UNION SASH AND DOOR COMPANY.

Waikato Times, Volume XXVI, Issue 2124, 18 February 1886, Page 2

UNION SASH AND DOOR COMPANY.

At the adjourned annual meeting of the shareholders on Tuesday, the following committee report was read and adopted, to be incorporated with the director*' report : —The balance-sheet for the year 1885, and the books of the Sash and Door Company, disclose a state of affairs which amid not have been p\pected by the shareholders from the accounts if previous years and the related a«Mminceis of the directors. For some years (with the exception of the Opunake Bush, near Kaipara) the properties and stocks of the company have been valued at extensive amounts, and, in the process of ve-valnation which ha>> recently taken place, the w hole of the. reserve fund has disappeared, upwards of £4000, under the head of "profits" <>f list year ha\o been absorbed, and the Opunake Bush, which originally c<wt £24 .)."> 8->, is now valued at £37,500(5ic.) ; th.xt is to say a sum of upwards of £80,000 lepre^ents the amount of the over- valuations as admitted by the directors. The question of course arises : Whether the e\i>tmp valuations are reasonably fail ? Taking the business of thecompany as a going 1 concern, we think they are. As an example of the nature of the purchases and the character of the valuations, we may instance the Matamataharakcka bush. The price agreed on three years ago was £10,000. Of this sum £5000 has been paid ; £1000 a year, with interest added, has to be paid till the whole is liquidated. Not a stick of timber has yet been cut from this bush, nor has the company derived one penny profit out of the purchase. In the re- valuation it is taken as wmtli less than £3000. We regret to be obliged to draw attention to the fact that foi M»mo year* accumulated bad debts of bush contractors, which last year amounted to about £12,500, have been regarded in the annual account submitted to the shareholders as good. In the re-valua-tion this sum of £12,000 has been entirely written off. We submit, for the information of shareholders, the following detailed accounts :— No. 1, Comparative btatement, showing increase and decrease in proparties and stocks. No. 2, Re-valuation. No 3, j Comparison of assets and liabilities, 1880 to 1 1885. No 4, Profit and loss. As regards i the future, looking at the amount of capital I and indebtedness, it is worth considering whether the business can bo carried on to as to make it pay » fair dividend to the shareholders. The annual sales are from about £87,000 to £100.000. The gross profits last year fiom all itunrces were £22,400. Against this has to be set, depreciation and royalty, bad trade debts, office expenses, etc., interest and insurance, which together last year amounted £19,700, leaving only a balance of £2700. The bad debts of last year were, however, large, amounting £1000. Somo reduction might be made in office expenses, so that perhaps the balance, under good management and with no further fall in the price of timber, might reach from £4000 to £5000. A divident of 5 per cent, on the capital would absorb about £7500. The estimated probable balance would «rive a dividend of about 3 per cent, were there no liabilities to he provided for. Leaving out of view the bank ovei draft of £17,000, the company is under agreement to pay off the debentures at the rate of £2500 a-year, hikl to j>av for the ne\t five years about £1000 a-year »n the Matamatabarakeke block. If these Minis cannot be obtained by the sale <>t some "f the property, of the company, tlieie is no other source but that of prouts wiiuuuu the money can be had. Hith. ito tht"«e payments have been made by haviug recouine to thu simple expedient of an ovei draft, but we think the overdraft ought n<>t t.. be increased. There in a property at X lipar.i of ahout 13,000 acres, of the Dargaville purchase, from which Ml the timber has been taken, and the land which is not being u«ed by the company is valued at 7s 6d per acre : if thu could be sold for about that sum the proceeds could not be batter used than in paying off a portion of the debenture debt. As regards the policy of selling some of the bush properties ef the company, that is a question that requires more consideration than we have been able to give it before offering an opinion. The general outlook is not cheering, but there is one feature in it that way remove a little of its gloom. The Opunake bush is untouched ; it is estimated to contain 150 million feet of timber. At present this timber cannot be got out, but the Kaihu railway will run through the bush, and when finished the timber will be at once available at a small cost. I Larger profits may be fairly expected, and better dividends paid. In the meantime, with proper management, we think the business of the company might be carried on without further loss. It is understood i that the Kaihu Railway Company have disposed of their debentures, and that financially they are in a position to go on with the work. Probably in a year and a-half the railway will be open for traffic. We think tho articles of association should be reconsidered, w ith a view of giving the shareholders some real voice and share in the appointment of directors ; as matters are at present, it is the direotora themselves who, to all intent* and purposes, have the appointment of their co-directors. The honorarium to directors, under the present circumstances of the company, we think should be reduced one-half, and the number of directors to five. We think the articles of association generally give too absolute a power to the directors. We consider the directors (with the exception of Mr Ware, who has only been recently appointed, and t () whom the revaluation \* entirely due) responsible to the shareholders for tho present financial condition of the noinpany.-^R. W. Moody, Chairman of the Committee.

Not a Bfverace." — "They are not a beverage, but a medicine, with curative properties of the highest degree, containing no poisonous drugs. I'hcy do not tear down ap already debilitated system, but build it up. One bottle contains more real h">p strength than * barrel of ordinary beer. Physicians prescribe them. — Rochester U.S.A., Evening Pro|i. or American