COMPANY MEETING REPORTS .sx JOHNSON AND PHILLIPS .sx FEATURES OF THE YEAR'S BUSINESS .sx HIGH REPUTATION FOR QUALITY AND SERVICE .sx MR G. LESLIE WATES ON THE OUTLOOK .sx The twenty-sixth annual general meeting of Johnson and Phillips , Ltd. , was held yesterday at Winchester House , Old Broadstreet , E.C. , Mr. G. Leslie Wates , J.P. ( the chairman ) , presiding .sx The Assistant Secretary ( Mr. W. W. Redman ) having read the notice convening the meeting and the auditors' report .sx The Chairman said :sx Gentlemen , - Before dealing with the ordinary business of this meeting , it is my painful duty to report the death in July last of our late Chairman and managing director , Mr. John Macgregor .sx Mr. Macgregor originally joined the late Mr. Walter Claude Johnson more than fifty years ago , and he very quickly became an important member of the staff of the business as then constituted .sx When this company was registered in 1905 he was appointed joint managing director , and subsequently in 1909 , became sole managing director and held that office until the date of his death .sx Since the death of Mr. Walter Claude Johnson , in 1928 , Mr. Macgregor had also occupied the position of chairman .sx During all these years he gave of his best to the business :sx he saw it through times of trouble and distress and in times of prosperity .sx He had a very large part in building the structure of the business on firm and solid foundations , the benefit of which we are realising to-day .sx He was a man of a lovable nature and of sound and mature judgment and experience .sx To those of us who knew him so intimately , it is impossible to speak in other than terms of the highest affection and regard , but thanks to the good work that he did during the years of his greatest activity in the business , the organisation is such that his loss , sad though it be , has not created such disturbance as might have happened under other circumstances .sx MR. SHEPPARD APPOINTED MANAGING DIRECTOR .sx You will no doubt recollect that Mr. Macgregor sustained a very serious motor accident a year or two before his death , and prior to and since that accident Mr. Sheppard had gradually been relieving Mr. Macgregor of numerous details of his work .sx The directors , therefore , felt no hesitation whatsoever in appointing Mr. Sheppard to be managing director of the company in the place of Mr. Macgregor , and we are quite sure that in him we have the best possible administrator .sx My colleagues have done me the honour to appoint me chairman of the company , and I am very pleased to give every assistance in my power to the business with which I have been closely associated for 24 years .sx THE BALANCE-SHEET .sx Having regard to the matters I have just referred to , you will perhaps consider it not inappropriate if I deal with the figures of the balance-sheet and profit and loss account in somewhat greater detail than has been customary at our recent meetings .sx Dealing first with the assets side of the balance-sheet , the freehold land and .sx 1905 , you will realise that we have a very substantial hidden reserve in this item , if we consider present-day values of land and buildings compared with the figures of 26 years ago .sx The land and buildings have not been written up in spite of the increase in values since the war .sx The next item of plant and machinery , furniture and fittings represents the cost of these items less depreciation .sx As the plant has been consistently maintained out of revenue , and the depreciation which has been written off is in addition to such maintenance , the figure appearing in the balance-sheet can be taken to be a conservative one .sx We have recently got out figures showing the replacement value of the plant and machinery , and the total is substantially in excess of the balance-sheet figure .sx Patents , licenses , etc. , is a small item which need not detain us .sx Stock-in-trade and work in progress is valued as usual on the basis of cost or market value , whichever is the lower .sx The work in progress does not include any item of profit .sx During the past year there has been a continued fall in the cost of raw materials , although I am glad to say that , as a result of the exercise of careful judgment on the part of our managing director and staff , we have been very fortunate in our purchase of raw material .sx This fall in material values has been fully taken into account in the valuation of our stock-in-trade and work in progress , and this fact is responsible to some extent for this item appearing at a lower figure than the corresponding item in last year's accounts .sx Sundry investments comprise relatively small holdings in companies in the electrical industry who are or have been at one time associated with us in business .sx NEW SUBSIDIARY COMPANIES .sx We next come to the item of subsidiary companies , which shows a substantial increase over the figures of last year's balance-sheet .sx Those of you who were present at the annual meeting last year will , no doubt , remember that in Mr. Macgregor's speech he referred to two subsidiary companies , one being our South African branch ; where during 1929 we formed a separate company to deal with the South African trade , and the other being the Midhurst and District Electricity Company Ltd. , which was formed by us for the purpose of taking up from the Electricity Commissioners an order for the Midhurst area .sx These two companies are still owned by us and operating successfully .sx In addition , we have during the year promoted , through the medium of subsidiary companies , an order for the supply of electricity to Dunoon , in Scotland , to Helen's Bay , in Ireland , and to Ringmer and district , in Sussex .sx In every case we have taken the best advice as to the possibilities of the area from an electrical point of view .sx The Dunoon supply was inaugurated with considerable local rejoicings in the autumn of last year .sx My colleague , Sir Philip Dawson , travelled specially to Dunoon , with Mr. Stewart , in order that this company might be fittingly represented at the inaugural ceremony , which was attended by almost every electrical notability in Scotland , and attracted considerable Press and other attention .sx I am pleased to say that this subsidiary company is already making good progress , and your Board have at present under consideration proposals for the extension of its activities into several districts adjoining Dunoon .sx These subsidiary supply undertakings are of value to your company in several ways .sx In the first place , they provide orders for our factories .sx In the second place , they are sound and promising investments which should appreciate in value with the passage of time .sx Thirdly , their growth and extension and the use of electricity in the premises which they serve create a further regular flow of orders to our works .sx Naturally , with all new undertakings some time is required before they can be developed to the profit-earning stage , but we have every hope that both the Midhurst and Dunoon companies will have reached the dividend producing stage by this time next year .sx Our South African company , you will be pleased to hear , is already on a profit-earning basis .sx FINANCIAL RESULTS .sx Before passing from this item of subsidiary companies I wish to draw your special attention to the statement at the foot of the balance-sheet , which is made in accordance with the Companies Act .sx You will see from this that full provision has been made in the accounts for the aggregate losses of the subsidiary companies , but profits have not been taken into account .sx The item has therefore been dealt with on the most conservative lines .sx The actual figure of net loss , after taking into account a reserve made on this account last year which is not now required , is only 356 9s 9d , and this loss only arises after the subsidiary companies have paid to this company , and been charged in their accounts , with upwards of 2,000 in respect of interest on their debentures due to this company .sx You will therefore see that , so far as the operation of the subsidiary companies are concerned , they have been carried on at a profit .sx Sundry debtors - The amount is less than last year , but is compensated by an increase in cash and decrease in creditors , and calls for no special comment .sx Bills receivable and cash at the bank show a satisfactory liquid position , but no more than is necessary having regard to the volume of the business of our company .sx The value of orders on the books is greater now than it was at this time last year , and there are many interesting developments in prospect .sx No one in these days can fail to be aware that new fields are opening out almost daily before our industry , and it is absolutely necessary that our liquid asset position should be a strong one , so that we may be in a position to take advantage of our opportunities when they arise .sx Turning to the liabilities side of the balance-sheet , you will be interested to know that the share capital ( which remains unchanged ) is held by about 3,000 individual shareholders , making an average holding of about 200 shares per member .sx The Six per Cent .sx First Mortgage money was somewhat costly , and for some time your company paid 8 per cent .sx interest on the stock .sx In the year 1925 your company was able to persuade the debenture holders to accept 6 per cent .sx interest , and the substantial saving thereby effected enures to the benefit of the shareholders .sx The item of sundry creditors appears at a relatively small figure , as , by reason of the healthy-cash position , we are able to take advantage of all cash discounts and to buy all our raw material on the most favourable terms .sx The reserve accounts speak for themselves and bring us to the balance on profit and loss account .sx THE YEAR'S TRADING PROFIT .sx The trading during the year 1930 has produced a slightly smaller trading profit than during the preceding year , but this will hardly come as a surprise to shareholders .sx The profit figure compares very favourably with that of recent years , being higher than any year since 1925 with the sole exception of last year .sx The profit is the third highest in the history of the company .sx During the first nine months of 1930 trading was quite satisfactory and orders were plentiful .sx There developed , however , during the last few months of the year a very great and somewhat sudden depression in all trades , which affected us , with others , although I am thankful to say to a smaller extent .sx This period of the autumn and winter of last year was the most serious the country has yet been through , the number of unemployed increasing by very large numbers .sx Although our industry is in a most favourable position , in not being affected so much as are some other industries by general economic conditions , yet no world-wide depression can occur without leaving its mark on us in greater or less degree .sx Having regard to these circumstances and the exceedingly difficult conditions experienced , particularly during the latter part of the year , your directors consider the trading profit satisfactory .sx ACTIVE SALES ORGANISATION .sx We are satisfied that we have secured a higher percentage of the total business available than in previous years , and this we believe to be largely due to our very active and efficient sales and distribution organisation and to the high reputation for quality and service which we have obtained by always insisting on giving to our customers of the best , and never being satisfied with the second best .sx The reduction in turnover which has resulted in the reduction of trading profit is rather in value than in volume , due partly to the continued fall in the cost of raw materials throughout the year , on which I have already commented .sx There are three items on the debtor side of the profit and loss account to which I would like to draw your attention .sx The first is the interest on the First Mortgage debenture stock , which now stands at 13,695 6s only , against a figure of 28,000 when this stock was first created .sx