FARMERS’ CO-OPERATIVE

Taranaki Daily News, 8 June 1932, Page 16

FARMERS’ CO-OPERATIVE

VERY .SATISFACTORY TRADING.

PROFIT TO STRENGTHEN RESERVE. The eighteenth annual report of the Farmers’ Co-operative Organisation Society of New Zealand, Ltd., states: There is little need to comment on the many adverse conditions existing during the year covered by this statement of accounts. The result of the year’s trading must surely be considered very satisfactory. The net profit, after allowing for bad debts, is £9022 10s 7d. This is reduced by depreciation, on plant and property £3490 13s lOd, and reserve for income tax £1442, to £4932 13s lOd; leaving a balance to be transferred to appropriation account of £4089 16s 9d. This results in a credit balance in the appropriation account of £9501 Ils lOd, and although your directors fully realise that a dividend could very well be paid, they consider that every shareholder will endorse their action in consolidating the finances of the society, thereby enabling them to render the greatest possible assistance to their clients during the present difficult period. Your directors, therefore, recommend that the sum .of £7OOO be transferred from appropriation account to reserve account, making a general reserve fund of £lO,OOO, and that the balance of £2501 Ils lOd be carried forward. The auditors, Messrs. Walkley, Cameron and Laurence, in their report, state: The year ended March 31, 1932, was one of unprecedented difficulty, and it will be gratifying to shareholders to know that, notwithstanding the depressed trading conditions, the company has 'been able to show a profit. The company is now feeling the benefit of the drastic reorganisation effected in 1926, in which year, after reorganisation had been effected, there remained a. deficit in the accounts of £37,179. The deficit was made good by the end of 1929, and in place of a deficit , you now have, visible reserves and undivided profits disclosed in the accounts of £14,412, or a consolidation since 1926 of £51,591. In .addition to the visible, reserves substantial provision 'has also been made to meet losses arising by reason of the present difficult times.

A very satisfactory feature of the year’s accounts is. the reduction in working expenses. Admitted that business is now harder to secure than it was a few years ago and that a greater volume of turnover has to be secured to yield the same profit, yet these expenses, compared ■with last year, show a reduction .of £8304, while the gross profits have dropped only £6Bll. In the year now under review £3490 has been set aside for depreciation. During the last ten years £43,832 . has been written off undeu this heading. In the seven years ended March 31, 1931, very substantial sums were charged to depreciation, and tfie 'effect of the failure to provide for adequate depreciation prior to 1926 now seems to us to have been adjusted. In the three years ended March, 1925, only £4248, or an average of £l4l6,iwas actually set,aside as depreciation, whereas for the last seven years the total aggregates £39,584, or an average annual provision of £5655. As the balance-sheet discloses, the company’s principal asset is its book debts. These appear to us to be well spread, and as we have already mentioned in this report substantial provision has been made to meet possible losses under this heading. The credit department of your business continues to be well and efficiently controlled.