 11s 6d : total, £66,098 Os 10d. LiiLBiLiTiKH. Cr. : Capital, 25,000 shares at £1 each. £25,u00; sh res suhscibed fully paid up, £18.795; sundry creditors, £31-73 Ss 3d; Bask of New Zealand, £27 385 12s 8(1; bills payable, £6446 12s 9d; baUnce profit and loss account, £1497 12s 3d : total, £56098 0s 10d. Profit and Loss Account. Dr.: General expen-es, repal*s, &c., £796 2s 4d; insurance. £300; interest and discounts. £229113s 7d ; balance, £1497 12 J 3d : total, £4886.83 2d. Cr. : Balance front last year, £1893 18s 6d; less dividen i and honorarium (£1076 7s 6d), £818 11s Id; grow profits on sales, £4086 7s Id: transfer fees, £1 10s: tot 1, £4886 8s Sd. Balance brought down, £1497 12s 3d. The Chairman, in moving the adoption of the report, said the directors appeared before the meeting on that occasion with lees satisfaction than they did at that time last year. The result of the previous year's trading showed a profit of something like 8 per cent, upon the paid'up oapital in the company, and with a prospect of a considerable increase of profit in the ensuing year. The result of last year's trading showed a profit of about 4 per cent, on the paid-up capital, and the prospects of the ensuing year waa scarcely so good as appeared at the beginning of the year. The report referred to the cause* whioh had disappointed the directors, and he had no doubt the shareholders also. It wonld, however, not be out of place for him to deal with one or two

point* at a little greater length than they had been treated in the report. In examining the figure* shareholders would see that there

was nothing pat down in the profit and lose account for depreciation of machinery ; that, however, was not an omission of the directors. The amount was put down exactly at coat, including land and building, and the iooreaee in tbe value of the landed property of the company would considerably more than cover depreciation up to the present time. The directors, however, intended to commence a depreciation account in future. In speaking of the position ot the company, the first point he would refer to would be the causes which had led to a worse result than the directors anticipated, and that cause might be said to be only one; viz., the question of the shortcomings in the sales of reaper .and binder twine. This was caused principally by the great diminution in the area of land under crop, and partly because what ha might almost call the promisee of the late Government regarding the re-imposition of the duty were not carried ont. Therefore, not only was there lees consumption, but there was more competition by imparts than the directors were led to believe there would be. The direotors calculated upon a sale of 250 tons of reaper and binder twine, but the tales for the year did* not oome np to the half of that; and seeiog that they had prepared by importation of material and partly by manufacture for that sale, they not only did not make the profit upon sales, but had increased expenses to bear in the matter of interest and insurance. The next point was regarding the prospects for succeeding years. Aa perhaps shareholders would be aware, the duty had, been re-imposed by the present Government, in the opinion that taking off the duty was a misinterpretation*of the act. The duty had been re-imposed sinoe the first of January. The direotors felt —evon allowing for a still further diminution in th«. area of land under crop— that with 16£ per tea t. import duty they would be aMa to defy at.y competition from abroad; therefore tiv-v 70uld.be able to calculate for a tale of *t least 50 tons more than they had made this year. Now that the directors knew pretty nearly what their iilea would be, they felt satisfied they oould work the concern with a capital of something like. £10,000 or £12,000 leas than appeared on the balance-sheet, both in raw material and manufactured stock, . The interest upon that large snin, and the profit upon the estimated increase of the sale of reaper and bindev twine, the directors felt satisfied would leave a fair, if not a handsome, profit on the capital inveitud. In making that estimate they did not take into consideration the question of the sale of rope, which was steadily increasing, Th* products of the company were gradually making their way in the market, and although they had not been calculated, She directors Mt satisfied they could look for nn increase of business in those directions. The directors wonld, however, be deceiving the meeting if they led shareholders to believe that the whole advantage whioh they had pointed out would occur during tho current year. The compa.ny started now with a heavy indebtedness, aid although during the year they expected to work that down, still there would be a considerable item of interest during the year—more than the directors expected would occur in future—so that, while the direotors had confidence in the future working of the company, thiy believed that the full advantage of what he might call the altered working of the company, would not be felt until the year after. He begged to move the adoption of the report and balancesheet. Mr. J, M. MoLich.lan seoonded the motion for the adoption of the report and balance-sheet, ' but had one or two questions to ask. He wonld like to know first, who proposed and seconded the vote of the honorarium to the direotors last year, and the sharei they held? The Manager replied that Mr. Cruickshank moved and Mr. Browning seconded, and Mr. Browning represented the Loan Company, whioh had a large interest in the oonoern. . Mr. MoLaghlan said he had seen it in more instances than one, men get up and propose honoraria j and it looked very graceful and generous. It was a very ud pleasant task he had to perform now. He thought there should be some legislation in the way of making the directors' honoraria depend somewhat on the result of the operations. It would not be a bad ide* if the manager were encouraged in some such method also, He (Mr.McLaohlan) went into the company, not because he thought ifi would succeed, but because it wae a local industry. He felt that there was great force in it that someone must be prepare! to eaortfice a little to start these things and keep them going. If none were to do bo, nothing wonld be" done. (Hear, bear.) Feeling that, he took some'shares, Unfortunately the result had not come up to his expectations. la the present circumstances, he thought it would be a graceful thing for director* not to take a honorarium. He had great faith in the company, and believed it would come out right yet. They had an energetic manager. He (Mr. McLachlin) would hold his shares to the end, loss or no loss. He had much pleasure in seconding the motion.

Mr. B. C. Barstow said the honorarium voted last year was for past aervioea—from the origination cf the company until that time. He quite believed, speaking for himself, that when there was no dividend, the direotors should receive nothing—he should not think of receiving anything this year, for inetanoe; but when- direotors devoted a large amount of time and trouble in each conoerns, he thought those who lay by and received the benefit should contribute something. The dintctors ware misled in their production of reaper and binder twine by the buyers in the South. The company were bound to have enough on hand to anpply the demand, but unfortunately they .had too muoht

Mr. Grekn commented on the removal and re-imposition of the duty on binder twine. He suggested that some portion of the com.

pany's - land might be leased. - Bβ quit* agreed that the direotorc should be paid for their service*. ■

Mr. Mason asked what proportion the business done daring the year" bore to the stock now in hnnd ?

The Chairman said, roughly .speaking, the stook carried forward amounted to the sales for the previoiuii year. Regarding the miscalculation of the direotors, that for the most part had been iinswerecL : He might mention that in the case of reaper and binder twine, there was only a sale for it once in the year; and to produce as much as the company expected to sell las': year, they had to commence manufacture long before the time of sale, and before ■ the time ■ the farmers decided the extent of land they wonld put under crop, so that shareholders would see that there was some excuse for their error in calculation, and, farther, that the thing had gone on a considerable time before it could be stopped; bat so soon as they found that the sale would not be so large, they countermanded the orders for raw material ooming forward, and reduced the quantity being manufactured. The Chairman then pointed out how the temporary removal of the duty had not onlyallowed shipments en route to come in free, but also gave importers time to cable homo orders and receive them free.. He did not think such a thing as that would occur again, because the law was in operation now. The company's Manilla reaper and binder twine in the market was admitted by the farmers to be the best they had ever need. A small dividend might have been paid this,year, but the directors thought it had better not, owing to the large overdraft ; and unfortunately the reaper and binder twine would not be sold until the end of this year, so that no considerable redaction of the overdraft could be made for three months. With regard to the suggestion as to leasing, the directors thought that would be impracticable at present; it mixht make it almost impracticable to get s.uy insurance, and in a business like theirs they* were sufficiently heavily handicapped without having a building alongside. The direction in which a reduction of their indebtedness might be made was by keeping smaller stock in raw material and manufactured goods. In a local industry they were all so much indirectly interested in its advance that he believed in the principle of directors doing the work gratuitously unless the industry was making a profit, and then it lay with the share* holders to say what recognition they would make the direotors for their services. The motion was put; and carried. ;■ ■•..-■• DIRECTORS. . i Oa the motion of Mr. Gkken, seconded by Mr. Jamks Wallace, Messrs. J. M. Clark and C. B. Stone were re-elected directors. AUDI I 08. Mr. J. Milne was re-appointed auditor. THANKS. On the motion of Mr. Masow, a vote of thanks was passed to the directors and manager Of the company. The Chaikman (on behalf of the directors) returned thanks. The Manager (Mr. W. Johnston), in returning thanks, said it would have been very gratifying to him if the result of the year's trading had been different; it would have cost him a great deal less labour. Considering the : circumstances, the surprise to him was not that they had done so little, but that they had done so much. , He hoped that next year the results would be more encouraging. ' -' :