SIX Exchange Regulation has reached an agreement with International Minerals Corporation in connection with a breach of International Financial Reporting Standards in their interim financial statements 2011/2012. The violations identified relate to the presentation of the income statement as well as disclosures regarding the valuation of securities held. As a condition of the agreement, the company committed to invest in IFRS-training for their employees.
In its interim financial statements 2011/2012 as of 31 December 2011 International Minerals Corporation (Whitehorse, Yukon Territory, Canada) chose a format of presenting its income statement that is not permitted under International Financial Reporting Standards (IFRS). Among others this resulted in the subtotal for expenses to be understated by USD 1.9 million (36.6%). In addition, the format selected by International Minerals Corporation failed to identify the amount of revenue for the period. The incorrect presentation did not impact the amount of net income for the period in the amount of USD 26.3 million presented by International Minerals Corporation.
Furthermore the notes to the IFRS-interim financial statements 2011/2012 described the securities held as valued at quoted prices in active markets (level 1), even though USD 395.7 thousand (9.5%) could only be valued at historical cost as a proxy for fair value (level 3). Even though this incorrect disclosure did not impact the valuation of these securities, readers of financial statements were deprived of qualitatively material information about the valuation methodology.
In connection with the agreement International Minerals Corporation committed to invest in accountingtraining to improve the IFRS-expertise of its employees. In addition, the company will disclose and correct the errors in its annual financial statements 2012 as well as in the interim financial statements 2012/2013.
The investigation against International Minerals Corporation is concluded with an agreement being reached as this course of action resulted in a more timely public disclosure than would have been the case with a duly completed sanction procedure. An agreement has to be published in accordance with the Rules of Procedure.