COMPANY BALANCE SHEETS.

Otago Witness, Issue 3867, 24 April 1928, Page 23

COMPANY BALANCE SHEETS.

AUSTRALIAN MUTUAL PROVIDENT SOCIETY.

1927 68,414,819 10,145,286 3,070,514 • The funds available for distribution at the close of the latest financial year exceeded £3,000,000, and the participating policy-holders in the ordinary and industrial departments are to benefit accordingly. While this is the largest amount devoted to that purpose in the company’s history and is nearly two and a-half times the amount of eight years earlier, it is noticeable that the increase on this occasion comes considerably under that of 12 months ago, and is less than the average annua: increase recorded since 1921. The revenue has now touched eight figures, while the total funds have been raised to nearly £70,000,000, the growth in each case being a recorc. for any one year. The scale of work necessary to produce figures of such magnitude may be conceived and the task of acquiring annually new business sufficient to counteract what matures and to provide such progress would natural! seen to be beset with more difficulties as the business grows larger. The steady progress which the printed accounts reveal shows the task to be well handled. The amount available for distribution as cash bonuses in the ordinary department is £2,867,022, representing 57.9 per cent, of the premiums received during the year on participating policies as against 57.7 per cent, for 1926. In arriving at the surplus, it was assumed, as on previous occasions, that only 3 per cent, interest would be earned on the society’s funds, whereas the rate realised on the mean funds during the past year was £5 12s lid per cent. There is thus a margin of about 90 per cent, between the assumed and the actual rate. This goes to strengthen further the position of reserves. The rate earned during 1926 was £5 13s Id per cent.

A prominent feature of the revenue account is the large amount received in interests and dividends. In the ordinary department alone, approximately 40 per cent, of the income is obtained from that source. The total unearned income comes to £3,744,870, being just about sufficient to cover all claims by death and maturity. Those aggregate £3,814.314 —a considerable rise over those of 1926, which, in turn, were the highest up to that date. When claims are placed opposite premium income, the following ratios are brought out, viz.:—

During the last nine years the proportion for 1927 has only been exceeded on one occasion—in 1919. Since the latter year the volume of business has greatly increased, the largest annual increment in the premium income having occurred during the past year. It may be a mere coincidence that the same period incurred the largest annual increase among the claims also, but it is apparent that the larger the risks covered the greater the vigilance and care required in their selection.

In addition to the claims, there are surrenders anu.’ nting to £645,579 —virtually the same total as those for 1926. Commission on first premiums in the ordinary department come to £206,299, or slightly over one-third of the total new premiums received. Agents’ travelling expenses and salaries are also included under the same heading, which seems to embrace all expenditure directly incurred in the acquisition of new policies. The chief liability consists in claims in process of adjustment amounting to £731,427. They come to something under one-fifth of the total for the year, being less in proportion than those outstanding at the close of 1926. A liability of this nature, requiring to be met by ash within a comparatively brief period, will necessitate the reservation of a somewhat equivalent sum in readily realisable form. Outstanding accounts make a further indebtedness of £182,900.

Among the assets, house propertj’ has risen to £1,290,900. Spread over the various Australian States, New Zealand, and Londom it conies almost as a surprise that the largest unit is New Zealand at £327,600. Depreciation has been allowed for, but to what extent on the fixed property is not stated. As a re-venue-earning asset, it must contribute rents to the income of the society, although no mention is made of rents received in the revenue account. Government securities are much in favour for employment of the funds. British, Indian, and colonial Government investments acco.unt for £22,381,471, the bulk of which is placed in Australia with the Commonwealth and States Governments. In this connection the large part an insurance concern plays in financing the public funds of the countries where its work principally lies may be realised. The millions invested with the Governments have been gathered originally from individuals in comparatively small sums. Mortgages on property and loans on security of municipal and other rates amount to £16,743,330 and £16,558,628 respectively, while loans on the company’s policies have risen to £9,972.344. The work of collecting the interests and dividends or what may be termed unearned income must be sufficiently laborious when sums of such magnitude are bandied. Outstanding premiums ate responsible for £681,252 of which £BO,OBB is in excess of days of grace and will require to be specially dealt with later on. Accrued interest comes to £780,765, and it is unlikely that ths whole will be eventually received without some small shrinkage, at any rate. Sundry debtors, at £114,561, are almost lost sight of among their great neighbours, while an-

other addition is made to the reserves by office furniture, which, spread over the head office and different branches, must come to something appreciable, yet appears in the balance as nil.

Speaking at the annual meeting of the A.M.P. Society this month, Mi- R. A. Holmes, of th*. New Zealand board of directors, in supporting the adoption of the report,- said that New Zealand has surpassed the most sanguine anticipations. The complete total new business for both departments of over £4,000,000 from a population of 1,375,000 was undoubtedly a remarkable performance, and easily beat all previous records. Respecting the society’s investments in New Zealand, Mr Holmes said the landed securities had stood the test of unsettled conditions well, and the fact that all interest due in 1927 was paid before December 31 was evidence of the care which has been exercised. The society’s investments in New Zealand Government and local body bonds now totalled over £9,500.000, so that the assistance rendered to New Zealand by the society was not inconsiderable.

Dee. Available for 31, Total Funds. Revenue. Distribution. £ £ £ 1919 41,202.199 5,875,245 1,229,878 1920 44,000,006 6,340,522 1,364.027 1921 46,913,757 6,713,464 1,538,369 1922 49,826,155 7,193,468 1,810,514 1923 52,881,528 7,697,301 2,083,387 1921 56,416,631 8,311,076 2,347,231 1925 60,229,856 8,876,760 2,553,694 1926 64,245,890 9,468,398 2,862,098

Claims. £ I’remlum Income. £ Rut io. Per cent. 1919 2,584,631 3,721,663 69.45 1920 2,234,907 4,069,885 54.91 1921 2,301,614 4,271,449 53.88 1922 2,674,807 4,544,892 58.85 1923 2,863,571 4,844,331 59.10 1924 2.948,163 5,227,507 56.40 1925 3,068,922 5,587,227 54.93 1926 3,282 638 5,910,608 55.54 1927 3,814,344 6(382,489 59.76