REG - SSE Plc - Preliminary results for the year to 31 March 2017 <Origin Href="QuoteRef">SSE.L</Origin> - Part 7

SSEAnnouncement

17/05/2017 07:06

- Part 7: For the preceding part double click  ID:nRSQ3515Ff 


 
The net movement reflected in the interim income statement can be summarised thus: 
 
                                            2017£m   2016£m     
 Operating derivatives                                          
 Total result on operating derivatives (i)  (438.6)  (1,375.4)  
 Less: amounts settled (ii)                 639.6    1,344.3    
 Movement in unrealised derivatives         201.0    (31.1)     
                                                                
 Financing derivatives (and hedged items)                       
 Total result on financing derivatives (i)  (136.3)  (214.9)    
 Less: amounts settled (ii)                 188.9    229.2      
 Movement in unrealised derivatives         52.6     14.3       
 Net income statement impact                253.6    (16.8)     
                                                                
 
 
(i) Total result on derivatives in the income statement represents the total amounts (charged) or credited to the income
statement in respect of operating and financial derivatives. 
 
(ii) Amounts settled in the year represent the result on derivatives transacted which have matured or been delivered and
have been included within the total result on derivatives. 
 
Notes to the Preliminary Statement 
 
for the year ended 31 March 2017 
 
14     Financial risk management (continued) 
 
14.2  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. 
 
                               Level 1  Level 2    Level 3  Total      
 Financial Assets              £m       £m         £m       £m         
                                                                       
 Energy derivatives            335.9    943.9      -        1,279.8    
 Interest rate derivatives     -        471.8      -        471.8      
 Foreign exchange derivatives  -        46.2       -        46.2       
 Equity investments            -        12.5       -        12.5       
                               335.9    1,474.4    -        1,810.3    
                                                                       
 Financial Liabilities                                                 
 Energy derivatives            (341.9)  (1,101.2)  -        (1,443.1)  
 Interest rate derivatives     -        (403.5)    -        (403.5)    
 Foreign exchange derivatives  -        (9.8)      -        (9.8)      
 Loans and Borrowings          -        257.4      -        257.4      
                               (341.9)  (1,257.1)  -        (1,599.0)  
 
 
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 2017. 
 
15.    Capital commitments 
 
                                  2017   2016   
                                  £m     £m     
 Capital expenditure:                           
 Contracted for but not provided  949.0  898.4  
 
 
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 2017 
 
16.    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. 
 
                                2017                        2017                          2017              2017            2016                        2016                          2016               2016             
                                Sale of goods and services  PurchaseOf goods andservices  Amounts owedfrom  Amounts owedto  Sale of goods and services  Purchase ofgoodsand services  Amounts owed from  Amounts owed to  
 Joint ventures:                £m                          £m                            £m                £m              £m                          £m                            £m                 £m               
 Seabank Power Ltd              11.0                        (134.0)                       0.1               17.0            13.7                        (125.8)                       -                  18.2             
 Marchwood Power Ltd            16.8                        (144.5)                       0.5               12.6            12.7                        (108.7)                       0.1                15.5             
 Scotia Gas Networks Ltd        45.5                        (158.0)                       0.9               0.9             46.3                        (155.8)                       15.9               0.9              
 Clyde Windfarm (Scotland) Ltd  5.7                         (0.1)                         -                 11.1            -                           -                             -                  -                
 Other Joint Ventures           10.4                        -                             2.3               -               8.1                         (1.2)                         8.4                -                
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
 Associates                     1.4                         (53.4)                        3.6               3.9             0.5                         (59.7)                        2.4                3.9              
 
 
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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