Sierra Cables awaits forensic audit over Rs. 172 m amiss in inventories

Friday, 13 June 2014 02:03 -     - {{hitsCtrl.values.hits}}

Sierra Cables Plc (SIRA) is awaiting the completion of a forensic audit to recent discovery of Rs. 172 million difference in inventories. In a fresh filing SIRA said further to the announcement made by the Board relating to certain matters affecting the authenticity of its financial statements, its auditors were mandated to conduct a review. A preliminary report from the Auditors covering the difference in the work in progress balance between the general ledger and the valuation carried out by the management and certain unrecorded transactions. The report discloses the following preliminary findings. Work in progress: There is a difference of Rs. 172 million in the value of work in progress of inventories between the General Ledger and Valuation carried out as at 31 March 2014. However the auditors have indicated that it is not practicable for them to make reliable assessment of the impact relating to previous periods based on the available records. As such this difference of Rs. 172 million will require to be written off in the financial statements for the year ended 31 March 2014. Unrecorded transactions: Certain revenue, expenses and assets of the Company have not been recorded in the General Ledgers and financial statements of the Company during the previous years and the year ended 31 March 2014. These items have now been provisionally quantified as (a) Income of approximately Rs. 113 million (b) expenses amounting to Rs. 107 million and (c) assets of Rs. 6 million. The Board has commissioned further investigations to verify the details of these transactions. In addition it has also been identified that there is a difference between the physical finished goods stock of the company and the stock value in the general ledger. The impact of the difference is approximately Rs. 93 million which will be written off in the financial statements after further investigation. In these circumstances, the Board in consultation with the auditors has determined that the financial statements cannot be completed pending the receipt of final confirmations following a forensic audit. The SIRA Board has assured shareholders and the public will be duly informed of the progress.