The chairman replied at length stating, that, while recognising the hardship on shareholders, the directors in this instance had carefully consid- ered this resolution and were of opinion that it was in the interests of the whole body of shareholders and the Company generally that this resolution should be passed, and in fairness to the shareholders they had, though they need not have done so, consulted them in the matter.
The amendment was lost, only three out of a large gathering of share- holders voting for it.
As a matter of policy it could not be publicly explained to the meeting that the call was necessary in view of the immediate purchase of the Hong Kong Ice Company, of which large concern the Dairy Farm Company had been the biggest customer, that part of the price to be paid was in shares of the Dairy Farm Company and that these shares would not be acceptable to the vendors unless fully paid up. Thus, on the carrying of the resolution submitted by the directors was the Company placed in a position of complete independence of any outside company for its cold storage facilities so essential to its business as well as to supply the community with ice. The shareholders have since had every reason to congratulate themselves on the deal as the report of the next annual meeting (6th October, 1918) testifies. At this meeting, Mr. W. S. Brown presided and again placed a satisfactory state- ment of accounts before the shareholders-another record despite abnormal conditions due to the war. He said "Our sales for the year, I am glad to say, show a substantial increase over those of last year, creating a new record for the Company. It is due to this increasing turnover that we are able to present such satisfactory accounts to you and to maintain the same dividend as the last two years. Your directors have been pleased to vote to the staff a 10% bonus on their salaries, which will doubtless meet with your approval as also the donation of the sum of $2,500 to the local War Charities. Prices of commodities, owing to the war, have ad- vanced considerably, thus reducing the margin of profits, whilst our retail prices have been maintained at a reasonable level so as not to impose any undue hardship on the consumer. The high rate of exchange has gone a long way to counteract the increased freights and first costs of food-stuffs imported from gold currency countries, but a considerable part of our purchases, such as cattle food, etc., and other expenses, are in local currency which are not directly affected by exchange. As a matter of fact, the cost of all food-stuffs for the maintenance of our herd have advanced, thus increasing the cost of production of our fresh milk and other dairy produce, but, in spite of this, the price of milk has not been increased. In connection
with the milk supply it is worth mentioning that after years of persistent endeavour followed by many disappointments we have at last been able to fill the gaps, caused by death, etc., in our herds, with young stock bred on the farms, and this is the only year in the history of the Company when we have not found it necessary to spend large sums of money on the importa- tion of new cattle. This is most fortunate under present circumstances, as owing to the scarcity of freight space and the enhanced value of live stock the cost of importation has become prohibitive. The Company's dairy herd to-day is, in the opinion of the manager, second to none east of Suez. The purchase of the business and undertaking of the Hong Kong Ice Co., Ltd. is now completed and the cold stores and other facilities are bound to have a beneficial effect on the expansion of the various branches of our business. The advisability of our having our own cold storage accommodation was considered by your directors, but the idea of erecting such stores was abandoned when the Hong Kong Ice Co., Ltd., which now offers almost all the facilities we require, was acquired. Our ham and bacon curing and meat canning can also be handled more economically and expe- ditiously. With regard to the meat canning scheme, you will perhaps remember that a few months ago a report by the American Consul-General appeared in one of the local papers copied from one of the American papers; this business, however, I am sorry to say, has not yet made much headway owing to the difficulty of obtaining the necessary machinery, but we hope to be able to begin on a small scale in the near future with the machinery we have on hand. Other and more up-to-date machinery will be imported in due course and we hope to be able to create a demand for our product in this line. You will observe from the accounts that the sum of $22,584.66 has been spent during the year on repairs and improvements of the Com- pany's machinery and property, and that the sum of about $30,000 has been expended on new and additional buildings to meet the requirements of our business. Following our usual custom, we have written off for depre- ciation, bad and doubtful debts, the sum of $28,384.24 thus leaving a net balance of $158,431.59 for appropriation, which your directors propose to deal with as follows:-
Pay a dividend of $2 per share on the Company's 60,000 odd
shares, absorbing $120,000.
To place to Cattle Reserve $20,000, and to add $10,000 to Fire and Typhoon Insurance Fund. thus raising these reserves to $100,000 and $60,000 respectively, and to carry forward to next year's account the balance, viz. $8.431.59.
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