Extract from Coopers and Lybrand long
form report on Transfer Technology Ltd concerning Debtors
1026 There is various demonstration equipment
which is included in finished goods at actual cost of £95,000.
No depreciation is charged on this equipment since management
argue that it can be sold at above cost. In our view and in accordance
with generally accepted accounting practice, demonstration equipment
should be subject to appropriate amortisation. We make the appropriate
adjustments in Section IX.
1027 Included in finished goods is £21,000
represented the cost of an M200 machine which is presently on
loan to a customer because the machine originally supplied to
him does not meet the necessary specification. In management's
view, it is not cost effective to rectify the original machine.
The machine on loan should, therefore, be written off.
1028 In addition, finished goods included, CNC
machines which were produced for Systems 3R Limited. (£15,000)
These machines are not up to specification and system 3R Ltd are
refusing to give The Group credit for them. Whilst The Group has
initiated legal proceedings against 3R, the carrying value of
these machines must be in doubt and provisions may be required.
We adjust for this Section IX.
1029 Transtec Inc's finished goods includes a
development machine with a cost of £25,000. This is being
written off over four years. It should be reclassified into fixed
assets. We adjust for this in Section IX.
1030 Included in Sarclad are stocks amounting
to £16,000 which have not moved since the 1990 year end.
A provision of £6,000 is held against these stocks.
1031 There is uncertainty surrounding the recoverability
of £503,000 due from Roll Centre Inc a company wholly owned
by Mr Robinson. Mr Robinson has indicated that he is prepared
to offer a personal guarantee as to the recoverability of these
amounts, and is currently making arrangements to pay £200,000
into The Group.