N.Z. FOREST PRODUCTS, LIMITED

New Zealand Herald, Volume 80, Issue 24758, 4 December 1943, Page 5

N.Z. FOREST PRODUCTS, LIMITED

ANNUAL GENERAL MEETING The chairman of directors. Mr.. David Henry, at the seventh annual general meeting of N.Z. Forest Products, Ltd.. held on December 3, 1943, stated that:— shnw "Accounts tor year ended 33/3/48 show that the company's first full, year of manufacturing activities resulted in a net Pf 0 ?' of i'L;u,3sfc>. The accounts are presented in a form to show the actual results achieved after charging forest maintenance against revenue, instead of against capital, as in former years. The directors contend that such expenditure is a normal and annually recurring charge, similar to any other operating charge, and should be allowed' as a deduction in our taxation assessments. "The taxation authorities have neve,r accepted this view,'but the Government has promised to grant some relief from what \ve regard as an inequitable charge, and we are working continuously to this end, "Nor do we agree that the company should be required to pay the greatly-increased land tax which resulted from the, passing of the legislation which formed the individual bondholders into a company. This legislation was designed to strengthen and improve the position of the shareholders, but in this respect the opposite result has followed. , , , "Tho company's financial position, staled simply, is that, with a continuance of Present working profits, tho whole undertaking can now tie viewed as a buoyant concern capable of sustaining itself indefinitely, providing the incidence of taxation is levied on profits after the forests have been maintained, instead of on gross profits as at present. "The profits shown on the company s manufacturing activities, in spite of tho difficulties inherent in war conditions, demonstrate tnat the establishment of the present mills is completely justified. The output of all our varied products was immediately required for war purposes both in New Zealand and also overseas to a very substantial extent. All the company's activities are classified as a lull war effort, and employees have willingly worked long hours to expedito production. ic plant has fully justified the makers claims regarding its quality and efficiency. "The company's position to-day is that £400,000 has been invested in existing mills —many thousands more invested in subsidiary undertakings, and a further sum of £OOO,OOO is available as the basis of further new developments—the huge forest asset 18. of course, free of all encumbrances. "The annual report mentioned that a licenco had' been granted to manufacture Kraft pulp and paper, and since then tho Government has granted a further licence to manufacture multi-wall b;igs. and all matters relating to the establishment of those industries are now being investigated. "Shareholders may rest assured that a progressive policy of manufacturing developments is essential if the forests are to be fully utilised in the future, and the directors will welcome the -establishment of those new industries. provided reasonable prospects of successful operations are indicated in the plans now being prepared. "Their establishment would, however, prove of the utmost importance to New Zealand as well as to the company, as it is expected that at least 09 per cent of the value of the output would represent materials and labour produced within the Dominion, while many hundreds of male adult workers would find permanent gainful employment. "The directors have noted with interest the substantial increase in the value of the company's shares during recent months, in both Australian and New Zealand Stock Exchange quotations, as this indicates a growing appreciation of the company's operations and prospects. It is proper, however, to remind shareholders that forests arc a long-term investment, and I must sound a note of warning against an early expectation of dividends or a return of capital from the investment. "Arrangements have now been completed with the shareholders of N.Z. Forests, Ltd. (England), whereby our company takes over their forests in exchange for shares in our company and tho payment to us of £7 per acre."

The chairman made feeling reference to the death of the Kt. Hon. J. G-. Coates, in whose stead the board appointed Mr. James Tyler, cit.v engineer of Auckland, and of Mr. S. J. McGihhon, formerly also a director of the Australasian Forestry Bondholders I'rust Company, who died in Melbourne while on his way to attend the annual meeting. To ensure adequate representation of Australian shareholders, Mr. I. H. Boas, chief of the forest products section of the Council for Scientific and Industrial Research, Melbourne, has been appointed to the board, and his technical knowledge will be of great value to the company in its future developments.— Advt.