SOUND POSITION

Hauraki Plains Gazette, Volume 52, Issue 32302, 20 August 1943, Page 5

SOUND POSITION

“VIRTUALLY FREEHOLD” THAMES VALLEY DAIRY CHAIRMAN’S REVIEW OF YEAR “ Virtually this balance sheet tells us that ours is almost a freehold company and that is a splendid position to be in, all the more so when the humble beginnings of our co-operative are recalled,” remarked Mr J. J- Shallue in seconding the motion moved by the chairman, Mr D. Courtney, for the adoption of the balance sheet of the Te Aroha-Thames Valley Co-operative Dairy Company, Limited, at its' annual meeting held recently. This motion carried by acclamation, marked the close of what is held to have been one of the most successful years in the company’s history. Although the meeting numbered only in the vicinity of 45 shareholders, it was characterised by the keen attention which was paid to proceedings throughout the long sitting.

Chairman’s Report Mr Courtney stated that the balance sheet was the best one the company had yet had, and it revealed a sound position. The tonnage of the company’s output had increased from 1963 to 2155 tons, although the anticipated output of 3000 tons had not been reached due to the effects of zoning, fertiliser and farm labour shortage. Diverted supply this season, it was added, would be increased and the output would be in the vicinity of 1800 to 2000 tons. The zoning order of November 21 last year transferred 1000 tons to the New Zealand Dairy and Morrinsville Dairy Companies. During the season 232 tons of loan supply from other companies had been manufactured. Grading of Butter The grading of 'butter had been most satisfactory. The average grade •was 93.659 as against 93.79 and 93.81 of the two previous seasons. Substantial premiums had been received for butter 93i and over and this amounted to a total of £950. Considering the rapid increases in , costs of material and the wage increases which had been granted by the Arbitration . Court, Mr Courtney said that factory costs .had naturally shown an increase. On the other hand, due to economy and careful management, general overhead costs had been reduced by over 30 per cent, with the result that costs to F. 0.8. had been reduced to ,1.982 d per'lb. butterfat. The Payouts The estimated average payout per lb. butterfat all grades for the season ‘ 1941-42 as quoted in the last annual report was 16.128 d and was the actual payment finally made. This payment included -097 d per lb. Government subsidy. The advance payment made during the season amounted to 15,523 d per lb. butterfat. The balance in appropriation account of £19,516 7s 6d will allow a further payment of I.lBod per lb. This when added to the advance payment already made will bring the average payout up to 16.703 d and with dividend of .022 d added, 16.725 d per lb. butterfat. The superfine payment with cream cartage added amounts to 17.347 d per lb. butterfat.

Local butter stocks on hand at June 30, 1943, have 'been valued at local market rates less relevant differentials. No export butter is held m stock. The total amount of cream cartage costs incurred by suppliers individually is £llB Is Bd, which represents .007 d per Ibi on the total number of pounds of butterfat received by the company. A cheese subsidy of lid per lb. butterfat totalling £10,890 5s was received from the Government on account of 144 suppliers. Plant and equipment had been maintained in first-class order during the season. Fertiliser Quota Mr Courtney said that the fertiliser quota was the same as last year, though the successful termination of the conflict in North Africa might release phosphate from that source. He urged all farmers to make out their applications for fertiliser as early as possible as this facilitated distribution through the company. The Current Season Speaking of the current > season, Mr Courtney said that the Government had granted a cost allowance of approximately Id per lb. which would come into this season’s accounts. The allowance was made up of a cost allowance to farmers of .767 d for farm costs and .187 d to factories for all

items which were impossible to take back: to the 1938-39 level. There was

a further' cost allowance to factories of .802 d which represented estimated savings on reduced costs of material.. The South Auckland Dairy Association had recommended increasing the net payout to Is 34d per lb. butterfat from August supply onward which would leave the bonus at the end of the season approximately the same as for the past season. A further reduction was expected in cream cantage costs though approximately the same quota as last year had been allowed for this item. Manufacturing charges had increased 1 by .025 d and charges to f.o.b. would be approximately the same as last year. Overhead Charges Reduced Overhead charges, said Mr Courtney, had been reduced from .207 d to ,140 d and this amounted to a saving of £lOOO. This was accounted for mainly by a saving of £360 in interest, insurances and administration. Final Bonus A balance of £19,883 or 1.202 d pei' lb. butterfat would be distributed by a final bonus of I.lBd and interest on share capital of ,022 d. It was added that the Government’s cheese subsidy of £1458 was included in last season’s payout. It was stated that the capital account had shown a small increase for the season. These increases would now become smaller each year for shares were nearly all allotted. General reserves were small but a substantial loan reserve had been built up which would eventually be transferred to general reserve. The deposit for two goods licences which had been acquired during, the year had also been paid for out of general reserves. The value of these licences was there, however. Much Lower The debit balance at the bank was much lower than last year, this being due to the absence of export butter in store all butter having been shipped prior to the end of the season. No large purchases had been made during the season and £lOOO had been written off plant and buildings for depreeiationt Payment of 6onus Mr Courtney said that the usual practice had been adopted in the payment of bonuses. These had not been paid out to members of other companies who were supplying this company ■on loan, but had been, paid to all members who were on loan from this to other companies. Keep Up The Quality Remarking that the most contentious matter apparent in the satisfies was that the average grading of cream had been lower than the previous season, Mr Courtney urged all farmers to do their utmost to keep up the quality. He knew it was difficult—he had found it so himself —but a very great deal depended on the quality in the matter of supply to the local market, a most important factor, and in building up a reputation to help post-war trade.

In conclusion, Mr Courtney paid high tribute to both factory and administrative staff and to his fellow directors. All had carried out their tasks in a fine spirit and with a skill that was reflected in the most favourable balance sheet the company had ever had. »

The adoption of the balance sheet was then moved by Mr Courtney and seconded by Mr Shallue. Some general discussion then took place, after which the motion was carried unanimously.