REG - SSE Plc - Preliminary results for the year to 31 March 2016 <Origin Href="QuoteRef">SSE.L</Origin> - Part 5
18/05/2016 07:06
- Part 5: For the preceding part double click ID:nRSR5345Yd
(24.7) 411.6 (586.4) (174.8)
Gas Storage 4.0 - 4.0 (150.9) (146.9)
Gas Production 2.2 - 2.2 (161.8) (159.6)
442.5 (24.7) 417.8 (899.1) (481.3)
Corporate unallocated 0.1 - 0.1 (4.0) (3.9)
Total 1,824.4 (166.7) 1,657.7 (872.3) 785.4
2015
Adjusted operating profit reported to the Board JV / Associate share of interest and tax (ii) Before exceptional items and certain re-measurements Exceptional items and certain re-measurements Total
£m £m £m £m £m
Networks
Electricity Distribution 467.7 - 467.7 - 467.7
Electricity Transmission 184.1 - 184.1 - 184.1
Gas Distribution 285.0 (137.1) 147.9 5.3 153.2
936.8 (137.1) 799.7 5.3 805.0
Retail
Energy Supply 368.7 - 368.7 (34.2) 334.5
Enterprise 70.4 - 70.4 30.3 100.7
Energy-related Services 17.7 - 17.7 15.6 33.3
456.8 - 456.8 11.7 468.5
Wholesale
Energy Portfolio Management and Electricity Generation 433.3 (21.3) 412.0 (483.8) (71.8)
Gas Storage 3.9 - 3.9 (163.9) (160.0)
Gas Production 36.6 - 36.6 (106.0) (69.4)
473.8 (21.3) 452.5 (753.7) (301.2)
Corporate unallocated 14.0 - 14.0 (0.4) 13.6
Total 1,881.4 (158.4) 1,723.0 (737.1) 985.9
(ii) The adjusted operating profit of the Group is reported after removal of the Group's share of interest, fair
value movements on financing derivatives and tax from joint ventures and associates and after adjusting for exceptional
items (see Note 6). The share of Scotia Gas Networks Limited interest includes loan stock interest payable to the
consortium shareholders (included in Gas Distribution). The Group has accounted for its 50% share of this, £24.3m (2015 -
£33.3m), as finance income (Note 7).
The Group's share of operating profit from joint ventures and associates has been recognised in the Energy Portfolio
Management and Electricity Generation segment other than that for Scotia Gas Networks Limited, which is recorded in Gas
Distribution, and PriDE (South East Regional Prime), which is recognised in Enterprise (£0.4m before tax; 2015 - £0.7m
before tax).
Notes to the Preliminary Statement
for the year ended 31 March 2016
6. Exceptional items and certain re-measurements
2016£m 2015£m
Exceptional items
Asset impairments and related charges (892.5) (667.5)
Provisions for restructuring and other liabilities (54.9) (56.0)
(947.4) (723.5)
Net gains on disposals of businesses and other assets 57.6 74.8
(889.8) (648.7)
Impairment of investments in joint ventures and associates (share of result) - (25.9)
(889.8) (674.6)
Share of effect of change in UK corporation tax on deferred tax liabilities and assets of associate and joint venture investments 46.7 -
Total exceptional items (843.1) (674.6)
Certain re-measurements
Movement on operating derivatives (note 16) (31.1) (67.8)
Movement on financing derivatives (note 16) 14.3 (44.2)
Share of movement on derivatives in jointly controlled entities (net of tax) 1.9 5.3
Total certain re-measurements (14.9) (106.7)
Exceptional items and certain re-measurements before taxation (858.0) (781.3)
Taxation
Effect of change in UK corporation tax rate on deferred tax liabilities and assets 41.5 15.6
Taxation on other exceptional items 227.6 145.6
269.1 161.2
Taxation on certain re-measurements 3.4 39.2
Taxation 272.5 200.4
Exceptional items after certain re-measurements after taxation (585.5) (580.9)
Exceptional items are disclosed across the following categories within the income statement:
2016£m 2015£m
Cost of sales:
Coal-fired Generation related provisions and charges (287.0) (313.5)
Gas-fired Generation related charges (326.4) (51.5)
Movement on operating derivatives (note 16) (31.1) (67.8)
(644.5) (432.8)
Operating costs:
Gas Production (E&P) related charges (161.8) (106.1)
Gas Storage related charges (150.9) (163.9)
Gas-fired Generation related charges - (24.9)
Other exceptional provisions and charges (21.3) (63.6)
(334.0) (358.5)
Operating income:
Net gains on disposals of businesses and other assets 57.6 74.8
Joint ventures and associates:
Impairment of investments - (25.9)
Effect of change in UK corporation tax on deferred tax liabilities and assets 46.7 -
Movement on derivatives (net of tax) 1.9 5.3
48.6 (20.6)
Operating loss (872.3) (737.1)
Finance costs
Movement on financing derivatives (note 16) 14.3 (44.2)
Loss before taxation (858.0) (781.3)
Notes to the Preliminary Statement
for the year ended 31 March 2016
6 Exceptional items and certain re-measurements (continued)
In the year to 31 March 2016, the Group recognised net exceptional charges of £889.8m. This consisted of asset impairment
and related charges totalling £892.5m, exceptional provisions of £54.9m and net exceptional gains on disposal of £57.6m.
The £138.6m gain on the part disposal of Clyde Windfarm (Scotland) Limited has been recognised directly in equity and
therefore does not form part of the Income Statement and therefore total gains on disposal were £196.2m.
Property, Plant & Equipment£m Goodwill & Other Intangibles£m Inventories £m Other charges £m TotalImpairmentrelated£m Provisions £m Total charges £m
Coal Generation (i) 67.6 - 87.9 83.2 238.7 48.3 287.0
Gas Generation (ii) 302.5 2.2 3.7 18.0 326.4 - 326.4
Gas Production (iii) 125.0 27.2 - 9.6 161.8 - 161.8
Gas Storage (iv) 150.9 - - - 150.9 - 150.9
Other (v) - 11.2 - 3.5 14.7 6.6 21.3
646.0 40.6 91.6 114.3 892.5 54.9 947.4
(i) Coal-fired Generation. On 20 May 2015, the Group announced that operations at Ferrybridge would cease at 31 March 2016
and consequently exceptional charges including the recognition of restructuring provisions, impairment of inventory and
other costs have been recognised (£72.0m). On 30 March 2016, the Group announced that following a consultation process and
success in securing a contract to provide ancillary services to National Grid for one year from 1 April 2016, operations at
Fiddler's Ferry would continue and that SSE would enter 'all or part of' the capacity at Fiddler's Ferry into any 2017/18
Capacity Market auction. Nonetheless, the challenging economic and regulatory conditions facing coal-fired generation in
the UK means that the long-term future of Fiddler's Ferry remains uncertain. In addition, SSE's longer-term strategic
involvement in coal-fired generation and coal procurement is now under review. As a result, further exceptional charges
have been recognised including impairment of the value of plant (£67.6m) and inventory (£47.9m) at Fiddler's Ferry and
accelerated decommissioning costs recorded directly as a charge to the income statement and, included in other charges,
irrecoverable current assets and financial losses relating to cessation of coal hedging activities (totalling £99.5m).
Following these charges, the residual value of the Group's coal generation plants is nil.
(ii) Gas-fired Generation. Following the failure of Peterhead Power Station to win a capacity contract under the Capacity
Market Auction for 2019/20 and the announcement, on 25 November, that the UK Government was withdrawing funding support for
the proposed carbon capture and storage project at Peterhead Power Station, exceptional charges of £129.3m have been
recognised in relation to the assets at the site. The economic conditions for the Group's other main Gas-fired Generation
plants in Great Britain (Medway, Keadby and Marchwood) remain challenging. While the Group's long term view remains that
the impact of regulatory changes will create a favourable economic environment for gas-fired generation, there has as yet
been no observable recovery in 'spark spread' margins at these plants and there remains uncertainty in relation to the
enduring ability of the plants to benefit from the UK Government's Capacity Market process. As a result, further impairment
charges have been recognised of £197.1m, principally in respect of Marchwood and Medway plant and certain contractual
prepayments. Following these charges, the residual value of the Group's GB gas generation plants under review is £226.2m
(iii) Gas Production. Impairment of the Group's Gas Exploration and Production assets in the North Sea has been recognised
predominately due to declining wholesale gas prices. The exceptional charges recognised include an element (£121.2m)
related to the impairment of Greater Laggan field assets acquired at 28 October 2015 which reflects the impact of the
decline in expected long term gas prices between the acquisition date and the financial year end. The other impairments
related to the impact of the fall in wholesale gas prices on the Group's other E&P assets at Sean, Lomond, Bacton and ECA
(£40.6m). Following these charges, the residual value of the Group's gas production assets is £888.0m
(iv) Gas Storage. Current and forecast demand for gas storage in Great Britain continues to be impacted by reduced short
term price volatility and seasonal spreads in the wholesale gas market. These factors have had different but significant
impacts on the Group's facilities at Hornsea (Atwick) and Aldbrough. As a result, exceptional charges of £150.9m have been
recognised across both assets. Following these charges, the residual value of the Group's gas storage facilities is
£21.2m.
(v) Other charges. Other exceptional charges have been recognised in relation to impairment of system development projects,
restructuring charges and exit costs associated with the strategic exit from certain non-core activities.
The Group recognised £57.6m of exceptional net credits arising from disposals. On 28 May 2015, the Group recognised an
exceptional gain on disposal of £39.3m in relation to the sale of three onshore wind development sites to Blue Energy. In
addition, the Group also recognised a gain on its disposal of its interest in the Galloper offshore wind development of
£18.3m. The latter disposal gain is considered to be exceptional due to the Group having previously impaired its investment
in Galloper as part of its decision to scale back its commitment to offshore wind development. Further detail is included
at Note 12.
In the previous financial year, the Group recognised exceptional charges arising from and related to asset impairments
amounting to £667.5m and provisions of £56.0m. The exceptional charges recognised can be summarised as follows:
Notes to the Preliminary Statement
for the year ended 31 March 2016
6. Exceptional items and certain re-measurements (continued)
6.1 Exceptional items (continued)
In the previous financial year, the Group recognised exceptional charges arising from and related to asset impairments
amounting to £667.5m and provisions of £56.0m. The exceptional charges recognised can be summarised as follows:
Property, Plant & Equipment £m Goodwill & Other Intangibles£m Inventories £m Other charges £m TotalImpairment related£m Provisions £m Total charges £m
Coal Generation 222.7 - 41.0 45.8 309.5 4.0 313.5
Gas Generation 14.9 51.5 - - 66.4 10.0 76.4
Gas Production 61.9 44.1 - 0.1 106.1 - 106.1
Gas Storage 162.4 - - - 162.4 1.5 163.9
Other 16.9 - - 6.2 23.1 40.5 63.6
478.8 95.6 41.0 52.1 667.5 56.0 723.5
The impairments of Coal generation plants followed the 31 July 2014 fire at Ferrybridge and the inability of both units at
Ferrybridge and one unit at Fiddler's Ferry to secure agreements to provide capacity under the auction process run by DECC
in December 2014. The impairments of Gas generation plants predominately related to development sites at Abernedd and
Seabank. The impairments of Gas Production assets related to the impact of declining wholesale prices on the Group's Sean,
ECA and Lomond fields. The charges associated with Gas Storage followed the strategic review of the Group's operations in
that segment the results of which were announced on 26 March 2015. The other charges mainly relate to asset impairments,
other charges in non-core businesses and provisions for certain disputes and claims. The exceptional disposal gains
recorded related to the sale of seven street lighting PFI companies to Equitix (£38.0m), the Group's share of the dividend
from the Environmental Energy Fund's disposal of its stake in Anesco (£19.6m) and the gain on disposal of non-core retail
assets (£17.2m).
As supplemental detail, the following table represents the exceptional charges recognised in the financial year to 31 March
2014 presented in similar format:
Property, Plant & Equipment £m Goodwill & Other Intangibles£m Othercharges £m TotalImpairmentrelated£m Provisions £m Total charges £m
Restructuring
Non-core 35.2 2.0 36.0 73.2 58.9 132.1
Wind 17.0 75.9 47.6 140.5 - 140.5
Coal Generation 191.6 - 47.0 238.6 - 238.6
Gas Storage 111.4 26.3 - 137.7 - 137.7
Other 17.5 18.7 15.7 51.9 46.4 98.3
372.7 122.9 146.3 641.9 105.3 747.2
The restructuring-related charges followed the announcement, on 28 March 2014, that the Group was intending to dispose of a
number of non-core assets and businesses, embark upon a programme of voluntary early release for around 500 employees and
scale back its commitment in relation to offshore wind developments. The impairments of the coal plants followed a period
of relatively favourable operating conditions for Fiddler's Ferry and Ferrybridge but were necessary in context of the
increasing impact on profitability of the Carbon Price Support (CPS) mechanism and uncertainty around future political and
regulatory support for coal generation. The impairment of Gas Storage was due to the impact of market and global factors
such as North American fracking and availability of LNG on the business. The 2014 financial statements noted that "there
remains inherent imprecision in the valuation processes for these long-term infrastructure assets which is dependent on
macro-economic factors. Management believe a balanced position has been taken regarding these factors". The other charges
relate to impairments of certain Retail developments and provisions for certain disputes and claims.
Notes to the Preliminary Statement
for the year ended 31 March 2016
6 Exceptional items and certain re-measurements(continued)
6.1 Certain re-measurements
The Group enters into forward commodity purchase contracts to meet the future demands of its Energy Supply business and to
optimise the value of its Generation and other Wholesale assets. Certain of these contracts are determined to be derivative
financial instruments under IAS 39 and as such are required to be recorded at their fair value. Changes in the fair value
of those commodity contracts designated as IAS 39 financial instruments are reflected in the income statement (as part of
'certain re-measurements'). The Group shows the change in the fair value of these forward contracts separately as this
mark-to-market movement is not relevant to the underlying performance of its operating segments. The Group will recognise
the underlying value of these contracts as the relevant commodity is delivered, which will predominately be within the
subsequent 12 to 18 months. Conversely, commodity contracts that are not financial instruments under IAS 39 are accounted
for as 'own use' contracts. The re-measurements arising from IAS 39 are disclosed separately to aid understanding of the
underlying performance of the Group. This category also includes income statement movement on financing derivatives (and
hedged items) as described in Note 16.
6.2 Change in UK corporation tax rates
Finance (No.2) Act 2015 which received royal assent on 18 November 2015 enacted a Corporation tax rate of 19% (currently
20%) from 1 April 2017, and a rate of 18% from 1 April 2020. As these changes have been substantively enacted they have the
effect of reducing the Group's deferred tax liabilities by £27.6m including the impact of changes recognised in the
statement of other comprehensive income. A further change to reduce the rate of Corporation Tax to 17% from 1 April 2020
was announced in Finance (No.2) Bill 2016, however as this change has not been substantively enacted at the balance sheet
date its effect, estimated to be £21.0m, has not been brought into account in calculating the Group's deferred tax
liabilities.
A resolution was passed under the Provisional Collection of Taxes Act 1968 on 22 March 2016 which reduced the rate of
Petroleum Revenue Tax (PRT) to 0% (from 35%) with effect from 1 January 2016. As this change has been substantively enacted
at the balance sheet date it has the effect of reducing the Group's deferred tax liabilities by £2.8m. Finance (No.2) Bill
2016 announced a reduction in the rate of Supplementary Charge on ring-fenced profits to 0% (previously 20%) with effect
from 1 January 2016. As this change has not been enacted at the balance sheet date it has not been brought into account in
calculating the Group's deferred tax liabilities. It is expected to reduce the Group's deferred tax liabilities by £9.0m.
Taxation
The Group has separately recognised the tax effect of the exceptional items and certain re-measurements summarised above.
Notes to the Preliminary Statement
for the year ended 31 March 2016
7. Finance income and costs
2016 2015
Before Exceptional items and certain re-measurements£m Exceptional items and certain re-measurements£m Total£m Before Exceptional items and certain re-measurements£m Exceptional items and certain re-measurements£m Total£m
Finance income:
Interest income from short term deposits 4.7 - 4.7 1.1 - 1.1
Foreign exchange translation of monetary assets and liabilities 9.0 - 9.0 - - -
Other interest receivable:
Scotia Gas Networks loan stock 24.3 - 24.3 33.3 - 33.3
Other joint ventures and associates 0.9 - 0.9 14.8 - 14.8
Other receivable 62.9 - 62.9 46.7 - 46.7
88.1 - 88.1 94.8 - 94.8
Total finance income 101.8 - 101.8 95.9 - 95.9
Finance costs:
Bank loans and overdrafts (27.9) - (27.9) (23.9) - (23.9)
Other loans and charges (257.1) - (257.1) (262.5) - (262.5)
Interest on pension scheme liabilities (20.4) - (20.4) (25.1) - (25.1)
Notional interest arising on discounted provisions (15.7) - (15.7) (14.0) - (14.0)
Foreign exchange translation of monetary assets and liabilities - - - (0.5) - (0.5)
Finance lease charges (34.7) - (34.7) (34.2) - (34.2)
Less: interest capitalised 47.6 - 47.6 57.8 - 57.8
Total finance costs (308.2) - (308.2) (302.4) - (302.4)
Changes in fair value of financing derivative assets or liabilities at fair value through profit or loss - 14.3 14.3 - (44.2) (44.2)
Net finance costs (206.4) 14.3 (192.1) (206.5) (44.2) (250.7)
Presented as:
Finance income 101.8 - 101.8 95.9 - 95.9
Finance costs (308.2) 14.3 (293.9) (302.4) (44.2) (346.6)
Net finance costs (206.4) 14.3 (192.1) (206.5) (44.2) (250.7)
The capitalisation rate applied in determining the amount of borrowing costs to capitalise in the period was 4.24% (2015 -
4.49%).
Adjusted net finance costs are arrived at after the following adjustments:
2016£m 2015£m
Net finance costs (192.1) (250.7)
(add)/less:
Share of interest from joint ventures and associates:
Scotia Gas Networks loan stock (24.3) (33.3)
Other joint ventures and associates (102.5) (90.9)
(126.8) (124.2)
Interest on pension scheme liabilities 20.4 25.1
Share of interest on net pension liabilities in joint ventures 1.9 (11.1)
Movement on financing derivatives (Note 16) (14.3) 44.2
Adjusted net finance costs (310.9) (316.7)
Notional interest arising on discounted provisions 15.7 14.0
Finance lease charges 34.7 34.2
Hybrid coupon payment (Note 14) (124.6) (121.3)
Adjusted net finance costs for interest cover calculations (385.1) (389.8)
Notes to the Preliminary Statement
for the year ended 31 March 2016
8. Taxation
Analysis of charge recognised in the income statement:
Before Exceptional items and certain re-measure-ments Exceptional items and certain re-measure-ments 2016 Before Exceptional items and certain re-measure-ments Exceptional items and certain re-measure-ments 2015
£m £m £m £m £m £m
Current tax
UK corporation tax 180.5 (44.2) 136.3 231.4 (25.1) 206.3
Adjustments in respect of previous years (21.2) - (21.2) (29.8) - (29.8)
Total current tax 159.3 (44.2) 115.1 201.6 (25.1) 176.5
Deferred tax
Current year 74.9 (186.8) (111.9) 52.7 (159.7) (107.0)
Effect of change in tax rate - (41.5) (41.5) - (15.6) (15.6)
Adjustments in respect of previous years 46.4 - 46.4 16.9 - 16.9
Total deferred tax 121.3 (228.3) (107.0) 69.6 (175.3) (105.7)
Total taxation charge 280.6 (272.5) 8.1 271.2 (200.4) 70.8
Notes to the Preliminary Statement
for the year ended 31 March 2016
8. Taxation (continued)
In October 2014, SSE became the first FTSE 100 listed group to be accredited with the Fair Tax Mark. As a consequence, the
Group's financial statements include a number of areas of enhanced disclosure which have been provided in order to develop
stakeholder understanding of the tax the Group pays. The table below reconciles the tax which would be expected to be paid
on SSE's reported profit before tax to the reported current tax charge and the reported total taxation charge:
2016 2016 2015 2015
£m % £m %
Group profit before tax 593.3 735.2
Less: share of results of associates and jointly controlled entities (204.8) (163.6)
Profit before tax 388.5 571.6
Tax on profit on ordinary activities at standard UK corporation tax rate of 20% (2014 - 21%) 77.7 20.0 120.0 21.0
Tax effect of:
Capital allowances (in excess of)/less than depreciation (24.9) (6.4) 86.0 15.1
Increase in restructuring and settlement provisions 9.2 2.4 2.6 0.5
Non-taxable gain on sale of shares (11.5) (3.0) (13.8) (2.4)
Fair value movements on derivatives 3.4 0.9 23.6 4.1
Pension movements (3.1) (0.8) (11.0) (1.9)
Relief for capitalised interest and revenue costs (20.3) (5.2) (22.3) (3.9)
Hybrid capital coupon payments (24.8) (6.4) (25.5) (4.5)
Corporation tax relief on PRT paid (3.2) (0.8) (4.5) (0.8)
Expenses not deductible for tax purposes 14.4 3.7 7.7 1.3
Impact of higher current tax rates on E&P profits 12.8 3.3 42.1 7.4
Impact of foreign tax rates (3.0) (0.8) 1.4 0.2
E&P tax losses carried forward 111.9 28.8 - -
Employee share awards (2.3) (0.6) - -
Adjustments to tax charge in respect of previous years (21.2) (5.5) (29.8) (5.2)
Reported current tax charge and effective rate 115.1 29.6 176.5 30.9
Depreciation less than/in excess of capital allowances 35.3 9.1 (68.5) (12.0)
Increase in restructuring and settlement provisions (9.2) (2.4) (2.6) (0.5)
Fair value movements on derivatives (3.4) (0.9) (23.6) (4.1)
Pension movements 3.1 0.8 11.0 1.9
Relief for capitalised interest and revenue costs 20.3 5.2 22.3 3.9
Impact of higher deferred tax rates on E&P profits (32.6) (8.4) (34.8) (6.1)
Impact of foreign tax rates (1.7) (0.4) (4.2) (0.7)
Adjustments to tax charge in respect of previous years 46.4 11.9 6.5 1.1
Change in rate of UK corporation tax (41.5) (10.7) (15.6) (2.7)
Arising due to business combination (14.1) (3.5) - -
E&P tax losses carried forward (111.9) (28.8) - -
Employee share schemes 2.3 0.6 - -
Other items - - 3.8 0.6
Reported deferred tax credit and effective rate (107.0) (27.5) (105.7) (18.6)
Group tax charge and effective rate 8.1 2.1 70.8 12.3
The adjusted current tax charge is arrived at after the following adjustments:
2016£m 2016% 2015£m 2015%
Group tax charge and effective rate 8.1 2.1 70.8 12.3
Less: reported deferred tax credit and effective rate 107.0 27.5 105.7 18.6
Current tax charge and effective rate 115.1 29.6 176.5 30.9
Effect of adjusting items (see below) - (22.0) - (19.6)
Current tax charge and effective rate on adjusted basis 115.1 7.6 176.5 11.3
add/(less):
Share of current tax from joint ventures and associates 34.1 2.3 23.2 1.5
Current tax on exceptional items 44.2 2.9 25.1 1.6
Adjusted current tax charge and effective rate 193.4 12.8 224.8 14.4
Notes to the Preliminary Statement
for the year ended 31 March 2016
8 Taxation (continued)
The adjusted effective rate is based on adjusted profit before tax being:
2016 2015
£m
Profit before tax 593.3 735.2
Add/(less):
Exceptional items and certain re-measurements 858.0 781.3
Share of tax from joint ventures/associates before exceptional items and certain re-measurements 39.9 34.2
Interest on pension scheme liabilities 20.4 25.1
Share of interest on net pension liabilities in jointly controlled entities and associates 1.9 (11.1)
Adjusted profit before tax 1,513.5 1,564.7
The adjusted current tax charge can therefore be reconciled to the adjusted profit before tax as follows:
2016£m 2016% 2015£m 2015%
Adjusted profit before tax 1,513.5 1,564.7
Tax on profit on ordinary activities at standard UK corporation tax rate 302.7 20.0 328.6 21.0
Tax effect of:
Capital allowances in excess of depreciation (170.7) (11.3) (42.1) (2.7)
Non taxable gain on sale of shares 1.9 0.1 (6.3) (0.4)
Increase in restructuring and settlement provisions 2.9 0.2 3.9 0.2
Pension movements (7.9) (0.5) (13.9) (0.9)
Relief for capitalised interest and revenue costs (9.3) (0.6) (15.2) (1.0)
Hybrid capital coupon payments (24.8) (1.6) (25.4) (1.6)
Corporation tax relief on PRT paid (3.2) (0.2) (4.4) (0.3)
Expenses not deductible for tax purposes 4.5 0.3 10.1 0.7
Relief for brought forward losses 108.8 7.2 (23.6) (1.5)
Impact of higher current tax rates on oil and gas profits 12.8 0.8 42.1 2.7
Impact of foreign tax rates (3.1) (0.2) 1.4 0.1
Adjustments to tax charge in respect of previous years (21.2) (1.4) (30.4) (1.9)
Adjusted current tax charge and effective rate 193.4 12.8 224.8 14.4
Notes to the Preliminary Statement
for the year ended 31 March 2016
9. Dividends
Ordinary dividends
Year ended 31 March 2016 Total Settled via scrip Pence per ordinary share Year ended 31 March 2015 Total Settled via scrip Pence per ordinary share
£m £m £m £m
Interim - year ended 31 March 2016 270.5 16.3 26.9 - - -
Final - year ended 31 March 2015 613.5 159.5 61.8 - - -
Interim - year ended 31 March 2015 - - - 262.6 81.6 26.6
Final - year ended 31 March 2014 - - - 591.5 174.0 60.7
884.0 175.8 854.1 255.6
The final dividend of 61.8p per ordinary share declared in the financial year ended 31 March 2015 (2014- 60.7p) was
approved at the Annual General Meeting on 23 July 2015 and was paid to shareholders on 19 September 2015. Shareholders were
able to elect to receive ordinary shares credited as fully paid instead of the cash dividend under the terms of the
Company's scrip dividend scheme.
An interim dividend of 26.9p per ordinary share (2015 - 26.6p) was declared and paid on 18 March 2016 to those shareholders
on the SSE plc share register on 22 January 2016. Shareholders were able to elect to receive ordinary shares credited as
fully paid instead of the interim cash dividend under the terms of the Company's scrip dividend scheme.
The proposed final dividend of 62.5p per ordinary share (which equates to a dividend of £629.8m) based on the number of
issued ordinary shares at 31 March 2016 is subject to approval by shareholders at the Annual General Meeting and has not
been included as a liability in these financial statements.
10. Earnings per Share
Basic earnings per share
The calculation of basic earnings per ordinary share at 31 March 2016 is based on the net profit attributable to Ordinary
shareholders and a weighted average number of ordinary shares outstanding during the year ended 31 March 2016. All earnings
are from continuing operations.
Adjusted earnings per share
Adjusted earnings per share has been calculated by excluding the charge for deferred tax, interest on net pension
liabilities under IAS 19R and the impact of exceptional items and certain re-measurements (Note 6).
Year ended 31 March 2016 Year ended 31 March 2016 Year ended 31 March 2015 Year ended 31 March 2015
Earnings£m Earnings per sharepence Earnings£m Earnings per sharepence
Basic 460.6 46.1 543.1 55.3
Exceptional items and certain re-measurements (Note 6) 585.5 58.5 580.9 59.2
Basic excluding exceptional items and certain re-measurements 1,046.1 104.6 1,124.0 114.5
Adjusted for:
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