Dairy company's 'fudge' causes ructions

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An embarrassed NZ Farming Systems Uruguay (NZS) has been forced to explain itself to the NZX's regulatory arm after including the word "fudge" in its accounts.

In note 3 to its financial statements released yesterday, and in relation to a figure for depreciation, PGG Wrightson offshoot NZS made the comment: "Fudge this to equal depn in FA note 11 $2391 - via no ca".

Market operator NZX asked the company this morning to explain what exactly was meant by the comment and why it was included. It also asked the company to confirm that the accounts gave a true and fair view of the financial performance.

In responding on behalf of NZS, PGG Wrightson's general counsel Julian Daly said the accounts were true and fair.

The comment had been a "personal file note" in an earlier working draft of the accounts and was made as a prompt to reconcile a "minor rounding difference" between amounts in note 3 and note 11.

"The comment was not in the financial statements reviewed and approved by the board of directors of NZX or its auditors," he said.

The words in the comment were "not well chosen" but were merely a prompt. "While the inclusion of the comment in the financial statements is regrettable and disappointing given the rigorous and thorough process that has been adopted in their preparation, we would assure NZX and the market that the comment should not be a cause for concern regarding the accuracy of the financial statements," Daly said.

NZS has "reviewed its internal processes" to establish how the issue arose.

Daly made no comment on whether the staff member responsible for the comment had been disciplined or not in respect of the error.

The original version of the NZS accounts containing the gaffe has now been removed and a new version without the offending text posted.

- © Fairfax NZ News