coMPANY MEETING

F. W. WOOLWORTH AND CO., LTD.

EXCELLENT RESULTS DESPITE DIFFICULTIES SOUND AND WIDESPREAD BUSINESS YEAR'S TAXATION EXCEEDS £5,000,000 MR. W. L. STEPHENSON'S STATEMENT THE 32nd annual ordinary general meeting of F. W. Woolworth and Co., Limited, was held on February 14th at the Connaught Rooms, Great Queen Street, London, W.C.

Mr. W. L. Stephenson (chairman) presided.

The secretary (Mr. F. J. Pearl) having read the notice convening the meeting and the auditors' report,

The following review.of the year's operations by the chairman was taken as read:— Many of our stockholders are away from London engaged upon their duties and affairs, and there are some who will not efind it convenient to attend the annual meeting. I am, therefore, setting forth a few remarks which I would make as chairman, and enclosing same with the report and statement of accounts for the year ending December 31st, 1940. I do not intend to offer further comment from the chair on the occasion of the annual meeting, and routine business only will be dealt with.

ACCOUNTANCY DIFFICULTIES

We are some two weeks later this year in releasing the statement of accounts. In normal years we set a very high standard of promptitude in producing during the second week in January the final audited figures of the company for the previous year. When you realise the magnitude of the stocktaking after the close of the year at December 3xst, the checking and re-checking of vast masses of calculations, and the close follow-up of these figures by our auditors, you will appreciate that it was an astonishing performance. Under today's conditions we cannot keep to the high standard previously set. You will, perhaps, know some of the difficulties of delay in transit, shorter hours due to black-out, loss of experienced help, &c., and, in addition to these troubles, we have been compelled to complicate our usual simple but effective methods of accountancy in order to cover a multitude of calculations caused by the Purchase Tax on goods, and the variation in the income-tax law by which tax is deducted at source from wages and salaries. We are effectively deal- ing with these duties, but this additional work on accounting has slowed up our usual methods considerably.

ADVANTAGES OF WIDESPREAD ORGANISATION

I am afraid there is little I can say of an illuminating character about the year under review. It has been a year of great and =teasing difficulty. We have suffered some damage from the enemy and have also lost the services of the majority of our experienced nen. The many Orders and Regulations sent out from the various Government Departments have thrown a great strain upon the organisation in order to comply with them both promptly and orrectly, and the fact that we have done so reflects much credit on the whole of our staff.

Fortunately the structure of this retail selling organisation is very .despread, and the result has been that where our business has ffered, sometimes to the extent of the complete destruction of a ore and all it contained, we have been able to meet the requirements f our customers in the locality in one or more minor stores which nge the larger cities. During the year there were important move- ents of the population, but wherever they went to throughout the °luau we were there with a store to supply their requirements to e extent that our range of goods permitted. The business stabilised nsiderably as it increasingly comprised the daily necessities which e People need, and your company will endeavour to continue along ese Lines in so far as the Limitation of Supplies Order will permit.

BALANCE-SHEET AND ACCOUNTS

You have the accounts for the year 1940, from which we can briefly ummanse as follows: The net profit for the year is £7,958,159. Of amount taxation takes £4,310,910, dividend to stockholders, both reference and ordinary, will take £2,975,625, building reserve 250400, benevolent fund Proppo—a total of £7,646,535, leaving sum of £311,624 to add to the amount to be carried forward. ese represent the facts as at December 31st, 1940.

In the balance-sheet it will be noted that the properties and fixtures In substantially as they were in the last accounts, having suffered current year's write-off for depreciation as indicated in the profit

d loss account, and subject to the footnote in respect of war damageovided for in ihe War Damage Bill now under discussion in Parlia- • Whilst referring to this part of the balance-sheet you will note an item in the profit and loss account of £150,000, which Lint is set aside to provide for the contribution and premium el' the War Damage Bill for the period of 16 months ending ber 31st, 1940.

The item " Sundry Creditors " looms unusually large in the balance- sheet. There is, however, an immediate liability for the payment of something over £5,000,000 to the tax collector, including the amount due to the Government for purchase tax. On the other side of the balance-sheet, " Sundry Debtors " is greater than usual, and it is mainly due to outstanding insurance claims and payments made against goods which were not in our possession at December 3Ist, 1940. The amount shown for stocks on hand, whilst larger than the previous year, in fact represents less actual merchandise owing to the inclusion of the purchase tax in the cost of the goods.

The company's holding in Government securities has increased by £3,182,616, whereas the cash is £725,175 less than the previous year.

I think there is nothing else in these accounts which calls for comment from me. We have increased the allocation to building reserve by £250,000, which will bring this item to the substantial amount of 050,000.

PROSPECTS OF .00,000,000 TAXATION IN CURRENT YEAR

As from April 1st, 1940, profits in excess of the average for the years 1936-37 are payable in full to the Government as Excess Profits Tax. For the year 1940 this tax amounts to approximately A:1.450.00o, which is included in the provision for taxation shown in the accounts. In addition, there is included in sundry creditors a further sum of approximately £700,000 for the company's liability in respect of Purchase Tax incurred for the period from October 21st to December 31st, 1940, and from this it will be noted that the total taxes, including income-tax, arising out of the company's operations for the year 1940 amount to over £5,000,000.

The Purchase Tax, of course, operated only for a little over two months in the year in question, and then only partially, as all stocks purchased prior to October 21M, 1940, were sold without the addition of Purchase Tax.. Should the company, therefore, be able to continue its business as successfully in this year as they have in the past year, it would seem as though something near £Io,000,00o will be payable to the State on the year's operations.

MANAGEMENT AND STAFF

Your board are very happy, and not a little relieved, to be in a position to render to you such an excellent account of their steward- ship for the troublous year of 1940, and this could not have been brought about without wholehearted co-operation amongst the employees of the company.

A very large proportion of our trained men are now with the Services, and we depend more and more on women to take over responsibilities of management and other duties, and they have done, and will I am sure continue to do, a wonderful job of work. It will interest you to know that the men remaining in our employ represent only 3 per cent, of our total employees today. We endeavour to keep in close touch with all of the men who have joined the Services, and we find that the discipline and training, with an ability to shoulder responsibility, which these men learned in the service of the company, are being increasingly reflected in the fact that, although joining the ranks in most cases, quite a handsome proportion has already succeeded in obtaining commissions. It will also please you to know that your company continue to assist financially their male employees serving with H.M. Forces.

There is not time here to dwell upon the excellent work which the staff have done ; indeed there are many instances of courage and coolness and endurance under the most distressing conditions, and it is with pride as well as with appreciation that I should like to send from the directors and stockholders a message of hearty thanks to all employees of the company.

NATIONAL SAVINGS GROUPS: 25,000 SUBSCRIBERS

During the latter part of the yeas the employees of the company conceived the idea that they would like to buy a Spitfire and with their odd sixpences and shillings they provided the price of one, and the company gave them another one. enabling them to hand Lord Beaverbrook a pair of Spitfires.

We were approached by Lord Kindersley, G.B.E., the president of the National Savings Committee, relative to the formation of Savings Groups amongst our employees. The matter was put to them and received with much enthusiasm, resulting in the formation of Ito Savings Groups with just under 25,00o subscribers.

We had the misfortune to lose during the past year one of our direc- tors, the assistant managing director, Mr. E. G. Cox, who died quite suddenly after a short illness. Although comparatively a young man he had been actively engaged in the company's business for a period of over 3o years, with the exceptit.n of the time spent with the Army in the Great War, 1914-18. His passing was a sad loss to the company and his co-directors. Mr C. H. Hubbard, who had been retired from active participation in the company's affairs since the end of 1937, has relinquished his directorship. It is not the intention of the board at the present time to fill these vacancies.

TRADLNG CONDITIONS IN CURRENT YEAR

I can say very little about the prospects for the business of the company this year. We, together with all others, share the difficulties arising in these times. I can say, however, as is evidenced by the accounts for 1940, that your company's business is built on wide and well-organised foundations, and despite the interruption of the normal flow of merchandise for retail distribution throughout the country, your company's stores have managed to maintain the con- tinued support of its customers.

It is possible that the increased tempo of the war machine will produce new difficulties and further restrictions of supplies. This is something obviously so much beyond our control that I can only express the hope that there will be as little dislocation as possible.

The report and accounts were unanimously adopted