City Forestry Finances 2014

12 Nov

Here are the 2014 finances for Invercargill City Forests Ltd (8Mb because it is scanned – only 25 pages) and the $22.7 million they owe to Holdco.  Realist will be interested in PDF page number 14 (Forest Growth Ltd information)


8 Responses to “City Forestry Finances 2014”

  1. Realist November 12, 2014 at 7:39 pm #

    This whole thing has me worried, the Annual Report States ICFL has assets of $36.2M, and Liabilities of $27.4M (Borrowings of $22.7M), yet $10.6M of those assets is an unsecured loan to FGHL. Meaning if FGHL defaulted and couldn’t pay they’d have assets of $25.6M and Liabilities of $27.4M.
    More worrying is Dean recently stated that ICFL’s borrowings were only $12.48M, (Clearly trying the offset method) and yet the paper released recently stated $18.4M.
    So unless ICFL have paid ICHL $6M – $9.9M in the last 5 months there is some obfuscation going on with the numbers. As ICFL’s borrowing are just that and can not be offset trying to use an unsecured loan as justification, it is afterall an actual debt owed by ICFL.

    • Philip T November 12, 2014 at 8:07 pm #

      Deans reply to Max Skerretts comments recently in the Times would tend to mean he was deliberately trying to mislead the public. If that is the case his position must now be on the line as that is just unacceptable from a person in his position. Max stated the borrowings were 22 million and was ridiculed and told he couldn’t read the accounts properly. Cant wait to hear how we are all reading things the wrong way or the 10 million loan to Holdco is not an actual debt. Its getting concerning that they seem to be in the dark when it comes to their own business accounts but the chair was applauding the wonderful job Dean had done over the year in his report so we must be missing something. Maybe the secret handshake?

      • Realist November 12, 2014 at 9:54 pm #

        The accounts are quite clear, borrowing of $22.7M, no question, despite $10.6M of these being a loan to an associate it does not detract from the fact that ICFL have actual borrowings of $22.7M.

        It could be stated that the net debt is less the $10.6M, and that being the case the latest figures supplied stating ICFL’s debt of $18.6M is still $6M higher than Dean is quoted as stating in Minutes recently.

        You will always get the argument that they are not trying to mislead, however they most certainly are not being transparent, Borrowings are borrowings plain and simple, Nett Debt is again different, however unsecured loans to associates of $10.6M when you’re a minority shareholder begs the question of just how much the other party has funded, or is the 49% a means of avoiding reporting?

  2. Philip T November 12, 2014 at 11:04 pm #

    The 49% owned company has a similar feel to the Bond Contracts deal where they inflated the value of Pro Drainage to help out a mate. The 1% to avoid shareholder and public scrutiny is a worry and its hard to understand how the company is valued when they talk of the roller coaster environment forestry companies are in. It would not be difficult to wipe 50% off the value of the company overnight if something affected the market. Having a bank call in shares would also have people scrambling.

  3. Kylie November 12, 2014 at 11:23 pm #

    I had hoped the following section of the LGA would provide a solution (depending on how the fifth Director was appted), sadly though the words “is not a company” screwed it up. The implication of (e) would have been significant (SOI and annual reports from FGHL)

    If a council organisation is not a company, references in this Act, in relation to the council organisation, to—

    (a) equity securities include any form of voting rights in that organisation; and

    (b) the directors and the board include trustees, managers, or office holders (however described in that organisation); and

    (c) shareholders include any partners, joint venture partners, members, or other persons holding equity securities in relation to that organisation; and

    (d) the constitution include any rules or other documents constituting that organisation or governing its activities; and

    (e) subsidiaries include any entity that would be a council-controlled organisation if the references to ““local authority”” or ““local authorities”” in subsection (1) read ““council-controlled organisation”” or ““council-controlled organisations””.

    • Realist November 13, 2014 at 10:02 am #

      Control is a key word in the LGA, and with only 49% of FGHL, there is no control :), a clever move

      • Kylie November 13, 2014 at 11:31 am #

        But aren’t there new standards? “NZ IFRS 10 establishes a new control model. The new control model broadens the situations when an entity is considered to control another entity.” according to page 28 of the Holdco Annual Report. There is hope….lol

  4. Philip T November 13, 2014 at 11:55 am #

    Is this the same council that has a mayor who talks about openness and transparency?????

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