Spedding, auditors disagree

Press, 11 August 1979, Page 19

Spedding, auditors disagree

PA Wellington Spedding Consolidated, Ltd, Auckland manufacturer and marine merchant, has been “ticked off” by its auditors in the company’s latest annual report. The tagbed auditors’, report concerns the company’s traditionally reticent policy on sales and asset values. A change in policy by the Society of Accountants on disclosure has left the company in breach of the society’s rules. The auditors, Gilfillan Morris and Company, say: “The company has not disclosed its sales and Government valuation of land and buildings for the year. This

is a departure from Statement of Standard Accounting Practice No. 9, issued by the New Zealand Society of Accountants.” Few companies give as little away in this regard as Spedding, and the company gives barely a hint of likely asset values from the report. The company’s procedure on fixed assets is simple. It discloses the original cost, deducts accumulated depreciation and shows the assets in the accounts at a book value. Total fixed assets at March 31, had a cost value of $938,225, accumulated depreciation was $456,331 and the resulting book value is $481,894.

However, apart from the company’s modesty on assets, the auditors are happy with the rest, saying; “Except for the non-dis-closure described in the preceding paragraph, in our opinion and to the best of our information and according to the explanations given us, the balance sheet with the notes thereto is properly drawn up so as to give a true and fair view of the company’s affairs as at March 31, 1979.” For the year just passed the company recovered from its 1978 loss with a profit of $251,007. The chairman (Mr F. H.

Reynolds) says the upturn was partly because of an improvement in demand for marine products. He says the adverse economic conditions made trading difficult, with ever-increasing overheads for salaries, wages, transport costs, and rents. And, in keeping with the company’s conservative disclosure policies, Mr Reynolds comments on trading in the first few months of the current year: “I am pleased to state that our turnover since balance date is equal to that of the same period last year, and very close to budget.”