JBM18881019

1888 October 19thDirectors’ Meeting
19th October 1888 3 P.M. at 7 Water St. Yokohama
Present: Mr.Talbot (Chair), Mr.Grosser, Mr.Dodds, Mr.Abbott, Mr.Baehr

Minutes of last meeting were read and signed.
¾Report on Company’s Financial Position as to Sept. 30th

Report on Company’s Position
Mr. Talbot read a Report and series of Accounts which he had prepared,
showing the Company’s financial position up to 30th September, as follows:Forty five days have elapsed since the last meeting of directors was heldon the 4th September last, when it was informally understood that periodical
meetings of the board might be, temporarily at least, suspended, and be
replaced by meetings convened for the despatch of such business as should
properly come before directors.
In the interval, a considerable amount of work has had to be performed.
Messrs. C. Rohde & Co sent in a mass of documents and invoices all ofwhich had to be analysed and classified, and apportioned to the several
accounts to which the articles are supposed to belong and where they willremain until the annual stock-taking at the end of the year enables a moreaccurate distribution to be made. As the documents involved the adjustment ofrebates and returns and separation of three currencies, with adjustment ofdifferences in exchanges, the task was by no means simple, and the amount ofwork required to perfect it, considerable; and if the records have been
imperfect the causes are, in my mind, sufficient explanation. The books are1

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now so far posted as to enable a fairly trustworthy statement of affairs to belaid before you, from which it will be seen that our first Capital of $75,000.was inadequate, and about one half of the money required to establish andwork the Brewery; we have however, a thoroughly complete outfit andestablishment in which nothing is wanted to secure an output of 200,000
gallons of saleable beer in the year.
The accounts now before you are:1. Beer Product a/c
2. Assets and Liabilities
3. Profit & Loss
One difficulty has been to arrive at the true quantities of beer brewed,delivered, and remaining in stock. The registers and other records of stock in
the office are imperfect, but no blame is attributable to any officer of theCompany for this, as it arises purely from the absence of system which takes
time to form in every concern not perfectly and practically organised before
business is begun. In future we will settle the beer stock at least once monthly
and discrepancies will be revealed in time to allow of their adjustment while
the circumstances are still fresh. The discrepancy or loss of beer we have todeal with is as follow;Brewed according to returns made byMr. Heckert to Secretary as
Saleable beer

3520 Hecto = 77,440 gallons

Delivered1156〃

25,440Stock should be galls〃
52,000Mr. Heckert makes several qualifications

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and returns as brewed Hecto
Delivered

3308 = 72784 galls
1156= 25440〃Stock actually on hand

47,344

Difference Galls

4,656

No doubt several brews failed, of which no account is here taken, and werethrown away. Six bad brews will account for the difference and it is almost
certain that number of brews failed. The question has not been put to Mr.
Heckert directly, but, no doubt, if it is, he will admit this to be the case. Theselosses are inseparable from new works and are not likely to recur. You willobserve the accounts deal only with the smaller stock. The cost of the beer,
apart from establishment expenses, is 22 Cents per gallon; and if bottles,Capsules, Corks, &c are taken into account, we have sold so far at the rate of
64 Cents per gallon for quarts and 73 Cents for pints. If we can maintain theseprices, our future is promising.
The point to which the serious attention of the directors is called is thefinancial position of affairs. Large orders for brewing material &c have beenexecuted, and acceptances maturing before the end of this year, in addition todrafts retired amounting to £999-0-8, are no less than £1956-19-9, or say$13,000. This, with current liabilities to provide for indicates a necessity forsome careful financial steering. Dealing with probabilities, and allowing afairly safe margin, our position seems to be:Debts now payable$3256

Due & payable at intervals
to end of year
Wages, Salaries, Duties, Charges

34650

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Bottles purchased here1800

Coal900

Margin394

11,000or with acceptances $24,000: and including excess of O.B.C. overdraft( $41,500 ) $25,500, which sum must be provided before we can begin to reducethe debts of the concern. The income with which we can reckon is:Due on good bills in Current a/cs
less discounts not yet charged$5,200Estimated Sales, local, Oct to Dec

12,000Consignments to 30 Sept, due,

5,325

Probable shipments Oct to Dec

3,000 25,525

But as we cannot reasonably calculate upon receipts from consignments ofmore than $2325, we are plainly $6000 short of the money we must actuallylook for. How this is to be provided, the meeting must determine.
The statement of account before you is not one of which we have cause tobe ashamed. The large stocks of imported beer seriously affect sales of ours,
but dealers assure our Agent that when rid of our imported beer the demand
will be almost solely for the Japan Brewery Coy’s beer. Upon the production to
30th September of 72,874 gallons, our profit on the small sale of 25,000 gallons
is considerable, and if we realise the stock at current prices, as we shallprobably do, the realised profit will be $13,500 more than we calculate upon.
With regard to stocks, we have perhaps laid in rather too rapidly, but it
was thought necessary to be on the safe side in the event of a demand failure
to supply which would have been injurious. On the 1st. inst. We had a stock ofmalt, hops, &c sufficient for 60 brews, that is 52,800 gallons of beer, so that for4

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the present we have no further anxieties on that score. Orders will, in future,
be prepared for supplies to arrive periodically from March 1st 1889 up to whichtime we are amply supplied for 15 Brews per month.
I think it is not unreasonable to say that the year’s balance should show aprofit equivalent to 10% on the subscribed capital after closing all expenditurefrom the commencement but whether dividend can be declared cannot now bediscussed. The profit has been used to supply or replace deficient capital andis locked up in property.
Beer Product AccountMemorandum

Sept. 30 by Total Sales$26,270.50〃 To Cost of Malt Hops &c

16,048.34〃 〃7720 doz quarts at 67c5172.40〃 〃7200 〃 Pints 〃 47c

3384.00〃 〃Capsules Corks labels&c800.00
9,356.40〃

Stockgalls
Brewed per a/c 3520 Hecto=77440
Sold & Delivered

25440

Balance @40c

52000

Profit & Loss a/c

20,800.00
21,665.76$47,070.50 $47,070.50

The stock above does not, however, tally with Mr. Heckert who furnishes astock, Oct 13th of 2152 hecto. This gives for Oct 1st the result following:-5

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Sept. 30 Items above

25,404.74

26,270.50〃 Stock per Heckert
Brewed 3308 hecto = 72784 galls
Sold & Dlivd per a/c25440 〃Actual Stock per Heckert

47334〃 @40cProfit & Loss a/c

19,803.36$45,208.10

Oct. 1st18,937.60

Stock actually in hand

45,208.10$18,937.60

Difficulty has been experienced in arriving at the true stock. Brews are
said to be 54 hecto each, less an allowance for 1st year of 15 to 30%. Mr.
Heckert always returned 40 hecto for the brews and now asserts that it should
be 37.8 only. Some brews have however been rejected with the result that thestock per register should be 52,000 galls, but actually is 47344 galls equivalent
to a loss of 6 brews.
Pro forma Balance Sheet 30th September 1888
-LiabilitiesTo Capital 696 shares at $100 each

69,610.00〃 Reserve Premium on 29 shares

700.00〃 New Oriental Bank Corp, Ltd.

40,483.93〃 Bills payable

15,037.05〃 Carl Rohde & Co

12,532.42〃 Profit & Loss surplus assets

3,041.13$141,404.58

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JBM18881019-AssetsBy Landed Estate

4,621.42〃 Buildings

34,403.94〃 Machinery

41,880.10〃 Plant

8,628.08〃 Stores10,159.09〃 Office Furniture603.32100,295.95

Fixed property〃 Brewing Material Sundries 1,703.88〃 Malt & Hops

8,418.03

10,121.91

Variable Property〃 Stock of Saleable beer $40c

18,937.60〃 Petty Cash in hand532.47〃 Bills receivable:on Current a/cs

6,191.15〃 Consignments

5,325.50

Money due

11,516.65$141,404.58

Pro forma Profit & Loss account to 30th Sept. 1888
By Beer Product a/c

19,803.36〃 Waste Grains Sold

212.00To Interest

1,954.56〃 Preliminary Expenses

1,651.15

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JBM18881019〃 Ground Rent

324.24〃 Office Expenses

360.38〃 Samples of Beer

150.00〃 Charges

848.19〃 Working Expenses

2,653.56〃 Fire Insurance

413.00〃 Salaries & Wages

7,086.05〃 Coal

1,429.20〃 Advertising104.00

Balance

3,041.13$20,015.36

20,015.36

In discussing the foregoing report, Mr. Heckert explained that thedifference in the stock of beer shown in the Beer Product a/c was owing to thedisadvantages naturally arising in the commencement of a new Brewery suchas workingmen to whom such work is entirely new &c, during which period
from15 to 30 per cent loss is generally allowed, but that such loss gets lessafter a short experience and in fact will in future be almost nil.
The other parts of the report were discussed at length, and, in regard tothe financial position, it was decided to issue the remaining unallotted shares,
54 in all, at $118, as it was understood that they could be placed at this price,and this would make an average price for the total number of $120, the priceoriginally determined upon.
¾

Bottle Contract with Shinagawa Glass Works

Bottle Contract

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Samples of bottles supplied by the Shinagawa Glass Works wereexamined and a draft Contract explained, by which they propose to supply amaximum quantity of 25,000 Quarts and 10,000 Pints per month commencing
on 1st April, at $4.50 per hundred for Quarts and $3.50 for Pints with anallowance for breakage of 15 bottles for each thousand. The general principlesof the proposal were approved of- all moulds and samples to be approved bythe Brewer. Decided to arrange a Contract.
¾

Export Duty on Beer

Export Duty on Beer
Mr. Talbot mentioned that he had seen the Commissioner of Customs inregard to the removal of this duty, but that gentleman did not appear inclined
to make any alteration.
¾

Change of Office to the Brewery

Change of Office to the Brewery
A suggestion was made by Mr. Abbott that the Company’s work could be
carried on better by having the Office at the Brewery, but other members ofthe Board thought this step although advantageous in some ways would bedisadvantageous in others and the matter was deferred for the present.
¾

Title Deeds

Title Deeds
Mr. Talbot read a Draft Conveyance of the Company’s landed property by
Mr. Abbott and himself in favour of the Company and it was decided to havethe same executed and registered.
¾

Change of Agencies from Caldbeck Macgregor to Carlowitz

Agencies

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Some dissatisfaction was expressed at the apparent want of energy on thepart of the Shanghai Agents, Messrs. Caldbeck Macgregor & Co, in disposingof the beer, and it was arranged to write to Messrs. Carlowitz & Co asking
them if they inclined to take the Agency over.
A letter was read from Messrs. Carlowitz & Co of Tientsin agreeing totake the Agency for the northern parts of China, and expressing greatsatisfaction with the beer already sent and holding out good prospects for thefuture.
The meeting adjourned at 5.45 p.m.
J. Donaldson

F. Grosser

Secretary

Vice Chairman

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