BRS Beacon Rise Holdings Plc

RNS No 6689h
FINANCIAL REPORTING REVIEW PANEL
2nd October 1997


          FINDINGS OF THE FINANCIAL REPORTING REVIEW PANEL IN
         RESPECT OF THE ACCOUNTS OF BURN STEWART DISTILLERS PLC
                    FOR THE YEAR ENDED 30 JUNE 1996

The Financial Reporting Review Panel has had under consideration the
Report and Accounts of Burn Stewart Distillers PLC for the year ended
30 June 1996 and has discussed them with the company's directors.  In the
Panel's view, which the directors have accepted, the information given in the
accounts did not fulfil the disclosure requirements of Financial Reporting
Standard (FRS) 5. As a result of these discussions, the directors have included
in their preliminary announcement published today and will be circulating to
the company's shareholders an amendment to their 1996 accounts in respect
of the matter at issue.

The amendment to the 1996 accounts gives additional disclosures in connection
with a material sale entered into in that year but rightly not reflected in the
results for the period because not all of the significant benefits and risks
relating to the stock had been transferred to the purchaser. The transaction was
for #5.1 million and, if completed according to its terms, would have resulted
in a profit of some #2.3 million.  The actual outcome however depended on a
variety of factors over which the directors had no control.  The reported profit
for the group in 1996 (after excluding the transaction in question) was #1.01
million.

In the view of the Panel, although the transaction was rightly not recorded as
a sale in the 1996 financial statements, it was nevertheless subject to the
disclosure requirements of FRS 5, in particular paragraph 30 which states that
'Disclosure of a transaction in the financial statements, whether or not it has
resulted in assets or liabilities being recognised or ceasing to be recognised,
should be sufficient to enable the user of the financial statements to
understand its commercial effect'.  Hence sufficient disclosure of the
transaction should have been given to enable an understanding of its commercial
effect and the consequences of its exclusion from the accounts.

The Panel welcomes the directors' decision to revise the company's 1996 accounts
accordingly and regards its enquiry into these accounts as concluded.

NOTES TO EDITORS

1     FRS 5 was issued by the Accounting Standards Board in April 1994 and
became effective for financial statements relating to accounting periods ending
on or after 22 September 1994.  Its overriding principle is that "A reporting
entity's financial statements should report the substance of the transactions
into which it has entered...". (para 14)

2     To determine the substance of a transaction it is necessary to identify
whether the transaction has given rise to new assets or liabilities for the
reporting entity and whether it has changed the entity's existing assets or
liabilities.  Where a transaction has not resulted in assets or liabilities
being recognised or ceasing to be recognised, FRS 5 nevertheless requires
sufficient disclosure to enable the user of the financial statements to
understand its commercial effect. (para 30)

3    The directors correctly excluded the transaction from the original 1996
accounts because it was caught by FRS 5. A transaction had nevertheless taken
place and it was therefore subject to the disclosure requirements of FRS 5 and
some associated Companies Act requirements.  These disclosures have now been
given in the amendments to the 1996 accounts announced today by the directors.

4    The remit of the Financial Reporting Review Panel is to examine the annual
accounts of public and large private companies to see whether they comply with
the requirements of the Companies Act 1985.  Within this framework a main focus
is material departures from accounting standards where such a departure results
in the accounts in question not giving a true and fair view as required by the
Act.

5     Where a company's accounts are defective the Panel will wherever possible
endeavour to secure their revision by voluntary means, but if this approach
fails is empowered to make an application to the court under section 245B of the
Companies Act 1985 for an order compelling their revision.  To date no court
applications have been made, though in some instances the necessary steps have
been at an advanced stage.

6     The Panel does not itself monitor or actively initiate scrutinies of
company accounts for possible defects, but acts on matters drawn to its
attention, either directly or indirectly.  The Panel's responsibilities do not
extend to the directors' report, summary financial statements or interim
statements.

7     The Chairman of the Panel is Peter Goldsmith QC and the Deputy Chairman is
Matthew Patient CBE.  There are currently 17 other Panel members. Individual
cases are normally dealt with by specially constituted Groups of 5 of more
members.


Press Enquiries: Sydney Treadgold, Secretary to the Panel, on 0171 404 8818


END

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