THE HAWKE'S BAY FARMERS' MEAT COMPANY, LIMITED.

NZ Truth, 5 October 1918, Page 4

THE HAWKE'S BAY FARMERS' MEAT COMPANY, LIMITED.

Sixth Annual Report and BalanceSheet.

The correspondents sending "Cambist" the balance-sheet of the above company usually advise him that this concern is "a .farmers' co-operative company." To look at the method m which the accounts are set out, it is not impossible to convince this writer that such is the case. Still, he may be quite m error, and will hasten to explain that he has never seen the articles of its association, -nor has he ever perused the original prospectus of the company. Without these impoi'tant documents to enlighten him, he has to depend upon the principles of deductive logic, and apply these to the report and balance-sheet. A critic who demands candor and clear statements m company matters, as is "Cambist's" invariable custom, must, therefore, m order to be consistent, admit the limitations, of his knowledge. On looking over the present balancesheet, and carefully reading the directors' report and making comparison of this with,..foi < mer-. statements, one can notice a growing' disposition to hold back from. the shareholders "MUCH VALUABLE INFORMATION that was formerly given m the younger days of. the company. In the beginning of its affairs, the directors took the shareholders into their confidence, and that sound practice evidently was very beneficial to all concerned. It helped greatly to attract the capital which the business required to set it going', and it gave a friendly associative feeling to every farmer who had money m the concern, or who eventually became a shareholder. A ijlttle statement showing how many meetings the directors attended served to prove the extent of diligent attention these gentlemen gave to the company's affairs. This has been dropped, and m "cutting out" this co-operative feature no one can say who on the board is an ornamental loafer, or who are active workers m the company's and shareholders' interests. Now this point is so personal and necesr sary that "Cambist" cannot overlook it, and he would advise the shareholders to insist upon having THE GOOD CO-OPERATIVE PRACTICE restored m the forthcoming balancesheet. Directors must be made to do something for their fees, and unless they turn up at the board meetings with punctuality they should be asked, to make room for others who would. Let me tell my Hawkers Bay friends that their beef and mutton company requires a great deal of close attention m times like the present. This country wiH soon have to face trouble m the local and foreign meat markets. Since the war started the Imperial fist has come down upon the real values of' these products, and so far it has "knocked the bottom" out of the trade. New Zealand has been shiit out from millions of pounds. On the one hand we find the workers forced to the very door of poverty by the wretched incompetence of the politicians and on the other, the real wealth producei-s on our fields and pastures are robbed of the. true value of their products. Labor is now IN A VERY SOUR MOOD. Loudly are they complaining of the failure of the bank notes they handle to purchase a fair equivalent of meat, butter, and other things needful. The failure is . caused principally by the Government's action m its miserable attempts to govern by sectional discrimination. The. cold hard fact is that by only allowing the farmers to receive . partial values for their products there is not enough surplus left to help the, workers to meet the rising prices, and carry increasing loads of taxation. It will not be long before the intelligent farmers will find out the truth of these remarks. The liabilities side of the balancesheet shows that the capital account has made progress m the right direction. The paid-up capital and calls paid m advance make a total of £69,---147, an amount which is quite inadequate to fully, meet the requirements of the company.. The reserve fund is now with £3000 added from the year's profits, £8000. Equalisation of dividend reserve fund" is £5000. Sundry creditors stand 'at £17,995. Drafts against consignments, £7025. Advance against, meat and. wool, £85,---733, while the . company stood overdrawn to the National Bank at date of the balance-sheet to the extent of £66,873. ' Casting one's eye over the very UNSATISFACTORY PROFIT AND LOSS ACCOUNT, the sum of £5205 is found as the cost of interest, exchange and discounts. To show the- farmer how expensive it is to work upon borrowed money, a little attention is invited to the last mentioned item. That charge applied to the amount of overdraft is equal to no less than 7.7S per cent., or, m plain language, £7 15s 7d per cent, for the use of the banks-m oney. Anyhow, there, still remains another way of looking at the position. Suppose the shareholders put' £50,000 more cash into the business, the charge for interest, etc. (£5205) would give them ten ' per cent, upon that investment. The company needs the money, and the best way to ' get it is to own it — not to borrow it. - On the assets side, freehold land, buildings . arid machinery are lumped together as. if there were no difference m the quality of these assets. In the early days the items were given separately, and properly so. The amount standing for the lumped assets, after writing off £4000 for' depreciation, is £99,271. The question arises, under what head has depreciation to be provided for? ' ; The report FAILS TO GIVE PARTICULARS, and, therefoi'e, one is left to conjecture about the matter. Of course, the thing may be done to build up a secret reserve fund. It may be done to cover up blunders connected with plant and machinery. It might be necessary if the laud is. slumping m value. These speculations will serve to instruct the farmer co-operators that they should demand the fullest details about their own business, and have the balance-sheet drawn up m a co-opera-tive fashion. Sundry debtors amount to £30.697, and unrealised consignments and advances to owners value £112,362 show where some of the borrowed money is used. Stocks and materials on hand come to £26,734, another sum that iises up the money. Before leaving the balance-sheet "Cambist" desires to point' out that nothing is mentioned regarding contingent liabilities. Of course., there may be none, but this writer can hardly accept that position. Should the Hawke's Bay Farmers' Meat Company, Limited, have a clean sheet regarding contingent liabilities, then the auditors ought to have certified accordingly. This involves little labor on their part, and at the same time it REMOVES THE HAUNTING DREAD • which dishonored bills or drafts give rise to. However, no harm is done by making the simple suggestion that a clear balance-sheet would be a boon to all concerned.. The profit and loss account needs more detailed information, but all the same, one need not be too critical about it. To pay the six per cent, dividend £3789 is needed. The sum left over from the . year's profits, after placing £11,250 to various reserves I and depreciation accounts, comes to

£32G9, so that some of the carry forward from the previous year had to be dipped into;- this left the amount for the forthcoming year's profit and loss account only £1684, as against the showing of £2204 m the previous period. Thirty-two thousand "fnore' sheep at 198,129 were' dealt with, and cattle increased by 1500" to 4267. This is progress, calling for more storage. The cold stores act as artificial market boosters," and so up goes the price of meat. When.. the boom is over we shall all have to eat refrigerated stuff, -and the mutton on the trotters will gradually fade .again to its true value.