Extract from the Hong Kong Daily Press
18th April, 1904
22696
9 1907,
CHINA LIGHT AND POWER COMPANY, LIMITED.
The sixth ordinary general meeting of shareholders in this Company was held at the office of the general managers, Messrs. Shewan Tomes and Co., yesterday morning. Mr. P. Shewan presided, other shareholders present being Sir Paul Chater, Messrs. H. P. White (consulting committee), R. Henderson (secretary), and Fung Wa-chun.
The SECRETARY having read the notice calling the meeting, the CHAIRMAN said—Gentlemen: The report and accounts for the year ending 28th February were issued to you on the 5th inst., and are now presented for your approval. The gross profit amounts to $79,966.66 as against $61,184.97 for the previous year, and the net profit to $46,459.10 against $31,219.89 last year—a fair improvement, but not so much as we had hoped and as it might well have been, had we not had rather bad luck. Last year we suffered from the boycott at Canton, and this year our earnings have been curtailed by two severe outbreaks of fire there. A number of good customers were thus lost to us for a time, but the quarters where these fires occurred are being rapidly rebuilt, and we hope before long to do a better business there than before. Interest on money borrowed is again a heavy item, and has reduced our profit by some $18,000. I cannot complain of this for the money was badly wanted and has been very useful, but I do feel it hard that we should lose over $7,700 in discount on the small coins, which we receive in payment of our bills, and which we cannot well refuse to take from our customers. Many of these coins are British coins, which the Government who issues them should never allow to fall below their par value. Apparently the Government, led away by the profit to be made on the subsidiary coins issued them to too great an extent, and so the interior of China became flooded with them. The Provincial Governments retaliated with a still baser coinage, and industries like ours have to suffer for want of forethought on the part of our rulers who now seem helpless to remedy the situation they have brought about, though surely it cannot be a difficult matter to prohibit the Chinese coins altogether and call in the British until the supply equals the demand. As it is, British coins are at a heavy discount in a British Colony, which it seems to me is a state of things far from creditable to those within whose jurisdiction this matter lies.
The cost of coal was a little lower than during 1905, but it was still much above the normal figure, while on the other hand the quality was worse than ever, so much so that we have now about decided to abandon Japanese in favour of Australian coal.
On the other hand, our experiment with a Diesel oil engine has so far resulted very satisfactorily with a substantial saving by the use of oil, compared with burning coal, although as the engine only got into regular working at the end of 1906 this economy has not appreciably affected the accounts before you. Our losses from the typhoon in September were about $2,500 in capital, and a small loss in revenue at Kowloon, and from wires at Canton about $1,600 in capital, and a heavy reduction in revenue which, however, will be recovered in time. You will see from the accounts that we have been at a large expenditure for additions, alterations and re-arrangements to the Power Station at Canton, which have been forced upon us through the Factory having been laid down by its original promoters in a cramped position, and with apparently no thought whatever of future extension or the expansion of business, which has since taken place. While these changes are absolutely necessary owing to circumstances beyond our control, they will at the same time create much more economical conditions and better working all round, but we have still a good deal more to do in this way before the plans of our manager, Mr. Marston, whose advice and recommendations in these matters we have found very reliable, can all be carried out.
We much regret that in spite of the fact that the present accounts show a substantial improvement all round and a larger balance of profit, we cannot, in face of the very serious amount of $749,970.10 due to our Bankers and other creditors, feel justified in recommending a repetition of last year's dividend. We, therefore, propose to dispose of the credit balance of $46,459.10 by writing off $21,459.10 as depreciation, and carrying $25,000 forward to credit of next year's Profit and Loss Account.
As you are all aware we are now raising a sum of $500,000 on debentures at 6 per cent which will pay off our present debts, and leave about $170,000 for further working capital. With part of this money we shall obtain two more 200 B.H.P. Diesel engines, one of which is actually required now, as all our plant is working full time, and to keep pace with the demand we have had to fall back on our spares, always a dangerous thing to do. The first of these engines should be working by November next, and the second a month or so later. This will give us three Diesels altogether on which there will be a marked saving in working expenses compared with steam. Our reason for ordering two of these engines at once is that they are in great demand at home, and the makers of them are so full of work that they must be ordered well ahead to secure the required delivery.
I am pleased to say as regards our prospects that the demand for light continues to grow, and we have not the least doubt that there will be plenty of work for both engines when they are ready to start, for as I explained just now, the first one could be utilised at once if it were here. I do not wish to appear too optimistic or to mislead you by painting the future in too glowing colours.
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