“Liquidity no better”

Press, 7 July 1977, Page 12

“Liquidity no better”

PA Auckland It was obvious from the continued upwards pressure on interest rates and the tightness of liquidity in the economy that there had been, no improvement since the | March 31 balance date of Marac holdings, Ltd, said the chairman (Mr J. C. Fletcher) at the annual meeting. As reported, he had commented in the annual report on the severity of the general liquidity crisis and of ( the concomitant rise in ( interest rates towards the' end of the financial year. Hence liquidity management in an expanding and diversified group w'as a major function, Mr Fletcher said. He told shareholders that the company maintained an adequate doubtful-debts provision. As well as endeavouring to maintain high acceptance standards on loans and advances made, it had always had a very prudent write-off policy. Nevertheless it had been a practice to create a specific provision from the tax-paid, profit to ensure an adequate) cover for any unexpected doubtful accounts. As a result of transfer] from the latest profit, the' amount of that provision I had increased $307,000 taxpaid this year, now standing |at $758,000. Because that provision was tax-paid, it would be 'possible to write-off problem

accounts of $1,378,000 against the provision without affecting future reported profits. Write-offs in the year to March 31, were about 25 per cent of that amount.

| At balance date, Marac I had total deferred income accounts in excess of SISM. That income will be brought to account in the normal course of events within the next two to three years. Mr Fletcher said the board would look at a suggestion from a shareholder who said (company directors were being paid part-time cleansers’ rates — their fees had moved up sevenfold in 10 years compared with auditors’ fees which had multiplied more than 60-fold. An extraordinary general meeting approved a series of resolutions enabling payments from the share premium account in lieu of dividends. Mr Fletcher informed the meeting that last week Security Pacific National Bank of Los Angeles obtained the consent of the Federal Reserve Bank to take up its entitlement of shares after • the increase on issued capital involved on the A.G.H. | take-over. The Security Pacific National Bank now owns 20 per cent of Marac share capital. Flexibility would be given • to the financial sector and in interest rates by overdue (changes to the Moneylenders Act, said Marac’s managing director (Mr J. D. Rose). 1 He cited a case of “United

States freedom” whereby a sale of loans was advertised. Referring to the proposed Securities Advertising Bill, Mr Rose said he was doubtful of advantages seen for licensing and thought disclosure provisions were more effective. Mr Rose said two officers had been working with the commercial affairs division of the Justice Department trying to find an acceptable formula.