Cheltenham Dairy Company Limited.

Feilding Star, Volume XVI, Issue 229, 28 March 1895, Page 2

Cheltenham Dairy Company Limited.

The fourth h:ilf'-_year]y meting" of shareholders in the Cheltenham Cooperative Daiiy Company was held in the school room, Cheltenham, last evening, upwards of thirty shareholders being present. Mr F. iipencer, chairman of directors, presided. The minutes of the half-yearly meeting held in September last were read and confirmed. Mr Rpencer having apologised for the short time the balance-sheets had been circulated prior to the meeting 1 , which was no fault of the directors, he called on the secretary, Mr Templer, to read the report and balancesheet, which were as follows : — Report. " Yonr directors have the pleisure of laying before you the balan^e^heet for the half-year ending Feburary 28th, 1895. Through the supply of milk not coming up to expectations your Directors have not been able to pay off the loss which was made on the first year's working. They have during the halfyear reduced it by the sum of £'77. There is, however, according to our Articles of Association, a liability to shareholders of about .£7O accrued interest, on paid up capital. Shareholders wbeu considing this will do well to bear in mind that when the company was .started, it was anticipated that at least 3000 gallons a day would be handled at Cheltenham and Colyton combined, and it was on this basis that the factory was erected and worked. During the last half-year 2200 galloDs was the maximum quantity and that only for a short time, the average quantity being only 15S0 gallons per day at the factory and two creameries combined. When the farmers of the district become thoroughly alive to the benefit of this industry and enable the plant to be employed to its fullest capacity, then they will receive the full benefit. During the half-year 2,761, 5891bs of milk have been received from which has been manufactured 101,0981bs of butter. Your directors were able to make very satisfactory arrangements for the disposal of their output up to the end of January, shipping the butter to London on a guaranteed advance of 9d per lb. Since that time up to the 16th March, they have been shipping on the Company's account. The shipping season beiug now over Directors have completed arrangements for the winter wbich they believe will bo most satisfactory to suppliers. With a view of reducing our liability to the Bank your Directors would recommend that the balance of the subscribed capital be called up, and that new capital be created by suppliers being compelled to take up shares in proportion to the quantity of milk delivered. Directors are still of opinion that farmers will find it most profitable to contmue dairying all the year round, but iv view of the loss made last year would like an expression of opinion from suppliers as to their intention for the coming winter, it being understood that Directors will deduct all expenses from each month's account so that there may be no possibility of a loss. In accordance with the articles of association it will be necessary to elect two auditors in place of Messrs Church and Fergusson who now retire, but are eligible for re-election.— F. Spencer, Chairman. Balance-Sheet for the half-year ending February 28th, 1895. Liabilities — Nominal capital 2500 shares at £2 each £5000, to capital paid up .£1365 7s 6d, premiums received £73 15s, sundry creditors £782 14s lid, cheques outstanding £117 9s Id, overdraft £2131 11s 3d, total £4470 17s 9d. Assets -By land etc. £3416 9s 3d, stock (including butter, etc) £593 2a 6d, sundry debtors £280 4s 6d, cash in hand £5 10s lid, balance £175 10s 7d : total £4470 17s 9d. Profit and Loss Account. Receipts— By sale of butter £3150 Is Bd, buttermilk £7 16s 1, milkcan £1 10s, balance £175 10s 7d : total £3334 18s 4d. Expenditure— To balance at September Ist £252 11s, general expenses, interest, carriage, Firewood, wages, etc., £731 12s 4d, payment to suppliers £2350 15s ; total £3334 18s 4d. The above Balance-sheet was certified to as being correct by the auditors, Messrs G. P. Church and A.. Fergusson. Mr Spencer moved that the bal-ance-sheet as read be adopted, and in doing so said that the Directors had not lost sight of the fact that the dividend had not been paid to shareholders or provided for in the balancesheet. The intention of the directors was that an expression of opinion could be obtained from those present the company having such a heavy overdraft, and he invited a discussion on the report, etc. Mr A. Fergusson asked, with reference to the clause which read " and that new capital be created by suppliers being compelled to take up shares in proportion to the quantity of milk delivered," what proportion and what quantity of milk ? Mr Spencer replied that the quantities had not yet been fixed. It was necessary to allot more shares to reduce liability at the banks. Mr Fergussson could understand reducing- liability to the bank, but thought the method of doing so was suicidal. Unless they got more milk the concern would not prosper and they (the Directors) were proposing to do that which would prevent suppliers from sending their milk to the factory or creamery. They should open the way to getting- more milk instead of cutting it off. Mr W. Jones (a director) said it was not the intention of the directors to make those who already had a good number of shares to take more ; but it was their idea that it a person sent a large quantity of milk to their factory he should hold sharqs in proportion. At present a man with five shares could send a very large quantity of milk and had the same privilege as a person with {wenty or over. Mr \y. Morton cliff not see ifyat it { would m^ke a great deal of difference whether they paid interest to the bank or shareholders. Tb,e Directors would have to be oareful in forcing suppliers to take up shares. Mr Spencer : Jt was not the intention of Directors to carry out the suggestions in the report, but merely to get the opinion of tide suppliers, Mr A- Paine did not think suppliers should be discouraged by foroing them to take up shares when they could not afford to. He thought those who had promised to milk a large number of cows and did not do so were the greatest to blame. He would prefer to call up more capital. Mr Morton asked il the Articles of Association would permit the Directors to compel suppliers to take up shares in proportion to their milk. Mr Spencer . They were left free in this matter q,nd QQ.uJ4 c|q sq. JMLr Tein.pler, thp^gfyt t^e Directors looked at"this matter with a view to placing' the Company on a sounder basis. The balance-sheet showed au overdraft of over £2000, but this had been considerably reduced since >(.}}§ Maiiee-sheet w& sfceuck, Hq di<V

not see that there was any necessity to call up more capital and the money would he far better invested in cows. Mr W. F. Jacob thought the overdraft had reached a rather serious amount, and he vras sure the Company would be in a better position if they called up more capital. He considered the bal-ance-sheet was not a true statement of the affairs of the Company, as nothing was written off for depreciation, and, instead of .£7O being shown for the halfyear, a loss should have been shown as the dividend was not provided for. The prospectus said that six per cent, would be kept back to pay dividend before the milk was paid, but this had not been done. Mr Fergusson said the balance-sheet as presented was correct, but it was not a true statement of the affairs of the Cempany, as an allowance of 6 per cent on the share capital would have to be recognised and there was no allowance for depreciation. Mr Spencer said the Directors did not lose sight of the fact that they should have written down for depreciation, but there had been continuous add.t ons to the machinery, and it would make things worse than they were to show a depreciation. Mr Mills thought that if a man had only a few shares and supplied a large quantity of milk it might be as well to : stop, say, a Is for every 60 gallons of ; milk. He considered this would be the fairest way to get capital, and the least felt. Mr Fergusson moved, and Mr Church seconded, That the latter portion of paragraph 5 be eliminated from the report, namely, the words, " and that new capital be created by suppliers being compelled to take up shares in proportion to the quantity of milk delivered." Mr Bruce supported the motion which was carried. Mr Templer asked what suppliers intended to do about carrying on through the winter. The Directors would like to have an expression of opinion as they intended to make the milk supply pay the cost of working and not run at a loss this winter. Messrs Templer, Mills, Spencer, Morton, Fergusson and. Jones were in favor of working through the winter. Mr Spencer pointed out that had it not been for itheir running through last winter they would have been in a nice fix during the past summer. They had obtained a grip of the market and it was only by continuing through the wiuter that their butter was in the market while others were out. Although they suffered a loss, working through last winter was their salvation. Mr R. Burne seconded the motion that the report and balance-sheet be adopted, and on being put it was carried. Mr Paine enquired why deductions had been made in the tests without suppliers being made aware of it, for instance, a 4*3 test was shown as say a 4-1 test. Mr Templer explained that this deduction was made in accordance with recommeudations niade in the report of the Agricultural Department to cover a loss of fat in separating and churning. They had made a deduction of 3-10ths for three months only (November, December and January), and £ of l-10th last month. This was done to save them from loss as H per lb was not sufficient to pay the cost of making, although some people complained, that that was too high. The basis they had worked on in the past was entirely wrong, but it was not their fault as they worked according to instructions published by the Department's expert. However, for the future it was their intention to pay monthly on the new composite system test. Arrangements are being made that all accounts shall be paid monthly, the actual, and not estimated cost of working as heretofore, being deducted from the milk, the suppliers getting the net return. They had lost £'50 in October and November through over estimating. Mr McEwen told him that their churn should always return more than the test, and that the purest butter only contained 85 per cent of fat, and in good butter there was usually 82 per cent. The difference waa made up of foreign matter such as water and saltMr Spencer said that they only charged lid per lb for making the butter, whereas it cost 2d. They had been estimating the cost and oharging rccordingly, and that was how they went wrong. Mr Fergusson thought the Directors should for the future act openly and let suppliers know what deductions were being made. Messrs Morton, Cuningham, and Paine contended they should have been told of the deduction. Proposed by Mr Jacob, seconded by Mr Cuningham, That Messrs Church and Fergusson be re-elected auditors at the same remuneration as previously. — Car* ried. Proposed by Mr Cuningham, seconded by Mr Paine, That a hearty vote of thanks be accorded the Directors, the Secretary, Manager and his staff. Mr Fergqsson in. supporting the motion said it spoke volumes for the Manager and his staff that they had topped the Danish butter by 6s per owt. The motion was carried unanimously. Mr W. Mitchell returned thanks for the vote on behalf of theh Directors, and Messrs Templer (secretary) and Nicholls (manager) also exDressed their thanks. A vote of thanks to the chairman closed the meeting.