MEAT EXPORT COMPANY .

Dominion, Volume 11, Issue 279, 14 August 1918, Page 8

MEAT EXPORT COMPANY .

v THE ANNUAL MEETING. SUGGESTIONS BY SHAREHOLDERS jjnneral meeting of shareholders of the' Wellington Meat Export Company, limited, was held in the Chamber of Commerce yesterday. Mr. W. G, foster (chairman of directors) presided, and about twenty-five shareholders ware present. Tha report stated that owing to continuance of war conditions and consequent lack of shipping, the company's stocks had accumulated exceedingly, and its responsibilities were correspondingly great. In consequence, the directors had not takeu to account estimated surpluses from rales of stocks in hand, but had decided to transfer to profit and loss account the balanco of ,£IO,OOO standing in the equalisation of dividend reserve whioh, after deducting ,£5564 9s. 4d; depreciation, left at credit of profit and lose account the sum of ,£12.544 9s. Gd. Prom this sum the interim dividend of i per cent., amounting to .£5929 13s. Gd, had been paid on December 31. 1917, leaving .£6614 165., which it was recommended to apply in payment of a' further dividend of i per cent., absorbing <£6132 9s. lid.,.and leaving ,£482 Gs. Id: to be carried forward. Chairman's Address. The chairman moved tho adoption of the'balance-sheet and the report. Ho said that no fresh shares had been allotted during the twelvo months under review. Tho sum of ,£10,422 10s. had been added to capital by calls of 25. Gd. per share made on 12,770 shares, which last J'ear stood at .£2,. paid, and on the 7001 Bhaies shown in 1917 as £1 paid a further j£l ss. per 6haro had been called up find paid. Further calls on these shares were due on July 4 (55.) and August 31 (2s. 6d.). With regard to frozen meat in 6tore requisitioned by tho Imperial Government, the'sum of .£148,411 was the proportion of the ,£3,000,QC0 recently received from the Imperial Government as the company's share, which amount was deductible pro rata from invoices of shipments (as they were made) of tho meat actually in store at May. 31, so that the credit to the Imperial Government extended- over and only finally expired on completion of'shipment of the meat actually partially paid for. The land, premises, and plant account showed an increase on last year nf .<£99,688 Is. 2d., of which 430 17s. 4d. had been expended during the year at the; new works at ICakariki. The ,£5584 9s. Id,. which had been deducted for depreciation, whilst rather less than last year, was considered by the directors to be'adequate, in view of the fact that to date ,£220,475 0.?. 2d., since the inception of the company, had been written off cost. So far, tho company's consignments, actually realised, had met fair markets and conditions, and had coma . up to expectations. Those unrealised, which were In transit, should also pan .out satisfactorily. Owing to shortage of shipping and increased cost ot' manu- - factoring stocks, stocks showed an increase over _ last year amounting to .2195,464 which, in view of the discouraging shipping outlook, and the excessive accumulations of Government purchases, it would tako some time to reduce by export.

The Dividend. _ "As indicated in tho report aecompanvmg the added the chairman, "the conditions which existed at this time last year continue with accentuation. Our slocks are heavier, our i responsibilities- greater, and the nncer-1 tainties as to markets and their control necessitate the greatest possible caution in declaring 'profit.' Your directors, having available for such a purpose a re. servo for equalisation of dividends, have, J think, wisely decided to utilise the .£IO,OOO standing to its credit, and take .to account in profit and loss only amounts actually earned; carrying stocks etc., and our expectations therefrom forward to tho current-year., We .lmve every reasoned hope that to shall have satisfactory issue. Meantime it -would be false policy to bring to account estimated profits which under adverse conditions might not materialise, but on which taxation must be faced. The company's premises and plant are maintained in perfect order and repair, the cost of same being .charged to working expenses. We .were unfortunate enough to have a somewhat 6erious interference with our running at the beginning of the season owing to the breaking of tho crank shaft of one of our power units. Had the break been confined to the shaft it -would not-'have been serious, as ire had a spare shaft, but the piston also was shattered, and we were held up pending the casting and adjusting ot a new one. "Much to your directors regret, tho Kakariki! works ''were, owing to scarcity of labour, material, etc., not completed in time for the busy paTt of the season, bill: although late it was thought, in view of the diminishing volume of avail-. able storage, at Ngahauranga, and for various other, reasons in connection with running tests, etc., desirable to make : a start. The work was commenced and. carried through without a'hitch, the quantity [killed and stored'between date of start, April. 24, and stop, June 12, being 17i0 oattle, 28,943 sheep, G143 lambs, or the equivalent of 40,'233 601b. carcnssw chambered. : The stores are about'half full, and tho opening. of the works was completely justified., The works have proved efficient as well as economical in every department, and the district,may be congratulated in .possessing the . most up-to-date establishment, for its size, in Australasia, and probably south of the line." That tho operations of the company during the past year have been strenuous' and not unattended with anxiety goes without saying. Not only have local conditions, owing to requirements of men for active service, resulted in inconveniences in both clerical and mechancial staffs, but foreign free markets, which have been. uvailable, have in somo cases been" either closed against our product, as in the case of tallow for the United States, or controlled prices have been established with troublesome conditions, as to procuring import licenses." The chairman added a tribute to the good work of the staff during the year.

"New Blood." Mr. A. E. Mabin said he was sorry to have to say that the report had c'omo to many of tho shareholders in a very discouraging form. Few of the shareholders had expected that in a year liko' last year the company would have no profit at all. Possibly the chairman ■would bo ablo to explain why other meat companies showed a reasonable profit on tho year's work whilo the Wellington Meat Export Company ehowed almost a loss. The other companies were operating under cxactly tho same conditions. Tho shareholders were getting a dividend, but many of them felt on the face of the balance-sheet they did not deserve it. It was 6ad to see tho company utilising a reserve, .oven an equalisation of dividend reserve, for tho purpose of keeping faith with tlia shareholders. It 6eemod to him that there was something wanting in the company. Ho thought it would bo a fair tiling if some of the present directors, who woro country men, would retire and admit some city men to tho board. A change of. that kind would give increased confidence to the shareholders and tho public. Tho amalgamation of business brains and farming brains would be a good thing for tho company. Tho shares of all the other meat companies wo at a premium, but tho shores of the Wellington Meat Export Company were quoted at £2 12s. cum dividend, and wero selling under nar That showed want of confidence on the part of the investing public, and it was for tie directors to take the matter up and remov'j tho cause, whatover it might be. Tho company had efficient works and a largo connection, and tore was nothing to prevent its shaies being worth- do-able what they were bringing to-day. He suggested that threo or four of the present directors should rotire

and make room for "new blood" on the board.

Tho chairman said that he had no doubt the directors, having heard what had been said, would take everything into consideration iu the best interests of the company. Mr. Mabin had assumed that thero had been no profits made. But tho real position was that if the company had not had the JOIO.OOO in hand in the dividend equalisation fund if would have been quito justified in paying tho dividend out -if anticipated profile. Tho re6ervo had been specially set apart to he dealt with in such a way, and the method adopted by the directors had beon a precautionary measure. "If wo had declared a dividend out of the profits made last year," said Mr. Foster, 'we would have had to pay taxation on tuo amount, when as a matter of fact the profit had not been realised, the produce being still in store, I think you will rcaliso that onr caution was very properly exorcised. Tho year, I may tell you," has beon a good one, and if we had not had this money available we would have paid the dividend out of anticipated profits. But a profit, in my opinion, is not a profit until it is actually made especially under war conditions, anil I think you will admit it would have been a very unwise proceeding to have deolared a pi-oAfc out of our business for the year or the last two years when the taxation on that would have been £7000. If things went to glory later—and tho chairman or the Bank of New Zealand is predicting tho 'very devil* —wo would have paid that money in taxation for nothing, therefore 1 personally think, with nil deference to itr. Mabin s known business knowledge, that the proper course has been followed. In the end, if the anticipated profits are made, the taxation will have to bo paid, so we are only deferring it. But it is a commercial principle not to pay out more than von can. On paper we have a very substantial amount of profit that we hope will be .realised.' Mr. l'oster added that the election of directors rested entirely with the shareholders. Mr. Mahin: How do other companies jiay dividends and get along so much The chairman said he could not state how other companies framed their bal-ance-sheets. He had not noticed that anv other company had had available a fund for the payment of a dividend. Probably if any other company had possessed a reserve of the same . , j would have followed the course adopted by tho Wellington Meat Company. Mr. D. Jones said he thought it a reasonable suggestion that some of the present directors should retire, lliere was some dissatisfaction among the shareholders. He was not trying to put blame upon any shoulders. But the ' commercial and professional sections ot 'tho community were largely represented among the shareholders, and they were entitled to a share in the management of the company. The chairman: Tou have elected these directors year after year. If you do not like them it is your own fault. Mr. Mabin: We like them all. They are fine men, but tho combination has not been a success, I think it is a matter for the directors themselves to tako np, recognising that there should be a certain number of men from this city on the board to help yon. 1 Mr. A. Forrest supported Mr. Mabin. He said the chief trouble had boen the pessimistic statement mado by the directors in their report. The chairman had thrown :i more cheerful light upon the situation. But if the year had been a 1 good one and profits were anticipated, why did not the balanco-sheot show tho position in more detail? It should bo possible to estimate to a fraction on tho Imperial buying. "This pessimistic balance-sheet has influenced public opinion," said Mr. Forrest. "We all have faith in this 'company. It is a good company, and it is capable of giving us a good return. But our shares unjustly are offering to-day at a discount, and there are no buyers. Why?, It is tho result of pessimism. The directors should remember that the sun is still shining, and bo a little more I cheerful."

The chairman said that he could not make any reply to the suggestions of tho shareholders as far as they involved members of the board personally. He believed that the method'adopted had been a good one, and that it would have been a mistake to have paid the dividend out of anticipated profits, thus incurring a liability for taxation earlier than 'was necessary. The directors hnd preferred to be on the safe side. The markets were controlled by the Governments at the present time, and the companies could not anticipate events with certainty. ' In the case of tallow the Home market had been closed, while the American market had been opened wide. The Imperial Government had recommended the companies to make full of the American market. The Wellington Meat Company did so as long as possible, but then the American market had been closed. He himself was not in tho least pessimistic about the situation. Ho saw no reason for long faoes. If tho shareholders did not get their dividend next year, possibly with a bonus added, the cause would be misfortune of the market, not loss of business. -. The motion for the adoption of tho report and balance-sheet was . passed unnniinouslv.

1 The remuneration of the directors was continued at i:S00 per annum. Mr. Jones moved a hearty .vote of thanks to the managing director. Mr. .Jlabiu seconded this motion, and paid a tribute to the wort of the statf. The motion was carried.

The chairman,. in. reply, said he felt entitled to say for the directors that the company's ..business had been well cared for at considerable inconvenience to themselves'. He' would bo sorry to allow it to bo thought thai: ho agreed in any way .with some of the remarks made by shareholders that day. Tho directors had the interests of the shareholders at heart, and it should be understood - clearly that the shareholders had the po<rer. as well ns the' right to mako changes if they thought fit. The directors in i lie past had not had any reason to believe that; thev did not enjoy the confidence' of shareholders.

Tho retiring directors, Messrs. James Campion and Martin Elgar, were reelected unopposed.