Broadlands auditor tags accounts over need for shareholder support

Broadlands Finance, the auto-financier whose credit rating was cut to CCC- in January, had its 2013 accounts tagged by the auditor over the lender's need for shareholder Tony Radisich's continued support to keep afloat.

Auditor Grant Thornton gave an unqualified opinion on Broadlands' accounts, while raising an emphasis of matter on its ability to continue as a going concern. Broadlands' directors decided the lender could continue as a going concern after shareholders agreed to continue providing financial support to pay debts as they fall due.

"In the event that the group does not continue to receive the financial support of the shareholders, the going concern basis used in the preparation of the financial statements would not be appropriate," the company says.

The Auckland-based finance company narrowed its loss to $4.07 million in the 12 months ended March 31 from $5.38 million a year earlier, taking a $4.82 million impairment charge on bad loans, up from $3.7 million.

That chewed up operating income, which more than doubled to $5.48 million in the year, primarily from higher interest revenue. The lender held net finance contract receivables of $15.89 million as at March 31, compared to $20.34 million a year earlier, and had $7.04 million of debenture stock outstanding, down from $12.03 million in 2012.

Standard & Poor's cut Broadlands' rating and left it on a negative outlook after delays to the lender registering a new debenture prospectus. That created a strained funding profile and liquidity position, leaving Broadlands reliant on shareholder support.

The finance company took a $50,000 provision to cover potential fines and legal costs from a Reserve Bank prosecution over Broadlands not having enough independent directors on its board. Broadlands pleaded guilty at a hearing last month and will be sentenced on July 16.

(BusinessDesk)

This article is tagged with the following keywords. Find out more about My Tags

1 Comment & Question

Commenter icon key: Subscriber Verified

It's about time this happened. Broadlands have switched auditors three times in the last 6 years because they argued that they didn't need to provide for loan books that were clearly impaired.

Trying to skirt around the IFRS rules was never its strong point.

What now? Switch again?

Reply
Share

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7733 -0.0013 -0.17%
AUD 0.9501 -0.0003 -0.03%
EUR 0.6313 -0.0023 -0.36%
GBP 0.4955 -0.0002 -0.04%
HKD 5.9975 -0.0098 -0.16%
JPY 92.7030 0.1190 0.13%

Commods

Commodity Price Change Time
Gold Index 1195.4 -2.890 2014-12-19T00:
Oil Brent 61.4 1.580 2014-12-19T00:
Oil Nymex 57.1 2.910 2014-12-19T00:
Silver Index 16.0 0.096 2014-12-19T00:

Indices

Symbol Open High Last %
NZX 50 5527.8 5553.7 5527.8 0.25%
NASDAQ 4759.0 4779.2 4765.4 0.20%
DAX 9827.3 9924.0 9787.0 0.81%
DJI 17812.2 17911.6 17804.8 0.49%
FTSE 6545.3 6620.9 6545.3 0.48%
HKSE 23264.0 23478.9 23116.6 1.26%
NI225 17685.5 17692.6 17621.4 0.08%