Document bBXxX8wR7nmQXb4K6kG0Yk9VO

\ i PLAINTIFF'S EXHIBIT ylnnual Report Riley Stoker Corporation December 31, 1943 Fred H. Daniels E.Louis Griffith K.David Beach . Aldus C. Higgins W.James Armour T.Robert Riley Chapin Riley Officers ............................................ President Vice-president andGeneral Manager .Vice-president and Treasurer ....................................Vice-president ....................................Vice-president ....................................Vice-president ............................................ Secretary Directors Aldus C. Higgins, Chairman Chapin Riley Fred H. Daniels K.David Beach E.Louis Griffith Frank C. Smith, Jr. N.George Jeppson Philip R. Mather RS-001672 1/17102 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 1943 including the Consolidated Balance Sheet as of the end of the year. The net profit was 3559,265.35 after provision for Federal taxes of $1,511,200.00 equivalent to $1.56 per share on the Common Stock after deduction of the dividend of $6.00 per share on the Preferred Stock. This compares with $1.52 per share of Common Stock for 1942. All of the above figures are before completion of renegotiation. During the year dividends of $6.00 per share amounting to $21,600.00 were paid on the Preferred Stock and 30 cents per share $103,167.30 on the Common Stock. Net additions and replacements to buildings and equipment for the year amounted to only $26,224.80. After depreciation of $213,673.47 the net investment in buildings and equipment decreased by $143,545.53. The volume of business transacted during the year was the largest in the history of your Company. Bank indebtedness was reduced by $270,000.00 and the net current position improved by $808,796.20. Your Company has entered the year 1944 with a large volume of unfilled orders. The prospects for future business are very favorable. May 1, 1944 Yours very truly, F. H. Daniels, President RS-001673 1/17/02 NUECES To The Board of Directors Rilet Stoker Corporation Worcester, Massachusetts We have examined the Consolidated Balance Sheet of the Riley Stoker Corporation and its Subsidiary Companies as at December 31, 1943 and the statements of Income and Surplus for the year ended on that date; have 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 exam ination was made in accordance with generally accepted auditing standards applicable in the cir cumstances 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 inventory of that Company: "Due to urgent orders on hand, no physical inventory of merchandise other than work in process was taken as at December 31, 1943, and, therefore, the general ledger inventory accounts have been used for balance sheet purposes in the absence of such physical inventories." 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, 1943 and the results of operations of these companies for the year 1943, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. George A. Smith and Company, Certified Public Accountants Worcester, Massachusetts May 1, 1944 RS-001674 1/17/02 NUECES RILEY STOKER CORPORATION A N D SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEET D e c e m b e r 31, 1943 ed-- Cost GC 00 CM CO >P r-j E-- -h \> o wc^o HO' 'ooO-i ros H\tcoT. Noo* <c*oC oH' cm" 3H S w2 Zo <3 =c e H C Ui s>. j 5 < i> mS fxi$,* bo rIw e^ 9<rAt D H to 5iZ- "v> 5o33 13 o *J Z < < cu -u O -5 S 0* U < v 6 2 - gp -s g 3 JS & S, 6 2 6 < a. Oo2 at O >> & o fc-s 2 W iJSSui CM ^ nS 2 a* M "E O "40J > -5 <Ccri) E Ps &E GE Zo Vj CO CU u wurt 3On ^fO 2C*f s"cT a3 i O H* 5 w- ?^l 't 1>N 'O iS s o S N CM u--N-> <I->0 ^ vC>O CO s S N2 Sr>' cemo". -T & On 04 O' **"> SS':iu3nj p Ed w s 3 S 2H2Ed c3 <2 s c3 .. . - . S2 2 O u ess* o fe E o o5 -S &1 s hi ..... .... .... Ic& . I IA5 -c* I *1 p E98 Consolidated Statement of Earned Surplus For the Year Ended December 31,1943 Balance, December 31, 1942 ........................................................................................ Add Renegotiation of Sales of the Riley Stoker Corporation and Badenhausen Corpora tion for 1942, adjustments of Taxes and other transactions affecting prior years--net................................................................................................................ Adjusted Balance, December 31, 1942 ....................................................................... Add Consolidated Net Income for the Year after Federal Taxes............................. Deduct Dividends Paid on Preferred Stock............................................... 321,600.00 Dividends Paid on Common Stock............................................... 103,167.30 Balance, December 31, 1943 ........................................................................................ 32,020,580.37 3,963.78 32,024,544.15 559,265.35 32,583,809.50 124,767.30 32,459,042.20 Note: No provision has been made in the account for possible renegotiation of the A. W. Cash Company for 1942, nor of all the Companies consolidated herein for 1943. Consolidated Statement of Profit and Loss For the Year Ended December 31,1943 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 Estimated Federal Income and Excess Profits Taxes........................ Balance to Surplus .................................................................................................... 32,302,629.83 213,673.47 32,088,956.36 20,693.68 32,109,650.04 39,184.69 32,070,465.35 1,511,200.00 3559,265.35 Note: The above income may be subject to renegotiation. rS-001*77 1/17/02 NUECES