FRRP forces papermaker to amend accounts

Inveresk, the former papermaker, has been forced to amend its 2004 accounts,
following an inquiry by the Financial Reporting Review Panel.

The amendment centres around the company’s treatment of the timing of the
£600,000 sale of its Borelands reservoir at Inverkeithing in Fife, which
Inveresk booked as profit for 2004, even though it only had outline planning
consent by the end of the year and the sale contract depended on a detailed
consent, the Herald reported.

The reservoir was eventually so another party without conditions in March

In a statement on the matter, the FRRP said: ‘If a post balance sheet event
does not provide additional evidence of conditions existing at the balance sheet
date, but is important for an understanding of the company’s position, it is
disclosed by way of note but not taken into account in the results for the

The correction resulted in the 2004 reported profit of £184,000 being
adjusted to a loss of £417,000, with reserves marked down by £601,000 for the
start of 2005.

Despite this ruling Inveresk chairman Jan Bernander insisted the contract was
a straight substitute so could be booked for 2004 and said: ‘The board had
believed ‘the position was fully understood by readers of the accounts including
bankers, suppliers and shareholders’.

Following the correction Inveresk was able to report a £3.82m profit for last
year against the £417,000 loss for 2004.

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