W.F.C.A. LTD.

Wairarapa Times-Age, 7 October 1941, Page 6

W.F.C.A. LTD.

PAST YEAR’S OPERATIONS TURNOVER MAINTAINED. CHAIRMAN OF DIRECTOR’S REVIEW. “I would like to state that the affairs of the company have progressed satisfactorily, despite the difficulties under which we are all working in these days of stress and tribulation,” said Mr V. E. Donald; chairman of directors, when moving the adoption of the report and balance sheet at the annual meeting of shareholders of the W.F.C.A. Ltd., held this afternoon. “Despite the fact that many thousands of our men are serving in various fields of war, and thousands more have spent long periods in Territorial camps, our turnover has been maintained, and the gross profit is only slightly less than that for the previous year, being £106,859 against £108,746,” said Mr Donald. “General overhead costs show a small decrease of £782, which indicates that rigid control has been exercised. After paying interest upon debentures, amounting to £3OOO, depreciating plant and fittings £2304, depreciating buildings £2263, and providing for any bad and doubtful accounts, the net profit amounts to £22,462, against £22,044 last year, and £15,738 in 1939.

DIRECTORS’ RECOMMENDATIONS

“With a carry forward from the previous year of £1255, there is a sum of £23,717' to be dealt with, and your directors propose that same be allocated as follows: —To payment of income tax, war tax. Social Security and National Security taxes, £13,328: to transfer to general reserve, £1,000; to payment of dividend on preference capital at the rate of 3 per cent (free of Social Security and National Security taxes) absorbing £7,500; and to carry forward the balance, namely £1,889. it is again satisfactory to record that every branch of the association showed a net profit upon its operations for the year.

COMPANY TAXATION. “I have previously referred to the extremely high rate of company taxation —a burden which makes it difficult for those concerns which do not possess substantial reserves, to place their affairs in such a position that they will be able to provide for the drop in stock values which is inevitable when the war ceases and an open world’s market is again available. The rate our company pays in taxation fs 12s 0.75 d in every pound of net profit, in addition to land tax — a colossal burden. If the bulk of the taxation collected was required for war purposes, there would be little complaint, but last year, only about one-quarter was utilised for war expenditure, whilst three-quarters was utilised to maintain our civil needs. This year the proportion will probably be about one-third to war and twothirds for civil expenditure. What a scope there is for adjusting Government departmental expenditure, which would give a measure of relief to those companies and individuals who are being taxed up to the hilt. As a matter of interest to shareholders, during the year our staff paid to the Government for Social and National Security taxes, a sum of £5938; add to this the amount of such taxes paid by the firm, namely, £2246, which makes no less a sum than £BlB4, contributed as a result of the operations of our company. This is in addition to income and land tax.

COMPANY’S ASSETS. “Stock-in-trade at £168,934, has been maintained at the previous year’s level, when it stood at £168.730. Owing to war conditions, and because of import restrictions, many lines are now in short supply, but we are doing our utmost to watch the interests of our clients and give them as good a selection of goods as is possible. Properties have been maintained in good order and condition, and depreciation has been written off the book values to the full extent allowed by the Department, for income tax purposes. Plant and machinery are shown in the balance sheet in a slightly different form on this occasion. We have always written down our plant in a drastic degree, and built up a depreciation reserve, which, in order to enable us to obtain the maximum allowance for income tax purposes, is now shown in the published accounts. Book debts show a reduction from £70,450 last year to £61,094 —a drop of £9356, and full provision for doubtful accounts has been made. The bank overdraft has been reduced by £14,812. If carefully scrutinised and compared with previous years, the balance sheet will disclose-a further strengthening of our.financial position, and the asset backing for preference shares, with stood at 17s 6d per share in 1933, has been increased each succeeding .year, until it now stands at 23s 6d per share.”

FARMING PROSPECTS. Mr Donald proceeded to state that the farming community had experienced a good season, but the disposal of produce was causing some concern. Farm labour was also very difficult to secure. At the request of the Government, many dairy farmers had changed over from butter to cheese production. There was an increase in the quantity of wool sold from 733,775 bales in the 1939-40 season to 798,365 bales in the 1940-41 season. The value per bale was £l7 8s 9d, and the total realisation amounted to £13,922,422, being £1,204,294 in excess of the 1939-40 season. The shortage of refrigerated vessels had caused a good deal of concern, and restricted the killing of certain classes of stock for export trade. The past season was not affected to the extent the coming season was likely to be, unless the shipping position improved very greatly. With thousands of their meh overseas, industry was feeling their loss, and production would fall, unless those physically fit men at present unemployed (or unproductively employed) were brought back into occupations which were .of national value. At the expiration of the war, prices would recede, and dairy produce would suffer severe competition from European countries, which were at present unable to export to England, . and the competition from margarine would be severe. They should prepare for this eventuality and save as- much as possible, which would stand them in good stead when that competition came. This applied to individuals as well as to commercial concerns. A few weeks ago Mr Churchill launched' the “V” for Victory Campaign. The tide was turning in Britain’s favour. New Zealand lads were playing a distinguished

part, and they were proud that 38 members 01 the firm’s staff were serving in the Navy, Army and Air Force. While intensifying their war effort, said Mr Donald, they should also now plan for peace. Plans should be made for the rehabilitation of their men. Was there not scope for absorbing them into industry? What an opportunity for the Government to place thousands of such men upon building permanent assets such as houses, which were still in short supply—not houses to be owned by the State, but rather the aim should be to encourage each family to occupy its own home, thereby providing an incentive to save. “I would like to express thanks to my fellow directors, who have at all times given their help and advice, and also to our general manager (Mr Cunningham) and his staff, for their loyal co-operation,” said Mr Donald in con-, elusion.