A.b.engineering Regulatory News (ASBE)

28 Jul 2006 09:38

Associated British Engineering PLC28 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 comparedwith a pre-tax loss of £327,000 last year. This is the first financial yearwhere the Group has produced its preliminary announcement in accordance withInternational Accounting Standards as adopted by the EU. As a result, whilstthere is an additional charge in respect of the interest on the pension fundliability, the underlying performance from the only operating subsidiary BritishPolar Engines Limited ('BPE') has improved. There have been further ongoing costs relating to the negotiation of thesettlement with the Trustees of the pension fund amounting to £35,000. We havebeen having negotiations with the Pensions Protection Fund ('PPF') for sometime, and the satisfactory conclusion of these, which is anticipated by theBoard in the near future, would result in the PPF taking over the obligationsfor the BPE section of the ABE Pension Fund, and the Company would then have nofurther liabilities to the ABE Pension Fund. BPE has not been able to meet itsstatutory obligations concerning its contributions to the Pension Fund, whichhas resulted in the need to conclude a settlement with the Pension Regulator andthe 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 ofthe Pension Fund, with the exception of the BPE section are in wind up. Furtherdetails of the Pension Fund are set out in note 7 to the preliminary financialstatements. 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 becongratulated for its endeavours for continuing to develop its businesses for astable platform. At long last, the Board feels that a final resolution of the Pension Fund issuesare in sight, and will be announcing at the appropriate time any completion ofcontractual arrangements with the PPF. Thereafter the Board will be able todevote more time to the future development of the Group, with the pensionmatters resolved and the operating subsidiary BPE performing well. The Board has continued to keep the central costs of the Company at as low alevel as reasonably possible, and recognises that its priority will be to find asuitable corporate transaction to take the Group forward. The Board and I are very grateful for the patience of the shareholders in whathas 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 £'000REVENUE 3,278 2,700Cost of sales and overheads (3,050) (2,671) ______ ______OPERATING PROFIT 228 29Finance expense (340) (387)Finance income 34 31 LOSS BEFORE TAXATION (78) (327)Taxation - - ______ ______LOSS FOR THE YEAR (78) (327) ====== ======LOSS PER SHAREBASIC AND DILUTED (6)p (25)p ====== ====== GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE FOR THE YEAR ENDED 31 MARCH 2006 2006 2005 £'000 £'000Actuarial (losses)/gains onretirement benefit obligation (933) 1,013Loss for the year (78) (327) ------ ------TOTAL RECOGNISED INCOME ANDEXPENSE FOR THE YEAR (1,011) 686 ====== ====== ASSOCIATED BRITISH ENGINEERING PLC GROUP BALANCE SHEET 31 MARCH 2006 2006 2005 £'000 £'000ASSETSNon-current assetsProperty, plant and equipment 299 337Current assetsInventories 1,328 1,273Trade and other receivables 670 407Held for trading investments 60 30Cash and cash equivalents 1,205 1,173 3,263 2,883Total assets 3,562 3,220 EQUITY AND LIABILITIESCalled up share capital 2,627 2,627Share premium account 5,038 5,038Other reserve 11 11Retained earnings (9,239) (9,178) --------- ---------Equity attributable to the Company's Equityshareholders (1,563) (1,502) --------- ---------LIABILITIESNon-current liabilitiesRetirement benefit obligation 4,395 4,124Cumulative preference shares - -Obligations under finance leases 1 1 --------- --------- 4,396 4,125 --------- ---------Current liabilitiesTrade and other payables 728 593Obligations 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 £'000Cash flows from operating activities Cash generated from operations 69 (57)Interest received 34 31Interest paid (4) (9) Net cash from/(used in) operating activities 99 (35)Cash flows from investing activitiesProceeds from sale of property, plant andequipment 5 -Purchase of property, plant and equipment (39) (7)(Purchase) /proceeds (of)/from tradinginvestments (30) 9Net cash (used in)/generated frominvesting activities (64) 2Cash flows from financing activities Repayments of obligationsunder finance leases (3) (4)Net cash used in financing activities (3) (4)Net increase/(decrease) incash and cash equivalents 32 (37)Cash and cash equivalents at beginning of year 1,173 1,210Cash and cash equivalents at end of year 1,205 1,173 CASH FLOW FROM OPERATING ACTIVITIES 2006 2005 £'000 £'000Net loss (78) (327)Adjustments for:Depreciation 72 83Interest income (34) (31)Interest expense 4 9Pension scheme interest expense 336 378Current service cost (37) -Changes in working capital:Increase in inventories (55) (13)(Increase)/decrease in trade and other receivables (263) 109Increase/(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 applicableaccounting standards as stated in the interim financial statements for the sixmonths ended 30 September 2005. The Group's interim report for the six months ended 30 September 2005 includeddetails of the transition to IFRS. However, following the release of the interimreport, further consideration has been given to the fair values of both thepreference shares in issue and the unpaid dividends thereon, as required by IAS39 'Financial Instruments: Recognition and Measurement', specifically theexpected payment dates. As a result the fair values for both the preferenceshares 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 reportingformat is by business segment. The directors consider that there is only onebusiness segment being diesel and related engineering activities. Therefore thedisclosures for the primary segment have been given in the Group incomestatement and Group balance sheet. The secondary reporting format is by geographical analysis by destination asshown below. The following table shows an analysis of the Group's sales by geographicalmarket: 2006 2005 £'000 £'000United Kingdom 1,347 1,120Europe 769 667Middle East 256 92Far East and Australasia 312 354Africa 57 209North and South America 522 233Russia 15 25 ------ ------ 3,278 2,700 ====== ====== All of the above turnover arises from diesel and related engineering activitiesand originates in the United Kingdom. In the year ended 31 March 2006 and 31 March 2005 all of the assets held by thegroup were located in the United Kingdom and all capital expenditure wasincurred 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 inrespect of the provision of non audit services during the year. The amountpayable 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 thisdividend which has been provided in accordance with the Company's Articles ofAssociation. Further information is disclosed within note 6 of the notes to thispreliminary announcement. 4. LOSS PER SHARE The calculation of loss per ordinary share is based on the loss attributable toordinary shareholders divided by the weighted average number of shares in issueduring the year. Given the loss in the current year and the prior year, theshare options in issue are not dilutive in accordance with IAS 33 'Earnings pershare'. 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 anddilutedloss (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) areheld under finance leases. The amount of depreciation in respect of such assetsamounted 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 2006or 31 March 2005. The company has one class of ordinary share which carries no right to fixedincome. The company also has two classes of cumulative preference shares, whichcarry the right to fixed returns of 7% and 8% per annum respectively. The 7% cumulative preference shares and 8% cumulative redeemable preferenceshares, classified as debt under IAS 32, are non voting unless the dividends aresix months in arrears or the resolution relates to the winding up of the Companyor affects the rights attaching to them. The Company has the power to redeem the8% Cumulative preference shares at par (together with arrears of dividends) atany 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 andthe 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 valuewithin the financial statements. As there is no expectation of being able toredeem the preference shares in the foreseeable future the fair value is deemedto be zero. The 7% cumulative preference shares are accruing a dividend of£38,000 per annum and the 8% cumulative redeemable preference shares areaccruing a dividend of £13,000 per annum. At 31 March 2006 total dividendarrears of £306,000 (2005: £255,000) had accrued, representing arrears to dateof 42 pence per share relating to the 7% cumulative preference shares and 48pence per share relating to the 8% cumulative redeemable preference shares. Under IAS 32 the preference dividends should be disclosed as finance charges andany arrears of dividends included with accruals. IAS 39 also permits the totalof accumulated arrears of dividends to be discounted. As the company has nodistributable reserves and there is no expectation of being able to pay thedividend arrears in the foreseeable future as a result of anticipated futurecash flows, the accrued dividends are deemed to have a fair value of zero andtherefore 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 aseparate trustee administered fund ("the ABE Pension Fund"). The requiredcontributions are assessed with the advice of an independent qualified actuaryusing the projected unit credit method and charged to the profit and lossaccount so as to spread the cost of pensions over employees' working lives withthe Group. The Group also has a designated Group personal pension plan whichmeets stakeholder requirements. The Company is in the process of leaving the ABE Pension Scheme and hasnegotiated '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 todisclose the history of experienced gains and losses from the date of transitiononly. In accordance with these transitional exemptions, the Group is required todisclose the cumulative actuarial gains or losses from the date of transitionwhich 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 inaccordance with UK GAAP until the period ended 31 March 2005. UK GAAP differs insome areas from IFRS. In preparing the Group financial statements, managementhas amended certain accounting methods applied in the UK GAAP financialstatements to comply with IFRS. The comparative figures in respect of 2005 havebeen restated to reflect these adjustments. The Group's transition date for IFRS was 1 April 2004 and it prepared itsopening 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 appliedIFRS 2 'Share Based Payment' from 1 April 2004 to those options which wereissued 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 preliminaryfinancial 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 notconstitute statutory accounts as defined in Section 240 of the Companies Act1985 but is derived from the 2006 financial statements. Statutory accounts for2005, which were prepared under UK GAAP and contained an unqualified auditor'sreport, have been delivered to the Registrar of Companies, and those for 2006,prepared in accordance with International Financial Reporting Standards, will bedelivered in due course. The auditors have reported on the accounts for the yearended 31 March 2006 and their report was unqualified and did not containstatements under section 237(2) or (3) of the Companies Act 1985. The auditors have included an emphasis of matter statement with regard to goingconcern. They have drawn attention to the Directors statement that 'BPE has notbeen able to meet its statutory obligations concerning the Pension Fund, whichhas resulted in the need to conclude a settlement with the Pension Regulator andthe 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 ofthe Pension Fund, with the exception of the BPE section, are in wind up. Thefinancial statements have been prepared on the going concern basis as the Boardexpects a successful outcome to negotiations with the Pension Regulator and thePPF, as explained in the Chairman's Statement. It therefore considers that theGroup has sufficient resources to continue in operational existence for theforeseeable future.' D A H Brown 28 July 2006 Enquiries: Mr D.A.H. Brown (Chairman) This information is provided by RNS The company news service from the London Stock Exchange