Financial Statements - Chemring Group PLC

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C H E M R I N G G R O U P P L CIndependent Auditors’ Report on theFinancial Statementsfor the year ended 31 October 2003Independent Auditors’Report to the Members ofChemring Group PLCWe have audited the financialstatements of Chemring Group PLCfor the year ended 31 October 2003which comprise the profit and lossaccount, the balance sheets, theconsolidated cash flow statement, thestatement of total recognised gains andlosses and the related notes 1 to 29,together with the reconciliation ofmovements in shareholders’ funds andthe notes to the cash flow statement.These financial statements have beenprepared under the accounting policiesset out therein. We have also auditedthe information in the part of theDirectors’ Remuneration Report thatis described as having been audited.This report is made solely to theCompany’s members, as a body, inaccordance with section 235 of theCompanies Act 1985. Our audit workhas been undertaken so that we mightstate to the Company’s members thosematters we are required to state tothem in an auditors’ report and for noother purpose. To the fullest extentpermitted by law, we do not accept orassume responsibility to anyone otherthan the Company and the Company’smembers as a body, for our audit work,for this report, or for the opinions wehave formed.Respective responsibilities ofdirectors and auditorsAs described in the statement ofdirectors’ responsibilities, theCompany’s directors are responsible forthe preparation of the financialstatements in accordance withapplicable United Kingdom law andaccounting standards. Ourresponsibility is to audit the financialstatements and the part of theDirectors’ Remuneration Reportdescribed as having been audited inaccordance with relevantUnited Kingdom legal and regulatoryrequirements and auditing standards.We report to you our opinion as towhether the financial statements give atrue and fair view and whether thefinancial statements and the part of theDirectors’ Remuneration Reportdescribed as having been audited havebeen properly prepared in accordancewith the Companies Act 1985. Wealso report to you if, in our opinion,the Directors’ Report is not consistentwith the financial statements, if theCompany has not kept properaccounting records, if we have notreceived all the information specifiedby law regarding directors’remuneration and explanations werequire for our audit, or if informationspecified by law or the Listing Rulesregarding directors’ remuneration andtransactions with the Company andother members of the Group is notdisclosed.We review whether the corporategovernance statement reflects theCompany's compliance with the sevenprovisions of the Combined Codespecified for our review by the ListingRules of the Financial ServicesAuthority, and we report if it does not.We are not required to considerwhether the Board’s statements oninternal control cover all risks andcontrols, or form an opinion on theeffectiveness of the Group’s corporategovernance procedures or its risk andcontrol procedures.We read the Directors’ Report and theother information contained in theannual report for the above year asdescribed in the contents sectionincluding the unaudited part of theDirectors’ Remuneration Report andconsider the implications for ourreport if we become aware of anyapparent misstatements or materialinconsistencies with the financialstatements.Basis of audit opinionWe conducted our audit in accordancewith United Kingdom auditingstandards issued by the AuditingPractices Board. An audit includesexamination, on a test basis, ofevidence relevant to the amounts anddisclosures in the financial statementsand the part of the Directors’Remuneration Report described ashaving been audited. It also includesan assessment of the significantestimates and judgments made by thedirectors in the preparation of thefinancial statements and of whether theaccounting policies are appropriate tothe circumstances of the Company andthe Group, consistently applied andadequately disclosed.We planned and performed our auditso as to obtain all the information andexplanations which we considerednecessary in order to provide us withsufficient evidence to give reasonableassurance that the financial statementsand the part of the Directors’Remuneration Report described ashaving been audited are free frommaterial misstatement, whether causedP 22
2 0 0 3 F I N A N C I A L S T A T E M E N T Sby fraud or other irregularity or error.In forming our opinion, we alsoevaluated the overall adequacy of thepresentation of information in thefinancial statements and the part of theDirectors’ Remuneration Reportdescribed as having been audited.Uncertainty relating toinsurance claimIn forming our opinion, we haveconsidered the adequacy of thedisclosure made in Note 6 concerningthe amounts recoverable andcontributions to profit recognisedunder an insurance claim relating to amanufacturing incident atKilgore Flares, a subsidiary undertakingof the Company, in April 2001,resulting in material damage andsuspension of operations. The futuresettlement of this claim could result ina shortfall, or a surplus, whencompared with the recorded debtor at31 October 2003. It is not possible toquantify the effect, if any, of thisuncertainty. Details of thecircumstances relating to thisuncertainty and the amount of therelated debtor recorded at31 October 2003 are disclosed inNote 6. Our opinion is not qualifiedin this respect.OpinionIn our opinion the financial statementsgive a true and fair view of the state ofaffairs of the Company and the Groupas at 31 October 2003 and of theprofit of the Group for the year thenended, and the financial statements andthe part of the Directors’Remuneration Report described ashaving been audited have beenproperly prepared in accordance withthe Companies Act 1985.Deloitte & Touche LLPChartered Accountants andRegistered AuditorsSouthampton2 February 2004P 23
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Financial Statements - Chemring Group PLC

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