COMPANY BALANCE SHEETS.

Otago Daily Times, Issue 19046, 17 December 1923, Page 6

COMPANY BALANCE SHEETS.

PACIFIC PRESERVING COMPANY (LTD.). (Formerly Hinton’s, Ltd.). Paid-up Capital, £12,500. General Year Be. ex- Trading Net Div. ended serve.-. ponses. account, result. Prof. Kept. SO. £ £ £ £ p-c. 1020 2,217 6,218 *8,062 *2,7SG 7 1021 1,081 4,032 *4,711 t 266 1022 2,113 5.582 *3,650 • 102 1023 ‘Profit, f Loss. Sine© this company was formed in 1916, it has paid two annual dividends of 7 pot cent, on its preference share capital. The capital has since been re-arranged; and the shares are now all on an equal footing, but nothing further has been forthcoming in the way of dividend. The result on the trading for the latest financial year is a less of £BBBO, or a sum equivalent to 71.04 per, cent, of the paid-up capital. When the balance brought forward is placed against this loss, the deficiency is £6767. A debit balance of £6767 on profit and loss account has apparently proved too heavy a burden to carry forward, and the result is an agreement to soil the whole of the company’s undertaking and assets to a new company to be formed under the same name. This is the result arrived at, It is stated, after. careful consideration by the directors. It is a melancholy announcement to make, and the fact that it follows upon a year when the result was a balance, albeit a small one, on the right side, bringing about a position that the board, as it stated, then regarded as satisfactory, makes it none the easier to bear. The information given in the accounts, which in previous years was on an extensive scale, has been considerably cut down for the. latest two financial periods, and the anxious shareholder does not receive much, enlightenment therefrom as to where the responsibility for the heavy debit balance lies. That the 12 months under review are entirely liable for the heavy writing down mentioned in the report, is hardly conceivable. Be this as it may, the blow has proved more than the company could bear. The loss on trading account is £8074. In the previous year the profit on the same account was £5650, making a difference of £8724. This sum practically amounts to the deficiency on the year’s trading, yet beyond the bald statements in their respective accounts there is nothing to show how these figures are arrived at. The comparison ef the sales for 1922-23 with previous periods is not mentioned, nor is any reference made to them in the report. The general expenses are grouped in one sum. They are £275 higher than in 1921-22, and the items covered, are more numerous. Formerly -the shareholder was in a position to scrutinise the details, but the information is not now given. Turning to the balance sheet, stock and stores after remaining for some years at a fairly even figure have risen £2158. This is surprising in view of the heavy writing down mentioned in the report, for, although plant and buildings are also affected in tins respect, it is stock and stores that probably have to bear the major portion. Has a largo accumulation taken place during the past 12 months? “Sundry debtors,” at £2938, after an allowance for discount and bad debts, are slightly higher than a year ago. The rest of the liquid assets axe comparatively small. Freehold land remains at £975, while buildings are reduced by the amount of the depreciation. Additions have been made to plant and machinery, involving an increase of £707. The full depreciation has been allowed for here. The balance of goodwill stands et £325. no writing off having been done during the last two years. The nominal capital has been doubled in 1922-23, hut the paid-up amount is unaltered. A prospectus dated January 24 last, and issued some months later dealt wuu this matter, but the balance sheet does not show that any response has been . made. Meanwhile the bank overdraft has been mounting up, and has considerably more than doubled. The' mortgage on factory, land, and buildings being insufficient, the further security of a store warrant has been granted. “Sundry creditors,” which at the end of previous seasons did net reach £SOO, have swollen to £3836. This is proportionally the largest alteration in the balance sheet figures. When bills payable come to be added, the total liability in this direction is £5392. There is a contingent liability for bills under discount of £1039. '' Such information as the published accounts do not disclose can be asked for at the annual meeting, but the too critical shareholder will do well to remember that the company has had the misfortune to be faced with certain abnormal circumstances during the •period involving a correspondingly heavy responsibility on the management. The auditors’ paragraph at the foot of the accounts shows that the company has been furnished with a special report, and this will be available for the shareholders when they assemble.