FARMERS’ CO-OPERATION

Taranaki Daily News, 28 May 1929, Page 4

FARMERS’ CO-OPERATION

DIRECTORS’ ANNUAL REPORT

DIVIDES D RECOMMENDED.

The fifteenth annual meeting of shareholders in the Farmers’ Co-operative Organisation Society of New Zealand, Limited, is to be held at Hawera on June 14. The report to be presented by the directors is as follows:— The directors are pleased to be in a position to report that the optimism displayed last year was fully justified. From the balance-sheet now presented yo>j will find that, not only has the debit balance in last year’s appropriation account been extinguished, but also a credit balance of £10,311 7s 6d remains for appropriation. The profits for the year amount to £30,923 Ss 7d. After writing down properties and plant to the extent of £5646 14s 8d and charging the year's bad debts against the current year's earnings, there is a balance of £25,276 13s lid left. The sum of £5900 has been reserved for income tax, so that the net profit for the year is £19,376 13s lid. In the appropriation account the 1928 debit balance has disappeared. To the debit balance of £18,420 6s Id brought

forward from March, 1928, there has been added the sum of £4OO, being the Combined Buyers Ltd. shares written off, as that company is now in the course of liquidation and the directors considered that tho shares were worthless. After paying last /ear’s dividend of £6251 5s lid, a balance of £5141 7s 6d was left for the appropriation account. This amount, together with the sum of £4613 12s 2d transferred during the current year from forfeited shares reserve account, left the appropriation account £9065 6s 5d in debit. Deducting this from the current year’s profit of £19,376 13s lid leaves £10,311 7s 6d for disposal. The directors recommend that a 4 per cent, dividend, absorbing £8397 4s lOd, be paid, and a credit balance of £19*14 2s 8d be brought forward to the 19291930 account.

The retiring directors are Messrs. J. S. Connett, Michael Fleming, C. R. Honeyfield, William Jones and Edward Marfell, who, with the exception of Mr. Marfell, have been nominated for re-elec-tion. In addition, Mr. N. R. Cleland, Kohuratahi, has also been nominated. As no further nominations have been received, and'the nominations not exceeding tho number required, a poll is unnecessary, and Messrs. Cleland, Connett, Fleming, Honeyfield and Jones are elected. During the year Mr. A. E. Symes, Waverley, resigned from the board, and Mr. Michael Fleming, Pungarehu, w 7 as appointed in hm place. The directors would like to place on record their very high appreciation of the efficient service rendered by Messrs. Marfell and. Symes, who so loyally assisted the society during the somewhat difficult periods through which it has passed. We have opened a garage in New Plymouth, making three garages in Taranaki. The motor branch of our business has been reorganised. Mr. R. M. Rickard, Wellington,- Avas appointed during the year as superintendent in charge of the three motor departments, with satisfactory results to the society and its large number of clients. The directors ha. e considerably enlarged the premises at New Plymouth for the convenience of their northern clientele. This branch will have control of the New Plymouth, Waitara and Inglewood accounts, and will be under the supervision of Mr, T. J. Salmon. Stratford branch, as heretofore, will continue to supervise Eltham and Kaponga accounts.

AUDITORS’ REPORT.

The report of the auditors (Messrs. Walkley and Cameron) states: — “In. many ways the year just ended has been a satisfactory one to the society, and in this connection the increase in . turnover is deserving of more than passing notice. Taking the year ended March 31, 1925, as a starting point, we find the following increases in turnover as compared with that year:— 1926, 4| per cent.; 1927, 2 per cent.; 1928, 24f per cent.; 1929, 70 pel* cent. This upward trend of turnover will doubtless be very gratifying to shareholders, especially when it is mentioned that while the turnover for the year ended March 31, 1929, shows an increase of 35.6 per cent, over 1928, the increased cost of securing the additional business is only 15 per cent. “In 1923 the balance-sheet disclosed a deficit of £20,336, which in 1926 had, upon a reorganisation, increased to a deficit of £37,179. An examination of this year’s balance-sheet will show that this deficit has been extinguished and the nucleus of the general reserve we recommended in our last year’s report has been established. “The following shows the trend of the profits and the gross profit and expense ratio':—

“A dividend of 3 per cent, was paid in 1928 and provision is made for a dividend of 4 per cent, this year. From 1923 to 1927 there was no dividend.

‘’On several occasions in past years we found it necessary to stat s in our report to shareholders that the provision for depreciation on plant and fixed .assets was wholly inadequate. We are now satisfied that a proper sum is annually being set aside for depreciation and the following statement indicates clearly that the deficit of 1923 has not been wiped off in recent years by inflated profits resulting from insufficient depreciation provision:—Depreciation written off: 1923, £1,000; 1924 £1,456; 1925, £1,792; 1926, £12,039; 1927, £2,377; 1928, £5,389; 1929, £5,729.

“In considering this depreciation comparison, shareholders will bear in mind that the fixed assets now are much the same as in 1923, with the additions, however, of a new concrete building at Inglewood and the Wanganui wool store. It will also bo recalled ■ that in 1926 asset values were adjusted by a heavy writing off to depreciation account.

“A careful examination of the accounts of the company leads us to the conclusion that the increase in the sundry debtors’ figures and the total of debts to banks and others are incidental to and the natural consequence of fjje increased business handled by the company. We are of th' opinion that the visible and other reserves for doubtful debts are adequate.” BALANCE-SHEET COMPARISONS. So that shareholders may conveniently obtain a clear conception of the com-

pany’s position this year as compared with last year, the auditors have presented a condensed balance-sheet, in the following form:—

Gross Net Year. Profits. Rxpens es. Profit.Deficit. £ £ / £ £ 1923 53,302 52,767 535 20,336 19,098 1924 57,313 56,075 1,238 1925 55,547 53,965 1,582 17,516 1926 46,067 36,328 9,739 37,179 1927 51,052 42,845 9,207 32,572 1928 63,234 47,231 16,003 13,279 Reserve. 1929 81,538 56,261 25,277 1,914

Liabilities 1928. ’ll) 29. £ s. d. ; ■ £ s. d. Paid-up capital 208,424 5 5 2O9J930 19 9 Cails in advance 18 10 0 7 G 1 Mortgages 14,350 0 0 12,919 5 0 Bank overdraft '2,890 3 7 34,847 12 2 Fixed deposits 36,6'91 0 0 38,184 0 0 Sundry trade 1 creditors and ■ I amount at ere1 dit of clients’ accounts 41,991 5 9 38,976 2 4 Unclaimed dividends .... 31 19 9 Ileservo for Income tax 2,700 0 0 6,090 7 0 Profit and Joss ♦ « « account 10,311 7 G i,-; 07,0G5 4 J £ 151,301 19 7 Assets. ? 1928. 1929. £ s. <1. £ s. <1. Freehold and leasehold land less de preci ation 69,137 0 1 65,865 0 0 Machinery and plant, less depredation 8,1,50 9 8,670 12 3 Stock on hand 30,336 14 35,547 16 11 Sundry debtors. less reserves for doubtful accounts .. 186,170 2 2 15,939 12 10 Shares in other companies 4,900 0 0 4,500 o o War loan stock 484 7 G 522 8 4 Cash in hand 249 18 1 256 9 3 Deficit .... ’,027 12 8 £31 7,005 4 9 o 3_ >1,301 19 7