N.Z. REFRIGERATING CO., LTD.

Dominion, Volume 14, Issue 132, 28 February 1921, Page 9

N.Z. REFRIGERATING CO., LTD.

ANNUAL MEETING (Published by Arrangement.) The thirty-third annual meeting of •hareholders of the New Zealand Refrigerating Company, Ltd.,, was held in the Company's offices, Hereford Street, Christchurch, on Thursday, February 24, 1921. Mr. H. A. Knight (chairman of directors) presided. Report and Balance-Sheet. The following was the report of the directors: — The directors have pleasure in presenting to shareholders the balance-sheet and profit and loss account for the year ended October 31, 1920. The balance available for appropriation, ns shown by the balance-sheet, is .£101,561 Ils., which the directors recommend should ho disposed of as follows:— £ b. d. To pay a dividend of Is. 3d. per share on the 300,000 fully paid shares, and of per share on the 600,000 shares 10s. paid 37,500 0 0 To place to the Reserve Account 20,000 0 0 Leaving an amount to carry forward of 44,061 11 0 -45101,561 11 0 The director retiring by rotation is Mr. H. A. Knight, who, being eligible, offers himself for re-election. The .auditor, Mr. J. W. K. Lawrence, also retires, and offers himself for re*leCtiOn - H. A. KNIGHT, Chairman of Directors.

BALANCE-SHEET. The following Balance-Sheet for the year ended October 31, 1920, was submitted. -

“ PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED OCIOBKR .IbJIO. —

H. A. KNIGHT, Chairman of Directors. WIL and Secretary. I hereby certify that all my requirements as Auditor f ' l ® fo^the yeur'ended October 31, 1920, •omplied with, and I now report having examined the Books; and a true and correct view of the xnd that the above Balance-Sheet is drawn \P, lna X°and didY certified Stock Sheets. I have seen that the state of the Company’s affairs, as shown by or s Messrs. Elies,' Salaman, Coates, and Co. London Accounts have been certified to by the London Auditors, Jless J 3 ' w K JjAWRENCB> F.P.A.N.Z., Auditor. Christchurch, February 3, 1921. , - — -

Chairman’s Statement. The chairman (Mr. Knight). addressing tire meeting, said: Gentlemen, —The-accbunts for last year have now been in your hands for some lime, and, subject to your permission, I propose to follow our usual custom and take the report and balance-sheet as read. I am glad once more to be able to congratulate shareholders on the position of the company and the results achieved, particularly as' the year just closed! has in many respects been one of the most remarkable commercial periods ever experienced. In my remarks at our last annual meeting, when dealing with the accounts of the 1919 season, I stated that it could hardlv.be expected that such favourable conditions us we hud experienced for that year could 'be permanently maintained. The conditions which we have had -to face during this lasC year, and more particularly during the last live or six months, have shown very clearly that there was every reason, when we last met, for liewing the future with a certain amount of caution. Piobably few outside those responsible for the conduct of such a business ns this are quite in a position to realise the unprecedented downward movement which has characterised the markets for most of our main products. As compared with the realisable prices current up to June or July of last year, values’of wool, edible fats, tallow, preserved meats, pelts, etc., have all collapsed, and that to such an extent that the values now ol>ta.ina.ble for practically each and all of these, our main sheep products, are from 50 per cent, to 75 per cent, lower than they were a very few months ago. In the conduct of the operations oi the company during last season, every opportunity was taken to realise as promptly as possible our holdings oi these various: lines, and, on the whole, the management was particularly successful in effecting mo.-»t substantial clearances before the downward movement had become so definitely established that business in many lines was P rac " ■ ticallv brought to a complete standstill. I have thought it well to draw attention briefly to these extraordinary conditions as," while the company has had —in spite of that—a successful year, the earnings naturally show a shrinkage as compared with those- of the 1919 Whilst this is so, I think shareholders have much reason for congratulation that the company's affairs are in sucn strong and sound position, as revealed bv the accounts now; presented. ‘Before I deal in detail with the accounts, T wish to make a very few remarks as to the conditions now facing us for the conduct of the current yeai ■ business. When we last .net. twelve months ago, it was anticipated that w miHit still 'be holding very heavy stocks of "Government meat at tl,,s , "J.‘J fears were naturally expressed a« to e difficulties of commencing private ttading under such anticipated circumstances. The past year has proved somewhat oi t“,£> relieve ’EXK to X »£•»=« vourablc conditions than .it on , «nneared possible. During 1 ' half' ofthZvon very large shipments were made by the Government. America, and considerably °' e ' U . o „‘ lion carcasses of a mb were sold < Government to that market. On tn whole, this lamb seems, to have ma de a verv favourable impression but it is n ficult to forecast the extent to uln Xed tariff legislation recently intio-Kl--further "complicate an already ... to What action the Imperial Govein'ment will take in regard to New Zealand

meat when the supplies of < ommaiideered meat cease and free meat is once more available. When that point is reached the continuation 'of control, for New Zealand ‘meat especially, would seem hardly reasonable, particularly if Homegrown supplies and imported meat from other sources are allowed to come on tho market free of such restriction. As probably most of you are aware, the Home authorities -ere meanwhile strictly adhering to -the control of New Zealand wholesale prices, but we are still somewhat in the dark as to what attitude they will adopt a month or two lienee when our free supplies come on the market, and it is impossible, therefore, to forecast the conditions wHich these new supplies will i ave to face. The final decision of the authorities is, therefore, awaited by producers, exporb ers, freezing companies, and all concerned with much interest. The extraordinary position of the wool market and the huge accumulation of Australian and- New Zealand wools left in the hands of the Imperial Government, has been so much discussed that I do not propose to take up your time by emphasising at length the gravity of this particular situation. Tire latest advices from America indicate the probable imposition of a heavy protective tariff on wool —a minimum of 15 cents up to 20 cents (or even more) per !b. has been suggested, and it does not, therefore, look as if we could expect much material. relief from that particular outlet. The greatly increased costs of working wool and the higher freights now ruling, further accentuate an already grave position, and to such an extent that it is quite conceivable that some of the lower grades of coarse wool may hardly be worth the costs of preparation and shipment. This unprecedented congestion of stocks of wool is, unfortunately, accompanied by probably the most serious fall in pelt values which the trade has ever experienced. On to-day’s markets the pelt from each lamb killed throughout New Zealand has depreciated, as compared with last

season, anything from 4s. to ss. each, whilst sheep pelts have meanwhile depreciated even more. A general survey of the position would hardly be complete without referring briefly also to the change, within the last few months, in the values of fats, both edible and inedible. The successful realisation of this particular product is of great importance to aU freezins? companies, and, under to-day s conditions, it is impossible to gauge the future with any confidence. So far as our edible fats are concerned, in the past they have found their market almost entirely on the Continent., I here is no doubt that the demand is still there, but the all-important question of payment is -stall the stumbling-block. Were international credits arranged for the relief of the starving countries of Europe, there is little doubt hut that oui edible fats would be readily—in fact, almost greedily—absorbed; but, unless something of that sort is done it is impossible at the moment to count ntfon the Continent to anything like its full extent as an outlet for this particular product. The same applies, to a certa>’> extent, to our non-cdible fat productions. Values for freezing stock, under such conditions, could not, naturally, be maintained at anything like the rates suit current, were it not that the demand for our meat, in snite of the uncertainties surrounding the conditions under which it will be marketed, has up to the present been characterised by a fairly confident tone, and at values which, If maintained, would help to compensate for the reduced value of the wool, pelt, and other by-products. In view, howev°r of the now world-wide tendency for values of all products to depreciate from the abnormal level reached under war conditions, it is difficult to justify the belief that meat especially will he immune from the general downward tendency. The great distance of New Zealand from its final maiket, and the present scarcity of refrigerating tonnage sufficiently close at hand to ensure prompt shipment, both emphasise the great uncertainty as to the stability of to-day’s dock values, and ri is. • think, fairly evident, that there is much room for a verv material readjustment. Whilst I have briefly outlined the extraordinary conditions surrounding our return to normal trade, I do not wish to appear in any way pessimistic, but I think it only right that you should know that the transition from war conditions and Government control back to ordinary unrestricted trade is bein<z attended 'with many special complexities, and he would be a bold man, and, if I may venture to say so, a very unwise one, who would attempt to prophesy as to what the coming year has in store. We as a company, however, are particularly fortunate in being very clear ol dependencies of unknown value, ’and the strong position, as shown by the balance-sheet in your hands, is, I think, amnio evidence that we are in a most excellent position to face the future with every reasonable confidence. Our business in particular, and the freezing industry in general, tn facing extraordinarily complex problems, is only in the same position as all other commercial and industrial undertakings at the present time, and there Is no reason why we should expect or consider ourselves entitled to ho especially immune from these difficulties, which are. unfortunately, common to the whole civilised world, and are only evidence of the terrific dislocation and disruption arising from the great conflict of the last few years.

Mr. Murray, the managing director, visited England at the end of last year’s freezing season, and was in close touch with the affairs of the compa.ny in London up to the middle of December, and was thus in the best, position to deal with our very important interests during n period of extraordinary difficulty. Mr. Murray is again present with us. hut expects to return to England in the course of another month or two. I will now briefly refer to the accounts before you.

The paid-up capital of the company stands unaltered at dlfiflO.OilO. and the debenture issue also stands unchanged nt -E150,000. The next item, reserve account, stands at .650.000, and is the first accretion to this account since the rearrangement of file capital.

iSundry creditors. advances against shipment, and. Txmdcn balances arc re-

presented by £182,810 16s. 6d„ as against £499,732 Os. lOd. in 1919. This large item is, of course, very fully covereu by the second and third items on the assets side of the balance-sheet. Tho next item shows a small indebtedness to our bankers of £2535 ss. 6d., ■whilst the previous year we had a credit balance of £65,649 18s. Id. Turning to the assets, land, buildings, machinery and plant stand at £852,674 4s. 2d., as compared with £813,010 13s. 3d. a year ago. lhe increase is almost entirely accounted foi by the erection of additional dwellings for our permanent employees at various of our factories. These additions w ere unavoidable, and. while undoubtedly expensive. they will. I think, materially strengthen the general position at these points, and help us to ensure reasonable safety and responsible supervision. The next item- shows a very largo reduction as compared with the previous year. A comparison of the figures shows that the stocks of meat held by tho company on account of the Imperial Government were £466.373 05.4 d., whilst twelve months ago they stood at no le=s than £909,577 Bs. Id. Against our holding of Government meat we haxe received advances amounting to £944.939 Is Kid leaving £115,373 Ife. &d. due to ns on shipment, as against a, balance a rear ago of £240.394 12s. 4d. The next item, sundry debtors, investments, consignments unreal-sod nml stocks in works, stands at £418,<91 W. <kl while last vea.r we held only £268.3b» 13-’ 4d There is thus in these figures ’the verv considerable increase of practically £150,000. This is largely due to a verv satisfactory increase in oui New Zealand fertiliser business, nece-M.it n, the holding of much larger stocks (which are. however, very liquid), and to tne necessary holding of various othei large items essential for the present yeai s '■’ particular attention has been paid to the valuations comprised in this impor-

tant total. and t in view of the great uncertainties surrounding the conduct of commercial affairs at the present time, a very conservative valuation has been placed on all dependencies, and I am confident that, considering all the abnormal conditions now obtaining, this policy will meet with vour complete approval. The profit and loss account shows a balance available for appropriation of X10J,561 11«.. which the directors recommend should bo disposed of as follows:—

You will notice that the proposed distribution. together with tbe mterini dividend, corresponds with the amount distributed during the previous year. Before closing, I would liko to draw vour attention to the extraordinary burden which is being thrown on joint stock companies by the presept method, oi collecting income tax. The position has been further accentuated since we last met by the unexpected increase- in the rates of taxation. The tax has now grown to a rate which practically places the Government in the position o£ « nil! partner, with preferential claims .on the profits, without, however, any corresponding responsibility for the losses. It will be apparent to shareholders what a handicap is imposed on industrial enterprise when 1 inform von that the company s income tax and ’ocal rates taken together absorb practically one-half of the income earned during the financial year. To put it in another way practically only 50 per cent, of the income of ,any large enterprise is now available as a fund from which the capital employed can draw its return. ft is to be hoped that the Government will realise that sr,i a crushing burden must, if long continued, stifle all enterprise, and that it will afford substantial relief ns soon as it finds itself m a position to do so. It is difficult to see how any progress cap be made, or real prosperity maintained, under such conditions as now exist. Last year special steps were taken to authorise the company to initiate a scheme for the creation of a provident and endowment fund, and it was then hbped that during the year some definite decision might be arrived at as to wliat, if anything, would !.e practicable. Whilst nothing conclusive has yet been arrived at in regard to the scheme, the company’s responsibilities aro fully realised, nnd it is hoped that' in the near future sonip solution of this somewhat difficult problem will be arrived at. The director retiring by rotation is myself, a.id, as von will see from the report 1 age’'i offer inv services. The auditor, Mr. .1. W K. Lawrence, also retires, and oilers himself for reelection.

Unless any shareholder wishes for further information on any point, which if possible. I shall be glad to afford, .1 will now formally move that the report: and balance-sheet as now in your hands Ire adopted. The chairman then formally moved the adoption of the report and balance-shet. The Seconder of the Motion. Mr. John Mill (Port Chalmers) said: It affords me very great pleasure indeed to second the adoption of the report and balance-sheet. It is one .which will give satisfaction to every' shareholder. We are satisfied that the business has beev conducted in a .very abje manner during Ihe last year, because von have had trouble during the year, end there are also troubles toeing you now. Jam sure, however, that you w 1 *?? be able to surmount these us you have done those of the past. We have a Board of Directors second to none, and can come to no other conclusion than that cur interests will be well and carefully guarded during 11m coming year. I think, sir. that the time is not far distant v hen you ought to have a good representation tn England, in some shape or other, .for the benefit of the shareholders and farmers of the Dominion. This company lias done a mightv lot for the people of New Zealand anil also for the farmers. I can remember sheep being sold in Dunedin for 2s. per head; 1 also remember tho

first ship that was loaded with meat from New Zealand. I ihink it was tho Dunedin, with 4000 jriieep. and we now find that the Dominion’s freezing business has grown to something like seven million sheep a year. , , , ... Mr Mill then seconded tho aocptlon of tho report and balance-sheet, which was carried unanimously. Electton of Officers.

Mr. H. A. Knight, who retired by rotation, was unanimously ro-elected a director. t tw Mr. Bloxam proposed that. Mr.-J. H. K. Lawrence be again elected avcitor. This was seconded by Mr. <j. G. Aitken and carried. _ Votes of Thanks.

Mr. W. H. Clark moved a vote of thanks to the directors and stall for the able manner in which they bad carried on the business of the ctunpany. This was seconded by Mr. John Mill and carried unanimously. Tho chairman responded for the directors, and Sir Francis Roys brief!) acknowledged the vote of thanks on behalf of tho staff. The meeting then terminated.

To Capital, l.OOOjOOO Shares at .£1 each Less Unallotted 100,000 Shares at »E1 each £ 1,000,000 100,000 s. d. • £ 0 0 6. d. Subscribed Capital ... 900,000 0 0 Less Unoalled 600,000 Shares at 10s. each 300,000 0 0 Paid Up Capital 600,000 0 0 Secured Debentures at 6 per 150,000 0 0 Reserve Account 50,000 0 0 Sundry Creditors, Advances against Shipments, and London Balances ' 482,810 16 6 Bank of New Zealand 2,535 5 6 Balance at Credit Profit and Loss 101,561 11 0 Al,386,907 13 0

6. d. £ 6. <1. Bv Land. Buildings, Machin4 ‘2 ery, Plant, etc Stocks Meat held on Account of Imperial (ioieminent •' ■U>0;373 0 4 Less Payments in advance by Imperial Government 344,999 4 10 115.373 15 6 Sundry Debtors, Investments, Consignments, uiirealised and Stocks in 418,791 10 8 Cash in hand 1 68 2 8 <£1,386,907 13 0

£ 8. d. £ 6 « d. £ s. d. <£ 6. d. 1919. , , . AJ OV . 1 —By Balance brought forward from last yo a . r after payment ot -IJiviTo Interim Dividend Balance 37,500 0 0 101,561 11 0 139,061 11 0 dend and Appropriations 58,259 r> io J Authorised 1920. „ Oct. 31—By Transfer rees ... 185 5 0 1 Profit after making proyi- • sion for Bepatrs, Henewals, Taxation, . and Sundry Contingencies... 80,616 13 2 .£139,061 11 0 X139.061 11 0

JC 6. d. To pay a dividend of Is. 3d. per share on 300,000 fullvpaid shares, and of 7J,d. per share on 600.000 shares. 10s. 37.500 0 0 To piace to the reserve ac20,000 0 0 Leaving an amount to carry 44.061 forward of 11 .0 .£101,561 11 0