Notes to the Financial Statements
6. Taxation
|
2013 |
2012 |
|
€’000 |
€’000 |
Taxation based on the profit/(loss) for the year: |
|
|
Irish corporation tax |
|
|
Current tax for the year |
2,818 |
2,733 |
Adjustments in respect of prior years |
14 |
113 |
|
2,832 |
2,846 |
Foreign taxation |
|
|
Current tax for the year |
12 |
9 |
Adjustments in respect of prior years |
0 |
0 |
|
12 |
9 |
Total current tax (see note below) |
2,844 |
2,855 |
Deferred tax - origination and reversal of timing differences (Note 17) |
465 |
664 |
Tax on profits on ordinary activities |
3,309 |
3,519 |
|
|
|
Factors affecting corporation tax charge for the year |
|
|
Profit/(loss) before taxation |
12,532 |
(12,742) |
Standard rate of corporation tax for the year |
12.50% |
12.50% |
Profit/(loss) before taxation multiplied by standard rate |
1,567 |
(1,593) |
|
|
|
Effects of: |
|
|
Expenses not deductible for tax purposes |
254 |
722 |
Depreciation and amortisation in excess of capital allowances |
16 |
168 |
Ineligible depreciation |
984 |
623 |
Impairment of tangible assets and investment property |
114 |
860 |
Amortisation of intangible assets |
312 |
411 |
Impairment of intangible assets |
0 |
2,107 |
Utilisation of tax losses |
0 |
(60) |
Taxation rate differences |
5 |
29 |
Pension contribution relief in excess of pension cost charge |
(422) |
(525) |
Adjustments in respect of prior years |
14 |
113 |
|
2,844 |
2,855 |
|
|
7. Intangible assets
|
Goodwill |
Other intangibles |
Total |
Goodwill |
Patents |
Total |
|
2013 |
2013 |
2013 |
2012 |
2012 |
2012 |
THE GROUP |
€’000 |
€’000 |
€’000 |
€’000 |
€’000 |
€’000 |
Cost |
|
|
|
|
|
|
At beginning of the financial year |
66,878 |
503 |
67,381 |
64,188 |
503 |
64,691 |
Reclassification (Note 8) |
0 |
7,355 |
7,355 |
0 |
0 |
0 |
Additions |
0 |
1,269 |
1,269 |
0 |
0 |
0 |
Arising on acquisition (Note 21) |
0 |
0 |
0 |
2,675 |
0 |
2,675 |
Exchange adjustment |
11 |
0 |
11 |
15 |
0 |
15 |
At end of the financial year |
66,889 |
9,127 |
76,016 |
66,878 |
503 |
67,381 |
|
|
|
|
|||
Amortisation and Impairments |
|
|
|
|||
At beginning of the financial year |
50,476 |
503 |
50,979 |
30,326 |
503 |
30,829 |
Reclassification (Note 8) |
0 |
3,187 |
3,187 |
0 |
0 |
0 |
Charge for year |
2,098 |
403 |
2,501 |
3,291 |
0 |
3,291 |
Impairment |
0 |
0 |
0 |
16,857 |
0 |
16,857 |
Exchange adjustment |
11 |
0 |
11 |
2 |
0 |
2 |
At end of the financial year |
52,585 |
4,093 |
56,678 |
50,476 |
503 |
50,979 |
|
|
|
||||
Net Book Amounts |
|
|
|
|||
At beginning of the financial year |
16,402 |
0 |
16,402 |
33,862 |
0 |
33,862 |
|
|
|
|
|||
At end of the financial year |
14,304 |
5,034 |
19,338 |
16,402 |
0 |
16,402 |
|
|
|
|
At the beginning of the year the Group reclassified its capitalised grid connection costs from tangible assets to intangible assets. The gross value of capitalised grid connection costs was €7,355,000 and the accumulated amortisation at the date of transfer was €3,187,000 (Note 8).
Other intangibles include €1,269,000 in respect of grid connection costs that are in the course of construction.
The carrying value of goodwill of €14,304,000 (2012: €16,402,000) is represented by goodwill in the Powergen business of €6,357,000 (2012: €6,962,000), goodwill in the Resource Recovery business of €7,705,000 (2012: €9,154,000) and goodwill in the Anua-Environmental business of €242,000 (2012: €286,000).
In accordance with the provisions of FRS 11 - ‘Impairment of Fixed Assets’, the Group has reviewed the carrying value of goodwill. The recoverable amounts of each of the identified income generating units (IGU) were estimated based on a value in use calculation using cash flow projections based on the financial five year plans as approved by the Board. Cash flows beyond five years are extrapolated based on a perpetuity growth rate of 2.3% (2012: 2.3%) and a pre tax weighted average cost of capital of 9.0% (2012: 9.7%) which are consistent with the Group’s expectation for market development and growth in market share where applicable. Based on these reviews there was no impairment of the carrying value of goodwill (2012: impairment charge of €16,857,000 on goodwill in the Resource Recovery sector).
The estimated value in use of the Resource Recovery generation unit is dependent on two key assumptions, the discount rate and the growth rate assumed in future EBITDA for which there could be a reasonably possible change that could result in the carrying amount exceeding the recoverable amount. The following table shows the amount by which these two assumptions would need to change individually in order for the estimated value in use of the Resource Recovery generation unit to be equal to the carrying amount.
Movement required in key assumptions for carrying amount to equal value in use:
|
2013 |
Discount rate |
2% |
EBITDA growth |
(7%) |
8. Tangible assets
|
Bogland, drainage & production buildings |
Landfill |
Railways, plant & machinery |
Generating assets |
Freehold land, administration & research buildings |
Assets in course of construction |
Total |
THE GROUP |
€’000 |
€’000 |
€’000 |
€’000 |
€’000 |
€’000 |
€’000 |
Cost |
|
|
|
|
|
|
|
At 28 March 2012 |
123,600 |
27,407 |
236,415 |
162,523 |
18,005 |
11,561 |
579,511 |
Reclassification (Note 7)1 |
0 |
0 |
0 |
(6,925) |
(430) |
0 |
(7,355) |
Additions at cost2 |
2,094 |
937 |
6,516 |
367 |
46 |
29,415 |
39,375 |
Disposals/retirements3 |
(223) |
0 |
(7,998) |
0 |
0 |
0 |
(8,221) |
Transfers out of assets under construction |
2,800 |
2,019 |
4,659 |
0 |
0 |
(9,478) |
0 |
Exchange adjustment |
0 |
0 |
24 |
0 |
(13) |
0 |
11 |
At 27 March 2013 |
128,271 |
30,363 |
239,616 |
155,965 |
17,608 |
31,498 |
603,321 |
|
|
|
|
|
|
|
|
Accumulated Depreciation |
|
|
|
|
|
|
|
At 28 March 2012 |
86,428 |
15,671 |
175,396 |
47,200 |
9,881 |
0 |
334,576 |
Reclassification (Note 7)1 |
0 |
0 |
0 |
(3,187) |
0 |
0 |
(3,187) |
Charge for year |
4,276 |
3,388 |
17,333 |
10,080 |
609 |
0 |
35,686 |
Disposals/retirements3 |
(207) |
0 |
(7,898) |
0 |
0 |
0 |
(8,105) |
Exchange adjustment |
0 |
0 |
20 |
0 |
(2) |
0 |
18 |
At 27 March 2013 |
90,497 |
19,059 |
184,851 |
54,093 |
10,488 |
0 |
358,988 |
|
|
|
|
|
|
|
|
Net Book Value |
|
|
|
|
|
|
|
At 28 March 2012 |
37,172 |
11,736 |
61,019 |
115,323 |
8,124 |
11,561 |
244,935 |
|
|
|
|
|
|
|
|
At 27 March 2013 |
37,774 |
11,304 |
54,765 |
101,872 |
7,120 |
31,498 |
244,333 |
|
|
|
|
|
|
|
|
1 At the beginning of the year the year the Group reclassified its capitalised grid connection costs from tangible assets to intangible assets. The gross value of capitalised grid connection costs was €7,355,000 and the accumulated amortisation at the date of transfer was €3,187,000 (Note 7).
2 Additions includes:
(i) a sum of €1,016,000 in respect of decommissioning and restoration assets (2012: €3,712,000) (Note 17).
(ii) the Group capitalised borrowing costs of €458,000 (2012: €132,000) in respect of assets in the course of construction during the year (Note 5). The rate of interest applied was 7.3% (2012: 7.3%).
3 Retirements/disposals during the year primarily relate to fully depreciated assets.
In accordance with the provisions of FRS 15 - ‘Tangible Fixed Assets’ the Group conducted impairment reviews of the Group’s tangible assets. This process has resulted in an impairment charge of €Nil (2012: €6,876,000 in the Resource Recovery and Anua-Environmental businesses).
|
Bogland, drainage & production buildings |
Railways, plant & machinery |
Freehold land, administration & research buildings |
Total |
THE COMPANY |
€’000 |
€’000 |
€’000 |
€’000 |
Cost |
|
|
|
|
At 28 March 2012 |
559 |
10,509 |
6,175 |
17,243 |
Additions at cost |
0 |
513 |
12 |
525 |
At 27 March 2013 |
559 |
11,022 |
6,187 |
17,768 |
|
|
|
|
|
Accumulated Depreciation |
|
|
|
|
At 28 March 2012 |
0 |
9,175 |
3,473 |
12,648 |
Charge for year |
0 |
1,048 |
260 |
1,308 |
At 27 March 2013 |
0 |
10,223 |
3,733 |
13,956 |
|
|
|
|
|
Net Book Value |
|
|
|
|
At 28 March 2012 |
559 |
1,334 |
2,702 |
4,595 |
|
|
|
|
|
At 27 March 2013 |
559 |
799 |
2,454 |
3,812 |
|
|
|
|
|
9. Investment properties
|
2013 |
2012 |
|
€’000 |
€’000 |
|
||
At beginning of the financial year |
8,660 |
11,900 |
Impairment during the year charged to the statement of total recognised gains and losses |
0 |
(2,463) |
Impairment during the year charged to the profit and loss account |
(910) |
(777) |
At end of the financial year |
7,750 |
8,660 |
|
|
|
The investment property is stated at market value as at 27 March 2013. Market value means ‘the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherin the parties had each acted knowledgeably, prudently and without compulsion’.
The valuation of the Group’s freehold interest in the property was carried out by DTZ Sherry Fitzgerald, qualified professional valuers acting in the capacity as external valuer. The valuation was carried out in accordance with the Royal Institution of Chartered Surveyors’ Valuation Standards Global, 8th Edition (the ‘Red Book’). The valuation was carried out as at 27 March 2013 and resulted in an impairment charge of €910,000 (2012: €3,240,000).
The market value of the investment property has been primarily derived using comparable market transactions on arm’s length terms and an assessment of market sentiment. The valuation reflects, where appropriate, the type of tenant actually in occupation or likely to be in occupation after letting of vacant accommodation and the market’s perception of their creditworthiness and the remaining useful life of the property.
10. Financial assets
2013 |
2012 |
|
THE GROUP |
€’000 |
€’000 |
|
|
|
Joint Venture |
|
|
At beginning of the financial year |
1,193 |
0 |
Investment during the year |
500 |
1,525 |
Group share of loss |
(717) |
(332) |
At end of the financial year |
976 |
1,193 |
|
|
|
Share of gross assets |
2,025 |
1,525 |
Share of gross liabilities |
(1,049) |
(332) |
Share of net assets |
976 |
1,193 |
|
|
|
2013 |
2012 |
The following transactions were carried out with the joint venture: |
€’000 |
€’000 |
|
||
(a) Purchase of services |
185 |
253 |
(b) Provision of finance |
535 |
1,525 |
(c) Amounts receivable from joint venture |
111 |
246 |
(d) Amounts payable to joint venture |
0 |
1,525 |
|
|
Oweninny Power Limited was incorporated in September 2011 as a joint venture between Bord na Móna Energy Limited and ESB Wind Development Limited to develop a 172MW wind farm in Oweninny, Co. Mayo. The joint venture is developing the wind farm project and has not yet commenced trading.
At the balance sheet date the Group had a commitment to provide additional funding of €1,700,000 to fund the development of the Oweninny wind farm.
|
Subsidiary undertakings |
|||
|
Unlisted shares |
Convertible loan stock |
Loans |
Total |
THE COMPANY |
€’000 |
€’000 |
€’000 |
€’000 |
At beginning of the financial year |
6,853 |
782 |
87,766 |
95,401 |
Repayment during the year |
0 |
(302) |
0 |
(302) |
Impairment during the year |
(6,853) |
0 |
0 |
(6,853) |
At end of the financial year |
0 |
480 |
87,766 |
88,246 |
|
|
|
|
|
The Company has reviewed the carrying value of investments in subsidiary companies as at 27 March 2013 which resulted in an impairment of the value of unlisted shares of €6,853,000 (2012: €18,547,000). The Company also reviewed the carrying value of the loans of €87,766,000 and there was no impairment on the loans.
The convertible loan stock was issued by the Company’s 55% owned subsidiary, Derryarkin Sand and Gravel Limited, with the balance of the stock held by the minority shareholders (Note 19). It is convertible at par value into ordinary shares by agreement between the stockholders and Derryarkin Sand and Gravel Limited. All convertible stock not previously redeemed or converted will be redeemable at par upon the expiration of ten years from the date of issue which is March 2013. Derryarkin Sand and Gravel Limited repaid €302,000 of loan stock to the Company during the year (2012: Nil). The Company has reviewed the carrying value of investments in convertible loan stock at the balance sheet date and impaired the investment by €Nil (2012: €730,000).
The principal subsidiary and joint venture companies in the Group at 27 March 2013 are as follows:
Subsidiary company |
Business |
Registered office |
Shareholding |
|
|
|
|
Bord na Móna Energy Limited1 |
Production and sale of milled peat |
Newbridge, Co Kildare |
100 |
Bord na Móna Allen Peat Limited |
Production and sale of milled peat |
Newbridge, Co Kildare |
100 |
Edenderry Power Limited |
Power Generation |
Newbridge, Co Kildare |
100 |
Edenderry Power Operations Limited |
Maintenance of power plants |
Newbridge, Co Kildare |
100 |
Cushaling Power Limited |
Power Generation |
Newbridge, Co Kildare |
100 |
Renewable Energy Ireland Limited |
Power Generation |
Newbridge, Co Kildare |
89 |
Mount Lucas Wind Farm Limited |
Power Generation |
Newbridge, Co Kildare |
100 |
Bruckana Wind Farm Limited |
Power Generation |
Newbridge, Co Kildare |
100 |
Bord na Móna Fuels Limited1 |
Production, sale and distribution of solid fuels |
Newbridge, Co Kildare |
100 |
BnM Fuels Limited |
Production, sale and distribution of solid fuels |
Newbridge, Co Kildare |
100 |
Suttons Oil Limited |
Distribution of oil |
Newbridge, Co Kildare |
100 |
Suttons Limited |
Distribution of oil |
Newbridge, Co Kildare |
100 |
Bord na Móna Horticulture Limited1 |
Production and sale of horticultural products |
Newbridge, Co Kildare |
100 |
Bord na Móna Environmental Limited1 |
Production, sale and installation of environmental products. |
Newbridge, Co Kildare |
100 |
Bord na Móna Environmental Products (UK) Limited |
Sale and installation of environmental products |
Bridgewater, Somerset, England |
100 |
Bord na Móna Environmental Products US Inc. |
Sale and installation of environmental products |
Delaware, U.S.A. |
100 |
Advanced Environmental Solutions (Ireland) Limited1 |
Resource recovery and recycling company |
Newbridge, Co Kildare |
100 |
Bord na Móna Property Limited1 |
Property holding company |
Newbridge, Co Kildare |
100 |
Derryarkin Sand and Gravel Limited1 |
Extraction and sale of sand and gravel |
Newbridge, Co Kildare |
55 |
Joint venture company |
|
|
|
Oweninny Power Limited |
Power generation |
St. Stephen’s Green, Dublin 2 |
50 |
Pursuant to the provisions of Section 17, Companies (Amendment) Act, 1986, the Company has guaranteed the liabilities of its Irish subsidiaries with the exception of Suttons Oil Limited. As a result, these companies will be exempted from the filing provisions of Section 7, Companies (Amendment) Act, 1986.
1Shareholding held directly by Bord na Móna plc.