Associated British Engineering PLC
28 July 2006
A • B • E
ASSOCIATED BRITISH ENGINEERING PLC•
PRELIMINARY ANNOUNCEMENT
ASSOCIATED BRITISH ENGINEERING PLC
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 MARCH 2006
The Group made a pre-tax loss of £78,000 from continuing operations compared
with a pre-tax loss of £327,000 last year. This is the first financial year
where the Group has produced its preliminary announcement in accordance with
International Accounting Standards as adopted by the EU. As a result, whilst
there is an additional charge in respect of the interest on the pension fund
liability, the underlying performance from the only operating subsidiary British
Polar Engines Limited ('BPE') has improved.
There have been further ongoing costs relating to the negotiation of the
settlement with the Trustees of the pension fund amounting to £35,000. We have
been having negotiations with the Pensions Protection Fund ('PPF') for some
time, and the satisfactory conclusion of these, which is anticipated by the
Board in the near future, would result in the PPF taking over the obligations
for the BPE section of the ABE Pension Fund, and the Company would then have no
further liabilities to the ABE Pension Fund. BPE has not been able to meet its
statutory obligations concerning its contributions to the Pension Fund, which
has resulted in the need to conclude a settlement with the Pension Regulator and
the PPF. All sections of the Pension Fund show an actuarial deficit of
£4,395,000 at 31 March 2006 (£4,124,000 at 31 March 2005), but all sections of
the Pension Fund, with the exception of the BPE section are in wind up. Further
details of the Pension Fund are set out in note 7 to the preliminary financial
statements.
BPE again improved its performance significantly and made an operating profit of
£337,000 against a profit of £65,000 last year. The Board of BPE should be
congratulated for its endeavours for continuing to develop its businesses for a
stable platform.
At long last, the Board feels that a final resolution of the Pension Fund issues
are in sight, and will be announcing at the appropriate time any completion of
contractual arrangements with the PPF. Thereafter the Board will be able to
devote more time to the future development of the Group, with the pension
matters resolved and the operating subsidiary BPE performing well.
The Board has continued to keep the central costs of the Company at as low a
level as reasonably possible, and recognises that its priority will be to find a
suitable corporate transaction to take the Group forward.
The Board and I are very grateful for the patience of the shareholders in what
has been a long and hard road to the resolution of the Pension issues.
D A H Brown
Chairman
27 July 2006
ASSOCIATED BRITISH ENGINEERING PLC
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2006
2006 2005
£'000 £'000
REVENUE 3,278 2,700
Cost of sales and overheads (3,050) (2,671)
______ ______
OPERATING PROFIT 228 29
Finance expense (340) (387)
Finance income 34 31
LOSS BEFORE TAXATION (78) (327)
Taxation - -
______ ______
LOSS FOR THE YEAR (78) (327)
====== ======
LOSS PER SHARE
BASIC AND DILUTED (6)p (25)p
====== ======
GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE
FOR THE YEAR ENDED 31 MARCH 2006
2006 2005
£'000 £'000
Actuarial (losses)/gains on
retirement benefit obligation (933) 1,013
Loss for the year (78) (327)
------ ------
TOTAL RECOGNISED INCOME AND
EXPENSE FOR THE YEAR (1,011) 686
====== ======
ASSOCIATED BRITISH ENGINEERING PLC
GROUP BALANCE SHEET
31 MARCH 2006
2006 2005
£'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 299 337
Current assets
Inventories 1,328 1,273
Trade and other receivables 670 407
Held for trading investments 60 30
Cash and cash equivalents 1,205 1,173
3,263 2,883
Total assets 3,562 3,220
EQUITY AND LIABILITIES
Called up share capital 2,627 2,627
Share premium account 5,038 5,038
Other reserve 11 11
Retained earnings (9,239) (9,178)
--------- ---------
Equity attributable to the Company's Equity
shareholders (1,563) (1,502)
--------- ---------
LIABILITIES
Non-current liabilities
Retirement benefit obligation 4,395 4,124
Cumulative preference shares - -
Obligations under finance leases 1 1
--------- ---------
4,396 4,125
--------- ---------
Current liabilities
Trade and other payables 728 593
Obligations under finance leases 1 4
--------- ---------
729 597
--------- ---------
Total liabilities 5,125 4,722
--------- ---------
Total equity and liabilities 3,562 3,220
--------- ---------
ASSOCIATED BRITISH ENGINEERING PLC
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2006
2006 2005
£'000 £'000
Cash flows from operating activities
Cash generated from operations 69 (57)
Interest received 34 31
Interest paid (4) (9)
Net cash from/(used in) operating activities 99 (35)
Cash flows from investing activities
Proceeds from sale of property, plant and
equipment 5 -
Purchase of property, plant and equipment (39) (7)
(Purchase) /proceeds (of)/from trading
investments (30) 9
Net cash (used in)/generated from
investing activities (64) 2
Cash flows from financing activities
Repayments of obligations
under finance leases (3) (4)
Net cash used in financing activities (3) (4)
Net increase/(decrease) in
cash and cash equivalents 32 (37)
Cash and cash equivalents at beginning of year 1,173 1,210
Cash and cash equivalents
at end of year 1,205 1,173
CASH FLOW FROM OPERATING ACTIVITIES
2006 2005
£'000 £'000
Net loss (78) (327)
Adjustments for:
Depreciation 72 83
Interest income (34) (31)
Interest expense 4 9
Pension scheme interest expense 336 378
Current service cost (37) -
Changes in working capital:
Increase in inventories (55) (13)
(Increase)/decrease in trade and other receivables (263) 109
Increase/(decrease) in payables 135 (139)
Decrease in provisions (11) (126)
---------- ----------
Cash generated from/(used in) operations 69 (57)
===== =====
ASSOCIATED BRITISH ENGINEERING PLC
GROUP ACCOUNTING POLICIES
FOR THE YEAR ENDED 31 MARCH 2006
BASIS OF PREPARATION
The preliminary announcement has been prepared in accordance with applicable
accounting standards as stated in the interim financial statements for the six
months ended 30 September 2005.
The Group's interim report for the six months ended 30 September 2005 included
details of the transition to IFRS. However, following the release of the interim
report, further consideration has been given to the fair values of both the
preference shares in issue and the unpaid dividends thereon, as required by IAS
39 'Financial Instruments: Recognition and Measurement', specifically the
expected payment dates. As a result the fair values for both the preference
shares in issue and the unpaid dividends is shown as zero.
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE PRELIMINARY STATEMENT
FOR THE YEAR ENDED 31 MARCH 2006
1. SEGMENTAL REPORTING
Based on risks and returns the directors consider that the primary reporting
format is by business segment. The directors consider that there is only one
business segment being diesel and related engineering activities. Therefore the
disclosures for the primary segment have been given in the Group income
statement and Group balance sheet.
The secondary reporting format is by geographical analysis by destination as
shown below.
The following table shows an analysis of the Group's sales by geographical
market:
2006 2005
£'000 £'000
United Kingdom 1,347 1,120
Europe 769 667
Middle East 256 92
Far East and Australasia 312 354
Africa 57 209
North and South America 522 233
Russia 15 25
------ ------
3,278 2,700
====== ======
All of the above turnover arises from diesel and related engineering activities
and originates in the United Kingdom.
In the year ended 31 March 2006 and 31 March 2005 all of the assets held by the
group were located in the United Kingdom and all capital expenditure was
incurred within the United Kingdom.
2. OPERATING PROFIT 2006 2005
£'000 £'000
Operating profit is stated after charging
Depreciation on owned assets 70 82
Depreciation on assets held under finance leases 2 1
Auditor's remuneration:
Audit (Company £15,000 (2005: £16,000)) 30 31
Operating lease rental on plant and machinery 25 32
Pension provision reversal (11) (49)
Staff costs 1,120 956
Cost of inventories recognised as an expense 1,686 1,349
====== ======
In addition an amount of £8,200 (2005: £18,000) was payable to the auditor in
respect of the provision of non audit services during the year. The amount
payable relates to corporation tax compliance and advisory work.
3. NET FINANCE EXPENSE 2006 2005
£'000 £'000
Interest on obligations under finance leases 4 9
7% Cumulative preference dividend - -
8% Cumulative redeemable preference dividend - -
Pension interest cost less expected 336 378
return on scheme assets 340 387
Interest receivable (34) (31)
(306) 356
===== =====
The Company is required to pay cumulative dividends on the non-equity shares.
However, the Company has insufficient distributable reserves to pay this
dividend which has been provided in accordance with the Company's Articles of
Association. Further information is disclosed within note 6 of the notes to this
preliminary announcement.
4. LOSS PER SHARE
The calculation of loss per ordinary share is based on the loss attributable to
ordinary shareholders divided by the weighted average number of shares in issue
during the year. Given the loss in the current year and the prior year, the
share options in issue are not dilutive in accordance with IAS 33 'Earnings per
share'.
2006 2005
Weighted Weighted
Average Per shares Average Per shares
Loss number of amount Loss Number of amount
£'000 Shares pence £'000 Shares Pence
Basic and
diluted
loss (78) 1,313,427 (6) (327) 1,313,427 (25)
per share
========= ========= ========= ========= ========= =========
5. PROPERTY, PLANT AND EQUIPMENT
Freehold
land and Plant and
buildings machinery Total
£'000 £'000 £'000
COST
At 1 April 689 1,512 2,201
2004
Additions - 7 7
Disposals - (85) (85)
---------------- ------------------- -------------------
At 1 April 689 1,434 2,123
2005
Additions - 39 39
Disposals - (97) (97)
---------------- ------------------- -------------------
At 31 689 1,376 2,065
March 2006
---------------- ------------------- -------------------
ACCUMMULATED DEPRECIATION
At 1 April 457 1,331 1,788
2004
Charge for 32 51 83
year
Eliminated - (85) (85)
on
disposals
---------------- ------------------- -------------------
At 1 April 489 1,297 1,786
2005
Charge for 32 40 72
year
Eliminated - (92) (92)
on disposals
---------------- ------------------- -------------------
At 31 521 1,245 1,766
March 2006
---------------- ------------------- -------------------
CARRYING AMOUNTS
At 31 168 131 299
March 2006
======== ========= ==========
At 31 200 137 337
March 2005
======== ======== ==========
Plant and machinery assets with a carrying amount of £10,000 (2005: £12,000) are
held under finance leases. The amount of depreciation in respect of such assets
amounted to £2,000 (2005: £1,000) for the year.
6. SHARE CAPITAL 2006 2005
£'000 £'000
Authorised:
1,699,078 ordinary shares of £2 each 3,398 3,398
750,000 7% Cumulative preference shares of £1 each 750 750
1,681,443 8% Cumulative redeemable preference shares of £1 each 1,681 1,681
------------- ------------
5,829 5,829
====== ======
Allotted and fully paid:
1,313,427 ordinary shares of £2 each 2,627 2,627
555,000 7% Cumulative preference shares of £1 each 555 555
157,395 8% Cumulative redeemable preference shares of £1 each 157 157
------------- ------------
3,339 3,339
====== =====
6. SHARE CAPITAL (continued) 2006 2005
£'000 £'000
Equity shares:
1,313,427 ordinary shares of £2 each 2,627 2,627
====== ======
Shares classed as financial liabilities
555,000 7% Cumulative preference shares of £1 each 555 555
157,395 8% Cumulative redeemable preference shares of £1 each 157 157
------------- ------------
712 712
===== ======
There were no shares allotted during the course of the year ended 31 March 2006
or 31 March 2005.
The company has one class of ordinary share which carries no right to fixed
income. The company also has two classes of cumulative preference shares, which
carry the right to fixed returns of 7% and 8% per annum respectively.
The 7% cumulative preference shares and 8% cumulative redeemable preference
shares, classified as debt under IAS 32, are non voting unless the dividends are
six months in arrears or the resolution relates to the winding up of the Company
or affects the rights attaching to them. The Company has the power to redeem the
8% Cumulative preference shares at par (together with arrears of dividends) at
any time. Since the dividends are more than 6 months in arrears, the 8%
Cumulative redeemable preference shares of £1 each have 50 votes per share and
the 7% Cumulative preference shares of £1 each have 4 votes per share.
In accordance with IAS 39 the 7% cumulative preference shares and the 8%
cumulative redeemable preference shares are required to be carried at fair value
within the financial statements. As there is no expectation of being able to
redeem the preference shares in the foreseeable future the fair value is deemed
to be zero. The 7% cumulative preference shares are accruing a dividend of
£38,000 per annum and the 8% cumulative redeemable preference shares are
accruing a dividend of £13,000 per annum. At 31 March 2006 total dividend
arrears of £306,000 (2005: £255,000) had accrued, representing arrears to date
of 42 pence per share relating to the 7% cumulative preference shares and 48
pence per share relating to the 8% cumulative redeemable preference shares.
Under IAS 32 the preference dividends should be disclosed as finance charges and
any arrears of dividends included with accruals. IAS 39 also permits the total
of accumulated arrears of dividends to be discounted. As the company has no
distributable reserves and there is no expectation of being able to pay the
dividend arrears in the foreseeable future as a result of anticipated future
cash flows, the accrued dividends are deemed to have a fair value of zero and
therefore have been discounted to zero.
7. STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT
Share Capital Share Premium Other reserve Retained Earnings Total
£'000 £'000 £'000 £'000 £'000
Balance at 1 April 2004 2,627 5,038 11 (9,864) (2,188)
Loss for the year - - - (327) (327)
Actuarial gains in - - - 1,013 1,013
defined benefit plan
-------------- -------------- -------------- --------------- -------------
Balance at 31 March 2005 2,627 5,038 11 (9,178) (1,502)
Loss for the year - - - (78) (78)
Actuarial losses in - - - (933) (933)
defined benefit plan
Defined benefit plan - - - 950 950
adjustment
-------------- -------------- -------------- --------------- -------------
Balance at 31 March 2006 2,627 5,038 11 (9,239) (1,563)
====== ====== ====== ======= ======
8. RETIREMENT BENEFIT SCHEMES
The Group operates a defined benefit pension scheme, holding the assets in a
separate trustee administered fund ('the ABE Pension Fund'). The required
contributions are assessed with the advice of an independent qualified actuary
using the projected unit credit method and charged to the profit and loss
account so as to spread the cost of pensions over employees' working lives with
the Group. The Group also has a designated Group personal pension plan which
meets stakeholder requirements.
The Company is in the process of leaving the ABE Pension Scheme and has
negotiated 'in principle' Heads of Terms with the Trustees of the scheme.
2006 2005
£'000 £'000
(a) Pension cost (recognised in Income Statement)
Operating charge
Current service cost 109 103
--------------- ---------------
Total operating charge 109 103
--------------- ---------------
Other finance charges
Interest on pension scheme liabilities 663 665
Expected return on pension scheme assets (327) (287)
--------------- ---------------
Net finance charge 336 378
--------------- ---------------
Total pension cost recognised in the Income Statement 445 481
======= =======
(b) Benefit liability
Present value of funded obligations 14,088 12,186
Fair value of plan assets (9,693) (8,062)
--------------- ---------------
Net liability 4,395 4,124
======= =======
The major categories of plan assets are as follows:
Equities 4,103 4,404
Bonds 4,673 2,574
Cash (33) 1,084
Other 950 -
--------------- ---------------
9,693 8,062
======= =======
(c) Change in benefit obligation
Benefit obligation at beginning of the year 12,186 12,200
Current service cost 109 103
Interest cost 663 665
Actuarial losses/(gains) 1,519 (444)
Contributions by plan participants 24 23
Benefits paid (413) (361)
--------------- ---------------
Benefit obligation at end of the year 14,088 12,186
======= =======
£'000 £'000
(d) Change in plan assets
Fair value of plan assets at beginning of the year 8,062 7,315
Expected return on plan assets 327 287
Actuarial gains on plan assets 586 569
Contributions made by employer 157 229
Contributions by plan participants 24 23
Benefits paid (413) (361)
Defined benefit plan adjustment 950 -
--------------- ---------------
Fair value of plan assets at end of the year 9,693 8,062
======= =======
2006 2005
% per annum % per annum
Equities 5.4 5.4
Bonds 3.0 3.0
Cash 1.5 1.5
--------------- ---------------
Overall rate of return for the plan 4.1 4.1
======= =======
The actual return on the plan assets over the year ended 31 March 2006 was 19.27%.
(e) Principal actuarial assumptions
Inflation 3.0% 3.0%
Rate of increase in pensionable salaries 4.0% 4.0%
Discount rate 5.0% 5.5%
Pension in payment increases 2.8% 2.8%
Revaluation rate for deferred pensioners 3.0% 3.0%
Estimate of contributions to be paid in the next
accounting period £161,000 £157,000
Pre retirement mortality AM92,-5 (males) AM92,-5 (males)
AF92,-5 (females) AF 92,-5 (females)
Post retirement mortality PMA92 (males) PMA92 (males)
PFA92 (females) PFA92 (females)
(f) History of experience gains and losses
(i) Difference between the expected and actual return on scheme assets:
(a) Amount (£'000) 586 569
(b) Percentage of scheme assets 7% 7%
(ii)Experience (gains) and losses on scheme liabilities
(a) Amount (£'000) (424) 444
(b) Percentage of present value of scheme liabilities (3)% 4%
The Group has taken advantage of the transitional exemption within IAS 1 to
disclose the history of experienced gains and losses from the date of transition
only. In accordance with these transitional exemptions, the Group is required to
disclose the cumulative actuarial gains or losses from the date of transition
which comprise a cumulative loss of £1,075,000.
(g) Balance sheet reconciliation 2006 2005
£'000 £'000
Liability as at 1 April 4,124 4,885
Pension expense recognised in financial year 445 481
Amounts recognised in Statement of Recognised Income and Expense 933 (1,013)
Employer contributions made in the financial year (157) (229)
Defined benefit plan adjustment (950) -
--------------- ---------------
Liability at 31 March 4,395 4,124
======= =======
Shown as:
Non-current liability 4,395 4,124
======= =======
9. TRANSITION TO IFRS
Associated British Engineering plc's Group financial statements were prepared in
accordance with UK GAAP until the period ended 31 March 2005. UK GAAP differs in
some areas from IFRS. In preparing the Group financial statements, management
has amended certain accounting methods applied in the UK GAAP financial
statements to comply with IFRS. The comparative figures in respect of 2005 have
been restated to reflect these adjustments.
The Group's transition date for IFRS was 1 April 2004 and it prepared its
opening IFRS balance sheet at that date.
In preparing the consolidated financial statements in accordance with IFRS 1,
the Group has elected to apply the share-based payment exemption. It applied
IFRS 2 'Share Based Payment' from 1 April 2004 to those options which were
issued after 7 November 2002 but had not vested by 1 April 2005.
10. EXPLANATION OF THE EFFECT OF THE TRANSITION TO IFRS
The following explains the material adjustments on the Group preliminary
financial statements following the transition to IFRS.
(a) Retirement benefit obligation At 1 At 31
April 2004 March 2005
£'000 £'000
Retirement benefit obligation (4,885) (4,124)
Reversal of pension provision 60 11
---------- ----------
(4,825) (4,113)
====== ======
Under IAS 19 Employee Benefits, actuarial gains and losses are recognised in
the balance sheet and the provision recognised under UK GAAP is reversed. No
adjustment has been made in respect of deferred tax as it is uncertain whether
any tax is recoverable.
(b) Non-equity financial instruments
Under IAS 32 'Financial Instruments: Disclosure and Presentation' the group's
7% cumulative preference shares and 8% cumulative redeemable preference shares
fall to be classified as debt in the balance sheet and the dividends
classified as financial expense in the income statement. However, under IAS 39
'Financial Instruments: Recognition and Measurement', the preference shares
and the dividend liability must be recognised at its fair value, taking into
account the expected payment date. As there is no expectation of being able to
redeem the preference shares in the foreseeable future the fair value is zero.
As there is no expectation of being able to pay the dividend arrears totalling
£204,000 at 1 April 2004 and £255,000 at 31 March 2005 in the foreseeable
future the fair value is deemed to be zero. The ability of the Company to
redeem the preference shares and to pay the dividend will be assessed on an
ongoing basis.
(c) Adjustments to Share capital At 1 At 31
April 2004 March 2005
£'000 £'000
Reclassification of non-equity instruments 712 712
====== ======
(d) Adjustments to Retained Earnings
At 1 At 31
April 2004 March 2005
£'000 £'000
Retirement benefit obligation (4,885) (4,124)
Reversal of pension provision 60 11
Fair value adjustment to non-equity instruments 712 712
------------ ------------
(4,113) (3,401)
====== ======
In addition, the following adjustments have also been made:
• the operating profit has been adjusted for the recognition of the current
service cost of £77,000
• the net finance expense for the Group has been adjusted for the effects of
IFRS as follows:
Net return on the pension scheme's £378,000
assets and liabilities
========
• £18,000 cash held by third parties is no longer recognised as an investment
but is included within cash
11. RECONCILIATION OF EQUITY
(i) At 1 April 2004 (date of transition to IFRS)
Note UK GAAP Adjustments IFRS
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 413 - 413
------------- ------------- -------------
Current assets
Investments 39 - 39
Inventories 1,260 - 1,260
Trade and other receivables 516 - 516
Cash and cash equivalents 1,210 - 1,210
------------- ------------- -------------
3,025 - 3,025
------------- ------------- -------------
Total assets 3,438 - 3,438
====== ====== ======
EQUITY
Capital and reserves attributable to the Company's
equity shareholders
Called up share capital 10(c) 3,339 (712) 2,627
Share premium account 5,038 - 5,038
Other reserve 11 - 11
Retained earnings 10d) (5,751) (4,113) (9,864)
------------- ------------- ------------
Total equity 2,637 (4,825) (2,188)
------------- ------------- ------------
LIABILITIES
Non-current liabilities
Retirement benefit obligation 10(d) 60 4,825 4,885
Obligations under finance leases 5 - 5
Borrowings - Cumulative preference shares 10(b and c) - - -
--------- ------------- ------------
65 4,825 4,890
--------- ------------- ------------
Current liabilities
Trade and other payables 732 - 732
Obligations under finance leases 4 - 4
--------- --------- ------------
736 - 736
--------- --------- ------------
Total liabilities 801 4,825 5,626
------------- ---------- -----------
Total equity and liabilities 3,438 - 3,438
====== ===== =====
(ii) At 31 March 2005
Note UK GAAP Adjustments IFRS
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 337 - 337
------------- --------- -----------
Current assets
Investments 10(d) 48 (18) 30
Inventories 1,273 - 1,273
Trade and other receivables 407 - 407
Cash and cash equivalents 10(d) 1,155 18 1,173
------------- ---------- ------------
2,883 - 2,883
------------- ---------- -----------
Total assets 3,220 - 3,220
====== ===== =====
EQUITY
Capital and reserves attributable to the Company's
equity shareholders
Called up share capital 10(c) 3,339 (712) 2,627
Share premium account 5,038 - 5,038
Other reserve 11 - 11
Retained earnings 10(d) (5,777) (3,401) (9,178)
------------- ------------- ------------
Total equity 2,611 (4,113) (1,502)
------------- ------------- ------------
Non-current liabilities
Retirement benefit obligation 10(d) 11 4,113 4,124
Obligations under finance leases 1 - 1
Borrowings - Cumulative preference shares 10(b and c) - - -
------------- ------------- ------------
12 4,113 4,125
------------- ------------- ------------
Current liabilities
Trade and other payables 593 - 593
Obligations under finance leases 4 - 4
------------- ------------- ------------
597 - 597
------------- ------------- ------------
Total liabilities 609 4,113 4,722
------------- ------------- ------------
Total equity and liabilities 3,220 - 3,220
====== ====== =====
12. RECONCILIATION OF PROFIT AND LOSS
(i) Year ended 31 March 2005
Note UK GAAP Adjustments IFRS
£'000 £'000 £'000
TURNOVER 2,700 - 2,700
Operating expenses 10(d) (2,748) 77 (2,671)
------------- ------------- -------------
OPERATING LOSS (48) 77 29
Net finance expense 10(d) 22 (378) (356)
------------- ------------- -------------
LOSS BEFORE TAXATION (26) (301) (327)
Taxation - - -
------------- ------------- -------------
LOSS FOR THE YEAR (26) (301) (327)
====== ====== =====
13. RECONCILIATION OF CASH FLOW STATEMENT
(i) Year ended 31 March 2005
Note UK GAAP Adjustments IFRS
£'000 £'000 £'000
Cash outflow from operating activities (57) - (57)
Net cash inflow from returns on investments and servicing
of finance 22 - 22
Net cash inflow from capital expenditure and financial
investment 2 - 2
Net cash outflow from the management of liquid resources 10(d) (18) 18 -
------------- ------------- -------------
Cash outflow before financing (51) 18 (33)
Net cash outflow from financing (4) - (4)
------------- ------------- -------------
Decrease in cash in the year (55) 18 (37)
====== ====== ======
14. PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information set out in the preliminary announcement does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985 but is derived from the 2006 financial statements. Statutory accounts for
2005, which were prepared under UK GAAP and contained an unqualified auditor's
report, have been delivered to the Registrar of Companies, and those for 2006,
prepared in accordance with International Financial Reporting Standards, will be
delivered in due course. The auditors have reported on the accounts for the year
ended 31 March 2006 and their report was unqualified and did not contain
statements under section 237(2) or (3) of the Companies Act 1985.
The auditors have included an emphasis of matter statement with regard to going
concern. They have drawn attention to the Directors statement that 'BPE has not
been able to meet its statutory obligations concerning the Pension Fund, which
has resulted in the need to conclude a settlement with the Pension Regulator and
the PPF. All sections of the ABE Pension Fund show an actuarial deficit of
£4,395,000 at 31 March 2006 (£4,124,000 at 31 March 2005), but all sections of
the Pension Fund, with the exception of the BPE section, are in wind up. The
financial statements have been prepared on the going concern basis as the Board
expects a successful outcome to negotiations with the Pension Regulator and the
PPF, as explained in the Chairman's Statement. It therefore considers that the
Group has sufficient resources to continue in operational existence for the
foreseeable future.'
D A H Brown
28 July 2006
Enquiries:
Mr D.A.H. Brown (Chairman)
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