PGC
22/07/2015 16:14
GENERAL
PRICE SENSITIVE
REL: 1614 HRS Pyne Gould Corporation Limited
GENERAL: PGC: PGC audit update
22 July 2015
PGC audit update
To clarify some misperceptions in the market, the audit of Pyne Gould
Corporation's ("PGC") annual accounts for the 12 months to 30 June 2014 was
completed on 3 November 2014 following which PGC announced the result. There
are a number of points relating to the PGC audit:
o PGC's final audit of its annual accounts to 30 June 2014 released last year
was qualified specifically and only to the extent that the Torchlight Fund LP
("TFLP") audit had not been completed. PGC held 25.33% of TFLP as at 31
March 2014 - which through one of its subsidiaries, had experienced a delay
in closing its 31 March 2014 audit. This was due to a requirement by the
auditor to fully value at 31 March 2014 a number of real estate assets in
that TFLP subsidiary. This was a lengthy process.
o In completing the half year results for the period to 31 December 2014, PGC
formed the view that although the TFLP audit process had not yet been
completed it was likely that an impairment would result. The best view that
PGC had at that time was that it was likely that there would be an impairment
of approximately GBP5.8 million. Consequently, an impairment of GBP5.8m was
reflected in the half year result.
o Following the recent completion of the TFLP 31 March 2014 audit process,
the final impairment level was confirmed as being approximately GBP7m which
was subsequently announced to the market. This is not in addition to the
GBP5.8m which had already been reflected in the half year result i.e. the
variance therefore is an additional GBP1.2m above what had already been
allowed for.
o The PGC 2014 annual accounts are final and will not be re-issued. Had the
TFLP audit been completed prior to release of the PGC accounts, PGC's net
assets would have been reduced by approximately GBP7 million and consequently
the Profit and Loss would also have been reduced by approximately GBP7
million. When PGC reports its full year results to 30 June 2015, the accounts
will restate the 2014 numbers to reflect the reduction for comparative
purposes only. The reduction of GBP7m represents an 8.8% negative impact on
PGC's Statement of Financial Position which will be reflected when restated
for comparative purposes.
o The relationship between Torchlight and PGC is that TFLP has historically
been considered as an associate of PGC. For the current financial year
ending 30 June 2016, TFLP will be treated as a subsidiary of PGC for
accounting purposes. The manager of TFLP is a wholly owned subsidiary of PGC
and receives management, investment acquisition and performance fees from
TFLP.
o An audit of TFLP's most recent financial statements for the period ending
31 March 2015 is underway as per normal.
As has been explained on a number of occasions to shareholders and the
market, PGC's results will be unpredictable and lumpy through the medium
term. This has been and remains the case.
For more information, please contact: David Lewis +64 21 976 119
End CA:00267294 For:PGC Type:GENERAL Time:2015-07-22 16:14:00
