COMPANY MEETING

RAND MINES, LIMITED

POSITION SATISFACTORY IN ALL RESPECTS DIVIDENDS MAINTAINED FINANCIAL POSITION FURTHER STRENGTHENED

MR. JOHN MARTIN'S SPEECH

Mn. JOHN MARTIN, the chairman, presided at the annual meeting of Rand Mines, Limited, held in Johannesburg on April 24th. In moving the adoption of the report and accounts, the Chair- man reviewed the operations of the company and said that the ' position was satisfactory in all respects, dividends distributed having been maintained at the same rate as in the two previous years and the company's already strong financial and investment basis having been further strengthened.

The profit earned had been £923,827, a decrease of £36,582 on the corresponding figure for the previous year That profit was exclusive of profits derived from the sale of investments which, in accordance with the established policy of the company, had not been utilised for dividend purposes but were available for reinvest- ment in its undertaking.

SALE OF RESERVE SHARES During the year 25,000 reserve shares in the company had been sold to General Mining and Finance Corporation, Limited, at £8 6s. rd. per share. The proceeds of that sale had been devoted to the purchase from that corporation of a large share of interest in West Rand Consolidated Mines, Limited.

The balance-sheet showed that the premium on those reserve shares and the amount realised by the sale of investments, less their book value and the amount written off investments generally, together had totalled £193,356. That sum had been added to the investment reserve account which, on the other hand, had been depleted by retransfer to the appropriation account of £316,139, which was the excess of receipts from reserve shares and invest- ments sold over the expenditure on new investments purchased.

Although the investment reserve account had consequently been decreased by £122,783, it had amounted at the year end to the sub- stantial total of £3,763,915. The balance of the appropriation account had increased by £379,959 to £944,565, represented by cash and cash assets after allowing for all liabilities except contin- gent liabilities. The company's contingent liabilities to guarantee and subscribe for shares in and to finance certain undertakings had been further reduced in total, and it had ample resources to meet all such commitments as and when they matured.

THE INVESTMENTS Investments in shares and debentures had been brought into account at a book value of £4,239,779, a decrease of £107,795, com- pared with the total at the end of the previous year. All invest- ments for which share market quotations were available appeared in the books at or under cost, but in no case above the market price on December 31st, 1938, and in instances where it had appeared to the board to be prudent, holdings had been written down both below cost and below market value.

Unquoted securities had been entered in accordance with con- servative values placed upon them by the directors, and in no case at a valuation exceeding the cost. It was evident from the schedule of investments appearing in the accounts that their market value had largely exceeded the book value stated in the balance-sheet. The market value of the company's gold-mining interests at the end of the year had represented 83.4 per cent, of the market value of all its investments, and 90.4 per cent, of those goldmining interests had been dividend producing.

GOLDMINING INDUSTRY'S PROGRESS The goldmining industry had maintained steady progress. Three new mines had been brought to producing stage. The industry's requirements of native labour continued to increase. The supply of such labour from the Union and British protectorates had shown a welcome improvement during 1938, but on the other hand the Portuguese Government had withdrawn—temporarily it was to be hoped—its permission for the mines to employ ro,000 Portuguese natives in addition to the 8o,00o allowed under the 'terms of the Mozambique Convention.

Experimental employment of "tropical" natives from areas north of the latitude 22 deg. south was making good progress. Results obtained as regards their health and mortality were gratify- ing and encouraged hope of the industry being permitted in the near future to obtain important additional supplies of native labour from those sources.

RELATIONS WITH TRADE UNIONS The satisfactory relationship established between the industry and recognised trade unions had been maintained. The "closed (Continued on top of next column)

RAND MINES, LIMITED

(Continued from previous column) shop" agreement concluded in 1937 was working smoothly and to their mutual satisfaction. The maintenance of industrial peace had been greatly facilitated by important improvements which had been effected during recent years in conditions of employment, by concessions under holiday leave regulations, and by the granting of holiday leave allowances, by the payment of a medical benefit allowance, and particularly by the establishment in 1934 of the Witwatersrand Gold Mines Employees' Provident Fund and the inauguration a year ago of a savings branch of that fund.

The total cost of all benefits which had been introduced was at least £53 per annum for each European employee, equivalent to an increase of 20 per cent, or more on the standard wages of the lower paid employees and representing an average increase of about 14 per cent, for all employees.

The tonnage of ore milled by the Witwatersrand Mines of the group had increased during 1938 by 415,700 tons as compared with 1937 to a fresh record of 19,005,700 tons. The average yield of gold per ton milled at 4.019 dwt. had shown a further small reduction of .085 dwt.

TOTAL WORKING PROFIT Working revenue had increased by £324,723, but working costs had increased by £378,564, and on balance the total working profit had been slightly lower at £8,885,418. The total amount distri- buted as dividends at £4,988,195 had been almost identical with the corresponding figure for 1937.

The average residue value for the past year had been reduced by .018 dwt. to a record low level of .186 dwt. per ton, an achieve- ment which reflected great credit on the metallurgical staffs at the mines and at head office. The development accomplished had totalled 654,427 ft., or 39,128 ft. less than the previous year's aggregate.

The available payable ore reserves of the z r mines totalled, according to latest recalculations, 76,396,900 tons, an increase of 1,743320 tons compared with the preceding estimate.

Mining accident mortality rate had increased slightly from 1.07 per t,000 in 1937 to 2.02 per r,000 in 1938. On the other hand, mortality rate from diseases among native employees of the group had decreased from 6.82 per i,000 in 1937 to a new and gratifying low record of 5.57 per 1,000.

CARE OF LABOUR FORCE

Care of a labour force of over too,000 natives, representing half- a-dozen different races and with an annual turnover of nearly too per cent., represented a major problem, and the group's chief medical officer and native labour adviser and the medical and compound staffs of individual mines were to be congratulated on the success that had been achieved in its solution.

As an example of what had been accomplished, incidence among native workers on the mines of the group of tuberculosis, the scourge of primitive races, had been progressively reduced from 11.78 per r,000 in 1915 to 1.8o per 1,000 in 1938.

In 1911 the death rate from pneumonia among natives employed by the mines of the group had been over 12 per thousand, the death rate from tuberculosis of the lungs about four per thousand, and the total death rate from all diseases over 30 per thousand. In 1938 those rates had been 2.28, 0.38, and 5.57 per thousand respectively.

The mines of the group had employed last year an average of approximately 5,700 " tropical" nauves recruited from areas north of latitude 22 deg. south, and it was of interest to note that the mortality from pneumonia among those had been 2.99 per thousand and the total mortality from all diseases 5.99 per thousand. Those rates corresponded very closely indeed with the ones already quoted for all natives employed on the group's mines.

The report and accounts were adopted unanimously.