COMPANY BALANCE SHEETS.

Otago Witness, Issue 3803, 1 February 1927, Page 38

COMPANY BALANCE SHEETS.

THE NEW ZEALAND REFRIGERATING COMPANY (LTD.). Paid-up Capital. 1919-25, £600,000; 1926, £6.6,310; debenture issue, £150,000.

♦Loss. -(lncluding bonus. The past season’s operations would have shown a balance of £4691 on the right side had it not been considered necessary to write down a- recently-acquired asset in the form of interest in shares of the Wanganui Meat. Freezing Company (Ltd.). As it happens, the year closes with a loss of £7412, the effect of which is to reduce the floating balance accordingly. This sudden drop from a net surplus of £38,329 for the prior year gives some indication of the extent to which the freezing industry has suffered from the prevailing adverse conditions. A comparison of the result with . that of 1923-24 further accentuates a position, for which no hopes of an immediate improvement are held out. To quote the directors’ report, “some of the unsound features of the trade still remain.” The directors are unable to recommend a dividend at the present time, and are prudently conserving the resources, of the company. From the form in which the printed accounts are drawn up, no information is given regarding the gross revenue and the expenditure. The balance js brought out after the disbursements and sundry provisions have been .met. How far the latter may have been increased on this occasion owing io special exigencies, is a matter for conjecture, but it. is a point on which shareholders are entitled to be enlightened. The fact, however, that the amount written off the. interest in the shares of the Wanganui Meat Freezing Company (Ltd.) is entered separately leads to the assumption that there is nothing of an extraordinary nature in the provision made for contingencies at this time. Reserves have been depleted by the amount of the debit balance. The reserve account stands at its former figure of £119,000, to which the accumulation of undivided profits amounting to £42,456 falls to be added. The total, although I somewhat shrunk, comes to approximately I 24 per' cent, of the paid-up capital. This j position, it may be noted, is more favourable than in the days when a 12 per cent, dividend was being declared. When there have to be added reserves of unstated quantities dealing with investments an<L general contingencies, it will be gathered that the company is well served in this respect. The fixed assets continue to occupy the largest place, and again stand at about one-half of the whole. During the year they have received the addition of the Castlecliff machinery and plant, which have been dispersed among the various works, while the buildings in which they were housed were sold. The price of £30,000 realised seems quite satisfactory, as, conjoined with the book value. of the respective machinery and plant, it exceeds the purchase figure of the property. Th< upkeep of the whole of the buildings and plant has been maintained out of revenue, and, while depreciation has been provided in this manner, there has been a slight appreciation apart from the abovementioned purchase. The ratio of the fixed to the total assets has been as follows —viz.:

The general group of the liquid assets at £583,397 has varied little in its aggregate, however far the components parts may have altered. It may be assumed that a considerable portion is attributable to consignments unrealised, against which there will be a corresponding rise on the other side in the shape of advances against shipments. The matter of grouping in the balance .sheet seems rather overdone when no distinction is .rawn between items so diverse as investments and stocks in works. The debentures secured by the Pukeuri Freezing Works are entered separately. They have been reduced by £lO,OOO during the 12 months and no vf stand at £132,500. The security, being associated with the freezing industry, will be affected by the depression now prevailing, and, whatever the conditions of the repayment may be, the borrowers’ ability to repay correspondingly impaired, "'he asset which consists of shares in the Wanganui Meat Freezing Co. (Ltd.) having proved to be of no direct value, s to be expunged at the earliest possible momepjt, and steps in that direction have already been taken by writing off one-third, leaving a balance of £24,207 to be dealt with later. As the paid-up capital has been increased to a like extent, it may be inferred that the relative compensation is mainly indirect. Cash at bank amounts to £8358, and has no demand for dividend to meet. The liabilities, apart from the debenture issue of £150,000, are comprised in the group totalling £580,709. Sundry creditors and advances against shipments are the headings given without indication of the figures they represent. There' has been arise here -of over £30,000 since October, 1925, but whether due to larger liabilities or further strengthening of reserves it is impossible to tell from the information given. The total is approximately balanced by that of the group of miscellaneous assets. That freezing companies may return speedily to their former prosperity is the hope of every well-wisher of this Dominion. Meanwhile, the testing process that they are undergoing means elimination of the unfit, and it is those which have made careful provision in the . past that have the best prospects of seeing the end of the depression.

Year ended'. General Reserves. £ Profit. £ Dividend. Oct. 31 " 1919 .. 108,260 147,940 |12J p.c. Oct. 31 1920 .. 114,062 80,802 12J p.c. Oct. 31 1921 .. 114,789 48,727 8 p.c. Oct. 31 1922 .. 125,773 48,484 61 p.c. Oct31 1923 .. 137,376 49,103 6J p.c. Oct. 31 1924 .. 159,039 59,163 61 p.c. Oct. 31 1925 .. 159,868 38,329 61 p.c Oct. 31, 192G .. 152,456 •7,412

Fixed Assets. £ Total .Assets. *' £ Ratio 1916-17 651,605 1,713,157 38.09 p.c. 1917-18 800,211 1,914,944 41.78 p.c. 1918-19 .813,011 1,410,492 57.64 p.e. 1919-20 852,674 1,386,908 61.48 p.c. 1920-21 912,563 1,437,853 63.46 p.c. 1921-22 338,351 1,176,653 79.74 p.c. 1922-23 778,619 1,078,581 72.19 p.e. 1923-24 777,728 1,285,790 60.49 p.c. 1924-25 755,545 1,481,747 50.99 p.c. 1925-2G 771,103 1,519,565 50.74 p.c.