§ Lord Hylton
asked Her Majesty's Government:
With regard to the Ministry of Defence's subsidiary International Military Services Limited,
- (a) whether this company's accounts for 1978 and 1979 (and any previous years) comply in full with the requirements of the Companies Acts;
- (b) who were the auditors and what were their stated qualifications regarding the accounts for 1978 and 1979 respectively;
- (c) when the accounts for 1980 are expected to be published;
- (d) whether the accounts for 1978 showed a loss of £12.5 million, and whether the "true" loss for 1979 was £500,000;
- (e) who are the present directors of the company;
- (f) whether they or any previous directors have been involved in offences against the Companies Act, and if so, what action will be taken.
§ Viscount Trenchard
(a) and (b) The company's auditors are Price Waterhouse and Company. In the years immediately preceding 1978, the accounts 946WA complied with the Companies Act subject to the auditors' disclaimers relating to specific uncertainties.
As a result of the Iranian revolution the company's accounts for the years 1978 and 1979 contained substantial provisions for probable losses. Because it was not possible to ascertain the extent to which these provisions might prove excessive, or possibly inadequate, inevitably the auditors were unable to express an opinion as to whether the 1978 and 1979 accounts gave a true and fair view of the state of affairs of the company and consequently whether these accounts complied with the Companies Acts.
(c) The company's accounts for 1980 are expected to be published in a month or two.
(d) The company's accounts for the year ended 31st December 1978 show a loss (before taxation) of £12,440,000, after making full provision for all probable losses resulting from the termination of contracts with the Iranian Government. The comparable figure in the 1979 accounts was a profit (before taxation) of £7,325,000.
(e) The present directors of IMS Limited are:
Sir John Cuckney, MA (Chairman) (Non-executive);
Mr. R. C. Orford, MSc, CPA, CEng, FIEE, FRAeS, European Patent Attorney (Managing Director);
Mr. P. J. Mooney, IPFA, MBCS;
Mr. M. H. S. Muller, MA, CEng, FICE;
Mr. J. M. Sutherland, CEng, FICE, FIStructE, FASCE;
Mr. J. M. Thomas, FCIS, Solictor (Non-Executive; and
Mr. R. Campbell, CEng, FICE (Non-Executive).
(f) None of the present directors has been involved in offences under the Companies Act. No past director has been involved in offences under the Companies Acts in relation to the business of International Military Services Limited, or to the best of the board's knowledge and belief, of any other limited company.