POWER BOARD

Hawera Star, Volume XLVII, 9 August 1928, Page 6

POWER BOARD

CHAMBER OF COMMERCE CRITICISM. MR E. DIXON REPLIES. BOARD’S INTERPRETATION OP COMPANY’S OFFER. (To the Editor.) Sir, —I would like to reply to the statements made by Mr. Bone yesterday 're Power Board and Electrio Light Company. The fact is that the manager of the Electric Light Company offered the deputation from the Power Board a loose leaf ledger and balance-sheet. These contained sufficient infoiinatlon to enable them to arrive at the tangible assets of the company. As proof of this- assertion I asked the manager if he would place the letter he sent to the board, also the loose leaf ledger and balance-sheet that he offered to the deputation from the Power Board, before two- accountants. On his agreeing to- this, what was the verdict of the two accountants ? “Any accountant or bookkeeper that ooukl not arrive at the tangible assets from the information .placed before us is a. dud.”

In reference to the £20,000: The question has been asked why did' the company spend that amount of money durfncr negotiations with the Power Board? Answer: Owing to the growth of the consumers' and the very dry summer the company had to face' the expense of a new Diesel engine or take the' risk of having to cut off supply; further; - the Government- insisted ton the lines being brought up to the standard required. Now, what about the £140,000? Well, Mr. Editor, I am sorry that Mr. Bone did not tell me that he queried my figures writing to the paper. I could have saved him the humiliation of having to admit that neither he or his hoard understand the offer made by the Electric. Light Company. The letter said distinctly £140,000,, LESS liabilities. I am not an hut still my experience in public, life* has made me careful, hence the figures given to the Chamber of Commerce were verified by the manager of the Electric Light Company. I was sorry they were not published in detail. They are as follows : . \ ' £ s. d.

Net profit to Bower Board 13,057 811 Taking the loan money at 5 per cent and 1 If per cent sinking fund this means that on the present working the company are making interest and sinking fund on a capital expenditure of £200,874. As to the statement of not sufficient/ margin in the price of £140,000, less liquid assets and liabilities, the bal-ance-sheet of March 31, 1928, shows: “ V ‘£ s. d.

Liabilities to Bank of , Australasia 21,176 17 11

Excess of liabilities ... 12,689 14 3 The company’s price of £140,000, less- £12,689 14s 3d, would require £127,310 os 9d as net payment by Die board. c The present profit on. the company’s working shows approximately 12 per cent investment on the offer made by tile company, viz., £127,310 os 9d, and the profit shown. by the balance-sheet shows approximately 20 per cent interest on the offer of £67,000 mode by the Power Board for the company’s undertaking. .1 These figures make it clear that all the Power Board had to ' pay -was £127,310. If the Electric Light Company owed the bank £SOOO for poles, etc., they do not expect the Power Board to pay for poles and then pay off the overdraft caused 1 by their purchase. *

Availability .rate: If the Power Board carry on sis successfully as the Electric Light Company they should lie able to reduce the price to the consumer and also avoid an availability rate. At the same time we know they could collect money in this way should it be needful through bad management. I am quite satisfied that the bringing of this, important matter before the chamber has liorne fruit. Thanking vou.—l am, etc., E. DIXON, President, Chamber of Commerce. August 9.

Gross nrofit as disclosed by the company’s lial-knee-sheet, March, 31, 1928 : 14,612 12 1 Less depreciation Gov- ■ eminent standard. ... 1,455 3 2 A mo mi t. shown bv Power Board as net profit ... 13.157 8 11 Present net profit capitalised at bank rate, 64 per cent, equals ... 202,415 0 0 Or, Gross profit equals 14,612- 12 1 Less Govt, standard of depreciation 1,455 3 2 Pcseowe for bad debts. ... 100 0 0

Less liquid assets bad debts reserve . 436 0 0 Undivided profits 4,358 0 3 Sundrv debtors 3,766 18 1 K.Z. inscribed stock ... 2,035 0 0 Cash in hand ' .~ 107 4 10 10,703 12 2 10,473 5 9 Add sundry oreditors ... 2.216 8 6