W.F.C.A. LTD.

Wairarapa Times-Age, 7 October 1940, Page 4

W.F.C.A. LTD.

SHAREHOLDERS’ ANNUAL MEETING HIGHEST TURNOVER SINCE 1930. COMPANY’S FINANCIAL POSITION STRENGTHENED. Speaking at the annual meeting this afternoon of shareholders of the W.F.C.A., Ltd., the chairman of directors, Dlr V. E. Donald, presenting the balance sheet and directors’ report, said: “In addressing you last year, I expressed the hope that the war upon which Great Britain and the Dominions had entered upon the cause of justice and freedom, would be of short duration, but such was not to be, and we have now entered the second year of hostilities. We, in New Zealand, are fortunate in that we have been spared the horrors of warfare. Our thanks are due to those men of the British Navy, the Royal Air Force, the infantry, and to the members of our Expeditionary Force, all of whom have done and are continuing to do such wonderful work. We are filled with admiration at the magnificent work of our men, who are inflicting severe damage on the enemy and are keeping the seas open for the export of our primary products. Our sympathy goes out to those people who are feeling the ravages of war. and we can only hope that Hitler and his murderous gangsters will be overthrown in the near future, and that a lasting peace will then ensue.

TURNOVER VERY BUOYANT. “Dealing with the affairs of the com- . pany, the turnover for the year was [ very buoyant and reached the highest figure recorded since the year 1930. The gross profit showed a substantial increase, being £108,746, against £103,422 last year—an increase of £5324. Overhead costs show a nomI inal increase of £562, occasioned by increases in award rates of wages, I which have, however, been offset to some extent by decreases under other headings. After paying interest on debentures, amounting to £3OOO, depreciating plant and fittings £2646, depreciating buildings £2210, expending a sum of £l2BO in renovations,, and providing for all bad and doubtful accounts, the net profit amounted to £22,045, against £15,738 last year, an increase of £6307. This profit, together with £728 from last year, makes an available sum of £22,773, which the directors propose be dealt with in the following manner: — “To transfer to taxation reserve account, in order to pay income tax, war tax, social security and national security taxes, £13,018. “To transfer £lOOO to general reserve account, bringing same to £9OOO. “To pay a dividend at the rate of 3 per cent to preference shareholders, absorbing £7500. “And to carry forward the balance, namely, £1255. “It is satisfactory to record that every branch of the association succeeded in showing a net profit on its operations for the year. • BURDEN OF TAXATION. “The tremendous burden of company taxation makes it very difficult to increase our general reserve account, but a sum of £lOOO has been added. Taxation has reached a very high figure—apart from land tax, costing our company £1690 —income tax now absorbs nearly 12s Id in the £l, made up as follows:—Ordinary income tax, 8s 9d in the £1; plus special war tax 15 per cent; plus Is in the £1 social security tax, plus Is in the £1 national security tax. If one were satisfied that the bulk of this taxation was to meet war measures, there would be little complaint, but such is not the case. Out of a Budget of £99 millions, only £37.5 millions is allocated for defence and war expenditure, whereas £62 million is allocated for social services and public works. This latter sum is altogether too high, and unnecessary expenditure should, under the conditions now ruling, be curtailed as much as possible. The public debt increased last year by about £l9 millions and now reaches the colossal figure of £322 millions. i

STOCK-IN-TRADE INCREASED. “Our stock-in-trade has been increased by £19,726 over the 1939 figure, and in this regard we are well placed in being able to look after the requirements of our thousands of customers, and to safeguard us against uncertain and slow deliveries in the future. Plant has been kept up to date, and adequately depreciated, and our buildings have been kept in order and our accounts in respect of such buildings have borne depreciation to the full extent allowed by the Income Tax • Department as a deduction for income tax purposes. An analysis of our balance sheet shows a further strengthening of our financial position, as the asset backing for preference shares, which stood at 17s 6d per share in 1933 and 22s 8d in 1939, has been increased to 23s 4d. Our debenture issue of £60,000 has. by arrangement with the individual holders, been extended for a further 10 years, and the new maturity date is September, 1951. Interest on this issue will continue to be paid at the rate of 5 per cent petannum. CALL FOR MORE PRODUCTION. “The farmers of New Zealand were asked to increase production—particularly of cheese and bacon—and have responded magnificently, and which will ensure that a greater quantity of these commodities will be able to be shipped to England during the next export season. For the year ended June 30, 1940, our exports reached a record figure, being £65.87 million against £57.85 million for the previous year, and this increase of £8.02 million, together with a decrease in imports of £10,43 million, gives us a substantial surplus, thereby building up our London funds.' Our increased exports are not so much because of greater production, but rather as the result of higher prices ruling for our piimary products. There has been a decline in the quantity of butter exported; but on the other hand, there has been an increase in the quantity of cheese. Mutton and lamb show increases in quantity exported, but wool fell in volume but rose in value by nearly £2 million. Generally speaking, we can say, therefore, that farmers have experienced a satisfactory year, not so much because of greater production, but because of the higher level of prices. Additional revenue was, of course, offset by increased cost of farming operations.

NEED FOR SAVING. ‘.‘Last year I referred to the necessity of endeavouring to save and build up a reserve for a rainy day, and this should apply to not only the Government, but also to private individuals. I am afraid that such advice fell mostly on deaf ears. I would, however, commend to you for your serious consideration the remarks of the Chancellor of the Exchequer, Sir Kingsley Wood, appealing to the people of Britain and warning them against the perils of inflation: ‘They could live for a time in the fools’ paradise of inflation, but it would be a short life and not a gay one. It seemed an easy course at first sight, to create money and credit —it cost nothing at first, for inflation was nothing more original than postponing the day of reckoning.’ “'The words of the Hon Winston Churchill, delivered at Manchester, will also bear repeating: ‘Come t|ien, let us to the task, to the battle ■ and the toil —-each to our part, each to our station—fill the armies, rule the air, pour out the munitions, strangle the J U-boats, sweep the mines, plough the ( land, build the ships, guard the streets, succour tile wounded, uplift the downcast mid honour the brave. . . Let us go forward together in all parts of the Empire, in all parts of this island. . . There is not a week, nor a day, nor an hour to be lost.’ "We might well ask ourselves, are we doing our utmost? We have certainly sent overseas some thousands of soldiers and airmen—but are those remaining behind doing all that might reasonably be expected? We should aim to achieve greater production, avoidance of waste, work harder, spend more wisely, and save for a rainy day. "In conclusion, I wish to thank the members of our board of directors for their great help during the past, also our general manager (Mr Cunning-

uim) and his staff, for their loyal coperation.”