REG - Compass Group PLC - Final Results <Origin Href="QuoteRef">CPG.L</Origin> - Part 4

CompassAnnouncement

26/11/2014 07:11

- Part 4: For the preceding part double click  ID:nRSZ9967Xc 

                                           £m    
                                                                                                                                                                                       
 Finance income                                                                                                                                                                        
 Bank interest                                                                                                                                                             5     8     
 Total finance income                                                                                                                                                      5     8     
                                                                                                                                                                                       
 Finance costs                                                                                                                                                                         
 Interest on bank loans and overdrafts                                                                                                                                     11    8     
 Interest on other loans                                                                                                                                                   69    60    
 Finance lease interest                                                                                                                                                    1     2     
 Interest on bank loans, overdrafts, other loans and finance leases                                                                                                        81    70    
 Unwinding of discount on provisions                                                                                                                                       3     4     
 Interest on net post employment benefit obligations (note 23)                                                                                                             7     11    
 Total finance costs                                                                                                                                                       91    85    
                                                                                                                                                                                       
 Analysis of finance costs by defined IAS 39(1) category                                                                                                                               
 Fair value through profit or loss(unhedged derivatives)                                                                                                                   4     2     
 Derivatives in a fair value hedge relationship                                                                                                                            (28)  (24)  
 Derivatives in a net investment hedge relationship                                                                                                                        3     5     
 Other financial liabilities                                                                                                                                               102   87    
 Interest on bank loans, overdrafts, other loans and finance leases                                                                                                        81    70    
 Fair value through profit or loss (unwinding of discount on provisions)                                                                                                   3     4     
 Outside of the scope of IAS 39 (net pension scheme charge)                                                                                                                7     11    
 Total finance costs                                                                                                                                                       91    85    
                                                                                                                                                                                       
 (1) IAS 39 'Financial Instruments: Recognition and Measurement'.                                                                                                          
                                                                                                                                                                                       
 The Group uses derivative financial instruments such as forward currency contracts, cross currency swaps and interest rate swaps to hedge the risks associated with       
 changes in foreign currency exchange rates and interest rates. As explained in section Q of the Group's accounting policies which are set out in the Annual Report, such  
 derivative financial instruments are initially measured at fair value on the contract date, and arere-measured to fair value at subsequent reporting dates. For derivative 
 financial instruments that do not qualify for hedge accounting, any gains or losses arising from changes in fair value are taken directly to the income statement in the  
 period.                                                                                                                                                                   
 
 
 4 Financing income, costs and related (gains)/losses (continued)      
 
 
 Fair value measurement                                                                                                                                                                                                                                                                                                                                                                           
 All derivative financial instruments are shown at fair value in the balance sheet.  All the derivatives held by the Group at fair value are considered to have fair values determined by level 2 inputs as defined by the fair value hierarchy of IFRS 13, 'Fair value measurement'. The fair values of derivative financial instruments represent the maximum credit exposure.        
                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                  2014  2013    
 Financing related (gains)/losses                                                                                                                                                                                                                                                                                                                                                 £m    £m      
                                                                                                                                                                                                                                                                                                                                                                                                
 Hedge accounting ineffectiveness                                                                                                                                                                                                                                                                                                                                                               
 Unrealised net (gains)/losses on derivative financial instruments in a designated fair value hedge (1)                                                                                                                                                                                                                                                                           (23)  47      
 Unrealised net losses/(gains) on the hedged item in a designated fair value hedge                                                                                                                                                                                                                                                                                                23    (44)    
 Total hedge accounting ineffectiveness (gains)/losses                                                                                                                                                                                                                                                                                                                            -     3       
                                                                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                
 Change in the fair value of investments and non-controlling interest put options                                                                                                                                                                                                                                                                                                               
 Gain from the changes in the fair value of investments (2), (3)                                                                                                                                                                                                                                                                                                                  2     -       
                                                                                                                                                                                                                                                                                                                                                                                                
 (1) Categorised as derivatives that are designated and effective as hedging instruments carried at fair value (IAS 39).                                                                                                                                                                                                                                                                
 (2) Categorised as 'fair value through profit or loss' (IAS 39).                                                                                                                                                                                                                                                                                                                       
 (3) Life insurance policies used by overseas companies to meet the cost of unfunded post-employment benefit obligations included in note 23.                                                                                                                                                                                                                                           
 
 
 5  US Disposals                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                      
 On 27 May 2014, the Group disposed of its retail cleaning business in the United States. Total consideration for the transaction was £31 million, of which £24 million was received by 30 September in cash.  There was a loss of £1 million on the transaction and a gain of £2 million from other small US disposals.        
                                                                                                                                                                                                                                                                                                                                        
 In 2012 the Group disposed of the assets related to its food and support services business in correctional facilities located in the United States.  In the year ended 30 September 2013 a loss of £1 million was recognised in relation to this transaction.                                                            
                                                                                                                                                                                                                                                                                                                          2014  2013    
                                                                                                                                                                                                                                                                                                                          £m    £m      
 Gain/(loss) on disposal of US businesses                                                                                                                                                                                                                                                                                 1     (1)     
 
 
 6 Tax                                                                                             
                                                                                                   
                                                            Before             Exceptional         
 Recognised in the income statement:                 Total  exceptional items  items        Total  
 Income tax expense on continuing                                                                  
 operations                                                                                        
                                               2014  2013   2013               2013         
                                               £m    £m     £m                 £m           
                                                                                                     
 Current tax                                                                                       
 Current year                                        271    299                (26)         273    
 Adjustment in respect of prior years                1      (3)                -            (3)    
 Current tax expense/(credit)                        272    296                (26)         270    
                                                                                                   
 Deferred tax                                                                                      
 Current year                                        10     1                  10           11     
 Impact of changes in statutory tax rates            1      5                  -            5      
 Adjustment in respect of prior years                (4)    (1)                -            (1)    
 Deferred tax expense                                7      5                  10           15     
                                                                                                   
 Income tax expense on continuing                    279    301                (16)         285    
 operations excluding exceptional                                                                  
 recognition of tax losses arising in prior                                                         
 years                                                                                             
                                                                                                   
 Current tax credit on exceptional                   -      -                  -            -      
 recognition of tax losses arising in prior                                                         
 years                                                                                             
 Deferred tax expense on exceptional                 -      2                  -            2      
 recognition of tax losses arising in prior                                                         
 years                                                                                             
 Total tax expense on exceptional                    -      2                  -            2      
 recognition of tax losses arising in prior                                                         
 years