Annual Report 2013

Notes to the Financial Statements

1. Consolidation

Bord na Móna plc is a majority State-owned company. 95% of its shares are held by the Minister for Finance. The remaining 5% is held by the employees of the Group through an Employee Share Ownership Plan (ESOP).

The Group financial statements consolidate the financial statements of Bord na Móna plc and all of its subsidiaries.

2. Profit/(loss) before taxation

 

2013

Gross

2013

2013

2013

Exceptional items

2013

Total

2012

Gross

2012

2012

Total

 

Less
Inter
Group

Before exceptional items

Less
Inter
Group

Continuing operations

’000

’000

’000

’000

’000

’000

’000

’000

Turnover 1

 

 

 

 

 

 

 

 

Powergen

76,046

0

76,046

0

76,046

71,340

0

71,340

Feedstock

137,150

(59,285)

77,865

(2,543)

75,322

121,339

(58,464)

62,875

Retail

199,308

(9,967)

189,341

0

189,341

183,344

(11,760)

171,584

Resource Recovery

71,806

(180)

71,626

0

71,626

65,496

0

65,496

Anua-Environmental and other

14,170

(385)

13,785

0

13,785

13,026

(495)

12,531

 

498,480

(69,817)

454,545

(70,719)

 

Net third party turnover

428,663

(2,543)

426,120

 

 

383,826

Cost of sales

(303,723)

(20,787)

(324,510)

 

 

(276,974)

Gross profit

124,940

(23,330)

101,610

 

 

106,852

Distribution costs

(33,167)

0

(33,167)

 

 

(31,724)

Administration expenses 2

(44,935)

0

(44,935)

 

 

(78,791)

Operating profit

46,838

(23,330)

23,508

 

 

(3,663)

 

Exceptional items

The Group presents certain material items separately which are unusual by virtue of their size and incidence in the context of its ongoing core operations. This presentation is made to aid understanding of the performance of the Group’s underlying business more accurately and reflects the manner in which management analyses its results. Judgement is used by the Group in assessing the particular items which should be disclosed as exceptional. Any amounts deemed "exceptional" have been classified in the profit and loss account in the same way as non-exceptional amounts of the same nature.

The harvesting of peat which is weather dependent is a significant operation within the Group’s activities. During the year the Group experienced an increase in the amount of rainfall during the summer months of June to August inclusive. Based on weather records dating back to the 1950’s the level of rainfall during this three month period was unprecedented with an increase of 100% to 150% above the norm. The Group achieved only 4% of its annual harvest during this period compared to a normal harvest of 60% to 70% of its annual target. The final outturn for the year was 1.4 million tonnes, 37% of the target and a shortfall of 2.4 million tonnes against the target. In accordance with the Group’s exceptional cost accounting policy, the Group has treated the impact as an exceptional cost that impacted the operating performance by 23,330,000 and profit for the year by 20,534,000.

1 The Group is organised into five business units, Powergen, Feedstock, Retail, Resource Recovery and Anua-Environmental. Analyses by business are based on the Group’s management structure. No analysis of Group operating profit or assets by business segment is provided in accordance with SSAP 25, ‘Segmental Reporting’, as the directors are of the opinion that such disclosure would be seriously prejudicial to the Group’s interests.

2 Administration expenses include:

(i) following the appraisal of certain of the Group’s businesses, the Group conducted impairment reviews of its assets, in accordance with the Group’s accounting policies. This process resulted in an impairment charge of 910,000 in the current year against investment properties (Note 9) (2012: 777,000). Total impairment charges in the prior year amounted to 24,510,000.

(ii) a charge for reorganisation and redundancy costs of 488,000 (2012: 147,000).

 

2013

2012

 

’000

’000

Profit/(loss) before taxation is arrived at after charging/(crediting)

 

 

Auditors’ remuneration1

 

 

Statutory audit of Group financial statements

265

340

Other assurance services

10

230

Tax advisory services

44

392

Other non-audit services

93

171

Operating lease rentals

 

Plant and machinery

1,502

1,432

Land and buildings

1,182

1,420

Staff costs2:

 

Wages and salaries

87,698

95,607

Social welfare costs

9,320

10,140

Pension costs

4,729

3,356

 

101,747

109,103

Staff costs capitalised

(1,555)

(704)

Net staff costs

100,192

108,399

 

 

Depreciation (Note 8)

35,686

38,399

Impairment of tangible assets (Note 8)

0

6,876

Profit on disposal of other fixed assets

63

138

Amortisation of intangible assets (Note 7)

2,501

3,291

Impairment of intangible assets (Note 7)

0

16,857

Impairment of investment property (Note 9)

910

777

Research and business development expenditure

4,011

5,664

Capital grants amortised (Note 16)

(1,361)

(1,391)

 

 

Number of employees

2013

2012

Average numbers employed:

 

Manufacturing and production

1,527

1,596

Administration

517

545

 

2,044

2,141

Peak employment

2,386

2,468

 

 

1 The Group changed auditors during the year from PricewaterhouseCoopers (PwC) to KPMG. The 2013 fees relate to KPMG only and the 2012 fees to PwC only.

During the year, the Company obtained audit services from KPMG at a cost of 10,000 (2012 PwC: 10,000).

2 Staff costs include a charge of 488,000 (2012: 147,000) in respect of redundancy costs.

The Group incurred an actuarial loss on its pension schemes of 16,247,000 (2012: 31,379,000) (Note 25) which was charged to the Group statement of total recognised gains and losses.

3. Dividends

 

2013

2012

 

’000

’000

 

 

 

To the Minister for Finance

2,375

4,115

To Bord na Móna ESOP Trustee Limited

125

217

 

2,500

4,332

 

 

 

The Company paid a dividend of 0.0383 per share during the year (2012: 0.0664). The total dividend payment for the year was 2,500,000 (2012: 4,332,000).

4. Directors’ remuneration

 

Fees

Salary

Performance related pay

Company contributions to pension

Taxable benefits

Total

 

’000

’000

’000

’000

’000

’000

Executive directors

 

 

 

 

 

 

Gabriel D’Arcy

 

 

 

 

 

 

Year ended 27 March 2013

13

226

0

58

20

317

Year ended 28 March 2012

13

231

0

58

20

322

 

 

 

 

 

 

 

 

Fees

Other remuneration1

Company contributions to pension

Total

’000

’000

’000

’000

Directors - Worker Participation

Directors appointed in accordance with the Worker Participation (State Enterprises) Acts 1977 and 1988 (4) - 27 March 2013

50

319

35

404

Directors appointed in accordance with the Worker Participation
(State Enterprises) Acts 1977 and 1988 (4) - 28 March 2012

50

441

35

526

 

 

 

 

 

Non executive Directors

 

 

 

 

Other non executive directors (9) - 27 March 2013

90

0

0

90

Other non executive directors (7) - 28 March 2012

79

0

0

79

 

 

 

 

 

The non-executive chairman receives a fee of 21,600 and each of the Directors receive an annual fee of 12,600. These amounts are adjusted on a pro rata basis where a term of office commences or concludes during the year.

The total remuneration paid to Directors during the year was 811,000 (2012: 927,000).

1 Other remuneration represents payments made for roles other than directors’ roles.

5. Finance (charges)/income

 

2013

2012

 

’000

’000

(a) Interest receivable and similar income

 

 

Interest receivable

6,133

5,705

 

(b) Interest payable and similar charges

 

Bank overdraft

(34)

(148)

Unsecured loan notes

(15,829)

(15,894)

Amortisation of issue costs

(176)

(176)

Net interest payable

(16,039)

(16,218)

Less capitalised interest 1

458

132

 

(15,581)

(16,086)

(c) Other finance income and charges

 

Other finance income - pension schemes (Note 25)

299

1,598

Financing charges on provisions (Note 17)

(1,110)

(1,013)

 

(811)

585

Finance charges, net

(10,259)

(9,796)

 

 

1 The Group capitalises interest on capital projects that take a substantial period of time to complete. The interest is included as part of the initial measurement of the cost of the tangible fixed asset (Note 8).