TIDMPURE
RNS Number : 0489F
PureCircle Limited
05 March 2020
Company Update
PureCircle (LSE: PURE) (the "Company"), the world's leading
producer and innovator of great-tasting stevia sweeteners for the
global food and beverage industry, provides the following update
further to the announcements of 20 September, 25 October, 28
October and 14 November 2019.
In these announcements, the Company referred to a potential
issue relating to classification and valuation of inventory and how
certain other transactions have been constructed and/or reflected
in the Group's accounting records. The Company wishes to announce
that the investigation work by KPMG LLP to identify possible
accounting irregularities and omissions, and to quantify the
necessary adjustments to be made to the accounts is now
complete.
The investigations relating to the classification and valuation
of certain inventory items identified errors that had not been
identified by our monitoring controls. In line with the guidance
provided in the announcement dated 14 November 2019, the Company's
assessment is that those issues have had the cumulative effect of
reducing inventory by approximately US$23 million and consequently
increasing cost of goods sold by the same amount, spread across
financial years 2018 and 2019, with potentially a relatively modest
adjustment to 2017.
Separately, as disclosed in the announcement dated 14 November
2019, during the course of work of KPMG and PricewaterhouseCoopers,
matters of concern were identified in relation to how certain other
transactions had been constructed and/or reflected in the Group's
accounting records. These matters relate to revenue cut-off, and
non-commercial transactions. The investigations identified apparent
override of controls by members of senior management that may have
contributed to the historical misstatements of the Company's
results going undetected. As a result, adjustments with the effect
of reducing sales of approximately US$5.9 million and US$2.2
million have been made to the 2018 and 2017 financial results
respectively.
The Company does not expect these amounts to change materially
in its audited financial statements for the year ended 30 June
2019, but still subject to any further audit adjustments, and yet
to be signed off by the Group's auditors,
PricewaterhouseCoopers.
Led by the new Group CFO and overseen by the Group's Audit
Committee, the Company is taking actions to prevent the incidents
that resulted in the accounting misstatements from re-occurring.
The measures include:-
1. Undertaking significant steps to improve the Group's systems,
processes and controls, both locally and at a Group level;
2. Increasing the resources and improving the capabilities of
the controlling function based in Malaysia;
3. Increasing financial oversight by the Group CFO of the Group
finance function, with clear and timely oversight from the Audit
Committee Chairman based in Malaysia; and
4. Strengthening of the internal audit and risk management functions of the Group.
The Group's Audit Committee has been appointed to oversee the
implementation of the work to be undertaken to strengthen the
Group's financial controls and the associated recommendations by
KPMG.
Date 5 March 2020
Enquiries:
Jimmy Lim, CFO
Phone: +603 2166 2206
Newgate Communications, Media Relations
Elisabeth Cowell
Giles Croot
Email: purecircle@newgatecomms.com
Phone: +44 (0) 20 3757 6880
Notes to Editors
About PureCircle
-- PureCircle is the only company that combines advanced R&D
with full vertical integration from farm to high-quality,
great-tasting innovative stevia sweeteners.
-- The Company collaborates with farmers who grow the stevia
plants and with food and beverage companies which seek to improve
their low- and no-calorie formulations using a sweetener from
plants.
-- PureCircle will continue to: lead in research, development
and innovation; produce a growing supply of multiple varieties of
stevia sweeteners with sugar-like taste, using all necessary and
appropriate methods of production; and be a resource and innovation
partner for food and beverage companies.
-- PureCircle stevia flavor modifiers work in synergy with
sweeteners to improve the taste, mouthfeel and calorie profile, and
enhance the cost effectiveness, of beverage and food products.
-- Founded in 2002, PureCircle is continually investing in
breakthrough research and development and it has been granted over
214 stevia-related patents with more than 300 applied for patents
pending.
-- PureCircle has offices around the world with the global headquarters in Chicago, Illinois.
-- To meet growing demand for stevia sweeteners, PureCircle is
rapidly ramping up its supply capability. It completed expansion of
its Malaysian stevia extract facility in March 2017, increasing its
capacity to rapidly supply the newer and great-tasting specialty
stevia sweeteners and helping provide ever-increasing value to its
customers.
-- PureCircle's shares are listed on the main market of the London Stock Exchange.
-- For more information, visit: www.purecircle.com
About stevia
-- Given the growing global concerns about obesity and diabetes,
beverage and food companies are working responsibly to reduce sugar
and calories in their products, responding to both consumers and
health and wellness advocates. Sweeteners from the stevia plant
offer sugar-like taste and are becoming an increasingly important
tool for these companies.
-- Like sugar, stevia sweeteners are from plants. But unlike
sugar, they enable low-calorie and zero-calorie formulations of
beverages and foods.
-- Stevia leaf extract is a natural-based, zero calorie,
high-intensity sweetener, used by global food and beverage
companies as a great-tasting zero-calorie alternative to sugar and
artificial sweeteners.
-- Stevia is a naturally sweet plant native to South America;
today, it is grown around the world, notably in Kenya, China and
the US.
-- The sweet-tasting parts of the stevia leaf are up to 350
times sweeter than sugar: stevia's high-intensity sweetness means
it requires far less water and land than sugar.
-- Research has shown that the molecules of the stevia leaf are
present and unchanged in the dried stevia leaf, through the
commercial extraction and purification process, and in the final
stevia leaf extract product. All major global regulatory
organisations, across 65 countries, have approved the use of
high-purity stevia leaf extracts in food and beverages.
-- For more information on the science of stevia, please visit
https://www.purecirclesteviainstitute.com/
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END
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