COMPANY PROGRESS

Otago Witness, Issue 4028, 26 May 1931, Page 62

COMPANY PROGRESS

THE COLONIAL SUGAR REFINING COMPANY, LIMITED. Paid-up capital, March, 1919, to September, 1920, £3,250,000; March, 1921, to September, 1923, £2,600,000; March, 1924, to March, 1927, £4,875,000; September, 1927, to March, 1931, £5,850,000.

* One year’s trading. t Including benefit funds. Troubles, both climatic and economic, have been experienced during the past half year, so that the fall in the net profit, when compared with that of the corresponding period of 1929-30, is not as large as might have been looked for. A severe hurricane in Fiji, the effects of which may not have had time to influence the returns fully, and a decreased consumption of sugar, are probably the main factors in bringing the net profit to its lowest level for several years in the March-September period. As, however, the net surplus is larger than that of the prior six months, and shareholders still receive their distribution of 25s per share, it would appear that the present depression has affected the sugar trade less heavily than some others. On this occasion the net profit earned is sufficient to cover the 12-1 per cent, distribution, and leave a balance of £18,472 to swell reserves. No direct transfer has been made to reserve fund, hut replacement and depreciation fund has increased by over £150,000. Employees’ Provident Fund has received an addition of nearly £50.000, so that a sum of not less than £200.000 appears to have been laid aside during the half year in allowances for reserve and benefit funds, which now aggregate closely upon £4,000,000. As is usual at the March balance, sundry creditors show a large sum. The total of £1,697,346 is greater than formerly, but may be counteracted partly by increased assets. Presumably they represent items of indebtedness only, the heading of suspense accounts covering all miscellaneous accounts. The trend of suspense accounts is still upward, although the recent rise is slight. After the paid-up capital, their aggregate of £3,017,197 makes them the largest item in the balance sheet, yet there is nothing to indicate of what they consist. The growth in the total assets is mainly due to the cash group, which, in cash balances, bank deposits, and remittances in transit, represents £2,953,395. An increase in their aggregate is looked for at the close of the March half year, but this time their rise is exceptional counteracting that of the sundry creditors. Alhough a considerable portion of the cash assets may be of a rapidly fluctuating nature, there should be

enough in an aggregate of nearly £3,000,000 to provide a permanent contribution in interest to the general revenue. Another revenue-producing item is found in the group of sundry debtors, loans and advances and other investments, which, at £2,124.066, has varied comparatively little. It does not appear, however, how much consists of sundry debtors. Stocks, both of sugar (£2,419,123) and material (£333,152) have fallen slightly, although it might have been thought that the former would, owing to reduced demand, be inclined to increase. As the value of sugar stocks is combined with balances due for payments for Queensland Government, it is impossible to tell exactly how far each is affected. Taken as a whole, the fixed assets have not altered greatly. The chief increase is to the Fiji sugar mills and their adjuncts, which, at their net figure of £1,366,655, have risen approximately £95,000. This may be due to the replacement required after the severe hurricane —a circumstance that may also partly explain the rise in replacement and depreciation fund. While the amount of £1,625,000, entered as written off, is unchanged from year to year, it would seem from the rise and fall of the gross figure that further writing down takes place periodically. Sugar mills in Australia, etc., are grouped at £2,427,281, which means a drop of some £57,000, possibly partly due to a wastage provision. Refineries continue to mount steadily, their latest increase having brought them to £2,989,983, but ocean steamers and office premises remain at £lOO,OOO and £56,011 respectively. Assets aggregate £14,890,072, of which £7,060,306 is fixed and subject to depreciation—in some cases rapid, owing to climatic and other conditions. When the value of stocks is added, it will be seen that an average rate for provision for wastage will annually come to a formidable sum, and make a heavy encroachment upon the profits. Viewed from that point alone, the net surplus, while satisfactory, cannot be said to be I excessive.

THE TRUSTEES, EXECUTORS, AND AGENCY COMPANY OF NEW ZEALAND, LIMITED. Paid-up capital, 1917-25, £10,000; 1926-31, £20,000.

The profit, both gross and net, continues to mount steadily. How far the net surplus on this occasion may be affected bj’ income tax is a matter for conjecture, but, judged by the sum entered in the profit and loss account under that heading and another, the figure will not be greatly reduced. In the allocation of the surplus, about 47 per cent, is recommended for dividend while 5J per cent, is retained. There is, thus, no inclination to sacrifice reserves, which again receive the full benefit of the increased profit. As no addition has been made to the dividend rate, it may be assumed that the excess now appearing as allotted to reserves is expected to meet the income tax incurred, making the division between shareholders and reserves approximately equal in the end. The revenue is apportioned roughly in the proportions of three-fourths to earned, and one-fourth to unearned income. Expenses, which total £7965, stand in the relation of practically 90 per cent, to the income from agency commission. The revenue from interest and rent comes to £2707, its growth alone more than covering the higher net profit. The charge of £lB6 appearing opposite Government license fee and income tax may be taken to concern income tax for the prior year. It is seen that taxation bears a small share of the total expenditure. Reserve account still stands at £lO,OOO, no direct allocation having been made to it for some years. Apparently the policy is to swell the undivided surplus, which has now reached £7lll. increasing the total reserves to £17,111. It does not appear in the balance sheet how far reserves are supported by investments, but the high proportion of 85.55 per cent, which they bear to the paid-up capital, after their depletion by £lO,OOO some five years ago, is an indication of the stress laid upon their maintenance. Liabilities are summed up in a total of £614. an indebtedness that is covered threefold by the cash in bank plus sundry debtors.

There are few complications in the assets of a company of this nature. There is neither plant nor machinery to wear out, nor stock of goods with its contingent fluctuations to be considered The sundry debtors aggregate £lB7, and. although, as in all businesses, a certain percentage may eventually be bad, the amount concerned must necessarily be small. Interest and commission accrued at £3lll form the largest liquid asset, being between one-third and one-fourth of the. year’s total. In this connection, it is seen that no estimate is made for agency services accrued. The retention of the bank balance at £I66S appears sufficient to meet all eventualities. Fixed assets are combined with some of the liquid section. Office furniture and stationery are entered at £6BB. of which it is recommended that £3BB be written off from the past year’s surplus. As stationery is not likely to deteriorate to that extent, the allowance may be regarded as referring chiefly to office furniture. Freehold property is united with cash investments, the view being apparently that, as employment for the company's funds, they are on a similar footing. It is proposed that a sum of £564 be written off freehold property, the book value of which is not disclosed. If, however, agency and rent at £2707 may be regarded as the total return from assets grouped at £34.223, a rate of 8 per cent, approximately is shown. As the return from mortgages and debentures can scarcely rise to that height, the rate of revenue from freehold property will increase to a corresponding extent, showing a satisfactory return upon the capital value represented by land and buildings, the result to some extent, it may be, of keeping them well written down. Funds administered have increased by nearly £lOO.OOO, although shares, landed property, and miscellaneous securities have all decreased. The increase is chiefly to be found in mortgages, but debentures have also risen. The respective amounts of each class of investment, and proportions of the whole are as under: —

The total funds controlled stand at £3.557,076 when the different moneys held in bank and on hand on account of clients are included. It is at a depressed time like the present that responsibilities are apt to lie heavier on the shoulders of trustees and executors, and their advice and assistance are most likely to be in demand.

Dividend and Bonus. Half-year Ended. f Reserves. Net Profit. Per Share. Per Annum. Mar., 1919 . ., 1,592.854 £ 147.611 17/p.c. 7 Sep.. 1919 . . 1.610.G52 130.012 13/7’2 Mar.. 1920 . 1.690.468 159.553 17/8% Sep.. 1920 . . 1.G45.S70 171.G42 ■ 17/8% Mar., 1921 . . 1.745.896 155.297 15/9% Sep., 1921 . . 1.834,902 20G.201 15/9% Mar.. 1922 . . 1,938,680 245.990 20/12% Sep.. 1922 . . 2.034.794 247.195 20/12% Mar., 1923 . . 2.156.603 251.395 20/12% Mar., 1924 . . 2.339.G17 673.039 45/12 13-16 Sep., 1924 . . 2.438.267 324.978 20/10 Alar.. 1925 . . 2.711.098 435.G7G 25/12% Sep.. 1925 . . 2.833.013 404,628 25/12% Mar.. 192G . . 2.999.556 396,104 25/12% Sep., 1926 . . 3.140.930 408.444 25/12% Mar., 1927 . . 3.274.527 ' 424,353 25/12% Sep., 1927 . . 2.490.571 47G.51G 12’LStar., 1928 . . 2.807,151 490.112 25/12% Sep., 1928 . . 2.942.014 469.157 25/12% Mar.. 1929 . . 3.289.402 507.149 25/12 Va Sep., 1929 . . 3.435.952 465.493 25/12% Mar., 1930 . . 3.GS2.329 445.337 25/12% Sep., 1930 . . 3.737.738 350.726 25/12% Mar., 1931 . . 3.959.903 384.097 25/12%

Dividend with Mar. 31. Bescrves. Gross Profit. Net Profit. Bonus 1917 .. 14,752 5.442 2,002 15 1918 .. 15,188 5.749 2.152 15 1919 .. 15,560 G.069 2.169 15 1920 .. 16,369 7.012 2.309 15 1921 .. 16,934 7.2C0 2.213 15 1922 .. 17,655 7,725 2.321 15 1923 .. 18,713 7.995 2,658 15 1924 .. 19.859 8.603 2.805 15 1925 .. 20.895 8,893 2.813 15 1920 .. 12.043 9,253 2,831 7% 1927 .. 13.249 9,398 2.910 7*,4 1928 .. *14.524 10.030 *3,028 8 1929 .. *15.958 10.494 •3.233 SI4 1930 .. *16.151 11.087 •3,443 8H 1931 .. *17,111 11.577 •3,613 • Subject to income tax.

Investment. Amount. Proportion. £ P.O. Mortgages .. . 1.470.429 42.54 Debentures 1.116.392 32.30 Shares 538.939 15.59 Landed Property . 2G4.7S7 7.66 Miscellaneous .. . 66.134 1.91 £.3,456.081 109.00