Document QXwoMLmGv63Mp3KpoEK09X1V7

N11782 rwi 10nee twcnotr iu Pu b l ic RLFERL^fcuHiTig^g^x. CHANGE COMMISSION DO NOT REMOVE X Fo r m 10-K FOR CORPORATIONS ANNUAL REFORT For Fiscal Year Ended 8*to )1, 19* (K.IPDIH COMPACT (Maine of registrant) Ohio (Address of principal executive offlees) e l g e Ei Okie. Ua-iny. (The State or other sovereign power under which incorporated and date of incorporation) ..FMg&tatl. (Date of termination of charter) -5annul. Tharaday In Tahrwaiy At Clawland, .fftila-.. (Date and place of annual meeting!) TABLE OF SECURITIES REGISTERED Title of issue Se c u r it ie s Re g is t er e d f Amount u of close of fiscal year Amount a> to which Amount to be regis registration ia tered upon notice effective of issuance Names of exchangee on which registered Comas Stack, without par. rain* ' l,78h,ooo ..Oomrartihla PrafmrraA 7.. Stock, 4j|rf4 Ouaalatlra, *50.00 Par Value 199. yw 349.290 law Terk Stack Jtxahaaca. ' Dona Raw York SSed& Exchange Name and address of person authorized to receive notices and communications from the Securities and Exchange Commission: Oliftan M. Kelh, 1396 Union Coauneroe Uu.lldi.rv* Olevaland Ik, Ohio.... o The information required to be sriven under the items herein'':het forth is more specifically defined in the Instruction Book for Form l(h-K for Corporations. Hie instruction book also sets forth requirements as to exhibits which are to accompany the.r annual report. AFFILIATIONS 1. List the following and indicate the respective percentages of voting power, or other basis of control, as required by the instructions: ( ) All subsidiaries of the registrant. ( ) All parents of the registrant. '' State of Incorporation Stock JZasi (a) Durkse reaems Foods, lao. 1 The Californio Sine Oeapaar 2 Saeraaeato Tailor and gaetsrn Railway Coapaiqr * Tho Rlpolin Ooapaay ^ Trace Ooepany oif 111 loots * The fillddea Oeapaajr, tailed Orevih Products Oonpangr * Sine Ch salssl Conpanjr I no. ^ Illinois Ohio California Ohio Illinois Ontario, Mississippi Hew Tork All All All All All All 50$ 1. Inactive mkeldlarleo included la all.statements. 2. Ths California Sine Coapanjr and saeraaeato Talley aad eastern Sailnay Coapeay are inactive aad hove boon oarriad as laveetnente which, at the beginning sf ths fiscal year aa&sd Oetokar 31, 1943, nan written dowa to a aoaiaal amount of $2.00, through a ahargo to sur plus, which amount has sines keen written off the keeks. 3. The alidden Company, United, a Canadian corporation, Is active aad it lneludedla consolidated statsaeats. 4. Active eekeidiarleo which have act keen included in anjr group or eonsolldated stetemeats for whlah separata statement! are net to ks filed. She aggregate assets of all uaoeasolldetsd saksidiariae for which statsaeats ara not filad do not exceed 15 par esat of the total assets nf ths registrant and its eonsolldated saksidiarles aa shown hy ths registrant's consolidated kalanee sheet filed with this report. The aggregate gross revsms sf all aaeonsalldatad sak- Idiarlss dees not eaoeed 15 par east of the aggregate gross rsrvsaus of the registrant and its ooaoolldatod sabsldlarlse as shewn tjr the registrant's osnsslidatsd prefit aad less statement filed with this report. : (h) Rene. 6 5. State briefly the general effect of: (a) Material changes, made within the fiscal year and not previously reported, in contracts and arrangements of the categories enumerated below which have been previously reported; (6) such contracts and arrangements, made or in /||& effect within the fiscal year and not previously reported, including the dates thereof and yfSP names of parties thereto. (i) Material management or genera] supervisory contracts providing for management of, or services to, the registrant or any of its subsidiaries. (ii) Material advisory, construction or service contracts with affiliates providing for man agement of, or services to, the registrant or any of its subsidiaries. (iii) Material contracts, except as provided by the instructions, between the registrant or any affiliate of the registrant on the one hand, and, on the other hand, any director or offi cer of the registrant, any principal underwriter of any securities of the registrant sold by the registrant within the past 3 fiscal years, or any security holder named in answer to item 3. (iv) Material bonus and profit-sharing arrangements. . (i) <*) Xeao <b) /Bono (14) (*> Kano (b) Boa (111) (a) Eano (b) Bo bo <W) (*) .-.Has-,. . (b) BOBO 6. As to any options outstanding at the close of the fiscal year to purchase securities of .thei regis trant from the registrant: (a) State the amount, with the title of the issue, called for by such options; (b) outline briefly the prices, expiration dates, and other material condi tions on which such options may be exercised; (e) give the name and address of each per son holding such options calling for more than 5 percent of the total amount subject to option, and give the amount called for by the options of each such person : and (d) for each class of such options not previously reported state the consideration for the granting thereof. (a) Oa octohar 31* 19W, th riglitmt had outstanding optloas to pnrah&ea 24.2J0 rirnrn of Its Qmr s b Stock withmat par vtlu halt la the Irmaary. (b) on Au^at 1, 19b7, the reglctraat granted options to 50 kojr acplajrooa t pnrehasa vlthJLa 5 pwri 12,300 shares of Its Cornea Stoak far Sb2.00 par share. I.tka options vara granted j athar kajr aaplepeae ea October 10, .19b7, to porahaae 900 addlttoaal aharaa of said atook. (e) Thora vat aa option ta purchase aora than 5jt of tho total i,:":.:'.'./. ysatook.'. mhjeet toeptloa. of O&ld BUSINESS 7. Describe briefly the material changes which may have occurred within the fiscal year in the general character of the business done by the registrant and its subsidiaries. Thors hare tin bo Material changes within the fiscal yoar ended October 31, 1947, in tha general character of tha business done by the registrant and its subsidiaries. The general character of the business la which the registrant was engaged at the end ef the final year was the produotlea of paints. Tarnishes, laotjoere, enaaelt and allied products: feed products consisting principally of vegetable ell nargarlne and shortening, spleen and the refining ef edible ells| ehealsale, plgaents and netal powders; soya bean products and by products Including protein, fleure, neals and pharsaeeutioal product{ feeds and naval storas) and that of lit subsidiary. The Olidden Conpaay, United, waa the prednetlen of palate, Tarnishes, lacquers and aataelt. The general character ef the business in which registrant's subsidiary, Growth Products Company, waa engaged at the end of lta fiscal year. Decanter 31, 1948, was tha Maraafactur* of ft eh eolubloe. fiegistrant' t subsidiary, Zinc Chaaieal Conpany, Inc., at tha and of lta fiscal year. Doceater 3V, 1948, was en gaged in tha Manufacture of cine sulphate. FINANCIAL STATEMENTS 8. Submit financial statements in accordance with the instructions and the rules and regulations of the Commission supplementary thereto. (Tk* financial atatenenta ahall be bound an a aaparate part of the annual report and attached-to it followup the signature page a) ...v-Financial etntansnte, separately bound* aeeeap&ay this report. 8 REMUNERATION OF DIRECTORS, OFFICERS, AND OTHERS 9* Give the information required below in tabular form concerning the aggregate remuneration jgfch paid by the registrant and its subsidiaries, directly or indirectly, to the following persons in tip , all of tkcir capacities; ( ) The name and aggregate remuneration of each person among the officers, directors, and - employees of the registrant receiving one of the three highest aggregate amounts of remuneration. ( ) The aggregate remuneration of all directors of the registrant; indicate the number of such directors without naming them. (c) The aggregate remuneration of all officers, other than those who are directors, of the reg istrant; indicate the number of such officers without naming them. (d) The aggregate remuneration of all employees of the registrant who, respectively, received remuneration from the registrant in excess of $20,000 within the fiscal year; indicate the number of such employees without naming them. Nairn, or number of persons - not named (a) Adrian E. Joyce Dwight P. Joyce R. H. RermbMrgti Ob) Rlevem Directors (c) Four officers (d) Thirteen employee* (Other than officer* and directors) Capacities in which remuneration was received Aggregate remunera tion within regis trant's fiscal year ahalnstn. Beard ef Director* President end Direeter Flee Cfaainstm, Board of Dlrcctcrc $ 96,300.00 61.633-3* 66,616.66 Salaries Directors' Tees Tetnl . 376.633.22 1.700.00 3781..133-22 Two Vice-Presidents, Assistant Secretory and Controller 62.533.26 Salaries Omni ssl one and Bonne Total 112.999.66 368.110.69 ffOTEi $oac ef the pereenc nanbd or referred to in the foregoing table are eligible for benefit* under Th > Qlldden Qocpnny* e Retirement l 'Inn for Salaried Employee* which beeaa* effect!,' e October 31, 1965, provided tl in la the employ ef the registrant until their retirement parscant to the provisions of the Plan. The amounte of aggr^gat* raaaneratien lieted above do not lselsds the nnonnta contributed by the registrant to the pension true primarily for "|e benefit of ouch per acne pcsuaat to said Pension Plan. 91 e total anoant pstrlbuted by the registrant aid Plan daring the Hegletnut1* last fiscal ended October 31, 19*8, Inded tha following amount* f<r said persons or greup* of pera ones reepee*!1 elyt Amount of 81igletreat' t Contribution! ti> Pension Trust (a) R. ft. Soreburgji 10,1'>3-88 * wight P. Joye 1 *,2i1 a. 13 (b) Ten T/lrectors 60.2T.Wi ' e) Three .Officer* 6.6*9.68 (4) Six employee* 16.7*1.99 10. State the name of, ind amount received by, each person who received as bonuses or shares in profits $30,000, or more, from the registrant or its wholly-owned subsidiaries, during the fiscal year. Rone. 9 II. Give the information required below in tabular form concerning the aggregate remuneration paid by the registrant, directly or indirectly, to any person, other than a director, officer, or employee, whose aggregate remuneration from the registrant* in all capacities, exceeded $20,000 during the fiscal year. Name Capacities in which remuneration vu received from the registrant Aggrtgiktk remuner ation during regis trant's fiscal year $ . .;;rmet'i"SnwtVv; Cleveland, Ohio Aeecuetaats ^ ? 25,425.00 SALES -OF SECURITIES BV -REGISTRANT 12. Furnish the following information as to all securities of the registrant sold by the registrant within the fiscal year: (a) Title of issue; and, if stock, the par value, or, if no par, Btated value, if any. (b) Amount sold. (e) Date of sale. (d) Aggregate net cash proceeds, or the nature and aggregate amount of any consideration other than cash, received by the registrant. '(e) Names of principal underwriters, if any, indicating any such underwriters as were affiliates of the registrant. (/) A statement that such securities were registered under the Securities Act of 1933, or a brief statement of the facts necessary to establish that such registration was not required. (a) C.mmon Stock without par value. (%) (1) 1950 Treasury shares sold through exercise of eBployeeo* stock options as reported on Fora 6(X) daring fiscal year ended October }1, 1948. (2) 2506,Treasury shscres,as covered by Toni 8-3b-l dated Jtea 16, 1948 and filed, vlth the Regional Office ef the Securities and Exchange Oesnsieeicn at Cleveland, Ohio on /one 18, 1948. (3) 9&7 Xreenxry shares, as covered by 2ora B-Jb-l dated Augaet 6, 1948 and filed with the Regional Office of the Securities and Exchange Ooaalstlen at Cleveland, Okie on dngeet 9, 1948 and neadsMat thereof dated Bcptenbcr 14, 1948, (e) (1) 1950 Treasury shares reported as la (b)(1), abeve.seld Dceaaber 31, 1947 through July 10, 1948. (2) 2500 freestay chares reported ae la (b)(2), above, issued August 5, 1946 to Chicago Paeeaatie Teel Ceapaay. / (3) 547 Tfeaeury shares rsported as la (b)(3), above, issued Septesber 21, 1948 to Sspire Usl Cs^any of Atlanta, Oesrs&a. (see page 9-1, facing this page) 12. (Continued) (d) (1) $40,950 recelT.ed by registrant through ezercite of employees' option* as reported in (h)(1), above. (2) Registrant applied securities reported as in (h)(2), above, in part payment of the purchase price of real estate located in Chicago, Illinois. The 2500 shares were accented by the seller at a valuation based upon the :aggregate; offering price paid hy the public; which aggre gate offering price was $53,225. (3) Registrant applied securities reported as in (h)(3), above, in part payment of the purchase nrice of real estate located in Macon, Georgia. The 5&7 shares were accepted hy the seller at a valuation of 326.00 per share, or an aggregate of $14,742. The aggregate offer ing price paid hy the public for the 567 ehares wae $12,107.13. (e) There were no underwriters involved in the above ealee in the usual acceptance of the terme; however. The Chicago Pneumatic Tool Company, Chicago Pneumatic Building, 6 East 44th Street, lew fork 17, Rev York, with respect to the securities referred to in (h)(2), above, and the Sap ire Land Company, Rhodes-Haverty Building, Atlanta, Georgia, with respect to the securities referred to in (b)(3l, above, may be deemed underwriters within the meaning of Section 211 of the Securities Act of 1933. neither of these under writers were affiliates of the registrant. (f) The sales of securities, as reported in (b)(1), above, were exempt transactions and registration of the securities was not required, in accordance with letter of approval dated August 27, 1947, from the Beglonal Office of the Securities and Exchange Commission, Cleveland, Ohio. The sales of se curities as covered in (b)(2) and (b)(3), above, were exempt transactions under Regulation A of the General Rulee and Regulations under the Securities Act of 1933. The aggregate offering price of the securities reported by the registrant in Tarns S-3b-l, filed June 18, 1948, and August 9 1948, does not sxoead $300,000. 10 IS. Am to nay securities for which application for registration under the Securities Exchange Act of 1834 had been filed and which remained unissued at the close of the fiscal year, furnish the following information: a*, .-.(a) Title of issue. (l) The total amount unissued at the close of the fiscal year, (c) A brief description of the proposed transactions for the issuance of such securities, (a) Oraon* vtttMttt JWMf V&&SM* () '(8m png* 10-lv fusing title p*) ' DESCRIPTION OF SECURITIES 14. (a) If any material modifications, not prev iously reported, have been made in any security a description of which has previously been reported, or in the indenture, charter, or other constituent instrument defining rights of the holders of such security, give the title of the issue and state briefly the general effect of such modifications. (6) For each class of capita] stock of the registrant a description of which has not previously been reported, and which, either as to dividends or on. liquidation, ranks equal or prior to any stock registered on a national securities exchange, outline briefly: (1) Dividend rights; (2) limitations in any indentures or other agreements on the payment of divi dends; (3) voting rights; (4) liquidation rights; (6) preemptive rights; (6) subscrip tion rights; (7) conversion rights; (8) redemption provisions applicable thereto; and (9) liability to further calls. {) . XOM. (b) . Stows. 10-1 11. (c) At of October 31, 1948, 289,373 eharee of Common Stock were reserved for the conversion of 199,5^0 shares of the Con vertible Preferred Stock, Cumulative, $50.00 par value, of the registrant. The difference between 289.373 tWl1 349,290 or: 59.917 eharee wee not, at of October 31, 1948, " required for issuance at the then current conrereion ratio of approximately 1.45 eharee of Common Stock for each share of Conrertihle Preferred Stock. Common Stock Dividends pro posed subsequent to the end of the fiscal year required the issuance on January J, 1949 of 32,050 additional shares of Common Stock in the form:of share dividends and the reser vation of an additional 55^7 shares required for the con version of the Convertible Preferred Stock at the new conversion ratio of 1.478 shares of Common, Stock for each share of Con vertible Preferrad Stock. Application for registration under fora B'rAi of the 32,050 additional eharee of Common Stock v issued as share dividende is being nrepared. The regiatreat proposes to apply the additional 5,547 eharee required at the I.478 conversion ratio as m deduction from the 59,917 eharee not required; aa of October 31, 19*t8 to bie set up ae a reserve at the I.45 ratio. ib'W 15. State briefly the general effect of~ ( ) Any material modification*, made within the fiscal year and not previously reported, in contracts of guarantee by the registrant of the 'securities of other issuers, which have been previously reported. ( ) Any such contracts made within the fiscal year an i not previously reported. (a) (I) Vme. This annual report comprises-- (1) Pages numbered ..........i__ ;___to______..................... , consecutively, and insert pages numbered ......... .......... ................... ........ ................. including the io'lou-ing financial statements and schedules: Ftnaetel itetemti, pnpefcly Wut, aoo?eny this report. Shodnleei ; Kens. (2) The 'fallowing exhibits: 12 This anmrd report is filed subject to the instructions con mined in the Instruction Book for Komi 10-K for Corporations, and amendments numbered ...... . .......... ....... SIGNATURE . In pursuance of the requirements of the Securities Exchange Act of 198*1, the registrant _m aHiin fliyiy '.... ... a corporation organized and existing under tho laws of ' 'jfrf tf flhl* , has duly caused tins annual report to he signed on its behajf be the undersigned, thereunto duly authorised, and U seal to be hereunto affixed.. and attested, ail in the city of.... ..... ..................................................................... ..... and State of ..... on the ,,28aA day of : v . MCMT.............--, IBB B&IWS8 OOKPAST ftai|fn*Uujv. ' sifntX __ [s e a l ] Attest: By_____-'s:i~r / c ' /t. Dvt^t P. Jey*, PmUtri r 2. c/.D; ,, v-!v-:y(N. ame and title) ; cilftoft *. ml, swtlsrr ****** ** > ~-ooOoo-~ FISARCXAI. STATEMENTS AK;i> SCmSSLfcS SSCURXIIEa AKD EXCHANGE COMHISGIOff FORM 10-K FOB CGHPOSATIOSS AKROAL r e p o r t f o r IKE FISCAL YEAR EHBED OCTOBER J1, I9MJ THE QLI1M^ COKPASI CLS8BL&J30' OHIO . -oQo- f-riJLEQ ima r q u i aiAt&mmz a n d wxmiLM The following financial statements and '-schedule* are Includes, i Consolidated balance sheet Consolidated profit and loss statement Statement of consolidated surplus Schedule V - Property, plant, and equipment Schedule V-A - Reserves for revaluation of property, plant, and equipment Schedule 1 - Reserves for deprivation, depletion, and amortisation of property, plant, and equipment Schedule XII -Reserves Schedule XVI - Supplementary profit and loss Inforation emitted The followinc statements and schedules have Mm Schedules 1, XI, III, XIII, and XVII are not required under the regulations. Subject matter for Schedules IV, VII, VIII, IX, X, XI, XIV. and XV Is not present. The (Hidden Compear (parent Company) i All of the eonditloos outlined under Instructions Item 8.1 (e) for Form 10-K annual report are met in this Instance , and the financial statements and schedules of the percat Company have been omitted. liliiiillliP ERNST & CRNCnr Tf'i. uiiyiww i-'iu a j im-! .^..nxnjj^.Y i/ots>hr 31, 15 48 6' c, ifflf Ca&h on head end demand deposits & 5,7*4,^55.11 Dominion of Canada Tietory loan aonds-at cost (approximate market) . P.?,'W>.OQ lead* notes receivable # 160,839.94 Arctic account* receivable 12.252.153.65 $1? ,412,993.59 tees reoervs-3cheduls XI1 1?,06P,93;.80 iKTentories-principnl raw materials are stated at cost (last-in* first-out method) which did not exceed replacement market* other items at the lower of cost (aceurculeted average) or replacement marketi Raw materials Ji';f76?t:3 58,63 Finished nerehondlse (Includes minor mount for work in process) 12 ,604,967,5V Supplies ZI7.a$Z2*S 32,085,504.02 Other current notes and accounts receivable mA advances 4 1 ,793,657.11 lees reserve-3ehcdule Xi I: , Jo'l CUHd&!iX biS 551,742,419.02 iwm Advance parent on account of possible federal income tax assessment Cash surrender value of life insurance $ 1,000,000.00 727,308.50 Miscellaneous investments, et cost or less (no quoted market prices) 162,725.97 Oleins against closed banks $ tests- reserve-schedule Xll Miscellaneous notes and accounts re- ociVablc and advances 4 430,645.25 teas reserve-schedule XII ----- .....j^m^aa 4"J,145.25 tetdusated refund of federal and dominion taxes on income of prior years jaasafflta& 2,619,464.55 t. fUffls MCP te .1, buildings, machinery, and eequipment .. at cost or appraised araount- Sehedule V #40,136,421.33 tecs reserves for revaluation as . u dwewt.eerrained by Board of Birotore 's y-tebcdule V-A 1 i 3.217.6gQ32 *36,918,770.41 . tees reserves for depreciation, depletion, and amortisation- ->*fcedule VI 20,550,270.63 ... m mMi and expenses 74l.4l6.32 875,655,570.57 1. th : t lettl J55.U >00.00 >3 >.50 504.02 pjs&xa. 419.02 ,464.55 1,270.63 A -..A \U*.L I ri *. i-i-fri Notes payable to bants Accounts payable-triads AP.ijes and oosanlssion* r-ny roll and withholding taxes Other current liabilities Accrued lit* bill ties* I t .j j ! Royalties, w^ter rent,, etc. J Insurance Federal, state, nad dominion taxes Sn income-estimated j ikAbi^ViL-dchodule XIJ for contingencies * 3,500,000.00 a 7,.?95,075.44 >6?,759.09 210,860.60 .......IgSaHfiSslft 3,654,100.31 i 307,530.62 262,525.00 . ... 773,053.12 li.N.vi. cuRansi UAditixiiia 619 2,525,000.00 VMMf^ii_wr_ik_L^b_M_tojilfsiinw fii iii Capital stock. Convertible preferred 4-1/2;$ cumulative, par value &50.00 a share, redeemable at 552.50 share (aggregate as Hint ^10,475,850,00)each share convertible into approximately 145 shares pf coia-non stock* Authorized 200,000 shares Issued and outstanding 199,540 shares $ 9,977,000.00 Consacn, wlthout per value* Au.t.h...o...r.i.z..e...d.....3...,.0..*510,000 shares Outstanding, inciluuddiing treasury shares1 1,734.000 , shares Reserved for conversion of prof sirred : stock 289.373 shares stated capital 4.4fe3.0Q0.ga *14^*37,000.00 Surplus (see statement)! Capitol surplus .512,581,433.41 kerned surplus (Includes 4.02 of surplus of Canodlan subsideary ) -Za/h-'17'; Leas cession stock in treasury 31,2-S3 shores, at cost (includes 24,250 shares reserved for sale to certain officers and key employees) -661.976.40 Vs.447.$3<*.M 53,884,639.03 >,570.57 ' *maa32$m*m . See principles of consolidation end dote* to financial statements. $ 44,100.00 $75,655,570.57 QU^ COPAM AU& CmmiAli Fiscal yoar on&od October 31, 1948 8302,3X8,7v^.33 rSotoo-'8 sad 0 , of ia 8168,002,808.95 telling, iwnl| ww t^MnistroUVO MtfMRIMMI 19*125,592.36 Ftefialoa for doubtful ^Mounts |#205|J?5,82) lot rtoorerlo on aeeotmtis charged Off in prior yeere-tehetele All _ 116.789.5 JLS?*ii&LJ&&t2i2L mum tmtmm fEHrSTstorte, psoeoasing, purchases and soles of ssiiicsllan- - '.i-'fiSM iswrohaadlse'' S Miscellaneous pntiFix rntroft- t a x iw 8 15,053,603.1*4 _, 283,925*04 100.200.70 o n i ^c o ms ...... . _____ 3Sia^5a2k 15 ,'*42,819.18 eteral ineooe taros fcainion and state taxes 6,000,000.00 166.Q-1Q.CO GU;;.j s >L IJiA'i'jiU JiuT PSOFIT 9,276,819.18 See principles of consolidation and notes to financial statements. ERNST A ERNST CQW hm AM13 CAflADlAfi StJBBXDlMiX F4eel rear endsd October 31, 15*8 Wiuut gMattgggga^aaaag -< et Memmeri li,.1547, end .::0tber 31* 1948 KARMfeO :SOKfrMiR MSTaflcvcober 1, 1947 Add net profit for the ftcal year i>*d*act cash dividends peldt Convertible prefarrd-4t2,2? per shore Co 32bo d -1,90 per shore Balenoe et October 31, 1948 8 443, tl2i'SS%438.4x -,,3e2SS,rjy 59*70 837,530,177.07 See notes to financial statements* '- ctober 31, Principles of consolidation; () Inventories Include smell amounts of Inter-company profit which are not significant and have not been eliminated because it is not considered practicable to do so. (b) The eomp&nloe Included in the consolidated financial statements. at '/ctober 31, 19^6. and for the fiscal year then ended ere the flame companies included in th fi nancial statements for the preceding year. (e) Inter-coir.pfiny sales have been litsinated. (d) Investment in the Canadian subsidiary is carried on the parent Company's books as recorded et drte of Re quisition. The parent Company'a equity in rat assets as nown by the books of such subsidiary is >2,228,42b.02 sore than the carrying amount. The excess rer.resents auity in accumulated net e^nings since dr to of ac quisition, and is nddod to earned surplus in consoli dation of the accounts of the parent and subsidiary companies* Heallnation of accumulated earnings is dependent upon Canadian foreign exchange control re strictions and is subject to reduction on account of federal Income taxes unynblo tiieroon ucon receipt by parent Company. Potest Note /. - property, plant, ond eaUipment are stated on the basic of coat or apprdsal value less reserves provided for re valuation, depreciation, depletion, and amortisation. The remaining portion of unrealised appreciation (upproximstely 1,600,003.00) included in the gross amount of these assets is offset by s portion of the revaluation reserve which reserve wee also provided to further reduce the carrying amount of certain assets from cost to estimated values prevailing during the year 1932 as determined by the Board of Directors, Cost of property, plant, and equipment represents principally cash expenditures, although certain properties were acquired for stock. The net book carrying amount is not Intended to represent trie present values of tli properties. Note 8 - Inventories at the beginning and end of the fiscal year, in the respective amounts of 23,104,527.11 *hd ~ #32,685,504,02, used in the computation of oost of goods sold have been priced as described under the inventory caption of the consolidated balance sheet. Sete C - Depreciation, depletion, obsolescence, and amorti sation* The policy of the companies with respect to de predation is to provide amounts considered by the management as fair and reasonable to cover wear, tear, end deterioration of the property on e basis of specific rates es determined.; It is net certain es to what extent obsolescence Is covered In tis pro visions as changes In the art may result in shortening the useful life f tbo prepertf. The companies do not believe it preeti- '> csfelotoee'tforth the rates in use` as such rates have boon' detemifflsd Kcnsrally as applicable to specific assets or .group, off assets in various geographical locations. '; EPNOT E FINS r yQs &Sl .T9... Zk:.1 /riiOXiLit^iLCi '.:ote C - continued i . irevision for depletion is computed for each unit of rreduction* based upon estimated recoverable ore. iexpenditures for maintenrr.ee, repair*, r.nd .renewals &re charged to operating expenses, end errendituro* for better ments are added to the property Accounts* The recorded amounts of properties retired or sold arc ev>rced to related reserves for depreciation ?.nd revcluctlon if such retirements o t disposals were contemplated In the deter mination of depreciation rates* If such retirements or disposals were not eontempi#tedv the asset accounts and related reserves for depreciation end revaluation are reduced by the amounts included therein for such properties. Mote X - The reserve for contingencies has be^n provided I'rirtarily for possible additional a rises ament of* federal taxes on income of prior years, but includes a provision of *33!>,0f>0.00 for possible patent infringement liability* 'iot ii. - Reference Is made to Schedule ?VI for information ?!S to charges for maintenance and repairs, depletionf depreci ation ond atcorti cutler;, taxes (other than income taxes), miuiageraeat sad service contract fees, rents and royalties* \ - C a p ita liz in g itaais charged to sapenae In .p rio r year. MMT t BNNT ".ycarn^y^tff&ytoa TOt GUM CMftm MW CAKADIAJI 5UBSICIARI ;' fiscal year ended Octobap jl, 19**8 ; - iU, BALAMCii At amrMim csr xm riscst XiutR a s FSB ACCr>l'5TS lOB ' . Buildings fcaehiaery sad Qulpsent Furniture and fixtures fiallrosd tidings a - ^^ i orAt;..' W5***718.9? 1*594,353.'* lt17W,l6.05 28,935.39 .frs3MsZ& ADDITIONS to fisvSi>RVa -oj=g=- 3, U'A. .. 4^. '$*8& gets A these reitmi were provided lay charges to capital surplus (charges, t: surplus in 19M) end reserves for depreciation. to elInina te appreeietioa.off proper eqeipent, arA to reduce recorded enount to estinated basis of value during 1932 a; the Board off Directors. rvorj vers provided by charges to capital surplus (charges transferred to earned trvss for depreciation* to liinte appreciation af property* plant, snd recorded scourt to estinsted basis of values during 1932 ee determined by