COMPANY MEETING

RAND MINES LIMITED

YEAR OF PROSPERITY DESPITE DIFFICULTIES DIVIDEND OF 160 PER CENT.

MR. W. H. A. LAWRENCE ON THE LABOUR POSITION

THE annual meeting of Rand Mines, Ltd., was held on April 25th in Johannesburg.

Mr. W. H. A. Lawrence, deputy chairman presided in the

unavoidable temporary absence of the chairman, John Martin, on other business.

In moving the adoption of the annual report and accounts, the Deputy Chairman said that the year that had passed since the last annual meeting had at different stages witnessed changes, diffi- culties, and alarms. Because of the world situation it had throughout seen nervous periods from whose anxieties South Africa had not escaped.

Nevertheless, South Africa had cause for gratitude that progress and prosperity had been so well maintained—a condition of affairs that was primarily due to the strength and stability of the goldmining industry. The producing mines had milled a record tonnage of ore and had achieved a record output of gold, both in quantity and in vz lue, and an unprecedented amount of work had been done by many new companies that were still in the stage of prospecting and development.

PROFIT MAINTAINED

Reviewing the year's accounts, the Deputy Chairman said that the profit for the year, excluding profits derived from the sale of investments had been £960,409. That profit was practically the same as that for the previous year, and the rate of the dividend was unaltered at 160 per cent. per annum. In accordance with established policy the profits accruing from investment realisations had not been utilised for dividend purposes but had been reinvested in the undertaking.

The balance-sheet disclosed that the amount realised by the sale of investments, less their book value, and the net amount written off investments generally had been £271,092. That sum, together with £154,654 from the appropriation account, being excess of expenditure on investments purchased over receipts from invest- ments sold, had been added to the investment reserve account, which had thus been increased to the substantial total of £3,886,698.

The balance of the appropriation account showed a reduction of £44,474 at £564,606, represented by cash and cash assets, less all liabilities except contingent liabilities. Contingent liabilities were considerably less than they had been at the end of the previous year, and the resources of the company were fully adequate to meet all commitments of that kind as and when they matured.

THE INVESTMENTS

Investments in shares and debentures appeared in the balance- sheet at £4,347,574, an increase of £433,438. All shares, interests, and investments for which the share market quotations were available appeared in the books at or under cost, but in no case above the market price at December 31st, 1937.

It had been deemed expedient to write down the book value of certain holdings both below cost and below market value. Unquoted ,ecurities had been taken into account in accordance with conservative valuations fixed by the directors, and in no instance at a valuation exceeding cost. It was evident from the schedule of investments included in the accounts that the market value largely exceeded he book value shown in the balance-sheet.

The market value of the company's gold-mining interests at the end of the year had represented 84.2 per cent. of the market value of all its investments, and of those goldmining interests 89.6 per cent. had been dividend-producing. The company was of course sub- tantially interested in various goldmining companies which had not et reached the milling stage.

GOLDMINING DIVIDENDS

It must not be overlooked that the large proportion of the company's revenue which accrued in the form of dividends on its goldmining nvcstments contained an element which represented the return of

Goldmining shares were wasting assets, but nevertheless,

had been pointed out at a previous annual meeting, they had '.erved the company well, and would undoubtedly continue to serve the company well in future. Regular reinvestment of some part of the revenue derived from them was in the circumstances an essential rolIcY to be pursued by a company like Rand Mines.

The goldmining industry had continued to progress and its cosperity had been well maintained. The industry's requirements 01 native labour had increased and would continue to increase

steadily and substantially. Concurrently with that expansion of requirements, available supplies of labour had shown a marked falling off during the latter part of the year, due mainly to the improved agricultural position in the native territories. The mines as a whole had temporarily experienced a serious shortage of native labour. The inflow of natives had increased satisfactorily during the first few months of the current year.

NATIVE LABOUR

The experimental employment of tropical natives from areas north of latitude 22 deg. S. continued to give encouraging results in all respects, including health, which strengthened the prospects of the industry being able in due course to obtain substantial additional supplies of labour from such sources.

The decision of the industry to introduce the closed shop •' principle had been brought into effect without difficulty—a pleasing indication of the satisfactory relationship that had been maintained between industry and the rccognised trade unions.

At the instance of the South African Mine Workers' Union, a conference had been held during the latter part of the year between representatives of that union and of the Gold Producers' Committee of the Chamber of Mines, presided over by the Minister of Mines, as a result of which already a large volume of existing phthisis legislation had been added to by another amending Act providing for certain further increases in payments made to beneficiary miners.

Since the inception of the Witwatersrand Gold Mines Employees' Provident Fund in January, 1934, the industry had subscribed £2,631,882 to it. The membership had increased from 26,321 at the outset to 37,628 in December, 1937, and benefits already awarded amounted to over £1,000,o00.

Following recent discussions with representatives of recognised unions' the industry had offered to establish a savings department of the fund into which mines would make payments at the rate of £13 per annum in respect of every adult European employee, to be credited to the individual employee's account and to be with- drawable by him under certain stipulated conditions. The offer was contingent upon existing agreements being brought up to date as covering present conditions affecting employees and industry.

CENTR U. MINING-RAND MINE GROUP

The Witwatersrand gold-producing mines of the Central Mining-. Rand Mines group had milled 18,590,000 tons of ore, an increase of 458,500 tons on the previous year's record figure. The average yield of gold per ton milled at 4.104 dwt. showed a further small reduction of .087 dwt., but owing to the larger tonnage treated the working revenue of the mines of the group had increased by £262,280 to £26,921,008.

The last-mentioned figure included the amount of £82,639 in respect of special declarations made by the East Rand Proprietary Mines, Limited, and Geldenhuis Deep, Limited, in connexion with certain abnormal recoveries of gold at their respective reduction plants. Working costs had been higher by I.2d. per ton milled and consequently the total working profit decreased by £269,453. Dividend declarations totalled £4,990,519, as compared with

£5,315,457 in 1936.

RESIDUE VALUE REDUCED

It was satisfactory to note that despite the increase in total tonnage milled the average residue value had been reduced to the record low level of .204 dwt. per ton, as against .234 dwt. per ton in 1936. Although the development of footage totalling 693,555 ft. had been 52,281 ft. less than the previous year's record figure, available payable ore reserves of ix producing mines had shown, according to latest re-estimates, a substantial increase of 3,573,960 tons, compared with the preceding year's total, and aggregated 74,653,580 tons.

It was gratifying to record that the mortality rate from diseases among groups of native employees had been the lowest in the history of the group, and the group mining accident mortality rate had decreased from 2.04 to 1.97 per r,000.

The present valuation of the outstanding phthisis liability of the mines of the group was practically unchanged at £4,963,501. The mines concerned had provided with accrued interest up to the end of the year the aggregate sum of £2,495,859 towards meeting that liability.

Non-producing companies of the group included the Blyvooruitzicht Gold Mining Company, Limited, which had been formed last year to acquire and exploit a mining lease which the South African Government had agreed to grant over an area of approximately 3,034 mining claims on the farm at Blyvooruitzicht No. 71 on the Far West Rand.

OTHER INTERESTS

As was evident from the schedule of investments in the balance- sheet the company had important interests in a number of Witwaters- rand goldmining companies, outside the Central Mining-Rand Mines group. Various South African industrial concerns in which the company was interested had been maintained in a sound position and had earned satisfactory profits. They included important coalmining and lime, piping and cement manufacturing enterprises.

Before concluding he referred with deep regret to the death of Mr. Frank Raleigh, who had been intimately associated with the goldmining industry of the Transvaal for more than 50 year. Mr. Raleigh had been appointed secretary of Rand Mines, Limited, in 1896 and had become in 1921 its managing director, the pt which he had occupied with distinction until his death.

The report and accounts were adopted unanimously.