REG - SSE Plc - Preliminary results for the year to 31 March 2015 <Origin Href="QuoteRef">SSE.L</Origin> - Part 7
15/07/2015 18:29
- Part 7: For the preceding part double click ID:nRST7125Nf
Derivative financial liabilities (2,297.3) (2,297.3) (1,470.2) (1,470.2)
(5,737.8) (5,739.5) (4,585.2) (4,588.1)
Non-current
Loans and Borrowings (5,068.4) (6,213.4) (5,365.5) (6,001.3)
Finance lease liabilities (299.5) (299.5) (310.8) (310.8)
Derivative financial liabilities (933.4) (933.4) (681.7) (681.7)
(6,301.3) (7,446.3) (6,358.0) (6,993.8)
(12,039.1) (13,185.8) (10,943.2) (11,581.9)
Net financial liabilities (4,315.1) (5,461.8) (5,431.1) (6,069.8)
Fair Value Hierarchy
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at
fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
· Level 1 fair value measurements are those derived from unadjusted quoted market prices for identical assets or
liabilities.
· Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that
are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
· Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or
liability that are not based on observable market data.
Notes to the Preliminary Statement
for the year ended 31 March 2015
17. Capital and Financial Risk Management (continued)
Financial risk management (continued)
Fair Value Hierarchy
Level 1 Level 2 Level 3 Total
Financial Assets £m £m £m £m
Energy derivatives 1,093.3 1,261.7 - 2,355.0
Interest rate derivatives - 188.5 - 188.5
Foreign exchange derivatives - 23.2 - 23.2
Equity investments - 26.4 - 26.4
1,093.3 1,499.8 - 2,593.1
Financial Liabilities
Energy derivatives (1,044.5) (1,643.8) - (2,688.3)
Interest rate derivatives - (473.3) - (473.3)
Foreign exchange derivatives - (69.1) - (69.1)
Loans and Borrowings - (30.9) - (30.9)
(1,044.5) (2,217.1) - (3,261.6)
There were no significant transfers out of level 1 into level 2 and out of level 2 into level 1 during the year ended 31
March 2015. Oil and coal commodities reported as level 2 for the year ended 31 March 2014 (assets of £316.8m and
liabilities of £319.4m) are now classified as level 1, following a reassessment of assets and liabilities by the Group.
18. Retirement Benefit Obligations
Valuation of combined Pension Schemes
Long- term rate of return expected at 31 March 2015 Valueat 31 March 2015 Long- term rate of return expected at 31 March 2014 Valueat 31 March 2014
% £m % £m
Equities 5.6 1,060.1 7.2 967.9
Government bonds 2.6 1,049.6 3.5 920.0
Corporate bonds 3.3 1,061.3 4.3 814.1
Other investments 4.1 580.0 1.3 555.3
Total fair value of plan assets 3,751.0 3,257.3
Present value of defined benefit obligation (4,209.1) (3,693.9)
Pension liability before IFRIC 14 (458.1) (436.6)
IFRIC 14 liability (i) (206.5) (201.1)
Deficit in the schemes (664.6) (637.7)
Deferred tax thereon 132.8 127.5
Net pension liability (531.8) (510.2)
(i) The IFRIC 14 liability represents the deficit repair obligations required to ensure a minimum funding level together
with a restriction on the surplus that can be recognised.
Notes to the Preliminary Statement
for the year ended 31 March 2015
18. Retirement Benefit Obligations (continued)
Movements in the defined benefit asset obligations and assets during the year:
2015 2014
Assets£m Obligations £m Total£m Assets£m Obligations £m Total£m
at 1 April 3,257.3 (3,693.9) (436.6) 3,118.0 (3,634.5) (516.5)
Included in Income Statement
Current service cost - (55.4) (55.4) - (56.2) (56.2)
Past service cost - (16.7) (16.7) - (0.6) (0.6)
Interest income/(cost) 139.9 (156.4) (16.5) 128.0 (147.0) (19.0)
139.9 (228.5) (88.6) 128.0 (203.8) (75.8)
Included in Other Comprehensive Income
Actuarial (loss)/gain arising from:
Demographic assumptions - - - - (12.4) (12.4)
Financial assumptions - (515.4) (515.4) - 14.8 14.8
Experience assumptions - 70.4 70.4 - 13.3 13.3
Return on plan assets excluding interest income 362.5 - 362.5 7.3 - 7.3
362.5 (445.0) (82.5) 7.3 15.7 23.0
Other
Contributions paid by the employer 149.6 - 149.6 132.7 - 132.7
Scheme participants contributions 0.3 (0.3) - 1.1 (1.1) -
Benefits Paid (158.6) 158.6 - (129.8) 129.8 -
(8.7) 158.3 149.6 4.0 128.7 132.7
Balance at 31 March 3,751.0 (4,209.1) (458.1) 3,257.3 (3,693.9) (436.6)
Charges / (credits) recognised:
2015 2014
£m £m
Current service cost (charged to operating profit) 72.1 56.8
72.1 56.8
(Credited)/charged to finance costs:
Interest on pension scheme assets (139.9) (128.0)
Interest on pension scheme liabilities 156.4 147.0
IFRIC 14 impact on net interest 8.6 7.8
25.1 26.8
19. Capital commitments
2015 2014
£m £m
Capital expenditure:
Contracted for but not provided 1,059.5 625.1
Contracted for, but not provided capital commitments, include the fixed contracted costs of the Group's major capital
projects. In practice, contractual variations may arise on the final settlement of these contractual costs.
Notes to the Preliminary Statement
for the year ended 31 March 2015
20. Related party transactions
The following transactions took place during the year between the Group and entities which are related to the Group but
which are not members of the Group. Related parties are defined as those in which the Group has control, joint control or
significant influence over.
Sale of goods and services Purchase of goods and services Amounts owed from Amounts owed to Sale of goods and services Purchase of goods and services Amounts owed from Amounts owed to
2015 2015 2015 2015 2014 2014 2014 2014
Equity accounted joint ventures: £m £m £m £m £m £m £m £m
Seabank Power Ltd 20.1 (115.5) 1.8 11.1 22.9 (108.7) 1.2 9.1
Marchwood Power Ltd 28.7 (114.4) 3.4 12.7 33.5 (94.5) 0.2 8.1
Scotia Gas Networks Ltd 49.0 (166.4) 7.7 0.3 58.7 (175.2) 15.7 0.7
Other Joint Ventures 27.6 (6.0) 3.0 - 36.5 - 1.1 0.3
Associates 0.8 (41.9) 1.9 2.5 1.5 (28.2) 1.1 2.5
The transactions with Seabank Power Limited and Marchwood Power Limited relate to the contracts for the provision of energy
or the tolling of energy under power purchase arrangements. Scotia Gas Networks Limited has operated the gas distribution
networks in Scotland and the South of England from 1 June 2005. The Group's gas supply activity incurs gas distribution
charges while the Group also provides services to Scotia Gas Networks in the form of a management service agreement for
corporate services, stock procurement services and the provision of the capital expenditure on the development of front
office management information systems.
The amounts outstanding are trading balances, are unsecured and will be settled in cash. No guarantees have been given or
received. No provisions have been made for doubtful debts in respect of the amounts owed by related parties.
This information is provided by RNS
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