I ., i' PEEL PORTS SHAREHOLDER FINANCECO LIMITED Report and Financtal Statements For the year ended 31 March 2010 Company Registration No. 5965116 A15 1511212010 234 COMPANIES HOUSE
I ., i'
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
Report and Financtal Statements
For the year ended 31 March 2010
Company Registration No. 5965116
A15 1511212010 234 COMPANIES HOUSE
•• PEEL PORTS SHAREHOLDER FINANCECO LIMITED
REPORT AND FINANCIAL STATEMENTS FOR 2010
CONTENTS
Officers and professiOnal adv1sers
Directors' report
Duectors' responsibllahes statement
Independent aud1tors' report to the members
Consolidated profit and loss account
Consolidated statement of total recogmsed gams and losses
Reconc1hatJOn of movements m Group shareholders' deficit
Balance sheets
Consolidated cash flow statement
Reconcahahon of Group cash flows to movement m net debt
Notes to the financial statements
Page
I
2
6
7
8
9
9
10
11
11
12
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
OFFICERS AND PROFESSIONAL ADVISERS
DIRECTORS
T E Alhson AA Barr P J Hosker J Whtttaker (Chamnan)
SECRETARY
W J Bowley C R Marrison Gill
(resigned 31 July 2009) (appomted 31 July 2009)
REGISTERED OFFICE
Mant1me Centre Port of Liverpool Liverpool L21 !LA
BANKERS
Royal Bank of Scotland PLC National Westmmster Bank PLC 22 Castle Street Liverpool L20UP
AUDITORS
Del01tte LLP Chartered Accountants and Statutory Auditors Liverpool Umted Kmgdom
'• PEEL PORTS SHAREHOLDER FINANCECO LIMITED
DIRECTORS' REPORT
The directors present thetr repon and the audited financial statements of the Company and the Group for the year ended 31 March 20 I 0
PRINCIPAL ACTIVITIES
The Company acts as an mtermedtate holdmg company wtthm the Peel Pons Holdmgs (Cl) Limited group of companies
The pnnctpal actlVlttes of the Group are the provtston of pon facthlles and cargo handlmg and marme related servtces together wtth the operatiOn of shtppmg and fretght forwardmg busmesses The substdtanes and JOmt ventures pnnctpally affectmg the profits or net assets of the Group m the year are hsted m note 34 to the fmancml statements
RESULTS AND DIVIDENDS
The tradmg results for the year and the Group's financial posttton at the end of the year are shown m the attached financial statements, and are discussed further m the busmess review below
The dtrectors proposed and patd mtenm dtvtdends of £24,000,000 (2009 £30,000,000) No final dtvtdend IS proposed (2009 £ml)
REVIEW OF BUSINESS, DEVELOPMENTS AND PROSPECTS
Summary of results
The results for the year and the prevtous year, all of whtch are from contmumg operatiOns, are summarised m the table below
2010 2009 Change £'000 £'000 £'000 %
Turnover 362,469 399,084 (36,615) (9 2)
Gross profit 114,066 115,932 (1,866) (I 6)
EBITDA 121,141 122,485 (I ,344) (I I)
Group operatmg profit 65,129 68,424 ~3,295l ~4 8l
The Group's results and financtal posttton are set out m the consolidated profit and loss account and balance sheet on pages 8 and I 0
Net habthttes were £434,838,000 at 31 March 2010 (2009 £402,434,000) In addttiOn to the profit for the financial year of £2,055,000 (2009 £5,685,000), the net deficit posmon has changed pnmartly because of
• an actuanalloss net of tax relatmg to the Group's pensiOn schemes of £9,663,000 (2009 £15,834,000), and
• the payment ofmtenm dtvtdends to the tmmedtate parent undenakmg of £24,000,000 (2009 £30,000,000)
1 EBITDA IS total operatmg profit before depreciatiOn, amontsatton, grant mcome and exceptional Items, and after finance mcome ansmg from the penston asset and mmonty mterests
2
'• PEEL PORTS SHAREHOLDER FINANCECO LIMITED
Summary of key performance md1cators
The drrectors use dtvtswnal annual budgets aggregated mto a Group budget as the basts for measunng Group performance In addmon the Group prepares three year rollmg htgh level forecasts and each dtvtston prepares a three year strategtc plan from a parttctpattve process
The drrectors have monttored the progress of the overall Group strategy and the mdtvtdual strategtc elements by reference to certam financtal and non-financtal key performance mdtcators for the contmumg busmess
Turnover (£'000)
Gross profit margm
Investment m trade debtors as a percentage of turnover from contmumg operations
Turnover per employee (£'000)
Tonnage throughput
UK Ports- (SHA)
lrtsh Termmals
Shtppmg
2010
£362,469
31 5%
14 7%
£279 0
50 9 mtlhon
2 7 mtllton
2 4 mtlhon
2009 Absolute % Change Change
£399,084 (£36,615)
290% 25%
134% 13%
£238 4 £40 6
56 0 mtlhon (5 I) mtlhon
3 5 mtlhon (0 8) mtlhon
2 9 mtlhon (0 5) mtlhon
(9 2)
86
97
17 0
(9 I)
(22 9)
(17 2)
Method of calculatton
Year on year growth m turnover
The ratto of gross profit to turnover expressed as a percentage
Contmumg operations Trade debtors net of proviSions as a percentage of turnover
Contmumg operations Turnover dtvtded by average number of employees
Year on year growth m tonnage usmg standard tonnage measures for the Ports mdustry
Tonnage throughput has decreased year on year whtch was fully expected as result of the dechne m the wtder global economic climate Mtmmum guarantees agreed with s1gntficant customers help to mitigate the Impact on turnover In addttJOn, due to the dtverse nature of the port commodtty base the decrease m volumes ts not as adverse as that expenenced at some European ports Contmumg focus on efficiency durmg the year has mcreased operatmg margms m our mam port operatiOns
Port operations
The level of busmess acttvtty for the port operattons has been sattsfactory m the current economtc chmate It ts anttctpated that the present level of acttvtty wtthm the busmess wtll be mamtamed for the next 12 months, wtth growth thereafter
PRINCIPAL RISKS AND UNCERTAINTIES
It ts now wtdely understood that the pnnctpal challenges facmg UK busmesses relate to those generated by the global economtc downturn The resultmg lack of hqutdtty m the financtal markets has reduced the abthty of mdtvtduals and busmesses to borrow money and thts has ulttmately led to a lack of demand m the global marketplace
Peel Ports Shareholder FmanceCo Ltmtted and tts substdtanes operate as the Statutory Harbour Authortty for the Port of Ltverpool, the Manchester Shtp Canal, the Rtver Medway, the Clydeport area, Ardrossan Harbour, Twelve Quays at Btrkenhead Docks and Heysham Port They also provtde port facthttes, fretght forwardmg and cargo handhng servtces m Glasgow, Greenock, Hunterston, Dubhn and Belfast Shtppmg and transport servtces to the UK, the Repubhc of Ireland and Europe are provtded by the shtppmg and fretght forwardmg substdtartes
Desptte the contmued downturn m the global economtc envtronment, the results for the year have remamed strong, whtch ts largely attnbuted to the benefit of a strong and dtverse portfoho of customers and servtce provtsJOn Although several European ports have been htt by the global dechne m contamer volumes, Peel Ports Group tS not as rehant on contamer handhng as many other port busmesses Wtth tts strong and dtverse servtce offenng, the Group 1s showmg greater rest hence m the current envtronment
3
', PEEL PORTS SHAREHOLDER FINANCECO LIMITED
The regwnal pons with m the Group each form pan of a wtder transport mfrastructure The key operattonal nsk and uncenamty relates to the dependency upon the economtc actiVIty of the busmesses and consumers wtthm an economtc geographtc proxtmtty of the ports These consumers and bus messes generate the trade whtch flows through the ports and when they are subject to economtc cycles or, at the extreme, to fatlure there ts an unavmdable tmpact on the pon
The mt!tgatwn of thts nsk comes from the wtde and diVerse nature of customers, markets and products served by the pons Thts has the effect of mtmmtsmg the tmpact of a pa.•tlcular cycle or bus mess fatlure and mdeed one trade can hedge agamst another
Fmancwl r1sks
The key financtal nsk anses from the level of long term debt held by the Group and the m teres! artsmg !hereon Peel Pons Group long tenn debt amountmg to £1,183,572,000 falls due for repayment between 31 December 2013 and 30 September 2046 as dtsclosed m note 19 In addttton the cash flow nsk ansmg m connection with mterest charges ts mtttgated through the use of mterest swaps Further detatls on thts can be found m note 19
The dtrectors constder that the combmatwn of the swap mstruments, stable tradmg of the pons bus mess, effective workmg capttal management and the development of the asset base asststs m managmg the nsks artsmg from the level of debt and vartabthty m mterest rates
The Group's bank loans and swap mstruments are spread over a large number of banks and wtthm the current facthty agreement there are undrawn funds avatlable
The Group ts exposed to translation and transactiOn foretgn exchange nsk TransactiOn exposures, mcludmg those assoctated wtth forecast transacttons, are hedged when known The Group manages tts foretgn exchange exposure on a net basts, and, tf reqwred, uses forward foretgn exchange contracts and financtal mstruments to reduce the exposure If the hedgmg acttvtty does not mt!tgate the exposure, then the results and the financtal condttton of the Group may be adversely tmpacted by foretgn currency fluctuatiOns Whtlst the atm ts to achteve an economtc hedge, the Group does not adopt an accountmg pohcy of hedge accountmg for these financtal statements The Group revtews Its exposure to translation nsk ansmg from tts overseas mvestments on a contmual basts and wtll enter mto hedges tf constdered necessary
In addttton, financtal nsk anses from credtt extended to customers Thts nsk ts mtttgated by usmg strtct credtt control procedures, the tmpost!ton of appropnate credtt hmtts and obtammg thtrd party credtt references
After makmg enqutnes and as dtsclosed m note I to the financtal statements, on page 12, the dtrectors have a reasonable expectatwn that the Company has adequate resources to contmue m operational existence for the foreseeable future and for thts reason they contmue to adopt the gomg concern basts m preparmg the financtal statements
DIRECTORS
The dtrectors who held office dunng the financtal year and thereafter, except as noted, were as follows
J Whmaker (Chatrman) A C Stmpson (restgned 9 October 2009) P A Scott (restgned I Apnl 2009) P J Hosker T E Alhson S R Baxter AABarr
(restgned 24 June 20 I 0)
PAYMENT POLICY
In the absence of dtspute, amounts due to trade and other supphers were settled as expedtttously as posstble wtthm the terms of payment
CHARITABLE AND POLITICAL CONTRIBUTIONS
Durmg the year, contrtbutwns by the Group for chantable purposes totalled £80,000 (2009 £ 182,000) The Group made no pohttcal contnbutwns durmg the financtal year (2009 £ml)
4
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
EMPLOYEES
The Group considers that employee mvolvement IS essential to the contmumg development and success of Its busmess and uses a vanety of methods to mform, consult and mvolve Its employees The pnmary commumcatmn channels for employees are Withm the Group's operatmg umts
ApplicatiOns for employment by disabled persons are given full considerauon, havmg regard to the capabilities of the applicant In the event of employees becommg disabled, e\Cl) effort "made 10 provide them With employment m the Group and to arrange any necessary re-trammg It IS the policy of the Group that the trammg, career development and promotiOn of disabled persons should, as far as possible, be Identical to that of a person who does not suffer from any disability Appropnate access and facilities are also provided for any disabled employees as requrred Trammg programmes are m place to ensure that the Group has smtably qualified mdlVlduals to undertake the vanous operatiOnal tasks w1thm the Group
ENVIRONMENT
The Group IS conscious of the rrnpact of Its operatiOns on the environment Necessary attentiOn IS given to environmental Issues particularly when developmg new proJects, refurb1shmg ex1stmg properties and on possible acqmsmons Design consultants are encouraged to promote good envrronmental performance With consideratiOn given to envrronmental nsk, energy consmnpt10n, the use of envrronmentally friendly matenals and the avmdance of matenals hazardous to health
AUDITORS AND THE DISCLOSURE OF INFORMATION TO THE AUDITORS
In the case of each person who IS a director of the Company at the date when the report IS approved
• so far as each ts aware, there ts no relevant audtt mformatton of whtch the Company's auditors are unaware, and
• each of the drrectors has taken all the steps that he/she ought to have taken as a director to make hrrnsel£'herself aware of any relevant audit mformat10n and to establish that the Company's auditors are aware of that m formation
This confirmatiOn IS given and should be mterpreted m accordance with the provisions of s4 I 8 of the Companies Act 2006
Delmtte LLP have expressed their wdlmgness to contmue m office as auditors, and a resolutiOn to reappomt them will be proposed at the forthcommg Annual General Meetmg
Dtrector 27 July 2010
5
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
The dtrectors are responsible for preparmg the Annual Report and the financtal statements m accordance wtth applicable law and regulatiOns
Company law requues the d1rectors to prepare financml statements fur each financial year Under that law the drrectors have elected to prepare the financial statements m accordance wtth Umted Kmgdom Generally Accepted Accountmg Practtce (Umted Kmgdom Accountmg Standards and applicable law) Under company law the drrectors must not approve the financtal statements unless they are satisfied that they gtve a true and fatr vtew of the state of affatrs of the Company and of the profit or loss of the Company for that penod In preparmg these financtal statements, the dtrectors are requtred to
o select suitable accountmg poiictes and then apply them consistently, o make judgments and accountmg estimates that are reasonable and prudent, o state whether applicable UK Accountmg Standards have been followed, subject to any matenal departures
dtsclosed and explamed m the financtal statements, and o prepare the financial statements on the gomg concern basts unless tt ts mappropnate to presume that the
Company wtll contmue m busmess
The dtrectors are responstble for keepmg adequate accountmg records that are suffictent to show and explam the Company's transactiOns and dtsclose wtth reasonable accuracy at any ttme the financial posttton of the Company and enable them to ensure that the financtal statements comply wtth the Compames Act 2006 They are also responstble for safeguardmg the assets of the Company and hence for takmg reasonable steps for the prevention and detectiOn of fi"aud and other trregulartttes
6
..
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PEEL PORTS SHAREHOLDER FINANCECO LIMITED
We have aud1ted the fmanctal statements of Peel Ports Shareholder FmanceCo Lun1ted for the year ended 31 March 2010 wh1ch compnse the consohdated profit and loss account, the consohdated statement of total recogrused gams and losses, the reconc1hauon of movements m group shareholders' deficit, the consohdated and parent company balance sheets, the consolidated cash flow, the reconcdtatiOn of group cash flows to movement m net debt and the related notes 1 to 34 The fmanc1al repurtmg framework that has been apphed m therr preparatwn IS apphcable law and Umted Kmgdom Accountmg Standards (Uruted Kmgdom Generally Accepted Accountmg Pract1ce)
Tlus report IS made solely to the Company's members, as a body, m accordance wtth Chapter 3 of Part 16 of the Compan1es Act 2006 Our aud1t work has been undertaken so that we m1ght state to the Company's members those matters we are requrred to state to them m an aud1tors' report and for no other purpose To the fullest extent penn1tted by law, we do not accept or assume respons1b1hty to anyone other than the Company and the Company's members as a body, for our aud1t work, for tins report, or for the oprruons we have formed
Respective responsib1hbes of d~rectors and aud1tors
As explamed more fully m the drrectors' respons1bllllles statement, the drrectors are respons1ble for the preparatiOn of the financ1al statements and for bemg sausfied that they g1ve a true and fa1r v1ew Our respons1b1hty IS to aud1t the financ1al statements m accordance wtth apphcable law and Internat1onai Standards on Aud1tmg (UK and Ireland) Those standards reqmre us to comply wtth the Aud1tmg Practlces Board's (APE's) Etlucal Standards for Aud1tors
Scope of the aud1t of the financ1al statements
An audtt Involves obtammg evtdence about the amounts and dtsclosures m the financtal statements sufficient to gtve reasonable assurance that the fmanc1al statements are free from matenal miSStatement, whether caused by fraud or error Th1s mcludes an assessment of whether the accountmg pohc1es are appropnate to the Group's and the parent Company's crrcumstances and have been consistently apphed and adequately d1sclosed, the reasonableness of s1gmficant accountmg estrrnates made by the drrectors, and the overall presentatiOn of the fmanc1al statements
Opm10n on financ1al statements
In our optmon the financtal statements
• g1ve a true and fa1r v1ew of the state of the Group's and the Parent Company's affa1rs as at 31 March 20IO and of the Group's profit for the year then ended,
• have been properly prepared m accordance wtth Umted Kmgdom Generally Accepted Accountmg Pracuce, and
• have been prepared m accordance w1th the requrrements of the Compames Act 2006
Opmton on other matter prescribed by the Companies Act 2006
In our op1ruon the mfonnatlon giVen m the drrectors' report for the financtal year for wh1ch the financ1al statements are prepared IS consistent wtth the financtal statements
Matters on wh1ch we are requ1red to report by exceptiOn
We have notlung to report m respect of the followmg matters where the Companies Act 2006 requrres us to report to you tf, m our optmon • adequate accountmg records have not been kept by the Parent Company, or returns adequate for our aud1t
have not been rece1ved from branches not VISited by us, or • the Parent Company fmanctal statements are not m agreement wtth the accountmg records and returns, or • certam dtsclosures of dtrectors' remuneration spectfied by law are not made, or •' we have not recetved all the mformat10n and explanat10ns we requtre for our audtt
ve-X- ~~ Patnck Loftus (Semor Statutory Aud!lor) for and on behalf of Delo1tte LLP Chartered Accountants and Statutory Aud1tors L1verpool, Uruted Kmgdom ~~ July2010
7
. . PEEL PORTS SHAREHOLDER FINANCECO LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT For the year ended 31 March 2010
GROUP TURNOVER
GROUP OPERATING PROFIT Share of operatmg profit of JOint ventures
TOTAL OPERATING PROFIT: GROUP AND SHARE OF JOINT VENTURES
Profit/(loss) on disposal of mterests m · - Jomt ventures - Subs1d1ary undertakmgs
Non-operatmg exceptional ttem Net mterest payable and similar charges
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION Tax on profit on ordmary actJvtttes
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION Equity mmonty mterests
PROFIT FOR THE FINANCIAL YEAR
The above results are denved from contmumg operatiOns
Note
2
2,3 2
7
8 9
10
32
22
2010 £'000
362,469
65,129 4,624
69,753
1,917 (448)
164 (59,813)
11,573 (9,611)
1,962 93
2,055
2009 £'000
399,084
68,424 4,845
73,269
(196) (1,692)
(60,722)
10,659 (4,939)
5,720 (35)
5,685
The Group's turnover IS stated net of turnover for JOint ventures and the Group's reported net mterest payable and taxation mclude the Group's share of JOint ventures' net mterest payable and taxatiOn These are not matenal to lhe Group and accordmgly are separately disclosed m the notes to the financial statements
There IS no difference between the profit on ordmary actiVIties before taxatiOn and the profit for the financial year stated above and their h1stoncal cost equivalents
8
·. PEEL PORTS SHAREHOLDER FINANCECO LIMITED
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES For the year ended 31 March 2010
Profit for the financ1al year -Group (loss)lprofit - Jomt ventures profit
Other recogmsed gams and losses Currency translatiOn differences on fore1gn net m vestments Actuanalloss relatmg to the Group pens1on schemes Movement on taxatiOn relatmg to pensiOn surplus -Deferred -Current Actuanal loss net of deferred taxatiOn relatmg to JOmt
venture pensiOn schemes
Total recogmsed net gams and losses for the financ1al year
Note
23
2010 2009 £'000 £'000
(1,299) 2,105 3,354 3,580
2,055 5,685
(178) 2,116 (13,228) (22,023)
2,914 5,255 651 934
(439) (109)
(I 0,280) (13,827)
(8,225) (8, 142)
RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS' DEFICIT For the year ended 31 March 2010
2010 2009 £'000 £'000
Profit for the financ1al year 2,055 5,685
D1v1dends (note 11) (24,000) (30,000)
Other recogn1sed net gams and losses for the financ1al year {10,280) { 13,827)
Net change m shareholders' deficit (32,225) (38,142)
Openmg shareholders' defiCit {402,914) {364,772)
Closmg shareholders' deficit l435,139l 1402,914l
9
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
BALANCE SHEETS As at 31 March 2010
Group Company 2010 2009 2010 2009
Note £'000 £'000 £'000 £'000 FIXED ASSETS lntang1ble assets 12 156,245 166,350 Tang1bic assets 13 718,542 726,545 Interests m JOmt ventures I4 - share of gross assets I I,874 20,340 - share of gross habllltles (8,8I8) ~I5,I I61
3,056 5,224 Other mvesnnents I4 792 926 337,493 337,493
878,635 899,045 337,493 337,493 CURRENT ASSETS Short term mvestments 14(d) 5,249 8,882 Stocks I5 I,I 75 1,396 Debtors amounts fallmg due w1thm one year 16 138,364 114,116 201,030 I66,228 Debtors amounts fallmg due after more than one year 16 3,523 120,000 120,000 Cash at bank and m hand 49,032 50,181
197,343 174,575 321,030 286,228 CREDITORS: amounts falhng due w1thm one year 17 (274,519) ~258,070) (199,115) (164,267)
NET CURRENT (LIABILITIES)/ ASSETS (77, 176) (83,495) 121,915 121,961
TOTAL ASSETS LESS CURRENT LIABILITIES 801,459 815,550 459,408 459,454
CREDITORS: amounts falhng due after more than one year 18 (1,227,220) (1,217,513) (120,000) (120,000)
PROVISIONS FOR LIABILITIES 20 ( 14,876) (14,230)
NET (LIABILITIES)/ ASSETS EXCLUDING PENSION ASSET (440,637) (416,193) 339,408 339,454
Penston asset 23 5,799 13,759
NET (LIABILITIES)/ ASSETS INCLUDING PENSION ASSET ~434,8381 ~402,4341 339,408 339,454
CAPITAL AND RESERVES Called up share cap1tal 21 337,493 337,493 337,493 337,493 Merger rehef reserve 22 (506,095) (506,095) Protit and loss account 22 (266,537) (234,312) 1,915 1,961
TOTAL SHAREHOLDERS' (DEFICIT)IFUNDS (435,139) (402,914) 339,408 339,454
Mmonty mterests 32 301 480
CAPITAL EMPLOYED (434,8381 (402,4341 339,408 339,454
The financial statements of Peel Ports Shareholder FmanceCo Lumted (company reg1strat10n number 5965116), were approved
A A Barr Drrector
the Board ofDrrectors on 27 July 2010 and s1gned on 1ts behalf by
10
• • •
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
CONSOLIDATED CASH FLOW STATEMENT For the vear ended 31 March 2010
2010 2009 Note £'000 £'000
Cash mflow from operauonal acllVIIles and non-operatmg exceptional ttem 24(a) 94,749 123,275
Dividends from JOint ventures 4,566 2,586 Returns on m vestments and servtcmg of finance 24(b) (50,611) (53,863) TaxatiOn paid (3,737) (I ,920) Capital expenditure and financial mvestment 24(c) (22,939) (39,0 18) AcqUisition and disposals 24(d) 3,656 (196) Equity dividends paid 11 {24,000) {30,000)
Cash ID flow before management of hqmd resources and financiDg 1,684 864
Fmancmg 24(e) {2,556) 9,527
(Decrease)/IDcrease ID cash in the year 25 (872l 10,391
RECONCILIATION OF GROUP CASH FLOWS TO MOVEMENT IN NET DEBT For the year ended 31 March 2010
2010 2009 Note £'000 £'000
(Decrease )/mcrease m cash m the year (872) 10,391 Cash outflow/(mflow) from mcrease m debt financmg 24(e) 24 {11,858)
Change ID net debt resultiDg from cash flows (848) (I ,467) Change m net debt ansmg from finance leases 25 1,590 2,331 Termmatwn payment accrued on mdex-lmked swap (8,826) (3,428) Change m value of unamortised tssue costs 19(c) (3,049) (3,050) Exchange differences 25 {157) 236
Change ID net debt m the year (11,290) (5,378)
Net debt brought forward 25 {I, 157,030) {1,151,652)
Net debt earned forward 19(b), 25 11, 168,320) 11,157,0301
11
. . . PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
ACCOUNTING POLICIES
These financtal statements are prepared under the htstoncal cost convention and m accordance wtth applicable Untted Kmgdom law and accountmg standards A summary of the more unportant Group accountmg poiictes, whtch have been applied conststently throughout the current and precedmg financtal years, ts set out below
Bas1s of preparation
The consolidated balance sheet at 31 March 2010 shows net IIabtiittes of £434,838,000 (2009 £402,434,000) The financtal statements are prepared on a gomg concern basts whtch the dtrectors believe to be appropnate for the followmg reasons
• the dtrectors prepare and update detailed annual budgets, three year htgher level forecasts, and three year strategtc plans Together these show that suffictent resources are avatlable to the busmess and on thts basts the dtrectors contmue to adopt the gomg concern assumptton,
• at the balance sheet date the Group has borrowmgs of£ I ,063,572,000, whtch are subject to covenant restrtcttons The borrowmgs are m place unttl 31 December 2013 No breaches have occurred m the htstoncal penod and the budgets and forecasts prepared by the dtrectors, takmg account of reasonable changes m tradmg performance, mdtcate the Group wtll contmue to comply wtth covenant reqmrements for a penod of at least 12 months from the date of approval of the financtal statements,
• m the year ended 31 March 2010, the reductiOn m turnover m an extremely challengmg economtc envtronment was contamed at £3 ?m or 9 2% £22m of the reductiOn m turnover related to lower margm non-Ports busmess Desptte the reduced turnover the fall m operatmg profit before exceptiOnal ttems was contamed at 2 I% due to a combmatwn of Improved sales mtx and the realised benefit of the Group's restructunng exerctses,
• durmg the two years ended 3 I March 20 I 0 the Group responded to the dtfficult economtc environment by restructunng tts busmess and cuttmg costs Whtlst the opportuntttes for growth m turnover dunng the next twelve months remam constramed, the financtal statements for the year endmg 31 March 2011 wtll show a lower cost base, reflectmg the benefit of the steps taken by the dtrectors,
• cash m flows generated m the year enabled the Group to finance fixed asset addttwns of £25m from cash, together wtth all financmg outflows, resultmg m a margmal year on year reduction m net cash of £0 9m, and
• there are undrawn loan factiittes of £60 mtiiion avatlable to the Group
After makmg enqutnes, the dtrectors have formed a judgment, at the ttme of approvmg the financtal statements, that there ts a reasonable expectatiOn that the Group has adequate resources to contmue m operational extstence for the foreseeable future For thts reason, the dtrectors contmue to adopt the gomg concern basts m preparmg the financtal statements
Group financtal statements
The financtal statements for the year ended 31 March 2007 were prepared under merger accountmg pnnctples applicable for group reconstructiOns set out m FRS6 followmg the merger of the Company and Peel Holdmgs (Ports) Ltmtted Under merger accountmg, the results and cash flows of the Company and Peel Holdmgs (Ports) Ltmtted were combmed from the begmnmg of the financtal penod m whtch the merger occurred All other substdtartes were consolidated under acqutsttton accountmg pnnctples The Group financtal statements consolidate the financtal statements of the Company and tts substdtary undertakmgs made up to 31 March each year
All substdtanes m the year ended 3 I March 20 I 0 are consolidated under acqutsttiOn accountmg prmctples Results of substdtary undertakmgs acqutred or dtsposed of dunng the year are mcluded from the date of acqutstiiOn or to the date of dtsposal to the extent of Group control
12
·. PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
The fmanc~al statements of Peel Holdmgs (Ports) Limited m 2005 were prepared under merger accountmg pnnc1ples applicable for group reconstructiOns set out m FRS6 followmg the merger of Peel Holdmgs (Ports) Limited and Peel Ports Holdmgs Limited Under merger accountmg, the results and cash flows of Peel Holdmgs (Ports) Limited and Peel Ports Holdmgs Limited were combmed from the begmnmg of the financial penod ,n which the merger occuiTed All other subsidianes were consolidated under acquiSitiOn accowltmg pnnc1ples
The Group profit and loss account mcorporates the Group's share of the results of JOmt ventures In the Group balance sheet, the fixed asset m vestment m JOmt ventures represents the Group's share of net assets of those undertakmgs
The separable net assets of subs1d1ary undertakmgs acqmred and accounted for under acqmsition accountmg and JOmt ventures are mcluded m the Group financial statements at their fair value to the Group at the date of acqmsll!on mcludmg prov!Slons and liabilities taken mto consideratiOn m assessmg the fair value of the busmess acqmred
Intra-group turnover and profits are elnmnated on consolidatiOn
As penmtted by SectiOn 400 of the Companies Act 2006, a separate profit and loss account for Peel Ports Shareholder FmanceCo Limited IS not presented The profit for the financial year of the Company was £23,954,000 (2009 £31,931 ,000)
Goodwill
Goodwill ansmg on the acquisitiOn ofsubs1d1ary undertakmgs, representmg any excess of the fair value of the consideratiOn given over the fair value of the Identifiable assets and liabilities acqmred, IS capitalised as an mtang1ble asset and written off to the profit and loss account on a straight I me basis over Its useful economic life, up to a maximum of twenty years ProvisiOn IS made for any 1mpamnent
When the Group has acqmred shares m other compames by the Issue of shares, and the reqUirements of merger accountmg have been satisfied, the Group has ut1hsed the merger relief proviSions available and the Issue of shares has been recorded at the nom mal value, any premmm bemg credited to the merger reserve
Tangible fixed assets
Tangible fixed assets are stated at cost, net of depreciatiOn and any prov!Slon for 1mpanment DepreciatiOn IS provided on all tangible fixed assets at rates calculated to write off the cost, less estimated residual value, of each asset on a straight line basis over Its expected useful economic life as follows
• OperatiOnal bmldmgs at rates varymg between I% and 4% per annum,
• Plant and machmery at rates varymg between I% and 25% per annum,
• Freehold and long leasehold land IS not depreciated except for dredgmg deposit ground bunds which are wntten off accordtng to annual usage,
• No depreciatiOn IS charged on capital work m progress until the assets are available for use On completiOn, such assets are transferred to the appropnate category of tangible fixed assets
Residual value IS calculated usmg pnces preva!lmg at the date of acqu!SltiOn
F1xed asset mvestments
Ftxed asset mvestments m substdtary undertakmgs are stated at cost less provisiOn for Impamnent Cost represents the aggregate cash consideratiOn, costs mcurred and etther the fau value or the nommal value of shares tssued
Investments m JOint ventures are accounted for usmg the gross equity method
Listed mvestments and other mvestments are stated at cost to the Group less proviSIOn for Impairment
Stocks
Stocks are stated at the lower of cost, mcludmg attributable overheads, and estimated net realisable value
13
.. PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
Government grants
Government grants received m respect of capllal expenditure are credited to a deferred m come account and released to the profit and loss account over the useful economic life of the assets to which they relate
Leased assets
Assets acquired under finance leases are capllaiised at a value equivalent to the cost mcurred by the lessor and depreciated over their expected useful economic lives Fmance charges !hereon are charged to the profit and loss account m the period m which they accrue The capllal element of the future lease payments IS reflected wtthm credttors
Expenditure on operatmg leases IS charged directly to the profit and loss account
Fmance costs
Issue costs associated with borrowmgs are charged to the profit and loss account over the term of the borrowmgs and represent a constant proportiOn of the balance of capital repayments outstandmg Accrued finance costs attributable to borrowmgs where the maturity at the date of Issue IS less than 12 months are mcluded m accrued charges w1thm current IIabiillles For all other borrowmgs, accrued finance charges and Issue costs are added to the carrymg value of those borrowmgs
Foreign currenc1es and financl8lmstruments
Assets and habtltues denommated m foretgn currencies, mcludmg overseas mvestrnents, are translated mto sterling at rates applicable at the balance sheet date or forward foreign exchange contract rates as appropriate The results of overseas operatiOns are converted at average rates applicable durmg the period Gams and losses arismg m the ordmary course of bus mess are m eluded m operatmg profit, and those on the translatiOn of assets, ltabthtJes and reserves of overseas compames are shown as a movement on reserves The Group uses forward foretgn exchange contracts to cover certam transactional currency exposures Gams and losses arismg are matched with the underlymg transactiOn bemg covered
Taxation
Current tax IS provided at amounts expected to be paid (or recovered) usmg the tax rates and laws that have been enacted or substanllvely enacted by the balance sheet date
Deferred tax IS recogmsed m respect of all t1mmg differences that have origmated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result m an obligatiOn to pay more, or a nght to pay less or to recetve more, tax, wtth the followmg exceptions
• provtston IS made for deferred tax that would anse on remittance of the retamed earnmgs of overseas subsidiaries, associates and JOint ventures only to the extent that, at the balance sheet date, dividends have been accrued as receivable,
• deferred tax assets are recogmsed only to the extent that the drrectors consider that 11 IS more likely than not that there Will be suitable taxable profits from which the future reversal of the underlymg llmmg differences can be deducted
Deferred tax IS measured on an und1scounted basis at the tax rates that are expected to apply m the penods m which llmmg differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date
Turnover
Turnover IS the revenue ansmg from the sales of goods and services It IS stated at the fair value of the consideratiOn receivable, net of value added tax, rebates and discounts Revenue from the sale of goods and services IS recogmsed when the significant nsks and benefits of ownership of the product have transferred to the buyer or the service has been discharged, which may be upon shipment, completiOn of the product or the product bemg ready for delivery, based on specific contract terms
14
.· PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
2.
Pensmn costs
The cost of the Group's money purchase pension arrangements are charged to the profit and loss account on the basis of contnbut10ns payable m respect of the accountmg penod The Group also operates defined benefit schemes which require contnhutJOns to be made to separately admmtstered funds These have been accounted for under the full requtrements of FRS No 17 "Retirement Benefits" ("FRS 17")
Under FRS 17, the defined benefit scheme assets are measured usmg market values Pens1on scheme hab1httes are measured usmg the projected umt method and are discounted at the current rate of return on a h1gh quahty corporate bond of eqmvalent terrn and currency to the hab1hty Any mcrease m the present value of the Group's defined benefit pens1on scheme hab1ht1es expected to anse from employee serv1ce m the penod IS charged agamst operatmg profit The expected return on the schemes' assets and the mcreases durmg the penod m the present value of the schemes' hab1ht1es ansmg from the passage oft1me are mcluded m other finance mcome Actuanal gams and losses are recogntsed m the statement of total recogntsed gams and losses
The Group recogmses an asset m respect of any surplus, bemg the excess of the value of the assets m the schemes over the present value of the schemes' hab1ht1es, only to the extent that 1t IS able to recover the surplus, e1ther through reduced contnbuuons m the funue or from refunds from the schemes
SEGMENTAL ANALYSIS 2010 2009
£'000 £'000 Turnover Port and canal mcome 230,210 238,107 Sh1ppmg mcome 61,116 81,377 Transport mcome 38,823 48,106 Gross rental mcome 28,497 28,440 Other tradmg mcome 3,823 3,054
362,469 399,084
Dtrect costs (248,403) (283, 152)
Gross profit 114,066 115,932
Admm1strattve expenses PensiOn funds serv1ce costs (note 23) (2,460) (3,725) AmortiSatiOn of goodwill (note 12) (I 0, I 05) (10,105) Excepttonal1tems (note 6) (8,526) (6,411) Other admmtstrattve expenses (28, 142} (27,456}
(49,233} (47,697)
Group operatmg profit before other operatmg mcome 64,833 68,235 Other mcome 296 189
Group operatmg profit 65,129 68,424
Share of operatmg profit m Jotnt ventures 4,624 4,845
Operatmg profit (mcludmg Group's share of JOmt ventures' operatmg profit) 69,753 73,269
Turnover does not mc\ude the Group's share of turnover ansmg from JOmt ventures amountmg to £43,760,000 (2009 £46.129.000)
15
.. PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
2010 2010 2010 2009 2009 2009 Rest of Rest of
UK Europe Total UK Europe Total £'000 £'000 £'000 £'000 £'000 £'000
Turnover by destmauon 290,292 72,177 362,469 304,041 95,043 399,084
Operatmg profit excludmg exceptiOnal Items 72,646 1,009 73,655 74,260 575 74,835
Excepuonal1tems (4,461) (4,065) (8,526) (5, 186) (I ,225) (6,411)
Operatmg profit/(loss) 68,185 (3,056) 65,129 69,074 (650) 68,424
Share of JOmt venture operatmg profit 4,624 4,624 4,845 4,845
Net mterest payable and Similar charges {59,5551 {2581 {59,8131 {60,3491 {3731 {60,7221
Group operatmg profit/(loss) less net mterest payable 13,254 (3,314) 9,940 13,570 i I ,023l 12,547
Profit/(loss) on disposal of mterests m -- Jomt ventures I ,917 - Subsidiary undertakmgs (44&) (\96)
Non-operatmg exceptional Item 164 {1,6921
Profit on ordmary acttvtties before taxation 11,573 10,659
Net (habihtles)/assets !450,&13) 15,975 (434,838l i421,716l 19,282 (402,434l
3. GROUP OPERATING PROFIT 2010 2009
£'000 £'000 Group operatmg profit IS stated after chargmgl( cred1tmg) DeprectatJon - owned assets 30,988 29,546
- leased assets 82& 1,106 Amortisation of goodwill 10, I 05 10,105 Profit on disposal of fixed assets (1,168) (4,045) Hire of plant and machmery under operatmg leases 19,829 29,560 Other operatmg leases 3,9&0 4,157 Losses/(gams) on foreign exchange 900 (1,823) Grant releases 093) (793l
Fees payable to the Company's auditors for the audit of the Company's annual accounts 10 10
Fees payable to the Group's auditors for the audit of the Group's annual accounts 375 362
Fees payable to the Group's auditors for non-audit services -- taxation services 203 215 - corporate finance serviCes 255 15 Total non-audit fees 458 230
16
:· PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
4. EMPLOYEE INFORMATION
The average monthly number of persons employed by the Group durmg the year, dtrectors, was as follows
Admtmstrauon Port operational and mamtenance staff
The staff costs for the above persons were Wages and salanes Socml secunty costs Penston funds servtce costs (note 23) Other penston costs
Group penston schemes - Multt-employer schemes
mc!ustve of exccutt\-e
2010 2009 Number Number
271 302 1,028 1,372
1,299 1,674
2010 2009 £'000 £'000
47,029 58,652 4,359 4,841 2,460 3,725
727 1,043 135 154
54,710 68,415
5 DIRECTORS' REMUNERATION
6.
The remuneratton of the dtrectors of the Group was as follows
Emoluments Group contnbutlon to defined contrtbutton penston schemes
2010 £'000
1,085 126
2009 £'000
1,310 110
1,211 1,420
At 31 March 20 I 0 rettrement benefits are accrumg to one dtrector (2009 one) under a Group defined benefit pens ton scheme and to two dtrectors under a defined contrtbutton scheme (2009 two)
The above analysts excludes the emoluments of dtrectors who are remunerated by undertakmgs outstde of the Peel Ports Shareholder FmanceCo group of compames Those dtrectors are remunerated by entlttes wtthm the wtder Peel Holdmgs group of compames, and have to account m turn to those undertakmgs
The remuneratiOn of the htghest patd dtrector was as follows 2010 2009
£'000 £'000
Emoluments 727 777 Group contnbutton to defined contnbutton penston schemes 100 87
EXCEPTIONAL OPERATING COSTS
2010 2009 £'000 £'000
Restructunng costs 8,526 6,411
Restructurmg expenses compnse redundancy and other costs mcurred m connectiOn wtth the streamhmng and reorgamsatwn of acttvtties as part of a strategtc revtew of the Group's operattons.
17
.. PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
7. PROFIT ON DISPOSAL OF INTERESTS IN JOINT VENTURES
The profit for the year relates pnnc1pally to the sale of the Group's mvestment m the JOint venture V1zag Seaport Pnvate Limited
Proceeds
Share of net assets disposed
Profit on disposal of JOint venture
2010 £'000
3,633
(1,716)
1,917
There was no taxatiOn or mmonty mterest charge or credit applicable to the profit shown above
8. NON-OPERATING EXCEPTIONAL ITEM
2009 £'000
In 200 I, pnor to Its acqmslllon by the Group m September 2005, the Group's subsidiary, Merhn Ports Limited ("Merlm") acqUired from Onent-Express Holdmgs 3 Limited ("Onent"), the Issued share capital of Heysham Port Limited ("Heysharn") After Its acquiSition by Merhn, Heysharn ceased to be a partiCipatmg employer m the Sea Contamers 1990 Pension Scheme ("the Sea Contamers Scheme") Under the sale and purchase agreement, proviSion was made for the possibility of any hab1hty ansmg under the Pensions Act 1995 as a result of Heysham ceasmg to be a participatmg employer m the Sea Contamers Scheme and accordmgly both Sea Contamers Limited and Onent undertook to mdemmfY the Group m relatiOn to any hab1hty ansmg m respect of that scheme
In the year ended 31 March 2009, a letter was received from solicitors actmg for the trustees of the Sea Contamers Scheme cla1mmg that a statutory debt on Heysharn as employer was due to those trustees pursuant to sectiOn 75 of the PenSions Act 1995 Pursuant to the mdemmty, letters were wntten by the directors to Sea Contamers Limited and Onent However, Sea Contamers Limited had taken advantage of Chapter 11 admmistratiOn provisiOns m the Umted States and Onent had been wound up
Based on legal advice received, the Group paid £I ,692,000 m the year to 31 March 2009 m order to mitigate any possible further exposure relatmg to this claim In the year to 31 March 20 I 0, Sea Contamers Limited restructured and emerged from Chapter 11 admmistratwn, 1ssumg a partial diVIdend to Its creditors Net of professiOnal fees associated with the claims brought by and agamst the group, the Group recouped £164,000 of the £I ,692,000 expensed m the year to 3 I March 2009
As the cost d1d not relate to the contmumg or d1scontmued operations of the Group and was more akm to the ongmal transaction for the purchase of Heysham, the charge and subsequent recovery have been treated as non-operattng excepttonalttems
18
..
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
9. NET INTEREST PAYABLE AND SIMILAR CHARGES
Interest payable and Similar charges: Bank loans and overdrafts Amorttsauon of tssue costs 9% subordmated redeemable loan notes
Payable to group undertakmgs Payable to related undertakmgs
Other loans Fmance leases
Share of JOint venture mterest payable
Total mterest payable and similar charges
Interest receivable and Similar mcome: Group mterest receivable and stmtlar mcome Share of JOint venture mterest receivable Total mterest receivable and s1mdar mcome
Other finance mcome (note 23) Expected return on pensiOn scheme assets Interest on pensiOn scheme habthttes
Net mterest and stm1lar Items
2010 2009 £'000 £'000
(46,927) (47,280) (3,049) (3,050)
(5,411) (5,426) (5,389) (5,412)
(997) (2,787) {314) {369)
(62,087) (64,324) {663)
{62,087) {64,987)
618 1,273 IS 115
633 1,388
19,690 21,767 {18,049) {18,890)
1,641 2,877
l59,813l l60,722l
19
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
10 TAX ON PROFIT ON ORDINARY ACTIVITIES
Analysts of charge m year
Current tax: Umted Kingdom UK corporation tax Foretgn tax Corporation tax Other current tax Adjustments m respect of prevmus penods Share of JOmt venture
Total current tax
Deferred tax: Ongmatton and reversal ofummg differences - Unued Kmgdom - foretgn tax Share ofJomt venture
Total deferred tax
Total tax on profit on ordmary achvthes
2010 2009 £'000 £'000
7,504
90
38 1,279
8,911
1,188 (494)
6
700
9,611
2010
4,637
394
(395) 712
5,348
(329) (85)
5
(409)
4,939
2009 Reconcthallon of current tax charge £'000 £'000 The tax assessed for the year IS htgher (2009 htgher) than that ansmg from applymg the standard rate of corporatiOn tax m the UK of28% (2009 28%) The dtfferences are explamed below
Profit on ordmary activities before taxatiOn
Tax at 28% (2009 28%) Short term timmg dtfferences and capital allowances m excess of
deprectatmn Expenses not deductible for tax purposes Excess of book profits over taxable profits on sale of fixed assets Group rehef surrendered/( cla1med) Without payment Adjustments to tax charge m respect ofpnor penods Adjustments m respect of fore1gn tax rates
Total current tax
I L EQUITY DIVIDENDS PAID
lntenm ordmary d1v1dends of £0 071 per share (2009 £0 089 per share)
]] ,573 10,659
3,240 2,985
(310) (1,861) 6,557 5,579 (411) (807)
14 (6) 38 (395)
(217) (147)
8,911 5,348
2010 2009 £'000 £'000
24,000 30,000
20
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
12. INTANGIBLE FIXED ASSETS
Positive goodwill
Group £'000
Cost At I Apnl 2009 and at 31 March 20 I 0 202,108
Amort1satmn At I Apnl 2009 35,758 Charge for the year 10,105
At 31 March 2010 45,863
Net book amount At 31 March 2010 156,245
At 31 March 2009 166,350
13. TANGIBLE FIXED ASSETS
Land and buoldmgs-
freehold Plant and Plant and Capotal and long machmery machmery work m leasehold -owned -leased progress Total
Group £'000 £'000 £'000 £'000 £'000
Cost
At I Apnl 2009 646,389 166,650 19,229 9,305 841,573 Addotoons 2,997 11,018 942 9,658 24,615 Dosposals (7,491) (1,693) (9,184) Transfer from capotal work m progress 8,133 3,875 (12,008) Exchange dofference 163 (1,772) (I) 3 (I ,607)
At 31 March 2010 657,682 172,280 18,477 6,958 855,397
Depreciation
At I Apnl 2009 51,749 60,359 2,920 115,028 Charge for the year 20,966 10,022 828 31,816 Dosposals (7,105) (I ,692) (8,797) Exchange dofference (11) (1,181) (I, 192)
At 31 March 2010 72,704 62,095 2,056 136,855
Net book amount At 31 March 2010 584,978 110,185 16,421 6,958 718,542
At 31 March 2009 594,640 106,291 16,309 9,305 726,545
Non deprecoable land
Included wothm land and bmldmgs IS freehold and long leasehold land, whoch IS not subJeCt to deprecoatoon, m the amount of£ 129,561,000 (2009 £129,000,000)
21
• PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
14. INVESTMENTS
Subs1d1ary undertakmgs (note 14(a)) Jomt venture undertakmgs (note 14(b)) L1sted mvestments (note 14(c)) Unlisted mvestments
(a) Subs1d1ary undertakmgs
Cost At I Apnl 2009 and at 31 March 20 I 0
Group 2010
£'000
3,056 624 168
3,848
Company 2009 2010 2009
£'000 £'000 £'000
337,493 337,493 5,224
624 302
6,150 337,493 337,493
Company £'000
337,493
At 31 March 2010, the Company holds an mvestment m the ent1re share cap1tal of Peel Ports lnterrnedl3te Holdco L1m11ed The 1ssued share cap1tal of that company IS 337,492,988 ordmary shares of £1 each
Deta1ls of mvestments of the Company m 1ts pnnc1pal subs1d1ary undertakmgs and JOIDI ventures are g1ven m note 34
(b) Jomt ventures
At I Apnl 2009 D1v1dends Share of results for the year Reclass•ficat10n of JOmt venture debtor balance Share of actuanalloss on pens ton scheme net of taxes Share of net assets d1sposed Loan repayment Exchange difference
At 31 March 2010
Group £'000 5,224
(4,566) 3,354 1,392 (439)
(1,716) (130)
(63)
3,056
The followmg mforrnat1on IS g•ven m respect of the Group's share of the pnnc1pal JOmt venture Cammell La1rd Sh1prepa1rers & ShipbUilders Limited (note 34)
Group 2010 2009
£'000 £'000
Turnover 42,101 42,300
Profit before tax 4,503 4,507
TaxatiOn (I ,258) (1,009}
Profit after tax 3,245 3,498
Ftxed assets 994 461
Current assets 6,190 7,022
LJabJhtJes due wllhm one year (4,859} (3,837}
Net assets 2,325 3,646
The turnover and net assets of the other JOmt ventures amounted to £I ,659,000 (2009 £3,829,000) and £731,000 (2009 £I ,578,000) respectively
22
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
(c) Listed mvestments
At I Apnl 2009 and at 31 March 20 I 0
Group £'000
624
The aggregate market value of the Group's hsted mvestments based on the closmg m1ddle market pnce on the London Stock Exchange on 31 March 2010 was £586,000 (2009 £648,000) The mark-to-market loss at 31 March 20 I 0 on hsted mvestments has not been recogn1sed by the Group as 1t IS not considered to reflect a permanent dtmmutton m value
(d) Short term mvestments
Short term mvestments compnse £5,249,000 (2009 £8,882,000) of cash held on short term depoSit wh1ch acts as collateral for certam floating rate guaranteed loan notes (note 19(b)) ThiS cash IS only ava1lable for redemption of those floatmg rate guaranteed loan notes
15. STOCKS
Group 2010 2009
£'000 £'000
Raw matenals and consumables I ,175 1,396
There IS no matenal difference between the balance sheet value of stocks and the1r replacement cost
16. DEBTORS
Group Company 2010 2009 2010 2009
£'000 £'000 £'000 £'000 Amounts falhng due w1thm one year: Trade debtors 53,224 53,404 Amounts owed by group undertakmgs 70,798 46,498 201,028 166,228 Amounts owed by related compames 236 267 Other debtors 2,410 3,302 2 Prepayments and accrued mcome 10,702 10,289 CorporatiOn tax recoverable 994 356
138,364 114,116 201,030 166 228 Amounts falhng due after more than one year Amounts owed by Group undertakmgs 120,000 120,000 Prepayments and accrued mcome 3,523
141,887 114,116 321,030 286,228
Amounts owed by Group undertakmgs falhng due after more than one year relate to a loan made to a subs1d1ary undertakmg The loan bears mterest at 9% per annum and 1s repayable m full on 30 September 2046
23
.. •
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
17. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Group 2010 2009
£'000 £'000
Bank loans and overdrafts 4 52 Floatmg rate guaranteed loan note mstruments 5,249 8,882 Fmance leases 2,031 2,290
Debt falling due Wlthm one year (note 19) 7,284 11,224 Trade cred1tors 27,059 18,039 Amounts owed togGroup undertakmgs 163,741 139,591 Amounts owed to related compames 296 88 CorporatiOn tax 8,889 4,961 TaxatiOn and soc1al secunty 3,677 3,870 Other creditors 13,744 12,300 Accruals and deferred mcome 49,038 67,204 Government grants 791 793
274,519 258,070
18 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Group 20IO 2009
£'000 £'000
Bank loans 1,058,103 I ,055,054 Terrnmat10n payment accrued on mdex-IInked swap 30,766 21,941 9% subordmated redeemable loan notes due to group
undertakmgs 60,120 60,120 9% subordmated redeemable loan notes due to related
undertakmgs 59,880 59,880 Other loans 4,137 4,160 Fmance leases 2,311 3,714
Debt falling due m more than one year (note 19) I ,215,317 I ,204,869 Government grants 9,874 10,614 Other cred1tors 2,029 2,030
1,227,220 1,217,513
Company 2010 2009
£'000 £'000
193,700 158,852
5,415 5,415
199,115 164,267
Company 2010 2009
£'000 £'000
60,120 60,120
59,880 59,880
120,000 120,000
120,000 120,000
24
• ,. ..
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
19. LOANS AND OTHER BORROWINGS
(a) Fmanctal habllthes Bank overdrafts Bank loans Temunatton payment accrued on mdex-hnked swap 9% subordmated redeemable loan notes 2046
Due to group undertakmgs Due to related undertakmgs
Floatmg rate guaranteed loan note mstruments 2008 Floatmg rate guaranteed loan note mstruments 20 15 3% trredeemable loan stock 3 625% trredeemable debenture stock Perpetual debenture stocks Fmance lease obhgatwns
(b) Analysts of Group net debt Fmanctal habthttes falhng due wtthm one year Fmanctal habthttes falhng due after more than one year
Total financtal habthhes Cash at bank and m hand Short term depostts held as guarantee agamst Floatmg rate guaranteed loan note mstruments (note 14(d))
Group net debt
(c) Maturtty offinanctal habthttes
Net obhgattons under finance leases are payable as follows: In one year or less In more than one year, but not more than two years In more than two years, but not more than five years
Maturtty of other financtal habthltes: In one year or less or on demand In more than two years, but not more than five years In more than five years not by mstalments
Fmancial habll1hes, net of unamortised 1ssue costs and finance charges allocated to future perwd
Unamortised 1ssue costs
Group 2010 2009
£'000 £'000
4 52 1,058, I 03 1,055,054
30,766 21,941
60,120 60,120 59,880 59,880
13 55 5,236 8,827 1,176 I, 199
728 728 2,233 2,233 4,342 6,004
1,222,601 I ,216,093
7,284 11,224 I ,215,317 1,204,869
1,222,601 1,216,093 (49,032) (50,181)
(5,249) (8,882)
1,168,320 1,157,030
2,031 2,290 1,038 1,421 1,273 2,293
4,342 6,004
5,253 8,934 1,058,103 I ,055,054
154,903 146,101
1,218,259 1,210,089
1,222,601 1,216,093
5,469 8,518
Fmanctal habthttes mclude bank loans of £1,063,572,000 (2009 £1,063,572,000) and overdrafts of £4,000 (2009 £52,000) whtch are secured by a fixed legal charge on certam freehold properttes and mvestments and by a floatmg charge over all other assets of certam Group compantes both present and future A cross corporate guarantee extsts between certam Group compames m respect of secured borrowmgs Bank loans dtsclosed wtthm "Credttors amounts falhng due after more than one year" are due for repayment on 3 I December 20 13
25
.. PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
The bank loans bear mterest at LIBOR plus applicable margm At 31 March 2010, mterest on £594,000,000 (2009 £594,000,000) of these loans was fixed by an mterest rate swap at 4 469% plus margm, and mterest on £18,000,000 (2009 £ 18,000,000) of these loans was fixed by an mterest rate swap at 3 93% plus margm The fatr value calculated m respect of the swap of £594,000,000 at 31 March 2010 was a habthty of £47,746,000 (2009 £76,821 ,000) and the fatr value calculated m respect of the swap of £18,000,000 was a gam of £79,000 (2009 loss £422,000) The movement m the farr value of the mterest rate swaps reflects the revised expectatiOns of long term mterest rates followmg the global economic downturn
At 31 March 20 I 0, mterest on £343,000,000 (2009 £343,000,000) of bank loans was offset by an mdex-lmked swap under which the Group receives a floatmg rate of mterest of LIBOR plus margm and pays an Int!Ial rate of mterest of 2 3115%, which mcreases overthe term of the swap by the movement m the UK Retail Pnces Index ("UKRPI'') In addition a sum IS payable on termmauon, which IS also determmed by the movement m the UKRPI over the term of the swap At 31 March 2010 mterest on £9,000,000 (2009 £9,000,000) was offset by a further mdex-lmked swap under which the Group receives a floatmg rate of mterest of LIBOR plus margm and pays an miilal rate of mterest of I 65%, which mcreases over the term of the swap by the movement m the UKRPI, also with a sum payable on termmatiOn, determmed by the movement m the UKRPI over the term of the swap The fair value hab1hty of the mdex-hnked swaps mcreases over time to reflect the nature of the cash flows over the hfe of the swap, under which the Group receives a s1gmficant benefit m the early years which reduces as the UKRPI moves over time In addition the faiT value of the mdex-hnked swaps reflects movements m expectatiOns of long term mterest and mflat1on rates To the extent that the movement m the RP! m the penod to 31 March 20 I 0 has resulted m an amount payable on termmatwn of the swap, then provisiOn has been made m the financial statements At 31 March 2010, this amounted to £30,766,000 (2009 £21,941 ,000) At 31 March 2010, the faiT value calculated m respect of the swap of £343,000,000 was a hab1hty of£ 150,747,000 (2009 £156,213,000), which mcludes the termmatwn accrual of£30,766,000 detailed above The faiT value of the swap of £9,000,000 was a hab1hty of £1,414,000 (2009 £1 ,577,000) The movement m the faiT value of the mdex-lmked swaps also reflects the revised expectatiOns of long term mterest rates followmg the global economtc downturn
The mterest rate and RP! swaps are thirty year mstruments which contam mandatory early termmatiOn dates of 31 December 2013 The Group negotiated thirty year mstruments as the diTectors antiCipated usmg LIBOR based debt structures for at least that penod of time and they Wished to protect the Group's exposure to movements m mterest rates for the full thirty years The diTectors negotiated the mandatory early termmatwn dates so the Group would not be bound to the current hedgmg counterpart1es beyond 3 I December 2013 The diTectors anticipate replacmg the ex1stmg bank loans with similar fundmg on or before 3 I December 2013 and novatmg the mterest rate and RP! swap mstruments as part of the financmg exercise The diTectors anticipate rollmg up any positive or negative faiT value m existence at the refundmg date as part of the novation process This faiT value adjustment would be amortised over the remammg hves of the swap mstruments Consistent wtth accountmg reqmrements no fatr value of the denvattves IS recogmsed
At 31 March 20 I 0 the Group had also entered m to basis swap arrangements With a notional value of £964,000,000 (2009 624,667,000) under which 11 exchanges I month and 3 month LIBOR mterest rates The faiT value calculated m respect of these basis swaps was a hab1hty of £606,000 (2009 £3,075,000) reflectmg swap payments due after the year end
The 9% subordmated redeemable loan notes were ISSued to Peel Ports Holdmgs (!OM) Limited and to Infrastructure JVCo (Lime) S A R L at par m the year ended 3 I March 2007 Durmg the year the new loan notes were ISSued to the ex1stmg loan note holders m the same prmc1pal amount as those Issued m 2007 The consideration for the new loan notes was the surrender of the ongmal loan notes The new loan notes have Identical terms mcludmg a final repayment date of 30 September 2046 Interest IS payable bt-armually m arrears
The floatmg rate guaranteed loan note mstruments 2008 and 2015 are guaranteed by The Royal Bank of Scotland plc and Bank of Scotland plc respectively The floatmg rate guaranteed loan note mstruments 2015 bear mterest based on LIBOR and are redeemable at par on demand of the holder on any mterest payment date pnor to and mcludmg the final matunty date of 30 September 2015 The floatmg rate guaranteed loan note mstruments 2008 remam due but unpaid m relatiOn to unclaimed loan notes
The perpetual debenture stocks are secured by floatmg charges over the undertakmg of The Manchester Sh1p Canal Company and bear mterest at rates between 3 5% and 4%
26
. -••
.. PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
20
21.
The 3% Irredeemable loan stock tssued by Clydeport OperatiOns Ltmtted has no fixed redemptiOn dates and can only be redeemed wtth the agreement of the respective stockholders Stockholders have no nght to demand redemptiOn
The 3 625% Irredeemable debenture stock IS secured by a fixed charge over certam secunttes and a floatmg charge over Peel Ports (lDS) Limited
Fmance lease obhgattons are secured on the assets to whtch they relate (note 13)
PROVISIONS FOR LIABILITIES
Deferred Group TaxatiOn
£'000
At I Apnl 2009 14,230 Charge to profit and loss account 694 Exchange difference (48}
At 31 March 2010 14,876
Provision for deferred tax compnses 2010 2009 £'000 £'000
Accelerated capttal allowances 17,451 16,247 Other ttmmg differences (2,575} (2,017}
14,876 14,230
CALLED-UP SHARE CAPITAL
Group Group Company Company 2010 2009 2010 2009
£'000 £'000 £'000 £'000 Authortsed
500,000,000 ordmary shares of£ I each 500,000 500,000 500,000 500,000 Allotted and fully patd
337,492,988 ordmary shares of £1 each 337,493 337,493 337,493 337,493
27
.. •
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
22. RESERVES
Group
At I Apnl 2009 Net exchange adJUStments Profit for the financial year D1v1dends Actuarial loss relatmg to the penswn fund (note 23) Movement on tax relatmg to pens1on surplus Actuanalloss relatmg to JOint venture penston schemes
At 31 March 2010
Merger reserve
£'000
(506,095)
(506,095)
Profit and loss account Total
£'000 £'000
(234,312) (740,407) (178) (178)
2,055 2,055 (24,000) (24,000) (13,228) (13,228)
3,565 3,565 (439} (439}
~266,537) ~722,632)
The merger reserve arose as a result of the reconstructiOn of the Group m 2005 when Peel Holdmgs (Ports) Limited and Peel Ports Holdmgs L1m1ted merged and subsequently m the year ended 31 March 2007 when the Company merged With Peel Holdmgs (Ports) L1m1ted The merger accountmg pnnc1ples set m FRS6 were apphed to these Group reconstructions
Company
At I Apnl 2009 Profit for the financial year DIVIdends
At 31 March 2010
23. PENSION FUNDS
Defined contnbuhon schemes
Profit and loss account
£'000
1,961 23,954
(24,000}
1,915
The Group operates a number of money purchase penswn schemes prov1dmg benefits based on actual contnbut1ons pa1d m the Umted Kmgdom and the Repubhc of Ireland The assets of the schemes are held separately from the assets of the Group and are admm1stered by trustees and managed professiOnally The contnbut1ons of the Group var1ed between 2% and 25% (2009 var1ed between 2% and 25%) of penswnable salar1es for the financial year Group contnbuuons to money purchase penswn schemes match those pa1d by employees to a max1mum of 6% Contnbutwns totallmg £727,000 were pa1d dunng the year (2009 £I ,043,000)
Group defined benefit schemes
The Group also operates a number of defined benefit penswn schemes m the Umted Kmgdom and The Netherlands based on final pensiOnable pay The mam defined benefit pensiOn scheme IS based m the Umted Kmgdom and represents 98% of the total hab1ht1es m the Group's defined benefit penswn schemes The assets of the schemes are held separately from the assets of the Group and are admm1stered by trustees and managed professiOnally
Contnbutwns of the Group to the defined benefits penswn schemes are based on penswn costs across the Group as a whole The contnbutwns are determmed by a quahfied actuary on the bas1s of tnenmal valuat1ons usmg the proJected umt method The most recent actuanal valuatwns are at Apnl 2009
28
.. •
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
Contnbutwns totallmg £3,173,000 were patd durmg the year (2009 £4, 182,000) The contnbutions of the Group to the defined benefits pension schemes vaned between 12 0% and 28 7% of pensiOnable salanes The contnbutwns made by employees to the defmed benefits pensiOn schemes varied between 5% and 9% of pensiOnable salaries
The mam assumptions m the actuarial valuatiOn as at Apnl 2009 were that long-term mvestment rates would be 7 0% per annum pre retirement and 4 75% per armum post retirement, pensiOnable salary mcreases would be 2 8% per annum, the maJonty of pensions m payment would mcrease at a rate of between 2 8% and 3 3% per annum, and pnce mflatiOn would be 2 8% per annum As at the latest actuanal valuation, the value of the assets was enough to cover between 78% and 88% of the benefits that had accrued to members, after allowmg for expected future mcreases m eammgs
As at 3 I March 20 I 0, the assets of the defmed benefit pensiOn schemes were valued at £365 milhon (2009 £295 million)
Group contributions for the defined benefit pensiOn schemes for the year endmg 3 I March 2011 are expected to be m the regiOn of £5 7 million
The most recent actuarial valuations were updated to 3 I March 20 I 0 by qualified actuaries These valuatwns used a set of assumptions consistent with those required under FRS 17 The maJor assumptiOns used by the actuanes are set out below
MaJor actuanal assumptiOns
Rate of m crease m pensiOnable salanes Rate of m crease of pensiOns m payment Rate of m crease for deferred pensioners Discount rate InflatiOn
Mortality Current pensiOners Actuanal tables used
Male life expectancy at age 65
Future pensiOners Actuanal tables used
Male ltfe expectancy at age 65 (currently aged 45)
31 March 2010
0/o pa
3 60 3 60 3 60 5 50 3 60
I I 0% SAPS tables, birth year, With medmm cohort
Improvements and a I% underpm*
20 6 years
110% SAPS tables, birth year, wtth medmm cohort Improvements and a I%
underpm
22 5 years
31 March 2009
0/o pa
4 00 2 75 2 75 6 75 2 75
PMA92/PFA92 tables, birth year, with medium
cohort Improvements and a +4 year age ratmg
18 8 years
PMA92/PFA92 tables, btrth year, with medmm
cohort Improvements and a +4 year age ratmg
19 7 years
The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions whtch, due to the ttmescale covered, may not necessanly be borne out m practtce
*An adJUStment of 120% (mstead of 110%) was applied m settmg the mortality assumption adopted for the Clydeport section of the mam defined benefit pension scheme
29
.. PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
Changes m the present value of the defined benefit hab1htoes are as follows
Openmg defmed benefit hab1hty Current servtce cost Interest cost Employee contnbutwns Actuanallosses/(gams) on scheme hab1l111es Fore1gn currency exchange rate changes Benefits pa1d Past servtce cost Curtailments and settlements
Closmg defined benefit hab1hty
Analys1s of the defined benefit obhgatwn:
Present value of unfunded hab1ht1es Present value of funded hab1l1t1es
Reconc1hahon of fa1r value of scheme assets
Openmg fa1r value of scheme assets Expected return on scheme assets Actuanal gams/(losses) on scheme assets Fore1gn currency exchange rate changes Contnbutwns by the Group ContributiOns by employees Benefits pa1d
Closmg fau value of scheme assets
Amounts to be recogmsed m the balance sheet
Present value of funded 11ab1htles Fatr value of scheme assets
Present value of unfunded hab1ht1es Recogn1sable asset before deferred taxatiOn Deferred taxatiOn
Amount recognised m the balance sheet
Group 2010
£'000
275,681 2,860
18,049 1,076
80,127
(20,712) 37
(437)
356,681
Group 2010
£'000
1,628 355,053
356,681
Group 2010
£'000
294,790 19,690 66,899
3,173 1,076
(20,712)
364,916
Group 2010
£'000
(355,053) 364,916
9,863 (I ,628) 8,235
(2,436)
5,799
Group 2009
£'000
297,851 3,816
18,890 1,368
(25,602) 165
(20,716) 230
(321)
275,681
Group 2009
£'000
1,608 274,073
275,681
Group 2009 £'000
350,225 21,767
(62, 123) 87
4,182 1,368
(20,716)
294,790
Group 2009
£'000
(274,073) 294,790
20,717 (I ,608) 19,109 (5,350)
13,759
30
.. PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
Amount to be recogmsed m the profit and loss account
Current serv1ce cost Interest cost Expected return on scheme assets Past servtce cost Gams on curtailment and settlements
Total expense
Cumulative amount of actuanal gams and losses recogmsed m the statement of total recogmsed gams and losses smce adoplton of FRS 17:
Openmg cumulattve
Actuanal (losses)/gams on scheme habthttes Actuanal gams/(losses) on scheme assets Irrecoverable surplus Movement m the year
Closmg cumulattve
Plan assets Fa1r value
of assets 31 March
2010 £'000
31 March
Equtttes Ftxed Interest Gtlts Index Lmked Gtlts Corporate Bonds Cash and msured schemes
Total market value of assets
172,734 16,777 28,918
140,701 5,786
364,916
2010 %
47 5 8
39 I
lOO
Expected rate of Fatr value return of assets
31 March 31 March 2010 2009
% £'000
8 50 122,241 4 50 56,179 4 50 26,162 5 50 85,243 0 50 4,965
6 70 294,790
Group Group 2010 2009
£'000 £'000
2,860 3,816 18,049 18,890
(19,690) (21,767) 37 230
(437) (321) 819 848
Group Group 2010 2009
£'000 £'000
(4,560) 17,463
(80, 127) 25,602 66,899 (62,123)
14,498 (13,228) (22,023)
(17,788) (4,560)
Expected rate of return
31 March 31 March 2009 2009
% %
41 8 50 19 3 80 9 3 80
29 6 75 2 0 50
lOO 6 55
The overall expected return on assets ts calculated as the wetghted average of the expected returns on each mdtvtdual asset class The expected returns are set by reference to market mdtcators, mcludmg pnce mflatwn, dtvtdend ytelds, economtc growth, ytelds on mdex hnked gtlts and bonds and mterest rates The actual return on plan assets was a gam of £86,588,000 (2009 loss £40,356,000)
31
.. PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
Group Htstory of experoence gams and losses 2010
£'000
Present value of defined benefit habthty (356,681) Fair value of scheme assets* 364,916 Surplus 8,235
Experoence (losses)/gains on scheme hab1ht1es and changes m assumptions :
Amount (80, 127) Percentage of present value of scheme
habohtoes (22 5%) Dtfference between expected and actual return on scheme assets
Amount 66,899 Percentage of scheme assets 183%
Group 2009
£'000
(275,681) 294,790
19,109
25,602
93%
(62, 123) (21 1%)
Group Group Group 2008 2007 2006
£'000 £'000 £'000
(297,851) (334,469) (333,616) 350,225 355,846 348,530
52,374 21,377 14,914
42,533 3,498 (14,596)
143% 10% (4 4%)
(16,626) (5,351) 32,066 (4 7%) (I 5%) 92%
• The faor value of scheme assets os shown at btd value at 31 March 20 I 0 and 2009 and at mod-market value at all other dates
The sensittvttJes regardmg the prmcipal assumptions used to measure the scheme habthttes are set out below
Assumption
Dtscount rate lntlatton Rate of mcrease m pensionable salanes Mortality
lndustry-wtde schemes
The Former Regostered Dock Workers Pensoon Fund ("FRDWPF")
Change m Impact on assumptiOn scheme
habtltttes
+/- 0 5% -7%/+7% +/- 0 5% +5%/-5% +/- 0 5% +1%/-1%
+I year +3%
The FRDWPF os an mdustry wode defined benefits penston scheme As at 5 Apnl 2007, the date of the most recent valuatoon earned out by an mdependent actuary, the scheme had assets woth a market value of £868 mtlhon There was a fundmg rauo of I 07 6% and a net fundmg ratoo of I 05 9% after allowance was made for deficots ansmg from future contnbutoons As at 5 Apnl2007, approxomately 20% of the scheme's assets were mvested m equities, 78% m bonds and 2% m cash The valuatiOn assumptions adopted by the actuary at the ttme of the most recent valuatiOn were as follows
lntlatoon Rate of mcrease of pensoonable salartes Rate of mcrease for penswns m payment Rate of mcrease for deferred pensoons Discount rate Expected return on pI an assets
%
3 2 42 3 0 32 47 50
Because the Group tS unable to tdenttfy tts share of the scheme assets and habthttes on a conststent and reasonable basts, as perrmtted by FRS 17 'Retorement benefits', the scheme ts accounted for by the Group as tf the scheme was a defined contrtbutton scheme, the cost recogmsed wtthm the profit and loss account bemg equal to the contnbutoons payable to the scheme for the year
32
.. PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
Dunng the year the Group made contnbutwns of£ I 0,000 (2009 £29,000) to th1s scheme m relatiOn to Its current active members and has recorded those as defined contnbut10n costs w1thm the profit and loss account
Merchant Navy Officers Pensmn Fund ("MNOPF")
The MNOPF IS an mdustry w1de defined benefit penswn scheme The scheme IS d1v1ded mto two sectwns, the Old SectiOn and the New Section, both of wh1ch are closed to new members The most recent valuatwn for each section was camed out on 31 March 2009 As at 31 March 2009, the Old Sect1on had assets of£1,113 m1lhon, representmg 89% of the benefits accrued to members, wh1lst the New SectiOn had assets of £I ,54 7 m1lhon, representmg 68% of the benefits accrued to members as at that date Followmg the prevwus valuatiOn, the trustees undertook court proceedmgs to determme wh1ch employers were hable for the past-serviCe defiCit for the New Section In 2005, the court established wh1ch employers were hable for the past-serv1ce deficit and the trustees adopted an allocation conSIStent w1th the court rulmg The valuatiOn assumptiOns adopted by the actuary were as follows
lnflatwn Rate of mcrease for pens tons m payment Dtscount rate - mvestment return on extstmg assets
Pre-rettrement - Post-retirement
Old Section %
3 0
45
New Sectwn %
30 30
7 25 4 75
Dunng the year, the Group made contnbutwns of £125,000 (2009 £125,000) m relatwn to the past-serv1ce defic1t The Group has no current act1ve members m th1s scheme
Because the Group IS unable to 1denllfy Its share of the scheme assets and habll1t1es on a consistent and reasonable bas1s, as permitted by FRS 17 'Retuement benefits', the scheme IS accounted for by the Group as 1f the scheme was a defined contributiOn scheme, the cost recogmsed w1thm the profit and loss account bemg equal to the contnbutwns payable to the scheme for the year
The P1Iots National Penswn Fund ("PNPF")
The PNPF IS an mdustry-w1de defined benefit scheme The most recent actuarml valuatiOn, performed by an mdependent actuary, IS as at 31 December 2004 As at that date, the scheme had assets w1th a market value of £339 m1lhon, representmg 76% of the benefits accrumg to members after allowmg for future mcreases The most recent updated valuatiOn available from the scheme actuary IS at 31 December 2006 The value of the fund had mcreased to £350 m1lhon Approximately 32% of the scheme's assets were mvested m eqUities, 45% m bonds, With the balance bemg held m hedge funds and m cash The valuatiOn assumptiOns adopted by the actuary were as follows
InflatiOn Rate of mcrease of pensiOnable salar1es Rate of mcrease for pensions m payment Rate of mcrease for deferred penswns Dtscount rate Expected return on plan assets
Pre-rettrement - Post-rettrement
%
2 90 3 90 2 75 2 75 4 70
7 90 4 80
33
• .. ' . PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
The scheme rules have not h1stoncally provided a mechamsm for the allocatiOn of past-service deficits A number of different legal opmwns have been Issued concernmg th1s scheme However the Group has been unable to determme Its share of the past-service deficit on a reasonable and consistent basis In pnor years, the partiCipatmg bodies for this scheme had agreed a voluntary arrangement to mcrease contributions m order to reduce the deficit Based on legal advice the directors agreed to make voluntary contnbutions m respect of the Group's share of past-service deficit totalling £3,524,000 payable m mstalments over a 5 year penod from I Apnl2006
In the year ended 31 March 2008, the pensiOn fund trustees Imllated legal proceedmgs agamst all partiCipatmg employers as a means to obtam further contributiOns to fund the deficit As a result, all former voluntary payment plans have lapsed Durmg the year, the Group did not make any voluntary contnbutwns (2009 £ml) to this scheme
Smce the balance sheet date, a court JUdgment has been tssued m favour of the trustees However, as at th1s lime, the Group has not yet been able to assess the Impact of this In the absence of an agreement on the allocatiOn of the past-service deficit, the Group IS unable to determme Its share of assets and habihties for this scheme on a consistent and reasonable basis, as permitted by FRS 17 'Retrrement benefits', the scheme IS accounted for by the Group as If the scheme was a defined contribution scheme, the cost recognised With m the profit and loss account bemg equal to the contributiOns payable to the scheme for the year
24. NOTES TO THE GROUP CASH FLOW STATEMENT
(a) ReconciliatiOn of operatmg profit to net cash mflow from operating activities
Contmmng achv1hes Group operatmg profit Difference between pensiOn charge and cash contnbutwns Depreciation and amounts wntten offtangtble fixed assets Release of grants to mcome AmortisatiOn of goodwill Exchange differences Profit on disposal of fixed assets Decrease m stocks (Increase )/decrease m debtors (Decrease )/m crease m creditors Net cash m flow from conhnumg operatmg achvthes excludmg amounts due
from group undertakmgs Increase/( decrease) m short term loans to group undertakmgs
Total net cash mflow from contmumg operatmg acllviiies Total net cash mflow/(outflow) from non-operatmg exceptiOnal Item (note 8)
Cash m flow from operatiOnal act•v•hes and non-operatmg excephonal•tem
(b) Returns on mvestments and serv1cmg of finance Interest recetved Interest paid Fmance lease mterest paid
2010 £'000
65,129 (714)
31,816 (793)
10,105 (203)
(1,168) 217
(4,380) (9,941)
90,068 4,517
94,585 164
94,749
619 (50,916)
(314)
(50,611)
2009 £'000
68,424 (457)
30,652 (793)
10,105 85
(4,045) 214
25,764 14,676
144,625 (19,658)
124,967 (I ,692)
123,275
1,273 (54,767)
(369)
(53,863)
34
• .. PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
(c) Capital expenditure and financialmvestment
AcqmsttlOn of m vestments Repayments by JOint venture undertakmgs Payments to acqmre tangible fixed assets Receipts from government grants Receipts from sales of tangible fixed assets
(d) AcqmSihons and diSposals Outflow from disposal of mterests m subsidiary undertakmgs Proceeds from disposal of mterest m JOint venture
(e) Fmancmg New loans from third party undertakmgs Cash on short term deposit available only for redemptiOn of floatmg rate
guaranteed loan notes
25.
26.
Repayment ofloans from third party undertakmgs Capital element of finance lease rentals
ANALYSIS OF MOVEMENT IN GROUP NET DEBT
As at I April
2009 £'000
Cash at bank 50,181
Overdrafts (52)
50,129
Debt due withm one year (8,882) Debt due after one year (1,20 1,1 SS) Fmance leases (6,004) Cash on short term deposll available only for redemption of floatmg rate guaranteed loan notes (note 14( d)) 8,882
(1,207,1 59)
(1,157,030)
MAJOR NON CASH TRANSACTIONS
Cash flow £'000
(920)
48
(872)
24 2,532
2,556
1,684
2010 2009 £'000 £'000
(85) (82) 130
(24,590) (43,296) SI 112
1,555 4,248
(22,939) (39,0 18)
(196) 3,656
3,656 (196)
25,000
66 (24) (13,208)
(2,532) (2,331)
(2,556) 9,527
Other As at non-cash Foreign 31 March changes Exchange 2010
£'000 £'000 £'000
(229) 49,032
(4)
(229) 49,028
3,633 (5,249) (11,875) (1,213,006)
(942) 72 (4,342)
(3,633) 5,249
(12,817) 72 (1,217,348)
(12,817) (157) (1,168,320)
Durmg the year the Group entered mto finance lease arrangements m respect of assets With a total capttal value at the mcepllon of the lease of £942,000 (2009 £ntl)
27. CAPITAL COMMITMENTS 2010 2009
£'000 £'000
Capttal expendtture contracted for but not provtded for m these financtal statements 5,409 1,427
35
•
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
28. RELATED PARTY TRANSACTIONS
Related Party
Joint ventures
Cammell Latrd Shtprepatrers & Shtpbutlders Ltmtted
CL YDEBoyd Fort Wtlharn Ltmtted
Estuary Servtces Ltmtted
Fresh Frutt Termmal (Sheerness) Ltmtted • Vtzag Seaport Pnvate Ltmtted
TransactiOn
Sales
Purchases
Dtvtdend recetved
Rent received and serv1ces provtded
Repayment of loan
Sales and recharge of expenses
Purchases
Rent recetved and recharge of expenses
Management fees recetved
Enttties m the Peel Ho/dmgs group of compames
2010 2009 £'000
570
(473)
4,566
75
130
217
(934)
133
£'000
516
(625)
2,586
50
270
(1,433)
860
58
The followmg summartses the transactiOns dunng the year between enttttes m the Peel Ports Group and other dtvtstons of the Peel Holdmgs group of compames The other dtvtstons of Peel Holdmgs are headed by the followmg enttttes
Peel Holdmgs Land & Property (UK) Ltrntted
Peel Holdmgs (Energy) Ltrntted
Peel Property Partnershtp
Peel Ports Holdmgs (!OM) Ltrntted
Sales and expenses recharged
Purchases, rent and expenses retmbursed
Acqutsttton of land
Group rehef
Ftxed asset dtsposal
Sales
Purchases
Recharge of expenses
Expenses reimbursed
1,479 2,165
(1,486) (1,040)
(430)
300
216 3,000
37 57
(17)
228
(195)
Detatls of ordmary dtvtdends patd to the trnmedtate holdmg company, Peel Ports Holdmgs (Cl) Ltmtted, are dtsclosed m the dtrectors' report
• On 20 January 2009 Fresh Frutt Term mal (Sheerness) Ltmtted reverted to I 00% ownershtp by Capespan Ltrntted The amounts dtsclosed above are for the full year ended 31 March 2009
36
• . -PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
At the balance sheet date the followmg s1gmficant amounts were owed by I (due to) related parties
2010 Related Party £'000
Jomt ventures
Cammell Lmrd Sh1prepa1rers & ShipbUilders L1m1ted 71
Estuary Serv1ces L1m1ted (81)
Fresh FrUit Termmal (Sheerness) L1m1ted
CL YDEBoyd Fon W1lham L1m1ted 36
Entitles in the Peel Holdmgs group of compames
2009 £'000
57
129
130
The followmg summanses the year end balances between entitles m the Peel Pons Group and other diVISions of the Peel Holdmgs group of compames The other diVISions of Peel Holdmgs are headed by the followmg enhtJes
Peel Holdmgs Land & Propeny (UK) L1m1ted
Peel Holdmgs (Energy) L1m1ted
Peel Holdmgs (Glasgow Harbour) L1m1ted
Peel Pons Holdmgs (!OM) L1m1ted
Bndgewater Canal Trust
4
39
4,309
51
(9)
(29)
150
Included m accruals and deferred mcome IS accrued mterest of £2,687,000 (2009 £2,687,000) payable to Infrastructure JVCo (L1me) SarI and £2,698,000 (2009 £2,698,000) payable to Peel Pons Holdmgs (!OM) L1m1ted
29 OTHER FINANCIAL COMMITMENTS
At 31 March 20 I 0, the Group had annual commitments under non-cancellable operatmg leases as follows
Land and Land and bulldmgs Other bulldmgs Other
2010 2010 2009 2009 Group £'000 £'000 £'000 £'000
Expmng w1thm one year 15 7,107 15 5,21 I Expmng between 2 and 5 years mclusiVe 4,768 7,242 Expmng after 5 years 1,325 2,656 1,637
1,340 I I ,875 2,671 14,090
The Company has no annual comm1t1nents under non-cancellable operatmg leases
37
.-PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
30. ULTIMATE AND IMMEDIATE HOLDING COMPANY
The directors regard Tokenhouse Limited, a company mcorporated m the Isle of Man, as the ultimate holdmg company and Peel Ports Holdmgs (Cl) Limited, a company registered m the Cayman Islands, as the Immediate parent company
3I ULTIMATE CONTROLLING PARTY
32
33
Tokenhouse Limited IS controlled by The 1997 Bdlown Settlement Trust By VIrtue of Its controlling mterest m Peel Ports Holdmgs (Cl) Limited and the maJonty votmg power held by the directors appomted by Its Immediate parent undertakmg, Peel Ports Holdmgs (!OM) Limited, the Company considers The 1997 BIIIown Settlement Trust to be the ultimate controlling party
MINORITY INTERESTS
£'000
At I Apnl 2009 480
Profit and loss account (93)
Net exchange adjustments (86)
Eqmty mmonty mterest at 31 March 2010 301
SUBSEQUENT EVENTS
On I June 20 I 0 the Group disposed of 35% of Its mterest m Port1a Management Services Limited for proceeds of£963,000 resultmg m a gam of£761,000
38
.....--
PEEL PORTS SHAREHOLDER FINANCECO LIMITED
NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2010
34. PRINCIPAL SUBSIDIARY UNDERTAKINGS AND JOINT VENTURES
Subs1d1ary undertakmgs
The pnnc1pal subs1d1ary undertakmgs consolidated at 3 I March 2010, all of wh1ch were wholly-owned, were as follows
Country or mcorporahon Subs1d1ary
Great Bntam Ardrossan Harbour Company L1m1ted Great Bntam B1rkenhead Port L1m1ted The Netherlands B G Fretght Lme Holdmg B V Great Bntam Clydeport Ltmtted Great Bntam Clydeport Operattons Ltm!led Northern Ireland Coastal Contamer Lme Ltmtted Great Bntam Heysham Port Ltmned Repubhc of Ireland Manne Termtnals Limited Great Bntam Peel Pons Investments Ltmtted Great Bntam Peel Ports Ltmned Great Bntam Peel Ports Holdmgs Ltmtted Great Bntam Peel Ports Land and Propeny Investments Ltmtted Great Bntam Peel Pons Operattons Ltmtted Great Bntam Peel Ports UK Fmanceco Ltmtted Great Bntam Peel Holdmgs (Ports) Ltmtted Great Bntam Port of Sheerness Ltmtted Great Bntam Portta Management Servtces Ltmtted Great Bntam Seawmg Landguard International Ltmtted Great Bntam The Manchester Shtp Canal Company Great Bntam The Mersey Docks and Harbour Company Nonhern Ireland TR Shtppmg Servtces Ltmtted
(1) I 00% owned by Clydeport L1mtted (n) I 00% owned by Peel Pons Ltmned (m) I 00% owned by Peel Ports Investments Ltmtted (tv) I 00% owned by Peel Ports Operatmns Ltmtted or tls substdtancs (v) I 00% owned by Peel Ports Holdmgs Ltmtted (vt) I 00% owned by Peel Holdmgs (Ports) Ltmtted (vn) lOO% owned by Peel Ports lntermedtate Holdco Ltmtted (vm) I 00% owned by Peel Ports UK Fmanceco Ltmtted
Jomt ventures
The pnnctpal JOIDt ventures, as at 31 March 20 I 0, were as follows
Country or mcorporatwn Jomt venture
Great Bntam CL YDEBoyd Fort Wtlham Ltmtted
Great Bntam Cammell La1rd Shtprepa~rers & Shtpbutlders Ltmtted
Great Bntam Estuary Servtces Ltmtted
Pnnc1pal activities Note
Port Fac1httes (1) Port Authonty (IV) Shtppmg (tv) Holdmg Company (m) Port Facthttes (!) Shtppmg (tv) Port Authonty (tv) Stevedonng (tv) Holdmg Company (n) Holdmg Company (v) Holdmg Company (vt) Holdmg Company (vt) Holdmg Company (m) Holdmg Company (vn) Holdmg Company (vm) Operator of a Regmnal Port (tv) Port Consultancy (tv) Fretght Forwardmg (tv) Operator of a Regmnal Port (m) Operator of a RegiOnal Port (m) Shtppmg Servtces (tv)
Group shareholdmg Prmc1pal achv1hes
50% Port facthl!es
4749% Shtprepatrmg and shtp conversions
50% Port facthl!es
39