NEWTON KING LTD.

Stratford Evening Post, Volume I, Issue 497, 20 July 1932, Page 8

NEWTON KING LTD.

| HIE ANNUAL REPORT' i OPERATIONS for twelve i MONTHS i ‘ i The annual report cf Newton King I Ltd., just issued ■ to shareholders, states, inter alia: The 12 months’ trading period cov. sred by the accounts now submitted has shown a new low record (for many decades) for prices realised in the markets of the wlorld for all our nrimary products. The lengthy period j during which adverse conditions have I ruled and the persistence of low values have impelled your directors to "Otne to the conclusion that a prudent policy dictates that all securities must be viewed in the light of exist, tug conditions and the prospects fot ■he immediate future. This has been ! the policy adopted!' and, as a conse. i queued we have aside oa sum of j £49,3'17 '3S ‘ Id” to 7 proVi'de for double interest and estimated deficiencies on debtors' accounts caused by the decrease in values. In their report to i shareholders your auditors have indicated that if the provision now made should prove to be excessive, nothing will be lost to the company, but. in common with other similar institutions, we have found it very difficult to value accounts in the conditions and circumstances prevailing. The accounts disclose that to cff. set the provision of £49,317 3g Id, the following sums are available: - Net trading profit for the year, £1582 Os 9d; amount brought forward to credit (cf Profit and Loss Appropriation Account 1 from, last year, £1247 IGs 4d; amount at credit cl General Reserve Account, brought down into Profit and Loss Appropriation Account, £10,000; total, £12,829 17s, leaving an unfunded de. (icit of £36,487 6s Id to he carried forward to be dealt with at a later date when the future has clarified to a sufficient extent to enable the full effect of the disastrous collapse i'> prices on the company to be more accurately measured. The fact that during a most difficult year, the company has not lost money on its trading'operations, apart from :he reservations on interest ami debtors’ ac. counts, is regarded by your directors as an encouraging feature cf the year’s working'. This has .largely been brought about by drastic rcduc. lions in expenditure and the adaptation of the company’s adjustable overhead tot, /offset to as large an extent as possible the decrease in income imposed by the conditions ruling during the pastj two years. Shareholders . may he assured _ that economy of operation, c) insistent with the future welfare of the business, has been a prominent subject with the board. The hoard regrets the company’s inability to make any payment to preference shareholders on account of dividend or arrears. During the year, ycur directois appointed Mr Albert Thorne (a previ. ous director of the company) as an additional member of the { board. The following directions retire this vear: Messrs. J. H. Ashton, Vi ■ Healy, T. King, J. H. P. Strang and A. Thorne.

AUDITORS COMMEND DIRECTORS’ DECISION The auditors (W 7 E. Best ami Wilkinson) report on the position of the company as follows; We have to advise that we have made a com. plete and thorough examination ot the company’s affairs and have found everything to he iff order and have signed the balance sheet accordingly. Shareholders will note that the accounts as presented to I hem show a final deficit of £ ; ’6.487. This has been brought about by your dnectors deciding to make further pro. vision for doubtful accounts to meet the extraordinary ' dr/op in values which has taken place. M hen the company was reconstructed m 1. - It was felt that every possible provision had been made to meet losses, but owing to the present unprecedented shrinkage in both land and stock values, your directors deem it prudent, in the best interests of the company, to make further prevision as set forth in the accounts. The course adopted by your directors has our entire approval, as we consider it a tiicroughly sound priiii ipl" to adopt. The result of the year’s working has been that the company is able to show a profit, on trading, after charging all expenses and full depreciation. In these exceedingly difficult times we consider it very satisfactory indeed that this should he so and it shows that the company is thoroughly well conducted and able to earn profits under the difficult conditions which prevail at the present time. The expenses of conducting the business have 'been- very substantially reduced over the last two years, and this reduction has very largely offset the shrinkage in income which it was inevitable this business, together with others, would encounter during times like the present. From our knowledge of the business we can say definitely that your company is thoroughly well organised and managed, and is most efficiently and economically conducted. Whilst it is impossible to say when we may expect any improvement in the present conditions, we believe that indications point rather to an improvement than otherwise. Should such an improvement take place, the provision which has now been made for had and doubtful accounts would not all he required. Shareholders should bear in mind that in making this provision the amount is not necessarily lost as, if conditions im. ppove, accounts which are now con. sidered doubtful or bad will probably prove of some value. Should this happen, the amount now written off will not he lost but will b& recovered and go to strengthen' the" position of the company. We 1 have no hesitation whatever in thoroughly commending the action of your directors.

Company’s Assets and Liabilities The liabilities include 200,195 ordinary shares of 2s each, £30,029, 174 500 G?! cumulative preference shares of ~£l each, £174.500; mortgages on properties, £17,040; Hank nf New Zealand. £217,660; sundry creditors, £24,067; estate Newton King, £51,882; a total of £515,184. Contingent liabilities are £31,904 and arrears of preference dividends £22,685 Assets include freehold and leasehold properties, £69,402; machinery, plant, etc., £11,710; stocks, rner. > handise, £59,149; sundry debtors, £334,413; bills receivable, £4OOB. The position of the profit and loss account, etc., is dealt with in the directors’ -ireport- as above. .