THE KAITIEKE CO-OPERATIVE DAIRY CO., LTD.

NZ Truth, Issue 938, 17 November 1923, Page 13

THE KAITIEKE CO-OPERATIVE DAIRY CO., LTD.

Twelfth Ann .1 Report and Balance-

Sheet.

The above company's operations seem to this writer to be spread over a wide field and that raises, naturally, the question as to whether the manufacturing department is carried on economically. Owing to the faulty methods followed m the preparation of the statistics embodied m the annual, report it is impossible for this candid critic to give a decided answer to the question. It is true that m the profit and loss account some attempt is made to allocate income and expenditure on the basis of factories operating at Piriaka and Matiere, but this does not furnish any material help for the formation of a sound criticism. Under the heading of "special notices' it would appear that meetings of shareholders were held at Ohakune, Ohura and I'atiere and that the whole position of the company would be discussed and dealt with at Taumarunui, the head centre of the organisation. Ohakune and Ohura do not show up m the accounts. These places seem to be feeders or suppliers to the bigger^ districts, namely. Piriaka and Matiere. Aasuming that "Cambist" has arrived at the true position of the lesser suppliers, 1: Btrtkes him tiat

THE BASIS OF ECONOMY m the matters of production has not yet been properly •»**•* i»Vm T r do not appear to be any bullflinga or plant at Ohakune or Obura—ludging oy the balance-sheet set out— of properties owned by this company. From this it would seem that the last-men-tioned districts have their supplies railed for a considerable distance and this means a lot of transit costs. It is fin© to remember that the standing bush is not yet wiped out of Ohakune and Ohura and that, considering their pioneer state, dairying is already a big element m their economic development. Nevertheless, sufficient pasture is available m these places to Keep large herds of dairy cattle m good fettle. Such being the case, why not develop a factory system suitable for these districts, and so relieve them of the burdensome expenses connected with Joy-riding cream to such distant places as Matiere and Piriaka? It would appear to "Cambist" that it Is a foolish policy to grasp at too much and that the outcome of trying to force large independent districts into the control of a central body can only do one thing, namely, build up an expensive monopoly which m the long run disappoints or fails to benefit any one of the suppliers. The statistics supplied m the annual report of the directors are remarkable In this respect, but they fail utterly to put on record how much it costs to .manufacture the butter output. This "company is m a sense a giant undertaking. It produced 405% tons of butter at Piriaka and for Matiere 341% tons, making a total of 747 tonß for the year. Do not these important results demand the

MOST CANDID INFORMATION for the suppliers? Why should the toiling dairy-farmers be kept from this information? The report does not give any particulars regarding the over-run. On thQ other hand, some figures are supplied showing the payout to the shareholder suppliers. Those payments range from Is l%d to Is 7%d to which an all-round l%d per lb is to be added. Here again Ib a sloppy style In dealing with this, matter. It falls to tell the shareholders and suppliers what the average price of butter fat worked out at. Adding the figures together and taking the l%d Into account it would appear that the suppliers received an average price of Is 7d per lb for their butter fat. If this be correct (It is open to doubt, however), then these Suppliers did very well indeed. The position is very confusing and what is more, there can bo no reasonable excuse for the confusion prevailing m this instance. The sum Of £3948 has been expended upon honoraria to the chairmen and directors of the company, wages and salaries, so that the least to be expected from this heavy out-going, is a decently compiled statistical record of the business. Office and other salaries make up between them £1456. The chairmen and directors drew £320 to which has to be added another £ 107 for "expenses," while the wage earners are put down for £2171. The total of the foregoing figures amounts to £4055, or say nearly £5 8s 6d per ton of butter manufactured. Those facts, worked out of the accounts furnished, should cause the suppliers to wake up and oak is it really necessary to spend

SO MUCH MONEY on the non-productive persons who are fattening on the company? They seem to this writer as a very good reason for some practical economy. The auditor drew £102 for hfs fees spread over two years and for some extra work. His "report to the shareholders" Is not printed with his certificate on the balance-sheet. What is the object for keeping that important official's remarks out of the document now under notice?

The balance-Bbeet shows a paid-up capital of £4945 and reserves amounting to £1100. The latter Item Is a commendable attempt to protect the capital account. With regnrd to the former Item, there Jb not sufficient paid-up capital In this business. The directors should call up what is unpaid on the shares (£4113). Discount and interest charges amount to £630, which shadows forth tho expense of a big overdraft, most of which could be avoided if the company financed with its own capital. One good feature m the accounts is the fact that depreciations amounting to £1049 have been written off the assets. The latter bear an honest appearance, which gives satisfaction to this candid critic. All that "Cambist" will say m closing is, lot there be more economy: let there bo better statistics m the future and above all, try and avoid the folly of building up an cxpenslvo bug-bear. 113 has been done m the Wallcato and other dairying districts.