NutryFarm International Limited (Under Judicial Management): FY2023 Financial Analysis and Corporate Update

NutryFarm International Limited, a Bermuda-incorporated investment holding company, remains under judicial management following a court order in June 2022. The latest audited financial statements for the year ended 30 September 2023, together with the independent auditor’s report, reveal serious ongoing issues affecting the Group’s financial health, governance, and future outlook.

Key Financial Metrics and Performance Comparison

For the financial year ended 30 September 2023 (FY2023), NutryFarm continued to experience significant financial distress. The company’s liabilities far exceeded its assets, and it reported substantial net losses. The auditor was unable to express an opinion on the financial statements due to pervasive uncertainties and lack of audit evidence.

Historical Performance Trends and Financial Health

• The company has recorded consecutive annual net losses and negative operating cash flows.
• Liabilities have consistently and increasingly exceeded assets, raising substantial doubt about solvency.
• No dividend has been declared for at least two consecutive years.

Errors, Inconsistencies, and Auditor Disclaimer

• The auditor issued a disclaimer of opinion, citing inability to obtain sufficient appropriate audit evidence due to missing records, lack of documentation, and judicial management restricting access.
• Opening balances for FY2023 and prior years could not be verified, affecting comparability and reliability of financial information.
• Key judgments, such as asset impairment and related-party transactions, could not be sufficiently substantiated.
• Potential contingent liabilities from customer compensation agreements exist, but no provision was made due to insufficient evidence and ongoing legal proceedings.

Corporate Governance and Legal Issues

• An independent review by FTI Consulting uncovered serious lapses in corporate governance, including late disclosure and lack of board oversight over major transactions, interest-free loans to third parties, and questionable asset disposals.
• The company has commenced legal action against former directors for alleged breaches of fiduciary duty and dishonest assistance.
• The Singapore Exchange Regulation (SGX RegCo) is investigating potential listing rule breaches.

Restructuring, Fundraising, and Asset Sales

• NutryFarm remains under judicial management, with multiple extensions granted up to February 2026.
• A restructuring agreement was reached with Corpbond IV Ltd, the largest creditor, involving a lump-sum settlement and transfer of creditor claims to Corpbond.
• Several loans have been secured by the company and its subsidiary AI Nova Pte. Ltd., some convertible into shares contingent on a resumption of trading. These include:
  • S\$5,000,000 interest-free loan from Alpha Hill Pte. Ltd.
  • Multiple US\$-denominated loans for working capital, bearing interest rates between 7–10%.
  • Significant portions of AI Nova’s share capital are pledged as security for these loans.
• Restructuring activities and asset recovery efforts are ongoing, but their ultimate success is uncertain.

Exceptional Items and Related-Party Transactions

• Historical advances and interest-free loans to related parties and associates were significant, poorly justified, and contributed to financial distress.
• Asset disposal during the judicial management period was not approved by the judicial manager.
• No evidence of share buybacks, new share placements, or EPS spikes was found in the report.

Legal Disputes and Contingent Liabilities

• Ongoing court proceedings in Thailand involving a subsidiary and a former director regarding breach of contract and compensation claims.
• No compensation claims have been filed against the company as of the report date, and no provision for liability has been made.

Going Concern and Outlook

• The financial statements have been prepared on a going concern basis, but this is subject to material uncertainties and depends on the success of restructuring and fundraising efforts.
• If the going concern assumption fails, substantial asset write-downs and liability recognition may be required.
• Trading in NutryFarm’s shares has been suspended since April 2022, and resumption is contingent on regulatory approval and successful restructuring.

Chairman’s Statement

No Chairman’s Statement was included in the report.

Conclusion and Investor Recommendations

Overall Assessment: NutryFarm International Limited’s financial performance and outlook remain weak, with persistent losses, negative equity, and severe doubts about its ability to continue as a going concern. Corporate governance failures and legal disputes further undermine confidence. The outcome of restructuring, fundraising, and asset recovery efforts is highly uncertain.

• If you currently hold this stock: Consider maintaining a highly cautious stance. The shares are suspended, and recovery prospects are contingent on successful restructuring, asset recovery, and regulatory approvals—which remain uncertain. Investors should monitor restructuring progress and regulatory updates closely and consult professional advisors before making any decisions.
• If you do not currently hold this stock: Avoid initiating new positions until there is clear evidence of successful restructuring, improved financial health, and reinstatement of trading. The risk profile is extremely high, with no guarantee of recovery or future profitability.

Disclaimer: This analysis is based strictly on information contained in the company’s FY2023 financial statements and associated disclosures. It does not constitute investment advice. Investors should perform their own due diligence and consult with qualified financial advisors before making any investment decisions.

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