MASTERTON LICENSING TRUST THIRD ANNUAL REPORT FOR THE YEAR ENDED 31st MARCH, 1950

Appendix to the Journals of the House of Representatives, 1950 Session I, H-24a

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1950 NEW ZEALAND

MASTERTON LICENSING TRUST THIRD ANNUAL REPORT FOR THE YEAR ENDED 31st MARCH, 1950

Presented to Both Houses of the General Assembly Pursuant to Section 43 of the Masterton Licensing Trust Act, 1947

MEMBERS OF THE TRUST J. A. Betts, Esq. (Chairman); E. W. Cheetham, Esq. ; H. H. Ewington, Esq. ; S. J. Gilman, Esq. R. P. Levien, Esq.; J. C. D. Mackley, Esq. Sir, — 28th April, 1950. I have the honour to forward herewith the report of the Masterton Licensing Trust for the period ended 31st March, 1950. J. A. Betts, Chairman. The Hon. the Minister of Justice.

REPORT

Constitution The Trust is constituted under the Masterton Licensing Trust Act, 1947. In accordance with section 7 of the Trust Act, the term of office of three of the first elective members Expires in 1950. An election to fill these vacancies will be held in conjunction with localbody elections in November next. By agreement, Messrs. J. A. Betts, R. P. Levien, and J. C. D. Mackley retire and are eligible for re-election. Meetings There were thirty-nine meetings held during the year and a number of Committee pieetings.

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Development (a) General The Trust's policy had included the simultaneous opening of a minimum of two bars. However, in spite of repeated applications, the issue of a building permit for the first section of the Hotel Masterton scheme was delayed until September, 1949. Plans had been prepared and materials had been on the site for six months, but, as a result of the late issue of the permit, the plan for the simultaneous opening had to be abandoned. (b) Pioneer Bar/Lounge (Cosy Building) Full reconstruction work commenced in March, 1949, and the work has now reached an advanced stage. (c) Hotel Masterton (Northern Approach) A contract for the first section (bar/lounge) was let in mid-November, 1949, and construction work commenced in January, 1950. The permit for this section was made subject to preparation of plans for an accommodation unit. However, in view of the expected opening of the Empire accommodation unit, it is not intended, at present, to go beyond the preliminary stage until the Trust has a better indication of total accommodation needs and is satisfied that the capital expenditure will be economical and justified. (d) Hotel Empire A contract for the reinstatement of earthquake damage and complete modernization of the Hotel Empire was let in December, 1949. Work on this contract commenced in February, 1950. Good progress has been shown. Plans for an annex at the rear of this building have been approved. These incorporate staff quarters, additional guest accommodation, and a much needed bulk-store. . (e) Hotel Midland This property was acquired under the Public Works Act when negotiations arising from an offer by the owners of the Hotel Midland for its sale to the Trust broke down. The furniture and equipment was purchased by agreement. A claim for compensation for the land and buildings has not been made by the owners at this date. The Trust took possession on Ist October, 1949, without interruption of business activities and without any loss of existing staff. Extensive renovations and repairs, some of an urgent nature, are required, and the work is now being done in stages to avoid interference with accommodation. Opposition to Club Charters In November, 1949, the Trust was invited by the solicitors for the Wairarapa Soldiers' Hostel to give evidence before the Licensing Control Commission to whom application had been made for a club charter. The Trust questioned the Commission's powers to grant charters in the Trust District, but was advised that this power had not been excluded. It was clear that substantial operation by chartered clubs could vitally affect the Trust, and, in view of the very substantial commitment of public funds and the Trust's responsibility to the public, it was decided that all applications for club charters in the Masterton Licensing Trust District would be opposed. A case was therefore presented at the hearing,

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Finance Negotiations are being continued for the financing of the Trust's capital expenditureA number of alternative schemes have been submitted. The absence of any fixed initial :c capital " has greatly increased the Trust's problems. In September, 1949, at the request of the then Minister of Finance, preparations were made to place debentures on the market. The Trust had already been advised, and had formed the opinion from the facts and advice tendered, that such a scheme would be impracticable and uneconomic a-t that stage of development. In view of further problems which arose in the drafting of a Trust deed and prospectus, further action was deferred and discussion of a proposal for Government guarantee of the debentures was reopened. • Meantime, the earlier temporary method of finance of a Consolidated Fund advance plus a bank overdraft guaranteed by the Government has been continued. Latest estimates are that the capital cost of the first phase of development (to which the Trust is already committed) may exceed £334,000. A second phase has been under consideration, including the major accommodation hotel. Preliminary estimates for this phase were in the vicinity of £200,000. Trading Results eor the Year The annual accounts and Balance-sheet are appended and show that the over-all net trading profit, after providing for depreciation, preliminary and short-term capital expenses, but before providing for taxes, amounts to £20,917. Provision for taxes absorbs £12,932 of this, leaving a final net profit for the year of £7,985. Section 41 of the Trust Act requires that a depreciation reserve be established. Accordingly, a nominal sum of £5OO has been so set aside, leaving unappropriated profits from two year's trading of £13,310. No profits have been distributed. Taxation for the same period has absorbed over £22,000 which, at this stage, can come only from additional borrowings. Turnover has increased and the ratio of profit to costs is probably at its maximum. The accounts for the Midland Hotel cover a period of six months only. Certain expenses consisting of interest, rates, insurance, &c., dependent on a compensation claim by the former owners, were not ascertained at balance date and could not be included in this year's accounts. Distribution of Profits The Trust has again considered it prudent, in view of the heavy capital expenditure programme still in progress, to make no distribution of profits in cash this year. The Trust is of the opinion that the provision of new and modernized buildings in the town and improved accommodation and bar facilities for visitors and local people alike represents the best possible use of its profits at the present juncture.

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MASTERTON LICENSING TRUST Trading and Profit and Loss Account for Year Ending 31st March, 1950 Last Year. £ £ 77,760 Bottle-store sales .. .. .. .. .. .. .. .. 98,975 48,859 Deduct cost of goods sold .. .. .. .. .'. .. 62,018 28,901 Leaving a gross profit of .. .. .. .. .. .. 36,957 6 Add permit fees and sundry other revenue .. .. .. .. .. 30 28,907 36,987 Deduct— Bottle and bulk store expenses— £ £ 2,702 Wages .. .. .. .. .. .. 4,210 617 Rents .. .. .. .. .. .. 882 982 Freights, cartage, and wrapping .. .. ~ 869 608 General trade expenses, including insurances, maintenance, and licence fees .. .. .. .. .. 750 63 Depreciation on equipment .. .. .. .. 133 1,318 Balance of cost of temporary alterations to leased premises written off . . .. .. .. .. .. 1,348 8,192 Administration and management expenses—--1,822 Salaries .. . . . . .. .. 2,569 1,050 Trust members' honoraria .. .. .. .. 1,050 466 Rent, rates, insurances, and land-tax .. .. .. 1,027 463 Stationery, stamps, telephones, advertising .. .. 244 137 Members' travelling-allowances .. .. .. .. 51 360 Election expenses 493 General administration expenses, including legal expenses, audit fees, and staff travelling-expenses .. .. 688 21 Depreciation on office equipment .. .. .. 41 •• •. Unauthorized expenditure (search party, £2 6s. 6d. ; wreath, £2 Is. ; Rugby union, 12s. Bd. ; police charity day, £5 ; staff Christmas function, £8 12s. 7d.) .. .. .. 19 5,689 387 Financial expenses : Interest on overdraft and advances .. .. 1,612 856 Non-recurring expenses : Valuation, surveyors, and legal fees on properties written off .. .. .. .. .. 494 13,050 Total expenses deducted .. .. .. .. .. 15,987 Hotel Midland: Net trading loss for six months (as per statement) .. .. .. .. .. .. .. 83 16,070 15,857 Leaving net trading profit before providing for taxes .. .. .. 20,917 10,032 Provision for income-tax and social security charge .. .. .. .. 12,932 £5,825 Leaving net profit after providing for taxes .. .. .. .. £7,985 Appropriation Account £ Unappropriated profit last year 1 .. .. .. 5,825 Add net profit this year .. .. .. .. .. 7,985 13,810 Deduct amount placed to depreciation reserve .. .. .. 500 Unappropriated profit carried forward to next year .. .. .. £13,310 (N.B. —Shillings and pence omitted.)

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MASTERTON LICENSING TRUST —continued MIDLAND (PRIVATE) HOTEL Trading and Profit and Loss Account for Six Months Ending 31st March, 1950 £ £ Meals and lodging .. .. .. .. .. .. .. .. 6,358 Rent received .. .. .. .. .. .. .. .. 130 6,488 Deduct— Cost of food, supplies, fuel, and power .. .. .. .. .. 2,342 Wages .. .. .. .. .. .. .. .. .. 3,101 Laundry, stationery, stamps, telephones .. .. .. .. .. 322 General expenses, including insurances and advertising .. .. .. 125 Plumbing, electrical, and equipment maintenance .. .. .. .. 82 Depreciation on alterations and additions to building .. .. .. 15 Depreciation on furniture and equipment .. .. .. .. .. 495 Interest on bank overdraft .. .. .. .. .. .. .. 89 6,571 Net trading loss (six months) .. .. .. .. .. .. £B3 Contingent Expenses.—No allowance has been made for unascertained expenses contingent upon claim for compensation by Hotel Midland, Ltd., and the net trading loss shown is subject to this. (N.B. —Shillings and pence have been omitted.)

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MASTERTON LICENSING TRUST— continued Balance-sheet as at 31st March, 1950 Liabilities i Assets Last Year I last Year £ Current liabilities and provisions— £ £ \ ' £ Current assets— £ £ 9,333 Bank overdraft .. .. .. .. 23,662 > 70 Cash in hand .. .. .. .. 105 Deposit money .. .. .. 1,500 .. Sundry debtors .. .. .. .. 133 8,588 Sundry creditors .. .. .. 15,672 17,487 Stock in hand and in bond .. .. 21,750 10,032 Provision for taxation .. .. .. 12,900 21,988 53,734 Fixed assets— 30,000 Long-term liabilities: Treasury advance .. .. 50,000 Land and buildings— Capital reserves : Depreciation reserve as required under 25,314 Pioneer (late Cosy) at cost to date .. 46,850 section 41, Masterton Licensing Trust Act, 1947 .. 500 6,500 Empire Hotel at cost to date .. .. 16,440 5,825 Revenue reserves: Unappropriated profit .. .. 13,310 5,515 Hotel Masterton (late Northern Approach) at-cost to date .. .. .. 13,543 f .. Hotel M-idland (see footnote) 1,254 Temporary building, Bannister Street, at cost .. .. .. .. 1,309 78,142 Alterations to premises— £ Temporary alterations to leased premises .. . . . . 2,666 Less amount written off .. 2,666 1,318 Additions, alterations, and repairs to Hotel Midland . . .. 426 Less depreciation on additions and alterations .. .. 15 4ll 4ll Furniture and equipmentFurniture and equipment in use at cost .. .. .. 11,110 Less depreciation .. .. 753 1,720 10,357 4,600 Furniture and equipment in stock .. .. 6,646 17,003' 63,778 £117,544. 63,778 £117,544 Unascertained Liability,—There is an unascertained liability to Hotel (N.B.— The freehold property of Hotel Midland is vested in the Trust,, Midland, Ltd., for compensation for land and buildings taken under the but value has not been included as this is contingent on a compensationPublic Works Act. ' claim by Hotel Midland, Ltd.) (N.B.—Shillings and pence omitted.) (N.B.— Shillings and pence omitted.)

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Masterton Licensing Trust: C. Crawford, Secretary-Treasurer. The Audit Office, having examined the Balance-sheet and accompanying accounts required by law to be audited, hereby -certifies them to be correct.— J. P. Rutherford, Controller and Auditor-General.

Approximate Cost of Paper.— Preparation, not given; printing (734 copies), £l5.

By Authority: R. E. Owen, Government Printer, Wellington.— 1950.

Price 6d .]

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