C.F.C.A. ANNUAL MEETING

Timaru Herald, Volume CXLV, Issue 21156, 1 October 1938, Page 6

C.F.C.A. ANNUAL MEETING

Satisfactory Year Chairman’s Review Profit Shown The annual meeting of shareholders of the Canterbury Farmers’ Co-opera-tive Association was held in the Little Playhouse yesterday. The chairman of directors (Mr F. R. Flatman) presided, other directors present being Messrs A. S. Jones, T. B. Garrick, C. J. Talbot, J. Bitchener, J. M. C. McLeod, N. M. Orbell, A. Austin, and M. Guild. Chairman’s Address “Since last January, South Canterbury has not fared too well climatically, having suffered from a su ’eit of rain including three floods, during the critical time of harvest and lamb fattening, and farmers generally speaking have had a trying time working under abnormal climatic conditions,’’ said Mr Flatman. “This has resulted in considerably less income being available from the farms, and necessitating increased support financially by banks and mercantile firms.

“We have had to give increased support to farmers to the extent of £32.038, thus increasing our responsibility in finance as against last year, by £21,835,’’ he continued. “Added to this, the ever-increasing costs of working, owing to legislation, have handicapped farmers in their year’s results. Labour conditions have been difficult owing to men leaving farm work for the higher rates of wages ruling in Government undertakings.”

The balance sheet records a net earning of £19,360/11/-, a decrease on last year of £2,936, said Mr Flatman. Actually the gross earnings of the Association were down £5.687 compared with last year, but a careful supervision of expenses, resulting in a saving of £3,051, had enabled the firm to come out with a net profit earning of only £2.936 less than at July 31, 1937. This was accompanied notwithstanding, the fact that chiefly owing to Increases in awards, the Item of salaries and wages had increased by £4,076, compared with last year. The turnover for the year, £1,087.845 showed a recession of £201,192. This was accounted for chiefly by a drop in values of wool and live stock amounting to £154,000. It could not be expected that the same high range of prices in these two products could have been sustained, conforming as they did to a severe drop in price the world over. Grain and Produce Grain and produce turnover suffered a decrease of £34,000 owing to adverse climatic conditions as far as wheat was concerned, and the market price for potatoes being down some 40 to 50 per cent owing to the lack of facility of export that obtained last year. The merchandise trading turnover at £467,037 showed a decrease of £12,202 on last year. Depreciation on buildings, furniture, fixtures and plant had been well maintained at £6,165, and the ratio of expenses to turnover was 18.64 per cent as against 17.60 per cent last year. “In dealing with the net profit of £19,360 plus the carry forward of £3,736 from the previous year, the directors have been able to mak- nrovision for payment of 5 per cent on all classes of shares, to provide for payment of income tax £7,460, and to transfer £6,000 to General Reserve and Superannuation, leaving a carry forward of £2,159,” said Mr Flatman. “This, I trust, will be considered satisfactory by shareholders. It shows that the strength of the Association is well maintained. The balance, sheet shows that assets have increased £9,457, liabilities have increased £7,546, or a general improvement of £1,911. There was an indication that in future the firm would have to pay an additional 1/- in the £l, which would mean an Increase of £lOOO income tax, or 8/6 in the £l. Prospects of the Future “Weather conditions In South Canterbury seem to have so improved that we can look forward to a good season in sheep and lambs, dairy produce and crops, though we regret to say that through force of circ——rances, it would appear the ac’-eage in wheat will be very short, and importation to make good New Zealand's requirements will be pretty considerable next year,” said Mr Flatman. “The season for wheat sowing was very unfavourable, and has been the real obstacle to a sufficient crop being available for New Zealand’s requirements next year. Commercial Outlook "I had hoped that ere this the tangle of international affairs in the Northern Hemisphere could have been straightened out,” said Mr Flatman. “The position is very tense at the moment, and it would appear tha* the outlook for European peace has gone to the limit of insecurity, and one is very apprehensive of the future. “War has been averted chiefly by the combined efforts of Great Britain and France, and the result of diplomatic efforts in the next few days will be very vital to the whole of Europe, and incidentally the world in general,” he continued. “We can only hope that a permanent understanding may be arrived at with dictator countries for I feel that further pressure from the latter will break down all diplomatic efforts and result in a devastating war into which we will all be drawn. “From a commercial point of view the outlook Is most uncertain,’’ he said. “We in New Zealand are dependent upon our export trade, and one can scarcely attempt any prediction in the future outlook of prices. War risks have all been cancelled, and are subject to quotes day by day. This position has not obtained for the last 20 years, and is the strongest indication of the delicate position as affecting Europe and our own Empire.” Bad Fat Lamb Season “The season for the fat lamb producer in South Canterbury, has been one of the worst experience for the last 30 years,” said Mr Flatman. Meat values were quite sound, but not only was the price of by-products much

easier, but also the fattening season was upset by the abnormally wet year, which brought with it conditions which enabled sheep pests to thrive. As a result fattening was slow, the finished article of poorer quality than usual, and this accompanied by a large death rate, made the season one to be long remembered by South Canterbury farmers.

“It is not often we have to paint a picture like this, and when next season we meet, I sincerely hope that conditions will have been more to your liking,” added Mr Flatman. “At present the prospects for lamb look fairly sound, and I can only express the hope that farmers will not experience another season such as the one we have just had." "In conclusion I take this opportunity of expressing our sincere thanks to our shareholders and customers for the continuation of their splendid support to this business, and I would tender our thanks also to the general manager, branch managers and staff of the whole Association, for their loyal conservation of the Association’s interests during the past year,” said Mr Flatman, who added that it was with pleasure that he moved the adoption of the report and balance sheet, already published in “The Timaru Herald.” Advances to Clients In seconding the adoption of the report, Mr W. Cartwright said that the position of the Association was most gratifying. The only thing he was afraid of was that if the Socialists were returned to power, the Association would not have such a fine balancesheet as it had that day. Mr J. Anstey, referring to the Profit and Loss Account, said that he noticed that they had an increase in wages of more than £4OOO and on the other hand miscellaneous charges showed a substantial drop of £5OOO. He asked whether this meant a restricting of service to their customers. Had it had any effect on the turnover. He pointed out that they heard a good deal about increased spending power in New Zealand, and if this was so, then they did not seem to have had much of it in the

C.F.C.A. Evidently spending power was very sharply restricted. Mr Anstey went on to say that the Association’s bank overdraft had gone to the bad to the extent of £24,000 this year, as compared with last year. In other words, the Association had increased its liabilities to the Bank to the extent of £24,000. On the opposite side of the balance-sheet he noticed increased advances to clients. To his mind, that was a dangerous thing to do, for they knew that the spending power of their clients was down. The income of farmers to-day was seriously reduced, and the policy indicated in the balancesheet would only reproduce on a small scale the trouble they experienced a few years ago. The chairman: We won’t do that. Mr Anstey: We hear a lot about boom prices. We know' that the value of fat lambs was probably 5/- a head less than last season, and we know what has happened to wheat. The stupid way in which it has been handled in the last three years very nearly succeeded in driving the industry out of the country, and it will cost us nearly £2,000,000 to import the wheat we require. in view of the fact that income is coming down, it will be very difficult for people to meet these advances. On the whole the net profit is less than £3OOO, and income I tax has gone up by £7500, and that justifies the remarks I made at the last annual meetoperative concerns. Unless something ing that the system of company taxation is destructive, particularly to cols done to correct this, your taxation next year will be more, even allowing that your profit is the same. The chairman said that a good deal of what Mr Anstey had said had been covered by his address. Mr Anstey had drawn attention to the increase in the bank overdraft, and increased advances, but Mr Anstey had answered that himself by mentioning the decreased spending power of the farmer, and that was exactly where the discrepancy came in. Farmers could not pay as much as previously, and the bank was drawn on accordingly. The advances account carried more last and less this year. That was the point. Mr Anstey: They have not got the increased spending potver we hear so much about.

The chairman: They have not had it for the last 12 months, and the directors are fully alive to all that you have said. We are not going to advance to clients indiscriminately, and every account will be gone into very closely. You need have no fear about it getting away like that. I am glad to hear you bring up about increased spending power, for people have not had it, and no one can say they have. Mr Anstey: Hear, hear.

The chairman: It is true we have to pay an extra 1/- in the £, and although it is law, it can be repealed, and I hope it is. The report and balance-sheet were unanimously adopted. Auditors Re-elected Messrs A. c. Martin and J. Leggott were unanimously re-elected auditors and scrutineers. Directors Re-elected The retiring directors, Messrs J. Bitchener and C. J. Talbot (shareholder directors) and M. Guild, A. S. Jones and N. M. Orbell (stockholder directors) were the only ones nominated, and were automatically re-elected. Indirect Taxation Mr T. Manchester asked whether the extra company taxation would indirectly be another tax on shareholders. The chairman: Most decidedly. Mr Anstey: It will be passed on to

the consumers and they will have to pay it. Votes of Thanks On the motion of Mr J. Trotter, a comprehensive vote of thanks was passed to the chairman, the directors, the manager and the staff.