GUY MOTORS, LIMITED
Page 33
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FURTHER PROGRESS-EFFICIENCY OF GUY VEHICLES
The Twenty-fifth Annual Meeting of Guy Motors, Limited, was held on Thursday, 5th December, at the Victoria Hotel, Wolverhampton.
Ma. SIDNEY S. Guy, the Chairman, said: —With your permission I will as usual take the balance-sheet as read and will deal with the details.
On the assets side of the balance-sheet there are not any very large fluctuations in the figures of the various items, other than the bank balance and cash in hand, which has increased from E76,665 to £88, 869 .
On the other side of the account no alteration has taken place in the capital: Reserve Increased to 75% of Capital The total reserves have been increased to £150,000, representing an amount equal to approximately 75% of the share capital.
In the Profit and Loss account the depreciation and maintenance of buildings, plant, machinery, tools, etc., shows an increase.
This is occasioned by the fact that we have been working double shifts and a large amount of overtime. The arnount which the Inland Revenue allow for depreciation in these circumstances is totally inadequate and is aggravated by the' fact that the long hours . for which the plant and machinery is being used prevent the usual amount of regular maintenance being given, and this, together with the effect of being forced to employ new and unskilled labour, inevitably results in more rapid depreciation than would 'otherwise be the case. Your Directors have, therefore, provided what they consider should be adequate depreciation in the prevailing, circumstances.
The balance of profit of 252,461 shows a small increase on last year's figure but is arrived at after making provision for Excess Profits Tax and also after providing for stock obsolescence. It is obvious that interruption in our normal activities, due to the war, is bound to make some of the stock of doubtful value, and such items have been adequately written down or written off.
Dividends Maintained .
On turning to the Directors' Report you will notice that the total dividend on the participating preference stock is 7%, less income tax, and your Directors recommend a dividend on the ordinary stock of 15%, less income tax. Both these dividends are the same as those paid in the previous three years.
Your Directors also recommend setting aside £5000 for the staff profit sharing bonus, which is an increase of £2,000 on last year's figure. I would here like to say how much the Directors appreciate the loyal manner in which the staff, like the employees, have devoted themselves to the interests of the Company, working exceptionally long hours without a grumble. The employees are, of course, paid by results and it is only fair that the staff, on a fixed remuneration, should have some practical recognition of their extra efforts.
You will also notice that the Directors recommend a reserve of £7,500 for obsolescence and deferred repairs. I ,have already referred to the advisability of this course in dealing with the general question of depreciation. It is also recommended to reserve £10,000 for the development of new models and the reorganization which will be necessary for production when happier conditions of peace will allow.
Your Directors feel it would be grossly unfair to saddle the first post-war year with the whole cost of any neW designs and reorganization for production, and that the only prudent and reasonable course is to reserve for and spread such expenditure over other years and as far as possible in those years in which such expenditure would normally have been made. .
Your Directors are very concerned about the working of the Excess Profits Tax—and, whilst they agree wholeheartedly. that abnormal profits should not, be made out of the country's misfortunes, they do feel. most strongly that proper and adequate allowances should be made by the Authorities both for Income Tax and Excess Profits Tax on those items to which I have already referred.
If this is not done it is possible that• a company which in. 1939 was in a healthy position and having worked efficiently, might emerge from the war in a very much less favourable position, having been denuded of much working capital through taxation and totally inadequate allowances on its wasting assets.
Our staff and employees have responded excellently to all the various Auxiliary Services, and are most efficient, and the Directors are grateful for their efforts.
During the year, in an endeavour to combat, any ill-effects of working in partially or entirely blackedout conditions, coupled with long hours; the Company has installed a system of ultra-violet ray treatment, which is giving excellent results and is much appreciated. ,
The wisdom of the Company in consistently adhering to the policy, of building Guy Vehicles for " Long Life and Low Running Costs" is being more than ever appreciated by our customers during the present difficult' times when it is impossible to obtain new vehicles. Many people have asked us how we account for the apparent increase in the number of Guy vehicles on the road to-day; the reply is generally that the number of Guy vehicles in civilian use this. year has not increased, but as the proportion is certainly greater,. the only conclusion one can draw is that the Guys continue to perform satisfactorily, whilst some of the others have faded out.
In conclusion, I would say the works are fully employed and have orders on. hand which ensure the continuance of this position for a considerable time ahead. Your Company has done much good work in the National interest, but you will appreciate that the record of this will have to be deferred until we have won the war.
On proposing the re-election of Mr. W. E: Bullock to the Board, Mr. Guy paid a tribute to the magnificent work which he had put in since hejoined the Company. in 1937. Mr. Bullock's re-election was • confirmed.. The balance-sheet and accounts were unanimously adopt'ed and the meeting closed with a vote of thanks to the Chairman.