Management Resource Solutions PLC Update prior to General Meeting (5150D)

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RNS Number : 5150D

Management Resource Solutions PLC

27 April 2017

27 April 2017

Management Resource Solutions PLC

("MRS" or the "Company")

Update re accounting issues and lifting of suspension

In advance of the General Meeting of Shareholders being held today to approve matters relating to the fundraising announced on 10 April 2017, the Directors wish to clarify some recent statements concerning accounting issues.

In the circular to shareholders dated 27 January 2017, the Company stated that it had engaged a third party firm of forensic accountants to recover accounting information which had been lost.

Following the suspension of trading in the Company's shares in October 2016, the Board had engaged the services of an interim CFO with forensic accounting experience and skills. Since documentation appeared to be missing from the Company's office in Southport, Queensland, as previously announced, the Board had determined that some form of independent forensic review would be advisable to establish whether there had been instances of fraud or other misconduct.

Against this background, following publication of the circular on 27 January, the board at the time decided not to proceed with the investigation by the third party firm. Reliance was placed instead on the work carried out internally, over several months and in considerable detail, on the audit process and on the termination of activities in the subsidiary concerned (Management Resource Solutions Pty Ltd), to provide assurance that no fraud or misappropriation had occurred.

Following the new board appointments announced on 10 April, the two new independent non -executive directors, Nigel Burton and Trevor Brown, have led a review of the Company's recent history. This has focused amongst other things on the accounting issues. They have concluded that:

   --      No funds were improperly applied at a group level; 

-- Management reviews and the review of the interim results to 31 December all indicate that all cash is fully accounted for, notwithstanding the issues leading to the disclaimer of audit opinion for the year ended 30 June 2016. There is no evidence of any cash being missing or applied other than to legitimate business purposes;

-- It is also important to note that the company within which the loss of data/accounting problems arose (MRS Pty Ltd) is now in Administration, as previously announced.

On the basis of a lack of evidence of fraud or misappropriation of funds, the new Board confirmed the decision that notwithstanding previous concerns there was no need for a formal forensic investigation. As a footnote, the review has noted that the agreed scope of work for the firm of forensic accountants was more focused than described in the 27 January circular; and that the statement in note 27 to the 2016 report and accounts re an ongoing forensic investigation was incorrect.

A further announcement will be made in due course regarding the lifting of suspension of trading in the Company's shares on AIM. In the light of this, the long stop date in relation to the placing is being extended to 5 pm on Friday 5 May 2017.

This Announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 ("MAR").

For further information:

Management Resource Solutions PLC [phone]

John Zorbas, Chairman

Northland Capital Partners Limited [phone]

(Nominated Adviser and Joint Broker)

Tom Price

Gerry Beaney

Peterhouse Corporate Finance Limited [phone]

(Joint Broker)

Charles Goodfellow

Lucy Williams

About MRS

Management Resource Solutions (MRS), through its subsidiaries Bachmann and MRS Services Group, offers plant hire, equipment repair, refurbishment and fabrication, mine rehabilitation, earthmoving, road construction and other support services to a wide base of private and public sector clients in Australia. MRS caters predominately to the mining, civil engineering, construction and infrastructure industries.

Further information on the Company can be found at http://www.mrsplc.net/.

This information is provided by RNS

The company news service from the London Stock Exchange

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April 27, 2017 03:08 ET (07:08 GMT)