Select Committee on Standards and Privileges Seventh Report

Annex Q

Hollis Industries plc October 1990 Management Accounts



Assumptions used for October accounts: —

1.  The December balance sheet is based on the closing December 1989 Management Accounts as adjusted by: —

    i)    write off of Multiphase fixed assets

    ii)  loan to Pergamon AGB of £5,950,000 (the treatment of which is to be clarified).

2.  Hollis Industries has no charge from Pergamon AGB for management time.

3.  All debtors are collectible.

4.  Sale of Floform

A provision of £280,000 has been made for the disputed reduction in the sale proceeds of Floform. This has been charged against 1989 profits.

5.  Milthorp debts

A provision of £118,000 has been made (charged against 1989 profits) for liabilities owed by Milthorp for which Hollis Industries plc had given an indemnity.

6.  Deep discounted loan note

A provision has been made for the implied interest on the deep discounted loan note. This has been distributed as indicated below.

7.  Management fee

A management fee for £200,000 paid to Geoffrey Robinson MP in October has been charged to the period from January to June 1990, this being the period of which it relates.

As 4, 5, 6 and 7 above are included for the first time, the effect in restating profit is as follows: —

1989 3 months
to 31/3/90
AprilMay JuneJuly AugSept
As stated in September (23,248)(1,085) (274)(274) (414)(413) (281)(335)
Sale of Floform(280)
Milthorp Indemnity (118)
Management fee(98)(34) (34)(34)
Deep discounted loan note (350)(101) (34)(34) (34)(35) (35)(35)
As restated(23,996) (1,284)(342) (342)(482) (448)(316) (370)

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