FLAX WOOLPACKS

New Zealand Herald, Volume LXXVII, Issue 23599, 7 March 1940, Page 11

FLAX WOOLPACKS

DOMINION COMPANY ' STATE CONTROL PLAN LOSSES TN PAST IYEARS OUTPUT GUARANTEED Proposals which will give the Government a controlling interest in the ivoolpack industry in New Zealand are contained in special resolutions to be considered at ail extraordinary general meeting of New Zealand Woolpack and Textiles. Limited, in Wellington on March 28. It is proposed to reduce the capital of the company from £75,000 to £25,003 by cancelling unissued shares. A further resolution provides for the capital to be then increased to £225,003 by the creation of 800.000 preference shares of 5s each, which shall not be offered to the public for subscription, but which will be reserved for subBcription bv Hi? Majesty the King. Proposed Powers ol Directors It, is also proposed to divide the capital of the company into two classes. The existing shares are to be known ' as A shares, and the new preference shares as B shares, ranking equally for - a dividend up to 4 per cent pt>r annum. One of the proposed amendments to the articles states that the number of directors shall be not less than five , and not more than eight. Tho holders of A shares will be entitled to elect not more than three of these directors and the holders of B shares not moro than five. The proposed amendment also states that so long as His Majesty the King shall be the registered holder of any of the B shares, every appointment of directors shall be made in writing by the Minister of Finance, who may also remove any one' or more of the directors. Articles regarding qualification, disqualification flnd rotation shall not apply to these directors. Loss of £4714 Last Year

Another proposed amendment states that no resolution of the direetors shall " be deemed to have been passed unless two directors appointed by the Minister of Finance were present and voted jn support of it. This shall not apply where less than two such directors were present at a meeting of which due notice was given. The company was established in 1933 with a capital of £300,000 in £1 shares to specialise in the manufacture of woolpacks. In 1936 this was reduced to £75.000 by writing down the shares to 5s each. The capital written off was used to eliminate accumulated Josses and unsupported assets. The latest balance-sheet for the year ended December 31 shows a net loss of £4714, compared with a loss of £1897 in 1938 and a profit of £35 in 1937. The debit in the profit and loss account is shown at £6599. Bank overdraft amounts to £12,169, while adranees from the Department of Labour total £29,500. Among the assets are i land and buildings, £43,982, stocks, £25,512, and debtors, £3247. Previous Government Assistance The company was quoted as an example of the price paid by the farming community for the development of

uneconomic local industries at the last annual conference of the New Zealand i Farmers' Union. The Government has assisted the company in the form of a subsidy of 3d a pack. Retail prices hlso were fi.sf'ed by the Government, although the latest rates have been revoked by Order-in-Conncil. Output of the company also has heen guaranteed by the. provision that for every nine jute packs imported from Calcutta importers are forced to take iseven New Zealand flax packs before import permits are granted. Production of the company has risen from 245,866 packs in 1936 to 360,255 last year.