Wednesday, December 6, 2023

Fire-hit Mainland Poultry fails to file accounts

Avatar photo
Egg producer blames covid and personnel changes for failing to file its accounts despite three reminders.
The Companies Office has written to egg producer after repeated reminders failed to produce results.
Reading Time: 3 minutes

THE poultry company hit by a fire that killed 50,000 hens is now facing action after failing to file its accounts to the Companies Office. 

Mainland Poultry is New Zealand’s biggest egg producer but as its 2023 March financial year looms, its reporting entity, Indus Valley Limited, has yet to file 2022 accounts in spite of three reminders from the Companies Office. 

The first two were courtesy reminders on March 31 and August 1 last year but the third reminder on September 1 alerted Indus Valley to overdue accounts because they were required to be filed five months from balance date.

When they were not filed by December 2, the Companies Office referred Indus Valley to its integrity and enforcement branch.

National business registries manager Bolen Ng said this week that Indus Valley now had 10 working days to respond to a letter asking for an estimated time when it would meet reporting obligations. 

If it does not respond, it will receive a further notice asking for a response within five working days. If it still does not respond, Ng said infringement notices may be issued to directors.

Indus Valley is required to post its annual results under Companies Act regulations for large companies based on certain asset and revenue levels in the two previous accounting periods and because its foreign owners have more than 25% of the company’s voting power.

Malaysian-headquartered private-equity firm Navis Capital Partners paid US$242 million (then around $350m) in April 2017 for 75% of Mainland Poultry via Navis’s Australian office.

BusinessDesk wrote to Mainland in January asking when the 2022 results would be filed and why a new company, Rocky Holdings Limited, had been added into its ownership mix on December 22.

John McKay, chief executive of Zeagold Nutrition, Mainland’s egg trading entity, responded that covid and personnel changes had impacted the company’s ability to file. 

“We endeavour to meet the requirements of the Companies Office by filing six months after our balance date,” he said. 

“Like many businesses, over the past two years our staff and auditors have been impacted by covid, which has slowed down the process of filing our financial results. 

“We have also had personnel changes which have resulted in the results not being completed at this point in time.” 

Deloitte’s Dunedin office audits the accounts. 

McKay also said Indus Valley was making changes to its organisational structure to ensure it was more streamlined for tax and reporting purposes, hence the creation of Rocky Holdings. 

He did not elaborate on how Rocky Holdings would streamline reporting but assured it was not related to a float or sale of shares or any other change in the company’s shareholding.

Rocky Holdings’ sole shareholder is Indus Valley.

Since McKay’s response, he has become a shareholder of Indus Valley.

The company reported on February 28 it had redeemed 2.24 million shares on September 2, 2022, and had issued McKay 600,000 shares on February 7. 

McKay’s share issue came the day after he fronted to media about a fire in two of 12 hen-layer sheds at the company’s Orini chicken farm in the Waikato, killing 50,000 egg-laying hens.

The redeemed shares came from Indus Valley shareholder, Mainland Group MIP Ltd, owned by Mainland Poultry, in turn owned by Indus Valley.

Major shareholder Navis Capital now owns 72.9% of the company via Hong Kong-registered Paul Newman Ltd, understood to be unrelated to the salad-dressing empire named after actor Paul Newman.

Other shareholders include Mainland founder and managing director Michael Guthrie (13.8%), Murray Valentine (6.02%), the Winmill family (3.11%), the Sutherland family (0.49%) and McKay (0.30%). 

Indus Valley’s March 2021 results recorded a $2.942m loss, compared with $7.55m net profit in the previous corresponding period on the back of $176.04m ($186.13m in 2020). 

Shareholders injected $25m into the business in August 2021 to reduce debt after two breaches of its banking covenants in September 2020 and March 2021.

The recent share redemption may have been used to repay some of that money to shareholders.

The 2021 accounts showed Indus Valley had borrowings of $116m through a syndicate of three banks, with a funding arrangement extended from October 2022 to April 2023.

The company also disclosed an adjustment, restating the prior period comparatives to correct allocated amounts arising from the 2017 acquisition by Navis of the majority stake in Mainland Poultry.

Certain amounts were incorrectly recognised as property, plant and equipment, rather than goodwill. Deferred tax was also incorrectly recognised against certain fair value adjustments at the time of the sale, when they should have had a deferred tax impact.

People are also reading