COMPANY MEETINGS
ROLLS-ROYCE, LIMITED
LT.-COL. LORD HERBERT SCOTT (Chairman) presided over the thirty-second ordinary annual general meeting of Rolls-Royce, Limited, which was held at Derby. In presenting the report and balance-sheet he said the satisfactory figure of profit for 1938 was the result of a heavily increased turnover during that year. It was only towards the end of 1937 that the company achieved full production of the Merlin aero engine, which superseded the Kestrel, but the Air Ministry requirements for this engine necessi- tated double shift working and overtime throughout 1938, with the result that the turnover for the year in question benefited corre- spondingly. None of the turnover in 1938 was provided by the new factory at Crewe, but during the current year this factory would be making a substantial contribution to the company's output and it was anticipated that there would be a heavy increase in engines delivered in 1939. It would be clear from the figures in the balance-sheet that the real capital of the company was considerably in excess of the issued capital. This was the result of conservative finance over many years, which had enabled the company to have resources wherewith to increase its activities abnormally without having to seek new capital from the public. The accounts showed that trade and other creditors had increased by £316,715. This was partly due to the increased turnover, also to the fact that a substantial payment on account of taxation due on January 1st, 1938, was made before the end of 1937, whereas no such corresponding payment was made for taxation due on January 1st, 1939, until after the end of December, 1938. Sundry creditors at December 31st, 1938, therefore included a much larger amount for taxation than in the previous accounts. He did not intend to take up time with a discussion on world conditions.
They hoped and trusted that the present international difficulties might eventually be settled in a pacific manner, but the board were in the meantime taking every precaution to safeguard the company's interests. On the asset side of the balance-sheet there was a small decrease in the value of Govern- ment securities held, but cash and gilt-edged securities together still amounted to nearly k900,000. The increase in stocks and sundry debtors was merely an indication of the increased turn- over during the year. The profit of £479,950, together with the carry forward from the previous year of ,C91,947, gave a total of £571,897 for disposal, of which £82,857 was distributed in January last as an interim dividend of 71 per cent. The directors recommended a final dividend of 17 per cent., making a total for the year of 25 per cent., subject to income tax.
The report and accounts were adopted.
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