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October, 1898, to the 31st July last, the end of the financial year, the health of the herd has been above the average, and the loss by death less than for several years past, although rinderpest was rife in other dairies in the Colony, as also on the mainland. The effects of sickness in our herd in February, 1898, was much felt in the first part of the year under review, when, through a short supply of milk and enhanced cost of food-stuffs and management, we were barely meeting expenses, but with a general improvement in the health of the cattle and a large increase in milk returns, we were able to take full advantage in the curtailment in the supply of other dairies through rinderpest. I may state that the whole of the herd were carefully valued by our manager, Mr. James Walker, at a low basis, and on his valuation your directors deemed it prudent to write $7,755.38 off the book value. We have commenced business in fresh Australian butter with encouraging results, and we think the trade admits of large expansion. We had intended holding the meeting earlier in October, but owing to an outbreak of rinderpest in a shed at Pokfulum on the 25th September, it was decided to await the result. Fortunately the disease was confined to one shed, the stock in which consisted entirely of your heifers, ten of which died and one cow. We were granted a clean bill of health on the 1st Decem- ber, but I much regret that on the 15th inst. rinderpest again made its appearance. We do not anticipate much loss from the latter outbreak, and trust we shall soon be in possession again of a clean bill of health. As mentioned in the report, we have to deplore the death of the senior member of our board, Mr. Granville Sharp, who for many years acted as chairman and devoted a large amount of time and thought to the affairs of the Com- pany. After careful consideration, your directors recommend a dividend of thirty-six cents per share, being at the rate of 6% on the paid up value of the shares."
On December 8th, 1902, the sixth annual meeting was held, and the chairman was Mr. F. Maitland, who said in his speech - During the period under review, we have had to battle against a rather bad attack of rinderpest, the worst since 1896, but we again got over it without very serious loss to the Company. Still further precautions are now being taken to keep the dreaded disease from our farms. We have often thought that the pest was contracted through imported fodder, and as this is now cooked we trust that it will have the effect of freeing us from the disease. Our receipts have increased to a considerable extent, but so have our expenses, and during the year ended 31st July last, we spent more than we earned in building four fine new cow-sheds and a dairy house at Pokfulum, includ-
ing cost of a pasteurizer, and a sterilizer from home, repairs and alterations to manager's house and new cattle. Doubtless we shall feel the benefit of this expenditure in the future, but it is a question whether or no we have been extending on a little too large a scale for our small capital. But for the loss of cattle through rinderpest, our death rate has been small, and at present our herd is in splendid health. I would mention that during the past three years, the following increases have taken place in cost of main- tenance and cattle :--
Food-stuffs
60%
Wages
30%
Cartage
50%
Cattle
65%
But for the much larger turnover, the Company could not well have been run except at a loss, and the question of a rise in the price of milk is now under consideration of your directors. There appears to be little chance of the cost of maintenance and cattle ever being reduced to the normal prices of a few years ago, and it appeared to your directors that we must meet the increase by charging more for our milk.
I have now
to touch with much regret on the disappearance of our secretary, who absconded early in October after embezzling the Company of a large sum of money. His defalcations to 31st July, 1902, amounted to $5,735.26 and this sum has been written off Profit and Loss Account.
I am sorry that a sum of $5,296.15 will also have to come off the next account, making the large sum of $11,031.41 misappropriated funds. I can only say that he was thoroughly trusted by your directors and that he deceived them. Immediately I discovered his disappearance, I swore an affidavit for his arrest, but unfortunately he had left Shanghai. He has, however, been arrested in America and the Government has taken up the case as a criminal offence, and have applied to the United States authorities for his extradition. There is, I fear, no chance of getting any of the money back, for he started to misappropriate the Company's cash eight months ago. Should any shareholder desire further particulars of his defalcations, I have them before me and can either give them to the meeting or he can wait and inspect them after this meeting, We have engaged Mr. S. A. Seth as secretary. Your directors desire to record that they have been very pleased with Mr. James Walker, our manager, for the zeal and attention he has shown in the Company's interests. In view of the great increase in the business of the Company, we have engaged at home a Mr. Allan Stevenson to act as
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