TAM 1 , ^EETING I MPERIAL CHEMICAL INDUSTRIES LIMITED EXPANSION OF TRADE
LORD McGOWAN'S STATEMENT THE fourteenth annual general meeting of Imperial Chemical Indus- tries Ltd., will be held in London on May 29th. The following is a summary of the statement, issued with the report and accounts, by the chairman, Lord McGowan :
In the home trade the war has been the source, direct or indirect, of ever-increasing requirements for nearly all our products and in general the company's factories at home worked to full capacity during the whole of 1940. In particular we had during the year to meet increased demands owing to the reduction or cessation of competing imports, to the necessity to expand agricultural piroduction at home and to the fact that many of our goods are of direct importance in the manufacture of war material.
At our meeting last year I told you something of our price policy. We were able in 1940 to continue the course I described for our main products almost up to the close of the year. But the growing pressure of rising costs outside our own control then forced us to advance certain prices in the home trade and to warn our customers that we might have to make further increases at intervals during the present year. OVERSEAS ACTIVITIES War-time conditions have presented us with new problems affecting the company's activities overseas. I need not tell you we have not neglected our export trade. This branch of business is still of great national importance, for it furnishes purchasing power to pay for imported materials vital to the war effort. We have therefore regarded it as a duty to do everything possible to maintain our exports and shall continue so to do.
We have had to meet the difficulties of irregular shipping facilities and progressively more severe exchange control, while the demand abroad for the company's products in many cases increased owing to the cessation of supplies from enemy sources. The practical steps taken by the Government to foster export trade, notably the organisa- tion of the Export Council and Export Groups the extension of export credit facilities and the establishment of the 'United Kingdom Com- mercial Corporation, have proved of great assistance in this sphere.
Our main manufacturing subsidiary or associated companies in the British Empire—Imperial Chemical Industries of Australia and New Zealand, Ltd., Canadian Industries, Ltd., and African Explosives and Industries, Ltd.—continued to prosper and expand. Their object, like ours, is to serve the Empire need to the full. In sympathy with the urgent necessity in war conditions for local sources of supply, they continue to expand their own manufacturing capacity. In their respective countries they, too, are undertaking fresh tasks for their own Governments and ours and are doing all they can to help in the establishment of new factories for war purposes. We are proud to record what they have accomplished.
RESEARCH The research in our laboratories during 1940 was largely directed to efforts to assist the better prosecution of the war. In addition to service requirements manufacture of products either to replace those previously imported or to supply new demands under war- time conditions and the development of new products for sale to export markets involved considerable research in devising processes to make use of available raw materials. Our agricultural research station is co-operating with the Government on various problems related to the increase of domestic food production including the national silage campaign.
BURDEN OF TAXATION
The total gross income shown in the Consolidated Income State- ment is £18,375,000 compared with £15,343,000 for 1939. This .ncrease of £3,032,000 is chiefly due to additional manufacturing and :rading profits brought about by the larger volume of business. Net consolidated income,- however, has declined from £7,678,000 :o £6,756,000, a fall of £922,000. The factor which almost alone turns an increase of £3,032,000 in gross income into a reduction of £922,000 in net income is the charge for taxation. The net taxation burden to be borne by the company and its subsidiaries Is £7,385,000 against £3,654,00o in the previous year, an increase of £3,731090-
The effect of special war taxation on our results for 1940 may be .ilustrated by the fact that 70 per cent, of our consolidated income is required for taxation, 25 per cent, for net dividends to stock- holders, and only 5 per cent. goes to free reserves of the company and its subsidiaries.
The surplus of combined assets over combined liabilities and share capital rose from £14,666,000 to £16,204,000 during the year. The company's total reserves and carry forward amounted at December 31st, 1940, to £21,147,000, an increase of £3,000,00o ever the corresponding total last year.
In present orcumstanEes I am sure you will not expect me to make any prophecy as to the future. We are fortunate in this life and death struggle in having such a brilliant leader as our Prime Minister, Mr. Winston Churchill ; his unique qualities, his shining Courage, his staunch conviction, which we all share, that final victory must and will be oursc inspire all of us to still greater efforts, and we hope Mr. Churchill will be spared to lead us to such a peace as Will remove the menace of military aggression for all time.