31. Analysis of Net Debt

Reconciliation of opening to closing net debt

The reconciliation of opening to closing net debt for the year ended 31 March 2013 is as follows:

 

Fair value adjustment

 

At 1

Income

Cash Flow

Translation

At 31

 

April 2012

Cash flow

Statement

Hedge Reserve

adjustment

March 2013

 

€’000

€’000

€’000

€’000

€’000

€’000

 

 

 

 

 

 

 

Cash and short term bank deposits

670,837

(53,897)

-

-

(3,263)

613,677

Overdrafts

(70,758)

(34,677)

-

-

1,543

(103,892)

Cash and cash equivalents

600,079

(88,574)

-

-

(1,720)

509,785

Finance leases

(528)

(1,056)

-

-

(3)

(1,587)

Unsecured Notes due 2013 to 2025

(848,078)

-

(30,189)

-

6,008

(872,259)

Derivative financial instruments (net)

120,312

(3,753)

28,507

(995)

85

144,156

Group net debt
(including share of net cash in joint ventures)

(128,215)

(93,383)

(1,682)

(995)

4,370

(219,905)

Group net debt
(excluding share of net cash in joint ventures)

(129,952)

(92,470)

(1,682)

(995)

4,370

(220,729)

 

 

 

 

 

 

 

 

The reconciliation of opening to closing net debt for the year ended 31 March 2012 is as follows:

 

Fair value adjustment

 

At 1

Income

Cash Flow

Translation

At 31

 

April 2011

Cash flow

Statement

Hedge Reserve

adjustment

March 2012

 

€’000

€’000

€’000

€’000

€’000

€’000

 

 

 

 

 

 

 

Cash and short term bank deposits

700,340

(59,622)

-

-

30,119

670,837

Overdrafts

(34,212)

(33,862)

-

-

(2,684)

(70,758)

Cash and cash equivalents

666,128

(93,484)

-

-

27,435

600,079

Bank loans and loan notes

(926)

929

-

-

(3)

-

Finance leases

(888)

397

-

-

(37)

(528)

Unsecured Notes due 2013 to 2022

(766,760)

5,386

(62,134)

-

(24,570)

(848,078)

Derivative financial instruments (net)

57,263

(224)

62,804

-

469

120,312

Group net debt
(including share of net cash in joint ventures)

(45,183)

(86,996)

670

-

3,294

(128,215)

Group net debt (excluding cash attributable to assets classified as held for sale)

(71,649)

(101,344)

670

-

3,294

(169,029)

Group net debt (excluding share of net cash in joint ventures and cash attributable to assets classified as held for sale)

(73,252)

(101,478)

670

-

3,294

(170,766)


Currency profile

The currency profile of net debt at 31 March 2013 is as follows:

 

Euro

Sterling

US Dollar

Swedish Krona

Other

Total

 

€’000

€’000

€’000

€’000

€’000

€’000

 

 

 

 

 

 

 

Cash and cash equivalents

109,967

456,609

13,207

26,220

7,674

613,677

Borrowings

(345,101)

(630,992)

(944)

(701)

-

(977,738)

Derivatives

18,770

125,832

(446)

-

-

144,156

(216,364)

(48,551)

11,817

25,519

7,674

(219,905)

 

 

 

 

 

 

 

The currency profile of net debt at 31 March 2012 is as follows:

 

Euro

Sterling

US Dollar

Swedish Krona

Other

Total

 

€’000

€’000

€’000

€’000

€’000

€’000

 

 

 

 

 

 

 

Cash and cash equivalents

82,025

520,543

8,108

19,306

41

630,023

Borrowings

(325,953)

(592,509)

(902)

-

-

(919,364)

Derivatives

12,150

106,291

1,871

-

-

120,312

(231,778)

34,325

9,077

19,306

41

(169,029)

 

 

 

 

 

 

 

Interest rate profile

Cash and cash equivalents at 31 March 2013 and 31 March 2012 have maturity periods up to three months (note 28).

Bank borrowings are at floating interest rates for periods less than six months while the Group’s Unsecured Notes due 2013 to 2025 have been swapped to a combination of fixed rates and floating rates which reset on a quarterly or semi-annual basis (note 30). The majority of finance leases are at fixed rates.

32. Deferred Income Tax

The following is an analysis of the movement in the major categories of deferred tax liabilities/(assets) recognised by the Group for the year ended 31 March 2013:

 

Short term

 

temporary

 

Property

Retirement

differences

 

plant and

Intangible

Tax losses

benefit

and other

 

equipment

assets

and credits

obligations

differences

Total

 

€’000

€’000

€’000

€’000

€’000

€’000

 

 

 

 

 

 

 

At 1 April 2012

12,402

17,665

(1,196)

(2,569)

(688)

25,614

Consolidated Income Statement movement

864

(3,373)

338

591

(1,088)

(2,668)

Recognised in Other Comprehensive Income

-

-

-

(1,847)

(248)

(2,095)

Arising on acquisition

288

7,824

(692)

-

(150)

7,270

Exchange differences and other

(59)

(481)

(11)

30

95

(426)

At 31 March 2013

13,495

21,635

(1,561)

(3,795)

(2,079)

27,695

 

Analysed as:

Deferred tax asset

(1,020)

-

(1,561)

(3,992)

(4,636)

(11,209)

Deferred tax liability

14,515

21,635

-

197

2,557

38,904

13,495

21,635

(1,561)

(3,795)

(2,079)

27,695

 

 

 

 

 

 

 

The following is an analysis of the movement in the major categories of deferred tax liabilities/(assets) recognised by the Group for the year ended 31 March 2012:

 

Short term

 

temporary

 

Property

Retirement

differences

 

plant and

Intangible

Tax losses

benefit

and other

 

equipment

assets

and credits

obligations

differences

Total

 

€’000

€’000

€’000

€’000

€’000

€’000

 

 

 

 

 

 

 

At 1 April 2011

12,070

13,154

950

(3,180)

(6,888)

16,106

Consolidated Income Statement movement

(560)

(2,650)

(2,191)

1,866

4,960

1,425

Recognised in Other Comprehensive Income

-

-

-

(1,178)

(11)

(1,189)

Arising on acquisition

64

6,902

-

-

744

7,710

Disposal of subsidiary

-

-

-

-

(2)

(2)

Deferred tax attributable to assets classified as held for sale (note 19)

-

-

-

-

1,457

1,457

Exchange differences

828

259

45

(77)

(948)

107

At 31 March 2012

12,402

17,665

(1,196)

(2,569)

(688)

25,614

 

Analysed as:

Deferred tax asset

(1,708)

-

(1,344)

(2,569)

(776)

(6,397)

Deferred tax liability

14,110

17,665

148

-

88

32,011

12,402

17,665

(1,196)

(2,569)

(688)

25,614

 

Deferred tax assets and liabilities require management judgement in determining the amounts to be recognised. In particular, significant judgement is used when assessing the extent to which deferred tax assets should be recognised, with consideration given to the timing and level of future taxable income in the relevant jurisdiction. The majority of the net deferred tax asset at 31 March 2013 of €11.209 million is expected to be settled/recovered more than twelve months after the Balance Sheet date.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. Deferred income tax has not been recognised for withholding and other taxes that may be payable on the unremitted earnings of certain subsidiaries as the timing of the reversal of these temporary differences is controlled by the Group and it is probable that these temporary differences will not reverse in the foreseeable future.

33. Post Employment Benefit Obligations

Group

The Group operates defined benefit and defined contribution schemes. The pension scheme assets are held in separate trustee administered funds.

The Group operates eight defined benefit pension schemes in the Republic of Ireland and four in the UK. The projected unit credit method has been employed in determining the present value of the defined benefit obligation arising, the related current service cost and, where applicable, past service cost.

Full actuarial valuations were carried out between 1 September 2009 and 1 April 2012. In general, actuarial valuations are not available for public inspection, although the results of valuations are advised to the members of the various pension schemes. Actuarial valuations have been updated to 31 March 2013 for IAS 19 by a qualified actuary.

The principal actuarial assumptions used were as follows:

 

2013

2012

Republic of Ireland schemes

 

 

Rate of increase in salaries

2.00% - 3.25%

2.00% - 3.25%

Rate of increase in pensions in payment

0.00% - 2.50%

0.00% - 2.50%

Discount rate

3.70%

4.50%

Inflation assumption

2.25%

2.25%

 

UK schemes

Rate of increase in salaries

0.00% - 4.20%

0.00% - 4.30%

Rate of increase in pensions in payment

2.20% - 3.50%

3.40%

Discount rate

4.40%

5.05%

Inflation assumption

3.50%

3.40%

 

 

 

The expected long term rates of return on the assets of the schemes were as follows:

 

2013

2012

Republic of Ireland schemes

 

 

Equities

6.70%

7.00%

Bonds

2.30%

3.10%

Property

5.70%

5.50%

Cash

2.00%

2.00%

 

UK schemes

Equities

6.80%

7.00%

Bonds

4.40%

3.50%

Property

5.80%

6.00%

Cash

0.50%

0.50%

 

 

 

The expected rate of return for equities and property has been calculated assuming that equities and property will outperform bonds by 4.4% and 3.4% per annum respectively over the long term in the Republic of Ireland schemes and 2.4% and 1.4% per annum respectively over the long term in the UK schemes. The expected rate of return for bonds has been based on bond indices as at 31 March.

Assumptions regarding future mortality experience are set based on advice from published statistics and experience in both geographic regions. The average life expectancy in years of a pensioner retiring at age 65 is as follows:

 

2013

2012

Current pensioners

 

 

Male

23.6

23.4

Female

25.1

25.0

 

Future pensioners

Male

26.5

26.5

Female

27.7

27.6

 

 

 

The Group does not operate any post-employment medical benefit schemes.

 

The net pension liability recognised in the Balance Sheet is analysed as follows:

 

2013

 

ROI

UK

Total

 

€’000

€’000

€’000

 

 

 

 

Equities

31,350

9,098

40,448

Bonds

60,242

12,444

72,686

Property

790

1,086

1,876

Cash

828

1,057

1,885

Total fair value at 31 March 2013

93,210

23,685

116,895

Present value of scheme liabilities

(109,886)

(29,894)

(139,780)

Net pension liability at 31 March 2013

(16,676)

(6,209)

(22,885)

 

 

 

 

 

2012

 

ROI

UK

Total

 

€’000

€’000

€’000

 

 

 

 

Equities

27,520

7,977

35,497

Bonds

49,039

10,783

59,822

Property

921

1,082

2,003

Cash

3,628

598

4,226

Total fair value at 31 March 2012

81,108

20,440

101,548

Present value of scheme liabilities

(90,400)

(25,893)

(116,293)

Net pension liability at 31 March 2012

(9,292)

(5,453)

(14,745)

 

 

 

 

The amounts recognised in the Group Income Statement in respect of defined benefit pension schemes is as follows:

 

2013

2012

 

€’000

€’000

 

 

 

Current service cost (note 9)

(1,196)

(1,477)

Total, included in employee benefit expenses

(1,196)

(1,477)

 

Exceptional curtailment and settlement gains

-

3,587

Total, included in exceptional items (note 11)

-

3,587

 

Interest cost, included in finance costs (note 12)

(5,354)

(5,632)

Expected return on plan assets, included in finance income (note 12)

4,058

4,361

Total

(1,296)

(1,271)

 

 

Based on the assumptions employed for the valuation of assets and liabilities at 31 March 2013, the net charge in the Group Income Statement in the year ending 31 March 2014 is expected to be broadly in line with the current year figures.

 

The actuarial loss recognised in Other Comprehensive Income is as follows:

 

2013

2012

 

€’000

€’000

 

 

 

Actual return less expected return on pension scheme assets

7,834

1,222

Experience gains and losses arising on the scheme liabilities

1,678

1,849

Changes in assumptions underlying the present value of the scheme liabilities

(21,259)

(11,862)

Total, included in Other Comprehensive Income

(11,747)

(8,791)

 

 

 

The movement in the fair value of plan assets is as follows:

 

2013

2012

 

€’000

€’000

 

 

 

At 1 April

101,548

83,723

Expected return on assets

4,058

4,361

Actuarial gain

7,834

1,222

Contributions by employers

5,995

8,971

Contributions by members

463

480

Benefits paid

(2,590)

(1,964)

Acquisition of subsidiary

-

3,712

Exchange

(413)

1,043

At 31 March

116,895

101,548

 

 

 

The actual return on plan assets was a gain of €11.892 million (2012: gain of €5.583 million).

The movement in the present value of defined benefit obligations is as follows:

 

2013

2012

 

€’000

€’000

 

 

 

At 1 April

116,293

103,058

Current service cost

1,196

1,477

Interest cost

5,354

5,632

Actuarial loss

19,581

10,013

Contributions by members

463

480

Benefits paid

(2,590)

(1,964)

Acquisition of subsidiary

-

3,857

Curtailment and settlement gains

-

(3,587)

Exchange and other

(517)

(2,673)

At 31 March

139,780

116,293

 

 

 

Employer contributions for the forthcoming financial year are estimated at €6.0 million. The difference between the actual employer contributions paid in the current year of €5.995 million and the expectation of €5.5 million included in the 2012 Annual Report was primarily due to accelerated funding requirements in certain of the Group’s pension schemes which could not have been anticipated at the time of preparation of the 2012 financial statements.

 

History of scheme assets, liabilities and actuarial gains and losses

The five-year history in respect of assets, liabilities and actuarial gains and losses for the Group are as follows:

 

2013

2012

2011

2010

2009

 

€’000

€’000

€’000

€’000

€’000

 

 

 

 

 

 

Fair value of assets

116,895

101,548

83,723

79,953

52,265

Present value of liabilities

(139,780)

(116,293)

(103,058)

(103,643)

(81,763)

Net pension liability

(22,885)

(14,745)

(19,335)

(23,690)

(29,498)

 

Difference between the expected and actual return on scheme assets

7,834

1,222

(2,030)

13,178

(21,904)

As a percentage of scheme assets

6.7%

1.2%

(2.4%)

16.5%

(41.9%)

 

Experience gains and losses on scheme liabilities

1,678

1,849

1,344

2,231

(589)

As a percentage of the present value of the scheme liabilities

(1.2%)

(1.6%)

(1.3%)

(2.2%)

0.7%

 

Total recognised in Other Comprehensive Income

(11,747)

(8,791)

(2,590)

(1,595)

(9,517)

As a percentage of the present value of the scheme liabilities

8.4%

7.6%

2.5%

1.5%

11.6%

 

 

 

 

 

 

Cumulatively since transition to IFRS on 1 April 2004, €47.713 million has been recognised as a charge in the Group Statement of Comprehensive Income as follows:

 

€’000

Recognised in the financial year ended 31 March 2005

(7,742)

Recognised in the financial year ended 31 March 2006

1,779

Recognised in the financial year ended 31 March 2007

1,576

Recognised in the financial year ended 31 March 2008

(9,086)

Recognised in the financial year ended 31 March 2009

(9,517)

Recognised in the financial year ended 31 March 2010

(1,595)

Recognised in the financial year ended 31 March 2011

(2,590)

Recognised in the financial year ended 31 March 2012

(8,791)

Recognised in the financial year ended 31 March 2013

(11,747)

(47,713)

Sensitivity analysis for principal assumptions used to measure scheme liabilities

There are inherent uncertainties surrounding the financial assumptions adopted in calculating the actuarial valuation of the Group’s defined benefit pension schemes. The following table analyses, for the Group’s Irish and UK pension schemes, the estimated impact on plan liabilities resulting from changes to key actuarial assumptions, whilst holding all other assumptions constant.

Assumption

Change in assumption

Impact on Irish plan liabilities

Impact on UK plan liabilities

Discount rate

Increase/decrease by 0.25%

Decrease/increase by 5.7%

Decrease/increase by 5.6%

Price inflation

Increase/decrease by 0.25%

Increase/decrease by 4.2%

Increase/decrease by 5.1%

Mortality

Increase/decrease by one year

Increase/decrease by 2.9%

Increase/decrease by 2.5%

 

 

 

 

34. Deferred and Contingent Acquisition Consideration

Group

The Group’s deferred and contingent acquisition consideration of €89,829 million (2012: €98.699 million) as stated on the Balance Sheet consists of €71.291 million of sterling floating rate financial liabilities (2012: €77.702 million), €10.044 million of euro floating rate financial liabilities (2012: €10.998 million) and €8.494 million of swedish krona floating rate financial liabilities (2012: €9.999 million) payable as follows:

 

2013

2012

 

€’000

€’000

 

 

 

Within one year

22,944

13,428

Between one and two years

9,011

8,186

Between two and five years

57,874

77,085

89,829

98,699

Analysed as:

Non-current liabilities

66,885

85,271

Current liabilities

22,944

13,428

89,829

98,699

 

 

 

The movement in the Group’s deferred and contingent acquisition consideration is as follows:

 

2013

2012

 

€’000

€’000

 

 

 

At 1 April

98,699

74,344

Arising on acquisition

15,733

37,595

Amounts no longer required (adjustment to goodwill, note 21)

(1,912)

(441)

Amounts no longer required (recognised in the Income Statement, note 11)

(6,869)

-

Paid during the year

(14,680)

(8,063)

Exchange and other

(1,142)

2,417

Deferred and contingent consideration attributable to assets classified as held for sale (note 19)

-

(7,153)

At 31 March

89,829

98,699

 

 

 

35. Provisions for Liabilities and Charges

The reconciliation of the movement in provisions for liabilities and charges for the year ended 31 March 2013 is as follows:

Rationalisation,

restructuring

Environmental

and

and

Insurance

redundancy

remediation

and other

Total

Group

€’000

€’000

€’000

€’000

 

 

 

 

 

At 1 April 2012

10,426

9,884

5,094

25,404

Provided during the year

11,853

1,103

1,743

14,699

Utilised during the year

(7,669)

(354)

(765)

(8,788)

Arising on acquisition

1,790

-

1,964

3,754

Exchange and other

(330)

(225)

-

(555)

At 31 March 2013

16,070

10,408

8,036

34,514

 

Analysed as:

Non-current liabilities

3,668

10,278

6,325

20,271

Current liabilities

12,402

130

1,711

14,243

16,070

10,408

8,036

34,514

 

 

 

 

 

 

The reconciliation of the movement in provisions for liabilities and charges for the year ended 31 March 2012 is as follows:

Rationalisation,

restructuring

Environmental

and

and

Insurance

redundancy

remediation

and other

Total

Group

€’000

€’000

€’000

€’000

 

 

 

 

 

At 1 April 2011

4,402

8,258

4,705

17,365

Provided during the year

7,882

245

604

8,731

Utilised during the year

(1,095)

(1,817)

(497)

(3,409)

Arising on acquisition (note 46)

-

2,769

438

3,207

Provisions for liabilities and charges attributable to assets classified as held for sale (note 19)

(675)

-

(232)

(907)

Exchange and other

(88)

429

76

417

At 31 March 2012

10,426

9,884

5,094

25,404

 

Analysed as:

Non-current liabilities

3,871

9,884

1,683

15,438

Current liabilities

6,555

-

3,411

9,966

10,426

9,884

5,094

25,404

 

Environmental and remediation

This provision relates to obligations governing site remediation and improvement costs to be incurred in compliance with environmental regulations. The net present value of the estimated costs is capitalised as property, plant and equipment. The unwinding of the discount element on the provision is reflected in the Income Statement. Provision is made for the net present value of post closure costs based on the quantity of waste input into the landfill during the year. Ongoing costs incurred during the operating life of the sites are written off directly to the Income Statement and are not charged to the provision. The majority of the obligations will unwind over a 30-year timeframe.

Insurance and other

The insurance provision relates to employers liability and public and products liability and reflects an estimation of the excess not recoverable from insurers arising from claims against Group companies. A significant element of the provision is subject to external assessments. The claims triangles applied in valuation indicate that these provisions have an average life of four years (2012: four years).

Rationalisation, restructuring and redundancy

This provision relates to various rationalisation and restructuring programs across the Group. The majority of this provision falls due within one year.

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