W.F.C.A., LTD.

Wairarapa Times-Age, 4 October 1943, Page 3

W.F.C.A., LTD.

SATISFACTORY YEAR RECORDED SHAREHOLDERS’ ANNUAL MEETING. CHAIRMAN REVIEWS OPERATIONS The annual meeting of shareholders of the W.F.C.A., Ltd., was held in Masterton this morning. The chairman of directors, Mr V. E. Donald, presided. In moving the adoption of the report and balance sheet, Mr Donald said that despite staff difficulties and shortage of many commodities, the affairs of the company had progressed satisfactorily. The turnover had been well maintained, exceeding last year’s, and being the highest since the year 1921. The gross profit was £114,878, against £112.036 the previous year, and £106,854 in 1941. General expenses at £69,362 showed a slight reduction of £863 from last year. After paying interest upon debentures, amounting to £3OOO, depreciating plant and fittings £1568, depreciating buildings £2206, and providing for bad and doubtful accounts, the net profit amounted to £33,272, compared with £27,318 last year, and £22,462 in 1941. With a carry forward from the previous year of £1857, there is a sum of £35,129 to be dealt with, and the directors recommended that the amount be appropriated as follows:—To payment of income lax, war tax, social security and national security taxes, absorbing £23,382; to transfer to general reserve account, £2000; to payment of a dividend to preference shareholders (free of social and national security taxes) at the rate of 3 per cent, absorbing £7,500; and to carry forward the balance, namely £2247. It was again pleasing to record that every branch of the association showed a net profit upon its operations for the year. EARTHQUAKE RENOVATION Taxation, said Mr Donald, remained at the previous year's figures, 14s and 2-3 d in every £1 of net profit, and this high rate precluded them from adding to their reserve as much as they would like, and was also the main reason why dividends had to be maintained at a low level. Earthquake renovations had nearly been completed, and a new item, viz., Earthquake Rehabilitation Account at £8063, appeared in our balance sheet. The total cost might amount to approximately £lO,OOO altogether. The company could not pay this sum out of its profits, without earning an additional £33,000 net profit, of which £23,000 would go to the Government in additional taxation. Companies or individuals who suffered earthquake loss should be able to treat repairs as a deductible item in their income tax returns. It was bad enough to suffer the loss, without having to pay the Government over double the cost in extra taxation. The law was most unjust and should be amended. FINANCIAL POSITION The stock-in-trade at £155,746, said Mr Donald, was only £2226 less than the previous year, and it was satisfactory, considering the scarcity of many commodities, that they had been able to maintain stocks as well as they had. Owing to war condition and import restrictions, many lines were in short supply, but they were at all times doing all they could to give their clients as varied a selection of goods as possible. Book debts at £44,458, showed a reduction of £12,709 compared with the previous year. Full provision had been made for doubtful accounts. Sundry creditors at £48,555 represented purchases made in July, which were paid for during the following month. The bank overdraft at £21,860 showed a reduction of £17,673 compared with the previous year, and was the lowest overdraft since the year 1917. It was only a few years ago when the overdraft was £190.000, so that a substantial reduction had taken place in the intervening period. A careful examination of the balance sheet would reveal a further strengthening of the company’s financial position, and the asset backing for preference shares, which stood at 17s 6d per share in 1933, had been increased each succeeding year, until it now stood at 23s 7d per share. Since August, 1942, said Mr Donald, the Allies had gone on from one success to another in all theatres of war, and they could look forward with quiet confidence to the future, and with hope that the enemy forces would soon be overthrown. He expressed his appreciation to his fellow directors for their; help and advice during the past year, and to the general manager (Mr J. H. Cunningham) and his staff, for their good work and loyal co-operation. TRYING YEAR. In seconding the adoption of the annual report and balance sheet, Mr. T. Jordan said that the company had come through a trying and anxious year and the staff had every reason to be satisfied with its efforts. Referring to the financial position of the company, Mr. Jordan said that in 1937 the overdraft at the Bank of New Zealand was £112,220 against £21,860 in 1943. He gave the following comparative figures for those years, the figures for 1943 being in parentheses: General reserve, nil (£12,500); taxation reserve, £4,000 (£27,901); stock, £150.836 (£155,746); bad debts, £37,100 (£355); book debts, £75,545 (£44,458); turnover, £426,000 (£501,000). Referring to earthquake damage, Mr Jordan said that since waiting on Mr. Nash on July 19, when Mr. Nash had said he was not in favour of loaning interest free money he had not been able to get any further with a proposal that interest free money should be loaned from the War Damage Insurance Account and wiped out after the war. Mr. Jordan said he thought that the matter, should be raised from the floor of the House. To his mind there should be more agitation in the matter. Mr. Jordan said that the directors had not lost sight of the “poor, unfortunate ordinary shareholders,” and it was hoped one day to give them some return for their money. Due to the present rate of taxation a rebate on purchases would not be possible. He urged 'the continued support of shareholders and pointed out that the company employed over 200 hands in the district. EARTHQUAKE REPAIRS. Mr J. H. Cunningham, general manager, said it would be necessary to have a strong deputation to Parliament regarding earthquake repairs not being a deductible item for income tax purposes. Mr, Cunningham said tjiat throughout the district thousands of people were affected. The following directors were re-elect-ed unopposed: —Messrs J. G. Brechin (representing the preference shareholders) and H. G. Williams and W.

Howard Booth (representing the ordinary shareholders). Messrs Sellar and Sellar were reelected auditors.

TAXATION. Mr Cunningham said that, assuming there were 300 working days in the year the gross profit worked out at approximately £383 per day. That was distributed each day as follows:—Salaries, wages, rates and general charges, £231; income tax, social security, national security and land taxes, £B3; depreciation, £l3; interest, £l4; sundry charges, £9; to preference shareholders, £25; leaving for addition to reserve account and carry forward, £B. Taxation amounted to 14s 0 2-3 d in each £1 of profit. There were 113 members of the staff in the armed forces, of which three had paid the cupreine sacrifice and six were prisoners of war. Several girls had gone into essential industries. Social and national security taxes paid by the W.F.C.A.'staff totalled £8053, and the W.F.C.A. paid £4159. The total taxation paid by the W.F.C.A. for the year was £23,382. The net return upon shareholders’ funds, which was 4.4 per cent in 1936, had increased each year until last year it was 13 15 per cent, of which the Government took in taxation 9.24 per cent. Mr Cunningham added that from the figures he had quoted it would be seen that taxation prevented a bigger distribution to shareholders. On the motion of Mr Jordan, seconded by Mr J. G. Brechin, a vote of thanks to the staff was carried by acclamation. Mr Brechin said that it was the directors who really appreciated the work of the staff. The balance sheet, he said, spoke more for the staff than any words he could say. Mr Brechin paid a tribute to the work of Mr Donald, who, he said, was keen and enthusiastic. A motion of thanks to the directors was also carried by acclamation. Mr Donald replied on behalf of the directors and Mr Cunningham on behalf of the staff.