Document K67zbXE4e5Bz0VGZEqeN7J9Z2

PLAINTIFF'S EXHIBIT RS-316 ylnnual Report Riley Stoker Corporation December 31, 1942 C Officers Fred H. Daniels................................................................... President Louis E. Griffith Vice-president and General Manager David K. Beach .... Vice-president and Treasurer Aldus C. Higgins......................................................... Vice-president James W. Armour......................................................... Vice-president Robert T. Riley......................................................... Vice-president Chapin Riley............................................................................ Secretary Directors Aldus C. Higgins, Chairman Chapin Riley Fred H. Daniels Frank C. Smith, Jr. David K. Beach N.George Jeppson E.Louis Griffith Philip R. Mather c RS-001678 1/17/02 NUECES TO THE STOCKHOLDERS OF RILEY STOKER CORPORATION: There is submitted, herewith, for your consideration the Audited Consolidated Financial Statement of your Company for the year 1942 including the Consolidated Balance Sheet as of the end of the year. The net profit was 3544,756.78 after provision for Federal taxes of 31,391,421,80 equivalent to 31.52 per share on the Common Stock after deduction of the divi dend of 36.00 per share on the Preferred Stock. This compares with 32.00 per share of Common Stock for 1941. During the year dividends of 36.00 per share amounting to 321,600.00 were paid on the Preferred Stock and 30 cents per share 3103,167.30 on the Common Stock. Additions and replacements of buildings and equipment during the year increased the net investments in these assets after deduction of 3162,386.11 for depreciation and amortization by 3111,572.72. The large volume of business transacted has made it necessary to borrow during the year additional working capital amounting to 3450,000.00, in spite of an improvement of 3237,390.95 in the net current position during the year. Your Company has entered the year 1943 with the largest volume of unfilled orders in its history, all of which carry high priority ratings. May 15, 1943 Yours very truly, F. H. Daniels, President 1184)01679 1/17/02 NUECES To The Board of Directors Riley Stoker Corporation Worcester, Massachusetts We have examined the Consolidated Balance Sheet of the Riley Stoker Corporation and its Subsidiary Companies as at December 31, 1942 and the statements of Income and Surplus for the year ended on that date; hare reviewed the system of internal control and accounting procedures of the Riley Stoker Corporation and the Badenhausen Corporation; and, without making a detailed audit of the transactions, have examined or tested accounting records of both companies and other supporting evidence, by methods and to the extent we deemed appropriate. Our examination was made in accordance with generally accepted auditing standards applicable in the circumstances and included all procedures which we considered necessary. With respect to the A. W. Cash Company, a subsidiary, of Decatur, Illinois, whose accounts were not audited by us, we were furnished a report on that company prepared by independent Certified Public Accountants. Their report contained the following comment regarding the inven tory of that Company: "Due to urgent orders on hand, no physical inventory of merchandise was taken at December 31, 1942, and, therefore, the general ledger inventory accounts have been used for balance sheet purposes in the absence of such physical inventories." This inventory amounted to 2290,229.34. A representative number of items in process and in stock room checked by them to book records showed no exception of any consequence, according to their comments. In our opinion, subject to the remarks in the foregoing paragraph regarding the inventory of the A. W. Cash Company, the accompanying Consolidated Balance Sheet and related statements of Surplus and Income fairly present the consolidated position of the Riley Stoker Corporation and Subsidiary Companies at December 31, 1942 and the consolidated results of operations of these companies for the year 1942, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Worcester, Massachusetts May 19, 1943 George A. Smith and Company, Certified Public Accountants RS-001680 1/17/02 NUECES R IL E Y STO KER C O R PO R ATIO N A N D S U B S ID IA R Y C O M PAN IES CONSOLIDATED BALANCE SHEET ecem ber 31, 1942D O On oo No^' '^O M'SCO* cOo rrs*ii --< \o *%0\ o r v & 7D&D7J22 OorL>*--o% s- 1-^ rro4 pr 00 rvi Q N ~3 WuoH72 n<HJ; E U <2 8 4>" *102 xu sO,vSQ=o'3- ->^oCI oh T3> gcx. OoJNT1 SO so*" >^ p- 7g cIe3 I< j e US. UrJt VLcv-Oj mIO"n. 3O r-- 0 T- -< O 5 iv! \o TS. '"1. oo" 3 <S t> - 4 1-H 9. 00 LO t"- Tt< KI oC rs i--i **> CnT --" & ' s $r* V g 'I s| a1 S56 g O 04 O .a 3 ScS >g |Oh cB c % bb ^44 wa xW *jrt c3c wS wS > o. c .2 Vo s "Sa. 4 (2 u Q * I *g3r toO 1u2 < 0- O 2S i^5 U3 3 -g I KX ."uu WQ. 0u-i C"723O?** Q Consolidated Statement of Earned Surplus For the Year Ended December 31,1942 Balance, December 31, 1941........................................................................................ Add Consolidated Net Income for Year after Federal Taxes . . Net of Sundry Adjustments pertaining to Federal Taxes of Prior Years................................................................................... 3544,756.78 11,105.87 31,589,485.02 555,862.65 32,145,347.67 Deduct Dividends Paid on Preferred Stock............................................... Dividends Paid on Common Stock .......................................... 321,600.00 103,167.30 124,767.30 Balance, December 31, 1942 ........................................................................................ 32,020,580.37 Consolidated Statement of Profit and Loss For the Year Ended December 31, 1942 Profit on Operations after Selling and Administrative Expenses, and Provision for Doubtful Accounts, but before Depreciation and Amortization .... Depreciation and Amortization............................................................................ Operating Profit .................................................................................................... Other Income.......................................................................................................... Gross Income .......................................................................................................... Other Deductions.................................................................................................... Net Income before Federal Income and Excess Profits Taxes ....................... Provision for Federal Income and Excess Profits Taxes................................... Balance to Surplus.................................................................................................... Note: The above income may be subject to renegotiation. 32,099,911.14 162,386.11 31,937,525.03 32,586.24 31,970,111.27 33,932.69 31,936,178.58 i,391,421.80 3544,756.78 RS-001683 1/17/02 NUECES