46. Business Combinations

A key strategy of the Group is to create and sustain market leadership positions through bolt-on acquisitions in markets it currently operates in together with extending the Group’s footprint into new geographic markets. In line with this strategy, the principal acquisitions completed by the Group during the year, together with percentages acquired were as follows:

  • the acquisition of 100% of Midsona Manufacturing AB, a Swedish based business providing product development, registration, manufacturing and packing services, completed in June 2012;
  • the acquisition of BP’s LPG distribution business (‘BP LPG’) in Britain, completed in September 2012;
  • the acquisition of the trade, fixed assets, inventory and goodwill of Statoil Fuel & Retail ASA’s industrial LPG business in Sweden and Norway, completed in December 2012;
  • the acquisition of Benegas, BP’s LPG distribution business in the Netherlands and north Belgium, completed in October 2012; and
  • the acquisition of 100% of Kent Pharmaceuticals (Holdings) Limited (‘Kent’), a British generic pharmaceuticals company, completed in February 2013.

There have been no acquisitions completed subsequent to the balance sheet date which would be individually material to the Group, thereby requiring disclosure under either IFRS 3 or IAS 10. The carrying amounts of the assets and liabilities acquired (excluding net cash/debt acquired), determined in accordance with IFRS before completion of the business combinations, together with the fair value adjustments made to those carrying values were as follows:

 

2013

2013

2013

2013

2012

 

€’000

€’000

€’000

€’000

€’000

 

Kent

BP LPG

Others

Total

Total

Assets

 

 

 

 

 

Non-current assets

 

 

 

 

 

Property, plant and equipment (note 20)

10,920

35,577

31,304

77,801

26,224

Intangible assets - other intangible assets (note 21)

7,668

4,680

19,036

31,384

34,136

Deferred income tax assets

779

-

38

817

81

Total non-current assets

19,367

40,257

50,378

110,002

60,441

 

Current assets

Inventories (note 27)

11,180

527

9,376

21,083

27,205

Trade and other receivables (note 27)

12,142

9,355

22,353

43,850

111,106

Total current assets

23,322

9,882

31,729

64,933

138,311

 

Liabilities

Non-current liabilities

Deferred income tax liabilities

(1,764)

(1,076)

(5,247)

(8,087)

(7,791)

Post employment benefit obligations

-

-

-

-

(145)

Provisions for liabilities and charges

-

-

(3,436)

(3,436)

(3,207)

Deferred and contingent acquisition consideration

-

-

-

-

(940)

Total non-current liabilities

(1,764)

(1,076)

(8,683)

(11,523)

(12,083)

 

Current liabilities

Trade and other payables (note 27)

(16,148)

(20,622)

(17,467)

(54,237)

(131,960)

Current income tax assets/(liabilities)

183

-

230

413

(1,636)

Provisions for liabilities and charges

-

-

(318)

(318)

-

Total current liabilities

(15,965)

(20,622)

(17,555)

(54,142)

(133,596)

 

Identifiable net assets acquired

24,960

28,441

55,869

109,270

53,073

Intangible assets - goodwill (note 21)

37,390

19,793

40,814

97,997

143,658

Total consideration (enterprise value)

62,350

48,234

96,683

207,267

196,731

 

Satisfied by:

Cash

56,722

51,296

95,961

203,979

199,512

Net cash acquired

(4,895)

(3,062)

(4,488)

(12,445)

(39,436)

Net cash outflow

51,827

48,234

91,473

191,534

160,076

Deferred and contingent acquisition consideration

10,523

-

5,210

15,733

36,655

Total consideration

62,350

48,234

96,683

207,267

196,731

 

 

The acquisitions of Kent and BP LPG have been deemed to be substantial transactions and separate disclosure of the fair values of the identifiable assets and liabilities has therefore been made. None of the remaining business combinations completed during the year were considered sufficiently material to warrant separate disclosure of the fair values attributable to those combinations. The carrying amounts of the assets and liabilities acquired, determined in accordance with IFRS, before completion of the combination together with the adjustments made to those carrying values disclosed above were as follows:

 

Book

Fair value

Fair

 

value

adjustments

value

Kent

€’000

€’000

€’000

 

 

 

 

Non-current assets (excluding goodwill)

12,205

7,162

19,367

Current assets

23,582

(260)

23,322

Non-current liabilities

-

(1,764)

(1,764)

Current liabilities

(15,503)

(462)

(15,965)

Identifiable net assets acquired

20,284

4,676

24,960

Goodwill arising on acquisition

42,066

(4,676)

37,390

Total consideration (enterprise value)

62,350

-

62,350

 

 

 

 

 

Book

Fair value

Fair

 

value

adjustments

value

BP LPG

€’000

€’000

€’000

 

 

 

 

Non-current assets (excluding goodwill)

35,577

4,680

40,257

Current assets

10,825

(943)

9,882

Non-current liabilities

-

(1,076)

(1,076)

Current liabilities

(19,365)

(1,257)

(20,622)

Identifiable net assets acquired

27,037

1,404

28,441

Goodwill arising on acquisition

21,197

(1,404)

19,793

Total consideration (enterprise value)

48,234

-

48,234

 

 

 

 

 

Book

Fair value

Fair

 

value

adjustments

value

Other acquisitions

€’000

€’000

€’000

 

 

 

 

Non-current assets (excluding goodwill)

31,342

19,036

50,378

Current assets

32,044

(315)

31,729

Non-current liabilities

(3,777)

(4,906)

(8,683)

Current liabilities

(17,459)

(96)

(17,555)

Identifiable net assets acquired

42,150

13,719

55,869

Goodwill arising on acquisition

54,533

(13,719)

40,814

Total consideration (enterprise value)

96,683

-

96,683

 

 

Book

Fair value

Fair

 

value

adjustments

value

Total

€’000

€’000

€’000

 

 

 

 

Non-current assets (excluding goodwill)

79,124

30,878

110,002

Current assets

66,451

(1,518)

64,933

Non-current liabilities

(3,777)

(7,746)

(11,523)

Current liabilities

(52,327)

(1,815)

(54,142)

Identifiable net assets acquired

89,471

19,799

109,270

Goodwill arising on acquisition

117,796

(19,799)

97,997

Total consideration (enterprise value)

207,267

-

207,267

 

 

 

The initial assignment of fair values to identifiable net assets acquired has been performed on a provisional basis in respect of a number of the business combinations above given the timing of closure of these transactions. Any amendments to these fair values within the twelve month timeframe from the date of acquisition will be disclosable in the 2014 Annual Report as stipulated by IFRS 3.

The principal factors contributing to the recognition of goodwill on business combinations entered into by the Group are the expected profitability of the acquired business and the realisation of cost savings and synergies with existing Group entities.

€18.134 million of the goodwill recognised in respect of acquisitions completed during the financial year is expected to be deductible for tax purposes.

Acquisition related costs included in the Group Income Statement amounted to €14.896 million.

No contingent liabilities were recognised on the acquisitions completed during the financial year or the prior financial years.

The gross contractual value of trade and other receivables as at the respective dates of acquisition amounted to €46.862 million. The fair value of these receivables is €43.850 million (all of which is expected to be recoverable) and is inclusive of an aggregate allowance for impairment of €1.494 million.

The fair value of contingent consideration recognised at the date of acquisition is calculated by discounting the expected future payment to present value at the acquisition date. In general, for contingent consideration to become payable, pre-defined profit thresholds must be exceeded. On an undiscounted basis, the future payments for which the Group may be liable for acquisitions in the current year range from nil to €29.310 million.

There were no adjustments processed during the year to the fair value of business combinations completed during the year ended 31 March 2012 where those fair values were not readily determinable as at 31 March 2012.

The post-acquisition impact of business combinations completed during the year on Group profit for the financial year was as follows:

 

2013

2012

 

€’000

€’000

 

 

 

Revenue

260,784

1,238,936

Cost of sales

(213,100)

(1,175,091)

Gross profit

47,684

63,845

Operating costs

(35,106)

(49,827)

Operating profit

12,578

14,018

Finance costs (net)

(765)

341

Profit before tax

11,813

14,359

Income tax expense

(2,679)

(3,322)

Profit for the financial year

9,134

11,037

 

 

The revenue and profit of the Group for the financial year determined in accordance with IFRS as though the acquisition date for all business combinations effected during the year had been the beginning of that year would be as follows:

 

2013

2012

 

€’000

€’000

 

 

 

Revenue

13,273,957

12,112,182

Group profit for the financial year

138,682

105,158

 

47. Financial Risk and Capital Management

Capital risk management

The Group’s objectives when managing its capital structure are to safeguard the Group’s ability to continue as a going concern in order to provide returns to shareholders and benefits for other stakeholders, while maintaining a strong balance sheet to support the continued organic and acquisitive growth of its businesses and to maintain investor, creditor and market confidence.

Return on capital employed (‘ROCE’) is a key performance indicator for the Group. Further analysis of ROCE is included in the Financial Review on this page.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, issue new shares or buy back existing shares, increase or reduce debt or sell assets.

The Group includes borrowings in its measure of capital. The Group’s borrowings are subject to covenants. Further details on this are outlined in the Liquidity Risk Management section of this note.

The policy for net debt is to ensure a structure of longer term debt funding and cash balances with deposit maturities up to three months.

The capital structure of the Group, which comprises capital and reserves attributable to the owners of the Parent, net debt and deferred and contingent acquisition consideration, may be summarised as follows:

 

2013

2012

Group

€’000

€’000

 

 

 

Capital and reserves attributable to the owners of the Parent

1,052,450

1,011,323

Net debt (note 31)

219,905

169,029

Deferred and contingent acquisition consideration (note 34)

89,829

98,699

At 31 March

1,362,184

1,279,051

 

 

Financial risk management

Group financial risk management is governed by policies and guidelines which are reviewed and approved annually by the Board of Directors, most recently in December 2012. These policies and guidelines primarily cover credit risk, liquidity risk, foreign exchange risk, interest rate risk and commodity price risk. The principal objective of these policies and guidelines is the minimisation of financial risk at reasonable cost. The Group does not trade in financial instruments nor does it enter into any leveraged derivative transactions. DCC’s Group Treasury function centrally manages the Group’s funding and liquidity requirements. Divisional and subsidiary management, in conjunction with Group Treasury, manage foreign exchange and commodity price exposures within approved policies and guidelines.

There are no significant concentrations of risk and there has been no significant change during the financial year, or since the end of the year, to the types of financial risks faced by the Group or the Group’s approach to the management of those risks, other than the Group’s approach to the management of interest rate risk, which is outlined below.

(i) Credit risk management

Credit risk arises from credit exposure to trade receivables, cash and cash equivalents including deposits with banks and financial institutions and derivative financial instruments.

Trade receivables arise from a wide and varied customer base spread throughout the Group’s operations and as such there is no significant concentration of credit risk. The Group’s credit risk management policy in relation to trade receivables involves periodically assessing the financial reliability of customers, taking into account their financial position, past experience and other factors. The utilisation of credit limits is regularly monitored and a significant element of credit risk is covered by credit insurance.

Risk of counterparty default arising on cash and cash equivalents and derivative financial instruments is controlled within a framework of dealing with high quality institutions and, by policy, limiting the amount of credit exposure to any one bank or institution. DCC transacts with a variety of high credit quality financial institutions for the purpose of placing deposits and entering into derivative contracts. The Group actively monitors its credit exposure to each counterparty to ensure compliance with the counterparty risk limits of the Board approved treasury policy. Of the total cash and cash equivalents at 31 March 2013 of €613.677 million, 20.3% (€124.770 million) was with financial institutions with a minimum rating in the P-1 (short-term) category of Moody’s and 88.8% (€544.730 million) was with financial institutions with a minimum rating in the P-2 (short-term) category of Moody’s. In the normal course of business, the Group operates notional cash pooling systems, where a legal right of set-off applies. As at 31 March 2013 derivative transactions were with counterparties with ratings ranging from AA- to B (long-term) with Standard and Poors or Aa2 to Ba2 (long-term) with Moody’s.

Management does not expect any significant counterparty to fail to meet its obligations. The maximum exposure to credit risk is represented by the carrying amount of each asset.

Included in the Group’s trade and other receivables as at 31 March 2013 are balances of €132.677 million (2012: €106.031 million) which are past due at the reporting date but not impaired in the majority of cases. The aged analysis of these balances is as follows:

 

2013

2012

Group

€’000

€’000

 

 

 

Less than 1 month overdue

99,202

80,620

1 - 3 months overdue

25,002

19,069

3 - 6 months overdue

6,125

4,823

Over 6 months overdue

2,348

1,519

132,677

106,031

 

 

 

Trade and other receivables which are not past due nor impaired at the reporting date are expected to be fully recoverable.

The movement in the provision for impairment of trade receivables during the year is as follows:

 

2013

2012

Group

€’000

€’000

 

 

 

At 1 April

26,217

31,202

Provision for impairment recognised in the year

4,158

1,830

Subsequent recovery of amounts previously provided for

(527)

(1,118)

Amounts written off during the year

(6,577)

(7,105)

Arising on acquisition

1,494

1,635

Provision for impairment attributable to assets classified as held for sale

-

(1,205)

Exchange

(188)

978

At 31 March

24,577

26,217

 

 

 

Company

There were no past due or impaired trade receivables in the Company at 31 March 2013 (31 March 2012: none).

(ii) Liquidity risk management

The Group maintains a strong balance sheet with long term debt funding and cash balances with deposit maturities up to three months. Wherever possible, surplus funds in the Group are transferred to the centralised treasury department through the repayment of borrowings, deposits and dividends. These are then lent to Group companies or contributed as equity to fund Group operations, used to retire external debt or invested externally. The Group does not use off-balance sheet special purpose entities as a source of liquidity or for other financing purposes. In addition, the Group maintains significant committed and uncommitted credit lines with its relationship banks. Compliance with the Group’s debt covenants is monitored continually based on the management accounts. Sensitivity analyses using various scenarios are applied to forecasts to assess their impact on covenants and net debt. During the year to 31 March 2013 all covenants have been complied with and based on current forecasts it is expected that all covenants will continue to be complied with for the foreseeable future. Further analysis of the Group’s debt covenants is included in the Financial Review on this page.

 

The tables below show the projected contractual undiscounted total cash outflows (principal and interest) arising from the Group’s trade and other payables, gross debt and derivative financial instruments. The tables also include the gross cash inflows projected to arise from derivative financial instruments. These projections are based on the interest and foreign exchange rates applying at the end of the relevant financial year.

Group

Less than

Between

Between

Over

 

1 year

1 and 2 years

2 and 5 years

5 years

Total

As at 31 March 2013

€’000

€’000

€’000

€’000

€’000

Financial liabilities - cash outflows

 

 

 

 

 

Trade and other payables

(1,730,521)

-

-

-

(1,730,521)

Interest bearing loans and borrowings

(180,888)

(213,486)

(193,649)

(702,070)

(1,290,093)

Interest payments on interest bearing loans and borrowings

(59,179)

(47,048)

(119,877)

(118,001)

(344,105)

Deferred and contingent acquisition consideration

(22,944)

(9,011)

(57,874)

-

(89,829)

Cross currency swaps - gross cash outflows

(87,645)

(202,402)

(186,259)

(732,934)

(1,209,240)

Other derivative financial instruments

(2,805)

-

-

-

(2,805)

(2,083,982)

(471,947)

(557,659)

(1,553,005)

(4,666,593)

Derivative financial instruments - cash inflows

Interest rate swaps - net cash inflows

3,677

2,163

4,574

-

10,414

Cross currency swaps - gross cash inflows

128,506

221,464

257,991

820,071

1,428,032

 

132,183

223,627

262,565

820,071

1,438,446

 

 

 

 

 

 

Group

Less than

Between

Between

Over

 

1 year

1 and 2 years

2 and 5 years

5 years

Total

As at 31 March 2012

€’000

€’000

€’000

€’000

€’000

Financial liabilities - cash outflows

 

 

 

 

 

Trade and other payables

(1,533,882)

-

-

-

(1,533,882)

Interest bearing loans and borrowings

(70,999)

(73,288)

(331,882)

(342,199)

(818,368)

Interest payments on interest bearing loans and borrowings

(43,225)

(39,414)

(80,327)

(50,522)

(213,488)

Deferred and contingent acquisition consideration

(13,428)

(8,186)

(77,085)

-

(98,699)

Cross currency swaps - gross cash outflows

(14,881)

(80,824)

(319,621)

(306,607)

(721,933)

Other derivative financial instruments

(1,018)

-

-

-

(1,018)

 

(1,677,433)

(201,712)

(808,915)

(699,328)

(3,387,388)

Derivative financial instruments - cash inflows

Interest rate swaps - net cash inflows

3,182

3,182

5,555

398

12,317

Cross currency swaps - gross cash inflows

36,621

107,570

347,834

362,223

854,248

 

39,803

110,752

353,389

362,621

866,565

 

 

 

 

 

 

The Group has sufficient cash resources and liquid assets to enable it to meet its current borrowing obligations and trade and other payables. The Group has a well balanced profile of debt maturities over the coming years which will be serviced through a combination of cash and cash equivalents, cash flows, committed bank facilities and the raising of additional long term debt.

Company

Less than

Between

Between

Over

 

1 year

1 and 2 years

2 and 5 years

5 years

Total

As at 31 March 2013

€’000

€’000

€’000

€’000

€’000

Financial liabilities - cash outflows

 

 

 

 

 

Trade and other payables

282,424

-

43,694

-

326,118

 

 

 

 

 

 

Company

Less than

Between

Between

Over

 

1 year

1 and 2 years

2 and 5 years

5 years

Total

As at 31 March 2012

€’000

€’000

€’000

€’000

€’000

Financial liabilities - cash outflows

 

 

 

 

 

Trade and other payables

298,476

-

43,694

-

342,170

 

 

 

 

 

 

The Company has sufficient cash resources and liquid assets to enable it to meet its trade and other payables.

 

(iii) Market risk management

Foreign exchange risk management

DCC’s reporting currency and that in which its share capital is denominated is the euro. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations giving rise to exposure to other currencies, primarily sterling and the US dollar.

Divisional and subsidiary management, in conjunction with Group Treasury, manage foreign currency exposures within approved policies and guidelines using forward currency contracts.

The portion of the Group’s operating profits which are sterling denominated are offset to a limited degree by certain natural economic hedges that exist within the Group in that a proportion of the purchases by certain of its Irish businesses are sterling denominated. The Group does not hedge the remaining translation exposure on the translation of the profits of foreign currency subsidiaries on the basis that they are not intended to be repatriated.

The Group has investments in sterling operations which are highly cash generative. Although the Group holds significant borrowings denominated or swapped into sterling, these sterling borrowings have been offset by the strong ongoing cash flow generated by the Group’s sterling operations leaving the Group with a net position in sterling assets. The currency translation loss during the year ended 31 March 2013 of €13.8 million as set out in the Statement of Comprehensive Income was primarily due to the decrease in the value of sterling against the euro during the year of 1.4%. Included in this figure is a currency translation loss of €8.9 million relating to the Group’s intangible assets, a significant portion of which are sterling denominated.

The Group has a moderate level of transactional currency exposure arising from sales or purchases by operating units in currencies other than their functional currencies. Where sales or purchases are invoiced in other then the local currency and there is not a natural hedge with other activities within the Group, DCC generally hedges between 50% and 90% of those transactions for the subsequent two months. The Group also hedges a proportion of anticipated transactions in certain subsidiaries for periods ranging up to fifteen months with such transactions qualifying as ‘highly probable’ forecast transactions for IAS 39 hedge accounting purposes.

Sensitivity to currency movements

Group

A change in the value of other currencies by 10% against the euro would have a €14.8 million (2012: €10.4 million) impact on the Group’s profit before tax, would change the Group’s equity by €76.2 million and change the Group’s net debt by €0.4 million (2012: €76.1 million and €6.3 million respectively). These amounts include an insignificant amount of transactional currency exposure.

Company

The Company does not have any material assets or liabilities denominated in any currency other than euro at 31 March 2013 or at 31 March 2012 and consequently has no exposure to currency movements at 31 March 2013 (31 March 2012: nil).

Interest rate risk management

On a net debt basis, the Group is exposed to changes in interest rates, primarily changes in EURIBOR and sterling LIBOR. Having borrowed at both fixed and floating rates of interest, DCC has swapped its fixed rate borrowings to a combination of fixed and floating interest rates, using interest rate and cross currency interest rate swaps. Overall interest rate risk on gross borrowings is mitigated by matching, to the extent possible, the maturity of its cash balances with the interest rate reset periods on the swaps related to its borrowings.

Sensitivity of interest charges to interest rate movements

Group

Based on the composition of net debt at 31 March 2013 a one percentage point (100 basis points) change in average floating interest rates would have a €7.1 million (2012: €3.0 million) impact on the Group’s profit before tax.

Further information on Group borrowings and the management of related interest rate risk is set out in notes 29 and 30.

 

Company

The Company holds negligible levels of cash and consequently the interest earned on cash at bank does not give rise to any significant market risk. Finance income principally comprises guarantee fees charged at fixed rates on intergroup loans. Finance costs comprise interest on intergroup loans payable at variable market rates.

Commodity price risk management

The Group is exposed to commodity cost price risk in its oil distribution and LPG businesses. Market dynamics are such that these commodity cost price movements are immediately reflected in oil commodity sales prices and, within a short period, in LPG commodity sales prices and in the resale prices of recycled oil products. Fixed price oil supply contracts are occasionally provided to certain customers for periods of less than one year. To manage this exposure, the Group enters into matching forward commodity contracts which are designated as hedges under IAS 39. The Group hedges a proportion of its anticipated LPG commodity exposure, with such transactions qualifying as ‘highly probable’ forecast transactions for IAS 39 hedge accounting purposes. In addition, to cover certain customer segments for which it is commercially beneficial to avoid price increases, a proportion of LPG commodity price and related foreign exchange exposure is hedged. All commodity hedging counterparties are approved by the Chief Executive and the Chief Financial Officer and are reviewed by the Board.

Sensitivity to commodity price movements

Group

Due to pricing dynamics in the oil distribution market and the recycled oil product market, an increase or decrease of 10% in the commodity cost price of oil would have a nil impact on the Group’s profit before tax (2012: nil) and a nil impact on the Group’s equity (2012: nil).

The impact on the Group’s profit before tax and on the Group’s equity of an increase or decrease of 10% in the commodity cost price of LPG would be dependent on seasonal variations, competitive pressures and the underlying absolute cost of the commodity at the time and, as such, is difficult to quantify but would not be material.

Company

The Company has no exposure to commodity price risk.

Fair values of financial assets and financial liabilities

The fair values of borrowings (none of which are listed) and derivative financial instruments are measured by discounting cash flows at prevailing interest and exchange rates. The carrying value of non-interest bearing financial assets and financial liabilities and cash and cash equivalents approximates their fair values, largely due to their short-term maturities. The following is a comparison by category of book values and fair values of the Group’s and Company’s financial assets and financial liabilities:

 

Group

2013

2012

 

Book value

Fair value

Book value

Fair value

 

€’000

€’000

€’000

€’000

Financial assets

 

 

 

 

Derivative financial instruments

162,850

162,850

138,825

138,825

Trade and other receivables

1,347,287

1,347,287

1,291,698

1,291,698

Cash and cash equivalents

613,677

613,677

630,023

630,023

 

2,123,814

2,123,814

2,060,546

2,060,546

Financial liabilities

Borrowings

977,738

976,364

919,364

897,084

Derivative financial instruments

18,694

18,694

18,513

18,513

Trade and other payables

1,730,521

1,730,521

1,533,882

1,533,882

 

2,726,953

2,725,579

2,471,759

2,449,479

 

Company

2013

2012

 

Book value

Fair value

Book value

Fair value

 

€’000

€’000

€’000

€’000

Financial assets

Trade and other receivables

373,264

373,264

409,656

409,656

Cash and cash equivalents

3,998

3,998

867

867

 

377,262

377,262

410,523

410,523

Financial liabilities

Trade and other payables

326,118

326,118

342,170

342,170

 

326,118

326,118

342,170

342,170

 

 

 

 

 

Group

The Group has adopted the following fair value measurement hierarchy in relation to its financial assets and financial liabilities that are carried in the Balance Sheet at fair value as at the year end:

- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

- Level 2: inputs, other than quoted prices included within level 1, that are observable for the asset or liability either directly (as prices) or indirectly (derived from prices); and

- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Group

Level 1

Level 2

Level 3

Total

Fair value measurement as at 31 March 2013

€’000

€’000

€’000

€’000

 

 

 

 

 

Financial assets

 

 

 

 

Derivative financial instruments

-

162,850

-

162,850

 

-

162,850

-

162,850

Financial liabilities

Derivative financial instruments

-

18,694

-

18,694

 

-

18,694

-

18,694

 

 

 

 

 

Group

Level 1

Level 2

Level 3

Total

Fair value measurement as at 31 March 2012

€’000

€’000

€’000

€’000

 

 

 

 

 

Financial assets

Derivative financial instruments

-

138,825

-

138,825

 

-

138,825

-

138,825

Financial liabilities

Derivative financial instruments

-

18,513

-

18,513

 

-

18,513

-

18,513

 

Company

As at 31 March 2013 and 31 March 2012 the Company had no financial assets or financial liabilities which were carried at fair value.

48. Related Party Transactions

The principal related party relationships requiring disclosure in the consolidated financial statements of the Group under IAS 24 Related Party Disclosures relate to the existence of subsidiaries, joint ventures and associates and transactions with these entities entered into by the Group and the identification and compensation of key management personnel as addressed in more detail below:

Group

Subsidiaries, joint ventures and associates

The consolidated financial statements include the financial statements of the Company and its subsidiaries, joint ventures and associates as documented in the accounting policies on this page. A listing of the principal subsidiaries, joint ventures and associates is provided in the Group Directory on this page of this Annual Report.

Transactions are entered into in the normal course of business on an arm’s length basis.

Sales to and purchases from, together with outstanding payables and receivables to and from subsidiaries and joint ventures are eliminated in the preparation of the consolidated financial statements.

Compensation of key management personnel

For the purposes of the disclosure requirements under IAS 24, the term ‘key management personnel’ (i.e. those persons having authority and responsibility for planning, directing and controlling the activities of the Company) comprises the Board of Directors which manages the business and affairs of the Company. Key management remuneration amounted to:

 

2013

2012

 

€’000

€’000

 

 

 

Short-term benefits

3,048

2,046

Post-employment benefits

666

654

Share-based payment (calculated in accordance with the principles disclosed in note 10)

462

410

At 31 March

4,176

3,110

 

 

Company

Subsidiaries, joint ventures and associates

During the year the Company received dividends of €17.0 million from its subsidiary DCC Food & Beverage Limited, €11.0 million from its subsidiary DCC Energy Limited and €8.0 million from its subsidiary DCC Management Services Limited. Details of loan balances to/from subsidiaries are provided in the Company Balance Sheet on this page, in note 25 ‘Trade and Other Receivables’ and in note 26 ‘Trade and Other Payables’.

49. Events after the Balance Sheet Date

In April 2013, the Group completed a debt fundraising in the US Private Placement market raising $525 million (€404.1 million) with maturity terms of seven, ten and twelve years (average maturity of ten years).

50. Approval of Financial Statements

The financial statements were approved by the Board of Directors on 13 May 2013.

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