PracticeAuditITN hit by going concern statement

ITN hit by going concern statement

Deloitte identifies 'material uncertainty' at TV news providers

ITN, producer of News at Ten and Channel Four News, has received a going
concern statement from auditors Deloitte over the deficit in its pension fund.

The statement comes in the latest set of annual reports which show a
shortfall in the £320m pension scheme of £22.8m.

Pretax profits have fallen 44% to £2.8m on revenues of £96.7m.

The statement, signed on 13 March this year said: ‘The directors have
received indications that following the marked decline of equity markets since
June 2008, it is likely that the pension scheme will show a significant deficit
which may require finding contributions in excess of the company’s expected cash
resources.

‘This indicates the existence of a material uncertainty which may cast
significant doubt about the company’s ability to continue as a going concern.’

ITN’s financial statements are for the year ending 31 December 2007 and
acknowledge the pension scheme as a risk. The directors’ report said there is
‘currently uncertainty over the future funding requirements of the scheme.’

The accounts remain unqualified.

According to statements filed at Companies House, ITN’s group balance sheet
shows current assets of around £28.7m, at year end, with current liabilities
standing at around £31m- based on calculations using figures from the report- a
current ratio of 0.9.

Going concern statements have become highly controversial in recent months.

Guidance from the Financial Reporting Council was viewed as trying to head
off the possibility of a deluge of auditors making a deluge of defensive going
concern statements.

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