G.S.F.M. AND M. CO., LTD

Poverty Bay Herald, Volume LIX, Issue 17947, 26 November 1932, Page 2

G.S.F.M. AND M. CO., LTD

f 31ST ANNUAL MEETING

CHAIRMAN’S STATEMENT

£ profit in hard times

. The thirty-first annual general meeting •~ o f the Gisborne Sheepiarmers’ Frozen "-Meat and Mercantile Company, Limited, • was held to-day, there being a ' Gi y small attendance, barely sutticient to constitute a quorum in the company. £ The gathering was presided, over by ~Mr H B. Williams, chairman oi " directors, who in moving the adoption 0 f the report and balance-sheet, as recently reviewed in tho Herald, oflered following comments: - “At the last annual general meeting of shareholders, I predicted that the I sale of Haiti and Taruheru works to the 1 Gisborne Refrigerating Company, Limit~ed, the closing down of t '?°,, Taruh ® n ~ works for stock killing, and the extern " s ion of the Haiti works, should result r.in savings which would offset an. egmated drop of some _ £IO,OOO n by f products; a glance at the profit and . account will show you that the fore- • going, plus the extra killings at both ~ works, has turned last year’s .loss in,the I! freezing department of f !?, £] into a profit this year of £3269 11s hd. - “This season has been a most difficult Y one from a selling point of view, values -of all farm products having gradually r; declined. Wool at local and London . sales opened at a low level, and al- • though it fluctuated a (little during the v season, there was a very marked down- " Ward tendency, and -at the end of the year growers were obliged to accept a ' very low price. The early shipment of L lambs to - London proved disappointing to shippers and' on an average sold at 2d to 3d per lb. lower than the previous season. . “Your directors are fully aware ot the •" present low realisation values of your fat stock,..“and a reduction in the freezing charges on mutton and lamb at both Haiti and Tokomaru Bay of l-10d per '■ lb., and l-20d per lb. tin beef, has been “ decided on. This means a reduction of •“-jrpproximately per carcase on lamb. SUI per carcase on mutton, and 2s 6d ]>er head on cattle. “As mentioned in the published Report. the support given to the freezing and to the mercantile side of the business is fully appreciated, and in order to successfully carry on it is essential that this support continues.” INCREASED DEPRECIATION. / Y* ' Commenting on the main differences between last year’s balance sheet and this year’s, the chairman remarked: “On the assets side you will notice that the fixed assets of £468,317 3s Id are lower than last year by £7600 8s lOd; this is .accounted for_by this year’s deduction of depreciation amounting to £10,044 17s 9d less sundry additions to plant, etc. The difference of £1829 5s Id in shares and investment account represents investments in the company’s debentures from sinking fund money and sales of assets. Sundry secured debts are higher by £5166 4s 3d and this, together with the sum of £1321 7s -8d -actually written off as bad, represents the approximate amount of. cash invested in new secured accounts, which has brought in a considerable amount *of new business. Open accounts are different by the increase of approximately £4OOO in the freezing debts, and the mercantile open accounts are practically at the same figure as last year. The company has a reasonably adequate provision for future bad debts with the reserve of £9830 9s 6d, as a recent valuation has revealed the fact that the

reserve covers our requirements. Stocks -of merchandise are at nearly the same level as last year, but freezing stocks are lower by some £2500; this is only in keeping with a steady drop in value of all freezing stocks during the last 12 months.

“On the liabilities side of the balance sheet 'you will see there has been no movement in tho share capital account. Taking mortgages, bankers’ balances and sundry creditors as one total, there is a reduction this year of £4253 Bs. 3d. and when taken with the ’increase in the liquid assets of £8687 ■2s 6d, shows a considerable improvement in the company’s position. DETAILS OF FINANCE. “Turning to the profit and loss accounts, the total freezing and mer--eantilc expenses show an increase of £2131..18s sd. This is only a part of the increased depreciation charge of £5(105 19s, to which you can add £3OO extra legal fees through the sale of "the Kaiti works and the debenture re-

newal; leaving a net reduction in working expenses of £3174 Os 7d. All -means of reducing expenses have been fully explored and it must be gratifying to shareholders to see that freezing expenses are considerably reduced although killings showed a substantial increase. Gross profits on the freezing side show an increase in keeping with tho extra killings, whilst mercantile gross profits arc £7l 14s higher than last year. “Interest and depreciation are the two causes of the increase in the

mercantile department debits. Your ■ directors have adopted a conservative policy with regard to interest chargeable to secured accounts and unless there has been a reasonable chance of

the interest being collected, it has been omitted from the profit and loss account. The same policy has been adopted with regard to depreciation ; the sum of £BBO7 11s lid has been written off freezing assets and £123*7 Us lOd written off mercantile assets. The net result of the year's working, , a profit of £3145 6s 6d, is regarded as Very satisfactory in view of the general conditions of mercantile trading and the declining value of freezing byproducts, and out of this your directors aro pleased to recommend the paj--ment of one year's freezing and mercantile preference share dividend, and to use the balance in reducing the profit and loss apportionment account. ‘ ‘ The profit of £3145 6s Gd and transfer of the leasehold sinking fund reserve has reduced the profit and loss appropriation account from £13,889 4s to £8430 9s lid, and it is hoped that at'the end 6f the coming season we will be able to again reduce this debit. In conclusion, I would like to state that it is during such times as these that the true principles of cooperation are put to the test and I sincerely trust all shareholders will do their utmost to help the company to successfully weather the storm through which it is now passing." There was no further discussion on the report and balance sheet, and, Mr. G. M. Reynolds seconding their adoption, the motion was carried. Messrs. H. B. Williams, F. C. Loisel, and P. F. Barker, who retired . from the board of directors by rotation, were re-nominated and were returned without opposition. Mr. H. E. Dodd and Messrs. Watkins, Hull and Wheoler wero appointed auditors. A hearty vote of thanks to the staff, and particularly to the manager, Mr. -A. F. Salmon, was moved by tho chairman, who stated that the com- . ! ' •• - 1 '

— *~ pany had a most loyal, efficient, and painstaking staff. Mr. Williams mentioned that the ilmnager had stuck to his post under serious health handicaps, and, in fact, the directors had endeavored to prevent him overworking. The board was glad to note that Mr. Salmon was about to take a brief holiday, the work of the company’s year being now complete. The vote of thanks to the staff was earned by acclamation, and Mr. Salmon made a brief response on behalf of the staff. On his own account, lie remarked that the satisfactory outcome of the, year’s operations could not have been achieved without the most loyal and efficient co-operation in all branches of the staff. Congratulations to the directors on the fact that, by economical and efficient management, they had found it possible to show a profit in such times as these, were voiced by Mr, Francis Stafford, at the conclusion of the general meeting.