The company had not yet pressed any charges but left the door open for possible action. A senior employee has been sacked and another one had resigned, according to the company.
Imdex chairman Ian Burston said the company will still achieve its forecast domestic sales of A$36 million but the setback would affect the company’s EBIT after almost $4m in non-cash adjustements.
In a press release last week, Imdex stated, “The Board sought to strengthen the management at the Imdex Minerals Division and, as a consequence of certain staff re-organisation, deficiencies in recorded stock and debtors were detected.”
“As to the period 1 July 2003 to 31 December 2003, turnover at Imdex Minerals Division appears to be overstated by approximately A$700,000, which results in the profit during that period being overstated by approximately A$110,000,” added the company.
Burston said “At this stage, no further action has been taken against any individuals but the Company reserves the right to pursue whatever options are open to it and will co-operate fully with any appropriate authorities having jurisdiction.”
Imdex called in independent investigating accountants, PPB Consulting, which identified non-cash adjustments of around A$3.95 million the Board said will be made during the March 2004 quarter. These adjustments relate primarily to the time before 30 June 2003.
Furthermore, Imdex also feels it needs an added layer of protection. According to the company, “The Board has instructed that steps be taken to correct deficiencies found in the existing systems at the Imdex Minerals Division and to initiate whatever measures are needed to ensure that such matters cannot reoccur.”
“The Company’s current external auditors have been advised of these matters and have been asked to review their audit procedures,” added the company.
On a positive note, Burston said their Australian Mud Company division is operating at record levels and its global expansion strategy is continuing successfully.
“Sales continue into China and initial sales have been made into Canada and India. The onshore oilfield business is strong and appears set to continue given the buoyant oil price.”
