RATE OF DEDUCTION.

Waikato Times, Volume 106, Issue 17802, 29 August 1929, Page 9

RATE OF DEDUCTION.

A SUBSTANTIAL DECREASE

N.Z. CO-OP. DAIRY CO.’S ACTION. SHAREHOLDERS’ BONUS AFFECTED As previously announced, it has been decided by the New' Zealand Co- ! operative Dairy Company, Ltd., to reduce the rate of deduction for butter shares from fd to id per lb, states a ! report appearing in this month’s issue jof the Dairyfarmer. A corresponding ' reduction will be made in the shareholder's bonus, which will in future be 3d per lb—id in respect of butter shares and Jd in respect of “coal and timber” shares. ; The new system, w’hich will come ! into operation in respect of bulterfat supplied as from June 1, 1929, will . make the share position easier for i new shareholders whose share payments during the first few years will be considerably lighter than under the present system. At the same time, . the interests of the old shareholders j have been fully safeguarded, as the I alteration simply means they will receive a lesser payment by way of ; shareholders' bonus, and their ordi- ■ nary payment for butterfat will be 1 correspondingly increased. The shareholders’ bonuses will still be payable in cash on the butterfat i covered by fully paid shares, and the i balance owing on any contribuftng j shares will be cleared up before allot- ■ ing any additional shares. Any butterj fat supplied over and above the quantity represented by shares at present held will, however, be subject to the deduction of id per lb until the whole of the supply is fully covered. Take, as an example, a supplier who holds 120 fully paid shares and 15 shares paid up to £9 14s 6d, and who. supplies during the season 12,0001 b of butterfat. Although he actually requires 172 shares to fully cover his supply he will be credited with the shareholder’s bonus on the whole of his supply, amounting to £l2 10s. Of this amount he will receive in cash the sum of £8 15s (id per lb on the 84001 b of butterfat covered by the 120 -fully paid shares) and the balance of £3 15s will be credited to the 15 contributing shares, increasing their paid-up value to £l3 9s 6d. Assuming that the same quantity of butterfat is supplied during the following season the sum of £8 15s will again be payable in cash, the sum of £1 10s Gd will be applied in payment of the balance owing on the 15 contributing shares, and three additional shares will be allotted to represent the remainder of the shareholder's bonus, amounting to £2 4s Gd. In subsequent seasons the shareholder's bonus on the 94501 b of butterfat covered by the original 135 shares, amounting to £9 lGs lOd, will be payable in cash, whilst additional shares will be allotted each season, for the amount of the deduction on the remainder of the supply, until the full qualification is held on the basis of one share for each 701 b of butterfat. in the case of new suppliers the deduction of id per lb will be made in respect of the whole of the butterfat supplied until the supply is fully covered, just sufficient shares being allotted at the end of each season to absorb the amount deducted. An alteration has also been made in connection with “coal and timber” shares. The deduction at the rate of id per lb will still btf made in respect of the whole of the butterfat supplied, over a period of six seasons, but instead of taking up these shares at the end of the first season on the basis of one share for each 2001 b of butterfat just sufficient shares will be allotted at the end of each season to absorb the amount of the deduction. The question of raising the butterfat standard for butter shares has also been under consideration, but after a careful investigation of the company’s capital position it was decided that in order to provide for the normal expansion of business, and at the same time continue Hie existing policy of resuming shares from shareholders who retire from dairying, it would be necessary to retain the standard of 701 b.