British Steel plc - Interim Statement for 1998/99.LONDON--(BUSINESS WIRE)--Nov. 16, 1998-- Financial Highlights - Profit before tax of 108m pounds, Earnings per share of 3.99p, Interim dividend per share of 3p, Net funds of 432m pounds Statement By Sir Brian The name Brian (sometimes spelled Bryan) comes from an Irish backround. It is of Celtic origin and its meaning may be "hill" or "strong, noble, and high"[1]. Moffat Moffat is a former burgh and spa town in Dumfries and Galloway, Scotland, lying on the River Annan, with a population of around 2,500. The most notable building in the town is the Moffat House Hotel, designed by John Adam. , Chairman & Chief Executive In my statement at the Annual General Meeting in July July: see month. , I said that results for the first quarter were up to our expectations but that the trading situation for the rest of this financial year would depend on a number of external factors. During August and September September: see month. , selling prices weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. for most steel
products, as the adverse effects of the economic crises in the Far East
impacted on European Europeanemanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. and North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. markets. Subsequently there has been further deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in selling prices, a trend which if continued will lead to losses for the full year, particularly if pressure intensifies on sales volume. On a more positive note, we are one of the most efficient steel producers in the world and continue to drive forward our cost and efficiency improvement programme, the benefits of which we expect to accelerate in the second half year. Our employees and trade unions recognise the extremely difficult trading environment that faces the company and are co-operating on manpower productivity improvement measures. Good progress and further input cost reductions were also achieved through our suppliers initiative in the first half year, and the first tranche Tranche One of several related securities offered at the same time. Tranches from the same offering usually have different risk, reward, and/or maturity characteristics. tranche A class of bonds. of business improvement projects have been developed and launched in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with Cap Gemini Gemini (jĕm`ənī, –nē) [Lat.,=the twins], northern constellation lying on the ecliptic (the sun's apparent path through the heavens) between Taurus and Cancer, N of Canis Minor; it is one of the constellations of the zodiac. , our IT and management consultants. These improvements will move us closer towards restoring our competitive position despite the continuing strength of sterling and I anticipate being able to report significant year-on-year benefits arising from these initiatives when reporting our annual results in June June: see month. of next year. Although there has been some recent weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak en·er n. in sterling, the
benefits of which will flow through towards the end of the financial
year, we look forward to further reductions in interest rates which we
hope will help to redress Compensation for injuries sustained; recovery or restitution for harm or injury; damages or equitable relief. Access to the courts to gain Reparation for a wrong. REDRESS. The act of receiving satisfaction for an injury sustained. the overvaluation o·ver·val·ue tr.v. o·ver·val·ued, o·ver·val·u·ing, o·ver·val·ues To assign too high a value to: overvalued the painting. of the Pound which, for some two years, has undermined our UK customers' competitive position, both in domestic and in export markets. Good cash management, particularly on working capital, has ensured that the Balance Sheet remains strong with net funds of 432m pounds at the end of the half year. Consequently, the company is well positioned to take advantage of suitable investment opportunities and, in due course, for the upturn in our markets. The Board has declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. an unchanged interim dividend of 3p per share and intends to maintain the level of the final dividend at 7p per share, making 10p for the year. Financial Review Group operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the half year (which comprised 27 weeks rather than the normal 26) amounted to 82m pounds(1997/98: 121m pounds), the reduction mainly a result of the adverse effects of the continued strength of sterling and the marked deterioration in the results of Avesta Avesta, city, Sweden Avesta (ä`vəstä'), city (1990 est. pop. 16,860), Kopparberg co., S central Sweden, on the Dalälven River. Aluminum and high quality steel are manufactured there. Sheffield Sheffield, city, England Sheffield, city (1991 pop. 470,685), N England, at the confluence of the Don River and four tributaries. Sheffield was one of the leading industrial cities of England. It has been a center of cutlery manufacture since the 14th cent. , our 51% owned stainless steel stainless steel: see steel. stainless steel Any of a family of alloy steels usually containing 10–30% chromium. The presence of chromium, together with low carbon content, gives remarkable resistance to corrosion and heat. subsidiary. Despite an increase of 1% in deliveries to 7.6mt, Group turnover of 3,376m pounds (1997/98:3,398m pounds) was slightly below last year's level. This reflected a reduction of 2% in average revenue per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. , principally due to the lower levels of stainless steel prices. British Steel's deliveries to the UK market totalled 3.8mt, of which 3.3mt were in the company's main carbon and engineering steel finished products. Demand for these products, at 6.1mt, was 5% higher than in the same period of 1997/98 but a sharp rise in imports, fuelled by the crises in Asian economies, reduced the company's market share to 54% (1997/98:57%). Import pressures were also strong in other markets, notably mainland Mainland. 1 Island (1991 pop. 14,150), 178 sq mi (461 sq km), N Scotland. The largest of the Orkney Islands, it is also called Pomona. Kirkwall, the seat of the Orkney Islands council area, is on the island. Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , although British
Steel was able to increase deliveries there by 4% to 2.7mt. Deliveries
to markets outside Europe reduced to 1.1mt (1997/98:1.2mt).Operating costs operating costs npl → gastos mpl operacionales at 3,294m (1997/98:3,277m pounds) rose slightly, reflecting the rise in deliveries but also progress made on measures to improve British Steel's competitive position. These were described in the Report & Accounts for 1997/98, and are commented on in the Chairman & Chief Executive's Statement. Numbers employed reduced by 1,400 during the half year to 47,000 and it is anticipated that the rate of reduction will accelerate in the second half year. Group net interest and investment income receivable of 21m pounds (1997/98:22m pounds) was slightly lower than in 1997 due to the lower level of average net funds during the period. After net interest there was a profit before taxation of 108m pounds (1997/98:143m pounds) and earnings per share of 3.99p (1997/98:4.75p). The Group achieved an increased operating cash inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. of 299m pounds (1997/98:194m pounds) with reduced funds required for working capital. After taking account of capital expenditure, dividends and tax payments, this resulted in net funds of 432m pounds at the half year end, only 14m pounds below the year end level, despite the reduced operating profit. In May, British Steel raised 200m pounds in 6.75% sterling bonds due 2008. The bonds were issued at 99.122%. This further strengthens the balance sheet by providing a long term, low cost source of capital. Dividend payment For ordinary shareholders, the interim dividend of 3p per share is payable on 11 Jan. 1999 to shareholders on the register at close of business on 27 Nov. 1998. For American Depositary Receipt American Depositary Receipt (ADR) Certificates issued by a US depository bank, representing foreign shares held by the bank, usually by a branch or correspondent in the country of issue. holders, the dividend is payable in US dollars on Jan. 21, 1999 by the Depositary DEPOSITARY, contracts. He with whom a deposit is confided or made. 2. It is, the essence of the contract of deposits that it should be gratuitous on the part 'of the depositary. 9 M. R. 470. . The Bank of New York The Bank of New York, abbrieviated to BNY, was a global financial services company that existed until its merger with the Mellon Financial Corporation on July 2, 2007.[1] The bank now continues under the new name of The Bank of New York Mellon Corporation. , to the ADR ADR - Astra Digital Radio holders of record on Nov. 27, 1998. Year 2000 A consistent methodology for managing Year 2000 compliance has been adopted across the Group and Group companies are actively engaged in projects to minimise Verb 1. minimise - represent as less significant or important downplay, understate, minimize inform - impart knowledge of some fact, state or affairs, or event to; "I informed him of his rights" the business risk from the possibility of computer or equipment failure or malfunction mal·func·tion v. 1. To fail to function. 2. To function improperly. n. 1. Failure to function. 2. Faulty or abnormal functioning. associated with the Year 2000 date change. Priority is being given to impact analysis, renovation and testing, and replacement where necessary in respect of the most critical business systems, including process control. The programme, which started in late 1996 and is targeted to be substantially complete by end 1998, has an estimated total cost of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 60m pounds. In addition to dealing with internal risks there is also a programme to address those risks to which the Group may be exposed from problems at suppliers, customers or other third parties. The complexity and unprecedented nature of the Year 2000 issue mean that, while every effort is in place to overcome the problem, it cannot be certain that Year 2000 issues, particularly those external to the Group, will have no significant impact on British Steel's operations or financial condition. Accounting policies The half year accounts have been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the accounting policies and standards expected to apply for the financial year 1998/99, including the application of FRS FRS abbr. Fellow of the Royal Society FRS, n “flexed rotated side-bent,” an osteopathic abbreviation used to describe vertebral position in cases of spinal dysfunction. 10 'Goodwill and Intangible Assets', FRS 11 'Impairment of Fixed Assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → and Goodwill', FRS 12 'Provisions, Contingent Liabilities Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. and Contingent Fortuitous; dependent upon the possible occurrence of a future event, the existence of which is not assured. The word contingent denotes that there is no present interest or right but only a conditional one which will become effective upon the happening of the Assets', FRS 13 'Derivatives and Other Financial Instruments: Disclosures' and FRS 14 'Earnings per Share'. The accounting policies are consistent with those set out in the 1997/98 Report & Accounts except as disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). below. The adoption of FRS 10 and FRS 12 has resulted in changes to accounting policies. Goodwill arising on acquisition and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. acquired is now capitalised and amortised over its estimated useful economic life to a maximum of 20 years. Goodwill written off to reserves under the company's previous policy will not be reinstated and, accordingly, no restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of comparative figures is required. Revenue costs of rationalisation Noun 1. rationalisation - (psychiatry) a defense mechanism by which your true motivation is concealed by explaining your actions and feelings in a way that is not threatening rationalization and related measures are provided for when a constructive (mathematics) constructive - A proof that something exists is "constructive" if it provides a method for actually constructing it. Cantor's proof that the real numbers are uncountable can be thought of as a *non-constructive* proof that irrational numbers exist. obligation has arisen before the balance sheet date. The adoption of FRS 12 has had no material effect on the results of balance sheets of the Group and no restatement of comparative figures is required. -0-
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited Unaudited Audited
half year half year full year
to 3 Oct to 27 Sept to 28 Mar
1998 1997 1998
m pounds m pounds m pounds
TURNOVER: GROUP AND SHARE OF
JOINT VENTURES 3,472 3,509 7,166
Less: share of joint ventures turnover (96) (111) (219)
GROUP TURNOVER 3,376 3,398 6,947
OPERATING COSTS (3,294) (3,277) (6,682)
GROUP OPERATING PROFIT 82 121 265
Share of operating results of joint ventures
and associated undertakings - 1 -
82 122 265
Profit on sale of fixed assets 6 - 6
Profit on disposal of businesses, subsidiaries
and associated undertakings - - 5
PROFIT BEFORE INTEREST 88 122 276
NET INTEREST AND INVESTMENT INCOME
Group 21 22 41
Joint ventures and associated undertakings (1) (1) (2)
PROFIT BEFORE TAXATION 108 143 315
Taxation (45) (43) (82)
PROFIT AFTER TAXATION 63 100 233
Minority interests 16 (5) (7)
PROFIT FOR THE PERIOD 79 95 226
Dividends (62) (58) (195)
PROFIT RETAINED FOR THE PERIOD 17 37 31
EARNINGS PER ORDINARY SHARE 3.99p 4.75p 11.44p
FULLY DILUTED EARNINGS PER ORDINARY SHARE 3.98p 4.68p 11.22p
There were no material acquisitions or discontinued activities.
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
at 3 Oct at 27 Sept at 28 Mar
1998 1997 1998
m pounds m pounds m pounds
FIXED ASSETS
Goodwill 1 - -
Tangible assets 3,279 3,323 3,335
Investments in joint ventures 105 104 104
Investments in associated undertakings 10 7 9
Other investments and loans 202 176 181
Own shares - - 18
3,597 3,610 3,647
CURRENT ASSETS
Stocks 1,285 1,296 1,222
Debtors 1,403 1,617 1,643
Short term investments 1,230 1,124 1,043
Cash at bank and in hand 152 100 163
4,070 4,137 4,071
CREDITORS: AMOUNTS FALLING DUE WITHIN
ONE YEAR (1,449) (1,668) (1,672)
NET CURRENT ASSETS 2,621 2,469 2,399
TOTAL ASSETS LESS CURRENT LIABILITIES 6,218 6,079 6,046
CREDITORS: AMOUNTS FALLING DUE AFTER
MORE THAN ONE YEAR (909) (684) (723)
PROVISIONS FOR LIABILITIES AND CHARGES (282) (319) (292)
ACCRUALS AND DEFERRED INCOME
Regional development and other grants (54) (64) (58)
4,973 5,012 4,973
CAPITAL AND RESERVES
Called up share capital 991 973 991
Share premium account 51 17 51
Capital redemption reserve 47 47 47
Statutory reserve 2,338 2,338 2,338
Profit and loss account 1,215 1,265 1,195
SHAREHOLDERS' FUNDS - EQUITY INTERESTS 4,642 4,640 4,622
MINORITY INTERESTS
Equity interests in subsidiary undertakings 331 372 351
4,973 5,012 4,973
STATEMENT OF TOTAL RECOGNIZED GAINS AND LOSSES
Unaudited Unaudited Audited
half year half year full year
to 3 Oct to 27 Sept to 28 Mar
1998 1997 1998
m pounds m pounds m pounds
Profit for the period 79 95 226
Exchange translation differences on foreign
currency net investments 3 (1) (29)
Total recognised gains relating to the period 82 94 197
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Unaudited Unaudited Audited
half year half year full year
to 3 Oct to 27 Sept to 28 Mar
1998 1997 1998
m pounds m pounds m pounds
Profit for the period 79 95 226
Dividends (62) (58) (195)
17 37 31
Exchange translation differences on
foreign currency net investments 3 (1) (29)
Share buyback - (146) (146)
New shares issued - 1 19
Goodwill arising on consolidation - (8) (10)
Net increase/(decrease) in shareholders' funds 20 (117) (135)
Shareholders' funds at beginning of period 4,622 4,757 4,757
Shareholders' funds at end of period 4,642 4,640 4,622
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
half year half year full year
to 3 Oct to 27 Sept to 28 Mar
1998 1997 1998
m pounds m pounds m pounds
Net cash flow from operating activities 299 194 512
Dividends from joint ventures
and associated undertakings 3 3 6
Returns on investments and
servicing of finance 10 10 36
Tax paid (18) (15) (183)
Capital expenditure and financial investment (166) (173) (366)
Acquisitions and disposals (9) (40) (25)
Equity dividends paid (140) (142) (201)
CASH OUTFLOW BEFORE USE OF LIQUID
RESOURCES AND FINANCING (21) (163) (221)
MANAGEMENT OF LIQUID RESOURCES
Net (purchase)/sale of short
term investments (184) 236 311
FINANCING
Purchase of own shares - (146) (146)
Issue of ordinary shares 3 1 16
Increase in debt 187 26 88
NET CASH INFLOW (OUTFLOW) FROM
FINANCING ACTIVITIES 190 (119) (42)
(DECREASE)/INCREASE IN CASH IN THE PERIOD (15) (46) 48
RECONCILIATION OF NET CASH (OUTFLOW)/INFLOW TO
MOVEMENT IN NET FUNDS
(Decrease)/increase in cash (15) (46) 48
Increase/(decrease) in liquid resources 184 (236) (311)
Increase in debt (187) (26) (88)
Change in net funds resulting
from cash flows (18) (308) (351)
Long term debt acquired - (5) (1)
Other non cash items - - (3)
Effect of foreign exchange 4 (1) 16
Movement in net funds (14) (314) (339)
Net funds at beginning of period 446 785 785
Net funds at end of period 432 471 446
SUPPLEMENTARY INFORMATION
Half year Half year Full year
to 3 Oct to 27 Sept to 28 Mar
1998 1997 1998
m pounds m pounds m pounds
1. GROUP TURNOVER
a. BY DESTINATION
United Kingdom 1,482 1,476 3,010
Rest of Europe 1,333 1,279 2,687
North America 376 339 654
Other areas 185 304 596
3,376 3,398 6,947
b. BY PRODUCT GROUPING
Uncoated strip products 525 550 1,140
Coated strip products 614 595 1,218
Sections and plates 502 481 1,014
Tubular products 206 160 347
Wire rod 107 109 227
Semi-finished carbon steel
products 58 54 121
Engineering steels 246 254 528
Stainless steel products 651 734 1,473
Total steel industry products(a) 2,909 2,937 6,068
Distribution and further processing 406 408 779
Others 61 53 100
3,376 3,398 6,947
(a): By destination
United Kingdom 1,308 1,285 2,662
Rest of Europe 1,172 1,119 2,387
North America 299 285 560
Other areas 130 248 459
2,909 2,937 6,068
Half year Half year Full year
to 3 Oct to 27 Sept to 28 March
1998 1997 1998
mt mt mt
2. Sales Volume
a. By Destination
United Kingdom 3.8 3.7 7.7
Rest of Europe 2.7 2.6 5.5
North America 0.7 0.6 1.2
Other areas 0.4 0.6 1.2
7.6 7.5 15.6
b. By Product Grouping
Uncoated strip products 2.1 2.2 4.4
Coated strip products 1.5 1.4 2.9
Sections and plates 1.7 1.6 3.4
Tubular products 0.5 0.4 0.9
Wire rod 0.5 0.5 1.0
Semi-finished carbon steel
products 0.3 0.3 0.7
Engineering steels 0.6 0.6 1.4
Stainless steel products 0.4 0.5 0.9
7.6 7.5 15.6
3. Operating Costs Pounds m Pounds m Pounds m
Raw materials and consumables 1,480 1,525 3,019
Maintenance costs (excluding
own labor) 283 273 578
Other external charges 532 489 1,044
Employment costs 677 664 1,348
Depreciation (net of grants
released) 162 143 295
Other operating costs 212 234 434
Changes in stock of finished
goods and work in progress (47) (47) (26)
Own work capitalised (5) (4) (10)
3,294 3,277 6,682
The above costs include:
Redundancy and related costs 4 6 18
Accelerated depreciation 15 - 21
Other rationalisation costs 9 2 4
Realised gain on investment
held to fund insurance
liabilities (30) - -
Note: Realisation of gains on investments held by Crucible Insurance
(our captive insurance company) is taken into account in the
assessment of the underwriting results and liabilities of that
company and is dealt with as part of the operating costs in these
accounts.
Supplementary Information
(Pounds m)
Half Year Full Year
to Oct. 3, to Sept. 27, to March 28,
1998 1997 1998
4. Net Interest and
Investment Income
Dividends from other
fixed asset investments 3 2 2
Interest receivable 49 46 91
Interest payable (29) (23) (48)
Finance leases (2) (3) (4)
Joint ventures (1) (1) (2)
20 21 39
5. Taxation
UK Corporation tax at
31% 37 47 89
Double tax relief (1) (1) (7)
Prior year credit (2) (6) (4)
Overseas taxes 5 5 12
UK deferred tax 5 (4) (5)
Overseas deferred tax - - (8)
Joint ventures 1 2 4
Associated undertakings - - 1
45 43 82
The net taxation charge for the half year has been calculated by
reference to the estimated effective tax rates for each taxation
jurisdiction for the financial year 1998/99.
6. Dividends
The dividend of pounds 62m in the first half year includes the
final dividend for 1997/98 on shares which did not qualify for full
dividend at that time but which were subsequently issued before the
record date to members of the British Steel Employee Sharesave Scheme.
7. Capital Expenditure
Purchase of tangible
fixed assets 152 200 396
Movement in capital
creditors (42) 1 8
110 201 404
SUPPLEMENTARY INFORMATION
Half year Half year Full year
to 3 Oct to 27 Sept to 28 Mar
1998 1997 1998
m pounds m pounds m pounds
8. EMPLOYEES
number number number
Average weekly
numbers employed:
Within UK 38,200 41,100 40,600
Overseas 9,400 9,400 9,400
47,600 50,500 50,000
Numbers employed at
end of period:
Within UK 37,700 40,800 39,100
Overseas 9,300 9,500 9,300
47,000 50,300 48,400
9. RECONCILIATION OF OPERATING PROFIT m Pounds m Pounds m Pounds
TO NET CASH FLOW OPERATING ACTIVITIES
Operating profit 82 121 265
Depreciation (net of grants released) 162 143 295
Increase in stocks (61) (60) (16)
Reduction/(increase) in debtors 249 63 (9)
(Reduction)/increase in creditors (93) (62) 17
Rationalisation costs provided 13 8 22
Utilisation of rationalisation provisions (34) (19) (44)
Other movements (net) (19) - (18)
299 194 512
10. ANALYSIS OF NET FUNDS m Pounds m Pounds m Pounds
Cash at bank in hand 152 100 163
Bank overdrafts and other short term
loans (66) (94) (65)
Short term investments 1,230 1,124 1,043
Long term borrowings (830) (600) (638)
Obligations under finance leases (54) (59) (57)
432 471 446
SUPPLEMENTARY INFORMATION
Half year Half year Full year
to 3 Oct to 27 Sept to 28 Mar
1998 1997 1998
m pounds m pounds m pounds
11. US GAAP
PROFIT FOR THE PERIOD - UK GAAP 79 95 226
Adjustments:
Amortisation of goodwill (7) (7) (14)
Interest costs capitalised 12 14 27
Depreciation of capitalised interest (4) (3) (8)
Pension costs - (45) (18)
Stock-based employee compensation awards (3) (2) (6)
Rationalisation costs (11) - 14
Deferred taxation 5 10 9
PROFIT FOR THE PERIOD - US GAAP 71 62 230
Earnings Per Ads - US GAAP 0.36Pounds 0.31Pounds1.16 Pounds
DILUTED EARNINGS PER ADS - US GAAP 0.36Pounds 0.30Pounds1.14 Pounds
SHAREHOLDERS EQUITY - UK GAAP 4,642 4,640 4,622
Adjustments:
Goodwill 200 213 207
Interest costs capitalised
(net of depreciation) 145 129 137
Pension costs 103 76 103
Stock-based employee compensation awards (14) (7) (11)
Quest shares held in trust - - (18)
Rationalisation costs 3 - 14
Deferred taxation (491) (416) (496)
Investments in equity securities 8 26 31
Proposed dividend 59 58 137
Minority interests 20 20 20
Shareholders' Equity - US GAAP 4,675 4,739 4,746
Review Report by the Auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together to British Steel plc We have reviewed the interim financial information for the six months ended Oct. 3, 1998 set out on pages 5 - 13 which is the responsibility of, and has been approved by, the directors. Our responsibility is to report on the results of our review. Our review was carried out having regard to the Bulletin "Review of Interim Financial Information", issued by the Auditing Practices Board. This review consisted principally of applying analytical procedures Analytical Procedures is one of financial audit skill which help an auditor understand the client's business and changes in the business, to identify potential risk areas and to plan other audit procedures. to the underlying financial data, assessing whether accounting policies have been consistently applied, and making enquiries of Group management responsible for financial and accounting matters. The review excluded audit procedures such as tests of controls and verification See verify. verification - The process of determining whether or not the products of a given phase in the life-cycle fulfil a set of established requirements. of assets and liabilities, and was therefore substantially less in scope than an audit performed in accordance with Auditing Standards. Accordingly we do not express an audit opinion on the interim financial information. On the basis of our review: - in our opinion the interim financial information has been prepared using accounting policies consistent with those adopted by British Steel plc in its financial statements for the year ended March 28, 1998, except for the changes in accounting policies described on page four necessary to implement new accounting standards introduced in the period: and - we are not aware of any material modifications that should be made to the interim financial information as presented. |
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