NEW ZEALAND FROZEN MEAT AND STORAGE COMPANY. ANNUAL MEETING. DEBIT BALANCE £30,102 19s 10d.

Te Aroha News, Volume VII, Issue 399, 4 September 1889, Page 5

NEW ZEALAND FROZEN MEAT AND STORAGE COMPANY. ANNUAL MEETING. DEBIT BALANCE £30,102 19s 10d.

Auckland, Augrust 27. The annual meeting of the New Zealand Frozen Meab and Storage Company was held at the Company's office near the Railway Wharf this morning. There was a Rood attendance of shareholders, and Mr i A. Bull occupied the chair. Report. — The report of the directors to ! 30bh June, 1889, was presented as follows : — " The directors beg to submit to the I shareholders the accounts of the Company for the yoar ending 30th June, 1889, the debit balance on which stands at £30,102 19s lOd, including an amount of £7,850 13s lOd, brought forward from the previous j year. The directors regret that conI tinuod depreciation in the value of the Compauy's propertios, joined to unexpected lostes in the acid and manure business, and consignments of tinned meats to the Home market, have produced such an unsatisfactory outcome for the past year. The position of the Company in regard co the value of its assets, which i does not at present materially exceed the amount of the Company's debts, has been the subject of communication between your Board and those financially interested in the Company's position. A re-construc-tion of the Company will be suggested, as it is understood that the woiUs, as a going concern, may be acquired on favourable terms ; failing this, voluntary liquidation will be proposed." Bax.anoe-siieet. — The balance-sheet from 30th June, 1888, to 30bh June, 1889, was read aR follows : Capital, 40,000 shares at £2 10s, £100,000. To capital issued, 20,363 shares at £2 10s, £50,907 10s; less unpaid calls, £137 10s. Capital paid up, £50,770 ; bills payable, £813 14s lid ; sundry creditors, £75,632 10s 7d : total, £127,246 5s 6d. (Jr. : Assets: By properties, £20,103 9s Id ; properties leasehold, £45,909 11s 6d ; machinery and plane, £7,755 0s 3d ; bills receivable, £660 15s lOd ; cash on hand £353 4s 8d ; stock, Auckland, £13,201 Is lid; stock, on consignment, £4,402 Is 5d ; sundry debtors, £4,758 Is ; balance profit and loss account, £30,102 193 lOd : total, £127,246 5s 6d. Profit and Loss Account.. — Dr. : To balance, June 30, 1888, £7,850 13510 d; depreciation of properties, £12,400 ; depreciation of btocks, £1,125 ; charges and expenses, £6,116 9s 9d ; bad debts, £311 18s 2d ; interost and discount, £7,720 4s ; loss on consignments, £3,729 13s lid; rebate on storage charges, £787 7s ; Acid Works, $ loss 12 months, £1,604 14s 6d ; Thames Agency, loss 12 months, £363 17s 7d : Total, £42,009 18s 9d. Cr. : By commission, £29 6s 8d ; ice sales and cold storages, 2,479 5s Id ; stock account, trading profit, 9,330 4s 4d ; butter department, amount recovered, £68 2s lOd ; balance, £30,102 19s lOd : total, £42,009 18s 9d. The accounts were audited by Jno. Milne, auditor, per Charles A. Jonas. The Chairman, in moving the adoption of the report, said : — ''Gentlemen, — It is with feelings of very keen regret thab the directors have to meeb you with a balancesheet of so unsatisfactory a nature, and to admit that they have been unable to surmount the difficulties with which this Company has had to contend. Perhaps, before proceeding to di&cuss the balance - sheet, I may be allowed to give a short retrospect of the Company's history. The Company was floated in July, 1883, a period ot considerable prosperity, when I need hardly say thab very difl'erenb values were current, both here and on the Home markets from bhose now ruling. Among the principal promoters wore gentlemen largely interested in land in the Waikato and elsewhere, upon which extensive operations were then in course of being carried out, and from which it then appeared that a lai'ge amount of stock available for freezing and export would be forthcoming. Ib should be borne in mind thab neither at that period nor ever since has there been any sufficient quantity of stock in the Auckland province to constitute an export of frozen meat sufficient to support these works ; on the contrary, tho supply has been (except for a short period in each year) insufficient for our local consumption. Here therefore has been the root of our main difficult}'. We erected works which should have earned a yearly revenue from freezing of some £10,000 or £12,000 a year, besides the collateral proiits from dealing with that amount of stock, and our receipts from that source have in one year been nil and have averaged only £1,200 per annum for the five years tho Compciny has been working, while at least one - half of bhat amounb represented meat purchased and shipped by the Company on its own account, a course of business which at bhe bime involved considerable loss. I brusb, genblemeu, you will undersband bhab I am not following a course which now frequently obtains and taking upon myself to condemn (by the light of subsequent experience and in view of enbirely altered ciicumstances) the promoters of this Company who were among the foremost, and ab that time the most successful, citizens of Auckland ; on the contrary (albhough I had nothing to do with bhe promobion of bhe Company, or any share in its management until after it had been committed to bhe bulk of thecapitalexpenditure), I consider bhab bhe probpects were good having regard bo bhe prices bhen ruling on the Home markets. At that poriod frozen meat averaged 6d to 7d, tinned meats 6d, while tallow was over £40 per ton. Ab those prices the Waikato and other lands would havo been rapidly brought under cultivation, and production stimulated,"! but prices declined 50 per cent. ; land became a drug in the market and the anticipation as to incroased production oistockfell to the ground. These remarks as to altered values apply equally to the Company'b property in the reclamation here. We have 6 acres of land in a most valuable position, reclaimed at a cost of £28,000 besides ground renb, but which is almost enbirely unproductive and has for years pasb hung like a millstone round the Company'&neck, while property in bheneighbourhood of Queen sbreeb and our land ab Obahuhu have declined proportionally in value. To bhe losses under these bwo heads, viz., absence of the legitimate business for which the Company was formed and depreciation in values, the present position of the Company may, I think, be mainly ascribed, though other causes have also contributed. It may not be out of place to state here that more than half bhe capital (representing 10,400 shares) has been directly or indirecbly conbributed by gentlemen who have been ab one bime or another members of bhis Board, and who mainly constibubed the promoters of the Company, to whom 1 have referred. I will now proceed to the consideration of bhe balance-sheet, in which there are two items on the debit side which call for special remark. The first of bhe&eis bhe heavy loss we have sustained on the Acid and Manure Works. This business we have looked upon as a safe, and we hoped when fully estab-

lished, it would prove a profitable one. The oubpubhad steadily increased reachingnearly 2000 tons for the year ending June 1888. You will remember thab I made last year reference to a report bhat unsatisfactory analyses had been made of some of the Company's manures, and 1 regret to say that on full investigation the charges of inferior values were substantiated. Although I have no wish to evade tho responsibilities that must rest upon the directors of a company, yeb I fail to see that the Board is to blame in this matter. The establishment of these Acid and Manure Works was part of the original scheme of the Company as a branch business, working well with the slaughtering part of an export meat trade; and when Mr Banks proceeded to England he was commissioned to engage with a suitable gentleman who should possess both practical and chemical knowledge, and who would also be willing to take a pecuniary interest in the works. Tho gentleman who was engaged was highly recommended and took quarter interest in the concern — the works being erected under his superintendence ; while for three year 3 the manures gave every/ satisfaction, and stood successfully! I the test of l-epeated analyses. I should be sorry to press hardly on the gentleman referred to, who has assisted the Company in many ways outside his own department, and has, moreover, involved himseli in heavy loss, bub it was clear that grave errors wero made in the manufacture of several batches of manures, and the result was so disastrous to the reputation of the Company thab the sale of the works appeared the only alternative. I come now to the other heavy item — loss on consignments. A loss of £653 under this head appeared in last year's accounts. I then stated that some loss under this head might always be expected, inasmuch as these consignments represented the surplus of producbion ovei and above our local, Australian and Island sales which should leave a margin to cover such loss. The loss this year is however altogether exceptional and although due in some measure to the very low prices thab have {ruled at home for tinned meat, yet is also due to the large proportion of meat bhat has gone bad. Shortly before the bransfer of the tinning plant from Waibara a change occurred in the management of the meat preserving department, the expert (Mr Maw) who originally came from America, giving up charge and returning to the States. For sbme- time afterwards no perceptible difference appeared in the quality of the preserved meats, but later on an undue proportion of bad tins became apparent. On this coming to the knowledge ol the Board a careful inquiry was instituted, and eventually a re-engagement was entered into with Mr Maw, who returned to the Company's employ, but in the meantime a large quantity of meat had been manufactured, and considerable consignments shipped to England. It is in these shipments, which had to pas 3 through the tropics, that considerable losses have occurred, besides an undue proportion condemned from stock, and otherwise allowed for. Mr T. Buddie seconded the motion. Mr Stringer asked for information as to the amount paid bo Mr Muir, ab Obahuhu. The Chairman replied thab the amount paid was £9,000. Mr Stringer : And what was the object of bhe purchase ? The Chairman : The object of the purchase was to prevent deterioration of other property belonging to the Company, and to prevent our water supply being cut off. Mr L. D. Nathan pointed out thab the Oil Company had 'paid half bhe cosb of bhe water supply. Mr Stringer asked for information as to whence the directors obtained their loans, and the rate of interest. The Chairman replied that the l-ate of interest paid was 6 per cent., and the creditors were the Bank ot New Zealand and the Loan and Mercantile Company. Mr Green suggested that the Chairman should say .something about the proposed reconstruction of the Company referred to in bhe report. The Chairman replied that he thought the next step to be taken would be to put the Company into liquidation. Then the shareholders could come together, and meet mortgagees, who would be prepared to meet any favourable offer for the assets. This would be the time to see the returns of local business, and to consider what portion of the "live" business could be transferred to a new company. If ib were desired, however, he would go into the state of the " live " assets at once, to see which would be likely to pay it carried on. Mr Green said most of the shareholders were prepared to abandon the concern, but there might be a question of what amount of salvage mighb be obtained. The Chairman said ib had been found in every case of this sort, that where there were assets of a valuable description they failed to get sufficient capital from the shareholders to rescue them. Mr Green said there might be an interest in the concern worth taking over, and those who found the necessary money to go into a new \enture could take up deferred shares. The Chairman remarked that the present position of most shareholder of local companies was a hard one. They had borne the heat and burden of the day, and bhe heab hadbeen uncommonlytrying. Abettertime | now seemed to be in view, and for next 3 ear there promised bo be a considerable increase in their legitimate business, viz., frozen stock for export. They met with bhe great difficulty in bhe enormous depreciation of the Company's property that had taken place until the assets were now reduced almost to the margin of the Company's debits. With the further los3esbhat musbnece&sarily occur in realisation, he was afraid thab the margin would disappear altogether, and it their creditors saw enough to cover the Company's debts ib would be as much as they could do at the present time. The suggestion thab had been made therefore amounted to a proposal that the Company should carry on business ; if successful the shareholders were to have the benefit, and if unsuccessful the creditors were to make good the losses sustained. Ab bhe same time, he was sure the creditors would be only too glad to dispose of bhe assets at a reasonable rate. Mr Jones here interrogated the Chairman at some length. He said : You have borrowed all the money you possibly can to carry out this business ; the people you have borrowed from say you will have no more, and now you propose to wind the thing up. The Chairman : Precisely. Mr Jones : You say the depreciation has been £12,400 ; is that during the past year ? The Chairman : Not entirely. Some of the properties have been standing vacant for some time. We have tried to realise on them, and we did . not feel justified in rebaining them ob a larger value on the balance-sheet. The Chairman also stated that the Company wrote off £6,000 on the Waitara works. Mr Jones : And what did you lose on the Sydney Ice Works ? The Chairman: £18,000. (A voice 1

Shocking.) f Out of that we hold £3,500 in debentures, and that will bring the amount down to about £15,000. In answer to other questions the Chairman said there had\ been altogether £15,000 written off the Waitara works. On the Acid Works £900 was written off, and the depreciation on butter plant was £500. Sundry ' charges and expenses amounted to £6,014, and the total loss for the year was £30,000, leas the amount of £23,000. Mr Jones asked how a large quantity of tinned meat happened to go bad. The Chairman explained that there had been a change in the management in this department. About six or seven months after that a proportion of the tinned meat was found to be bad, but he could not give any explanation as to the cause. Mr Jones expressed disapproval of the action of the directors in entering into the retail butchering business, and asked what had been the result of this venture. The Chairman replied that the Company's two retail shops had made a profit of £70 in six months. He also stated that the Company had been compelled to go into the retail butchery business owing to the butchers having declined to take the Company's prime joints. Mr J. Dilworth expressed surprise that the Company had nob used these prime joints in their tinned meats instead of going into competition with from sixty to a hundred butchers. The Chairman replied that this was impossible on the score of cost, and contended that it would have been a very wrong thing for the Company to have placed themselves in a position to be dictated to by the butchers. Mr Fisher complained that he was unable to obtain good meat from the Company and that he cpuld get nothing but cows' meat. That was the reason why he and many others ceased to take their supplies from the Company. He also stated that he was at one time prepared to make an offer to the Company on behalf of the local butchers to take prime joints at the Company's own terms, but this was not agreed to, the directors having, in his opinion, made up their minds beforehand to go into the retail business. The Chairman stated that when Mr Fisher made the offer referred to the Company had made all their arrangements for opening retail shops, and had even canvassed for customers, so that they could not go back on their decision. Mr Jones characterised the present ptate of affairs as highly unsatisfactory, and referred bitterly to the | flattering prospectus issued, but never f realised, by what he styled "this accursed Company." He said the circular stated that it was proposed to call up £1 per share, and that it was expected when this pound would pay all the expenses likely to occur, that the Company would go on swimmingly, and pay dividends. The fact of the matter was, however, that the whole £5 was called up as rapidly as they could be called legally, and the result was a severe loss to the shareholders. Some Waikato farmers, he said, had even sold their cattle to pay for shares and calls. The shareholders had been bled to death, and the whole affair was a disgrace to the city of Auckland. He moved, " That this meeting fully recognises the unsatisfactory way in which this Company has been managed during nearly the whole of its existence, and the shareholders hereby express their dissatisfaction of, and lack of confidenco in its directors and managers." Mr Stringer seconded the resolution. He wondered that the directors had not resigned long ago, as they had been losing seven or eight thousand pounds year after year. It was suggested thatMr Jones' resolution should be taken as an amendment to the motion for adoption of the report, but Mr Pierce urged that the report and balance sheet should be taken on their merits, as no fault was found with them, and that the adverse resolution should be taken separately. Mr Battley also urged the adoption of this course, and it was agreed to. The report and balance-sheet were adopted unanimously. Speaking to the adverse motion, Mr L. D. Nathan said there was nothing so easy as fault-finding. He said he had been connected with the Company for many years, and had, with other directors, lost heavily in it. The gentlemen connected with the Board represented one half of the capital lost, over £50,000, and it seemed most ungracious to attack them for the nonsuccess that had resulted through sheer misfortune. He referred to the prospects of the Company when started as very promising, prices for frozen meat, tinned meat and tallow being good, and it al&o being understood that the Company would have power to lease part of their reclaimed land, and thereby obtain enough to keep the concern going. In both ways they were disappointed. It was thought advisable to start works at) Waitara, in the centre of the cattle district : many thousands of pounds were spent there, and owing to a fall in prices they resulted in a loss. They were then removed to Auckland, and the work had since been carried on ati a loss. The Acid Works, which were looked upon as a valuable local industry, promised well for some time, but they also proved unsuccessful, and the Ice Works, for a similar reason, were removed to Sydney. There it was found while ice could be imported for 12s 6d per ton, it could hardly be made at all, and the venture resulted in a further loss. The directors had, however, acted in the interests of all concerned, and they had also been the greatest losers, and he asked the shareholders to consider these things before voting for the resolution. With reference to the retail butchery venture he stated that the Gear Company and the Frozan Meat Company at Nelson carried on large retail businesses. Mr Battley said he had sincere sympathy with the directors in the position which they occupied. He said their difficulties had been such that human foresight could not have avoided, and that he had reason to know that the directors, and especially the Chairman, had been most indefatigable on behalf of the Company. Another lengthy discussion ensued on the retail butchery venture, and Mr West having been invited to speak, as an experienced man, said that the prime joints formerly sold to butchers were not so well suited for tinning as other parts of the beef. He did not agree with Mr Dilworth's suggestion that the prime joints should have been used up in the tinned meat. After some discussion Mr Jones and hia seconder consented to withdraw the adverse resoltuion . On the motion of Mr Pierce, seconded by Mr Buddie, Messrs Green, Ching, and West were appointed a committee to confer with the directors as to the position of the Company's affairs and report to a subsequent meeting to be held for the purpose of considering the advisabilty of re-iorming the company, or going into liquidation. Proceedings terminated with a vote of, thanks to the Chairman.