MOA FARMERS' UNION.

Taranaki Daily News, Volume L, Issue 61, 28 October 1907, Page 3

MOA FARMERS' UNION.

! ANNUAL MEETING. The annual meeting ol stiareholders in the Moa. Farmers' Union, Limited, was held at Inglewood on Saturday. About seventy attended, and Mr D. Toild, chairman of directors, presided. The annual report and balance-sheet, a synopsis of which lias been already published, were submitted by the chairman, who moved their adoption. In

doiug so, lie said the trade had increased a little on the previous year's figures, and the profits were bigger, too, for last year tin::"' had been none. I'he directors had economised by stopping one of the big delivery waggons, and would dispense with the other as soon as possible, for the neavy carting of goods was ail expensive business. The day for that ITad gone. It had been all very well in the early days when there were no metalled roads and the settlors had few vehicles. But conditions had altered, and there was no reason for continuing this heavy expense. The directors hid also introduced the cash trading system, and intended to stick to it. Already, as a result, the ?iook

debts showed a decrease of £2OO or .£3OO. By the next annual meeting there should be a big difference in the amount on the books. A heavy item of expense during ilic year was the. installation of a new sanitary system, costing £7O. The bakery brancH" was being improved, and a dough-mixer was to be set up to cheapen production. .Mr Davidson seconded the adoption. There was a long discussion. In answer to Mr Hcnwood the. manager and secretary, Mr B. H. Nicholls, said that the directors had to sign a joint and several guarantee to the bank for £2OOO. and they in turn were guaranteed by some seventeen shareholders to the amount of '£loo each. This ■liability could he reduced, and the shareholders llarl the matter in their own hands. More capital subscribed would relievo the directors of the necessity for the guarantee. This was a big business, with a turnover of '£.11,0(1(1 a. year, and a stock of £BOOO, and he had to run it on a capital of £SOOO or so. It was like trying to Tun a wholesale business on a few shillings. He was continually worrying debtors for money. The bread carts did not pay. Mr Henwood further complained of the expense of the cart delivery.

Mr Henderson reminded him that he was responsible for starting the system. Mr J. Brown asked how it was that the gross profit was only a little over 12 per cent, as against 17 per cent in 1002, 18 in 1903, 19 in 1904, and 17 per cent, in 1905. ' ' !

Mr Nicholls ?aid at was easily plained Owing to the high cost of stocks, the profits on sales were not so good. They had, too, to keep prices down to meet brisk compcttion. He said that bigger profits would only have meant more money drawn from the shareholders' pockets. Mr Brown considered that the depreciation of ly., per cent on the buildings was insufficient.

It was explained that the property was valued in the balance-sheet at £2(00, or £SOO less than the Government valuation. It was saleable at even more than the latter. Hence it was unnecessary to depreciate heavily. The manager also explained that purchases had been heavy latterly in anticipation of a rising market. The shareholders would reap the benefit, particularly in the price of bread. To Mr Brown: No debts on the books were "statute-barred." The bipgest 'debt was about £IOO, Huo by a shareholder, and covered by hills. He considered 12 per cent a reasonable gross profit. To speak generally, a fair profit was "what you can make reasonably and fairly."

Mr Brown said le had been speaking to several private business firms, who had told him they eould not continue in flrasiness without a gross profit of from 20 to 22 per cent. The chairman: I can quite believe that, Mr Brown.

I Mr Sawfe remarked that private business people had built palatial residences out of those enormous profits. The Union was not designed for that. Mr Brown considered the balancesheet should give more detail and should show clearly the profit on the year. He didn't want to appear antagonistic to the Union, for he had always supported it, and never dealt anywhere else if the Union could supply him. (The manager: That's true). He was not an expert on balance-sheets, but careful study has left an impression on his mind tliri.t the directors had not written oft enough for depreciation, and had not written off sufficient for bad debts, only 1 3-5 per cent. The net profit of £143 5b !id for the year was not a half per cent on the turnover, and would pay a dividend of only 2 l-sper cent on capital and reserve. Had 3 per cent been written off the book debts—and that was not too much —there would have been a loss. The costof running had been 12.5 per cent on the turnover, or all the gross profit (12.43 per cent), and a little more. So the Society depended entirely on commissions and discounts to keep it going.

Mr Nicholls said they were in the hands of the fates, chance, and good management. He had never knoiwn any concern to make a profit every time. It was a misfortune that the direotors Ind every year to tell everything out <to the public and the shareholders. If a private firm made a loss, no one heard of it. It was significant, though, that in the past 12 years pretty wel every business in Inglewood had gone down or changed hands. Had the men been doing Well they would have* stuck to their businesses. To give an idea, of the tactics of some traders, he mentioned that the other day a local business man was selling at 14s flour that cost him 14s Bd.

Mr Brown The TJnoin owed the merchants and the bank £lO.600. Why not get in the book -debt's and reduce that liability, and the big interest item? The gross profit was ridiculous. Either they were selling goods at nominal prices, or there was a big leakage somewhere, for he knew Mr Nirholls could buy as cheaply as anyone. He considered the shareholders wore entitled to statements showing the earnings of the various departments, so that they might close down any losing ones.

The chairmban said that separate accounts were now being kept, and they would be submitted at the next annual meeting. I lie manager said the refreshment room never had paid its way, but the shareholders insisted on keeping it open Mr Cowley cosidercd the place was overstaffed. I he manager thought otherwise. Mr Sawle considered that as long as this concern paid its way, and sold goods at fair prices, its object wits ac-lii'eved. I Hey were nut looking for big dividends. It was no co-operation to drag everv penny nut of the shareholders. All- lirown reiterated that the gross pi olits would not pay working jxpenses. He was sorry to do it, but ho would move an amendment to refer the report and balance-sheet back to the directors for further information and to have greater depreciation of plant and stock. Mr larplee seconded. the manager, in explanation, said t lere was no old stock, and it was scheduled in 'the balance-sheet at invoice

'l'lif amendment was lost hy 27 to 25. •\doi?Jd I)0rt 1,11(1 ba,ance " slleo 'were then ELECTION' OP DIRECTORS M,. S s' S J Brown, R. Marsh, P. Hoby, . ' r «l«on, ir. Ycates, C. Old, F. Brace?n'dle and Nhoemark declined, nominaJlTn I s ' rro,l<1 ' A - Coutts ' w - Cowley, ' ])H,lsnn ™ elected unopposed Messrs r. 0 Kelsey and M. Hopson "'""mated as auditor, and Mr jl 0 „. -on Wits clcc-ted by 21 to ]3. The meeting then terminated.