Exhibit 99
YORKSHIRE ELECTRICITY GROUP PLC
Report and Financial Statements
31 March 1996
Deloitte & Touche
Chartered Accountants
10-12 East Parade
Leeds LS1 2AJ
United Kingdom
YORKSHIRE ELECTRICITY GROUP PLC
TABLE OF CONTENTS
Page
Statements of Directors' responsibilities 3
Auditors' report 4
Consolidated profit and loss account 5
Consolidated balance sheet 6
Consolidated cash flow statement 7
Statement of total recognised gains and losses 8
Notes to the accounts 9
YORKSHIRE ELECTRICITY GROUP PLC
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The following statement, which should be read in conjunction with
the auditors' statement of respective responsibilities of Directors
and auditors, is made with a view to distinguishing for
shareholders the respective responsibilities of the Directors and
of the auditors in relation to the financial statements.
The Directors are required by the Companies Act 1985 to prepare
financial statements for each financial year which give a true and
fair view of the state of affairs of the Company and the Group as
at the end of the financial year and of the profit or loss for the
financial year.
The Directors consider that, in preparing the financial statements
on page 6 to 45 on a going concern basis, the Company has used
appropriate accounting policies, consistently applied and supported
by reasonable and prudent judgements and estimates, and that all
accounting standards which they consider to be applicable have been
followed.
The Directors have responsibility for ensuring that the Company
keeps accounting records which disclose with reasonable accuracy
the financial position of the Company and which enable them to
ensure that the financial statements comply with the Companies Act
1985.
The Directors have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the Group
and to prevent and detect fraud and other irregularities.
AUDITORS' REPORT
TO THE DIRECTORS OF YORKSHIRE ELECTRICITY GROUP PLC
We have audited the accompanying consolidated balance sheets of
Yorkshire Electricity Group plc and subsidiaries as at 31 March
1996 and 1995 and the related consolidated profit and loss
accounts, statements of total recognised gains and losses and group
cash flow statements for the years ended 31 March 1996, 1995 and
1994, all expressed in pounds sterling, which have been prepared
under the historical cost convention, as modified by the
revaluation of certain fixed assets, and the accounting policies
set out in the notes to the financial statements.
Respective responsibilities of Directors and auditors
As described on page 3, these financial statements are the
responsibility of the Company's Directors. It is our
responsibility to form an independent opinion, based on our audits,
on these financial statements and to report our opinion to you.
Basis of opinion
We conducted our audits in accordance with generally accepted
auditing standards in the United Kingdom. Those standards require
that we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free of material
misstatement, whether caused by fraud or other irregularity or
error. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
It also includes an assessment of the significant estimates and
judgements made by the Directors, and of whether the accounting
policies are appropriate to the circumstances of the Company and
the Group, consistently applied and adequately disclosed, as well
as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
We planned and performed our audits so as to obtain all the
information and explanations which we considered necessary in order
to provide us with sufficient evidence to give reasonable assurance
that the financial statements are free from material misstatement,
whether caused by fraud or other irregularity or error. In forming
our opinion we also evaluated the overall adequacy of the
presentation of information in the financial statements.
Opinion
In our opinion, the consolidated financial statements referred to
above, present fairly, in all material respects, the financial
position of Yorkshire Electricity Group plc and subsidiaries as at
31 March 1996 and 1995 and the results of their operations and
their cash flows for the three years ended 31 March 1996 in
conformity with generally accepted accounting principles in the
United Kingdom (which differ in certain material respects from
accounting principles generally accepted in the United States of
America - see note 26).
Deloitte & Touche
Chartered Accountants
10-12 East Parade
Leeds LS1 2AJ
9 June 1997
YORKSHIRE ELECTRICITY GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 31 March
1996 1995 1994
NGG
Pre Exceptional
Exceptional Items
Note Items (Note 4) Total Total Total
Lm Lm Lm Lm Lm
TURNOVER 2 1,426.0 (93.7) 1,332.3 1,459.3 1,307.9
Cost of sales 969.1 (8.5) 960.6 991.7 880.4
Gross profit 456.9 (85.2) 371.7 467.6 427.5
Distribution costs 157.3 - 157.3 154.5 140.5
Administrative expenses 88.6 13.0 101.6 108.2 136.1
Other operating income 3(b) (5.4) - (5.4) (22.8) (8.4)
OPERATING PROFIT/(LOSS) 2&3 216.4 (98.2) 118.2 227.7 159.3
Share of (losses)/profits of
associated undertakings:
Continuing (3.5) - (3.5) 0.3 (2.2)
Discontinued - - - (17.8) (20.3)
(3.5) - (3.5) (17.5) (22.5)
Income from investment in NGG 8.9 118.3 127.2 18.6 17.4
Loss on disposal of subsidiary
undertakings (2.5) - (2.5) - -
PROFIT ON ORDINARY ACTIVITIES
BEFORE INTEREST 219.3 20.1 239.4 228.8 154.2
Net interest payable 5 (20.1) - (20.1) (11.8) (5.2)
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 199.2 20.1 219.3 217.0 149.0
Taxation 7 52.1 37.5 89.6 55.3 41.1
PROFIT/(LOSS) ON ORDINARY
ACTIVITIES AFTER TAXATION 147.1 (17.4) 129.7 161.7 107.9
Equity minority interests 1.2 - 1.2 0.8 1.0
PROFIT/(LOSS) FOR THE FINANCIAL
YEAR 145.9 (17.4) 128.5 160.9 106.9
NGG distribution on equity shares 8 - 289.1 289.1 - -
Special dividend on equity shares 8 184.9 - 184.9 188.0 -
Ordinary dividends on equity shares 8 61.6 - 61.6 56.0 48.7
RETAINED (DEFICIT)/PROFIT FOR
THE FINANCIAL YEAR 20 (100.6) (306.5) (407.1) (83.1) 58.2
Earnings per ordinary share 9 81.7p 71.9p 79.1p 51.5p
Turnover and operating profit for 1996, 1995 and 1994 are in respect of continuing operations.
/TABLE
YORKSHIRE ELECTRICITY GROUP PLC
CONSOLIDATED BALANCE SHEET
As at 31 March
Note 1996 1995
Lm Lm
FIXED ASSETS
Tangible assets 10 772.0 759.1
Investments 11 104.3 132.9
876.3 892.0
CURRENT ASSETS
Stocks 12 4.3 5.3
Debtors 13 252.4 299.5
Investments 14 287.4 178.0
Cash at bank and in hand 1.1 7.5
545.2 490.3
CREDITORS: amounts falling due
within one year 15&16 (429.4) (402.7)
NET CURRENT ASSETS 115.8 87.6
TOTAL ASSETS LESS CURRENT LIABILITIES 992.1 979.6
CREDITORS: amounts falling due
after more than one year 15&16 (423.7) (304.5)
Provisions for liabilities
and charges 17&18 (47.3) (47.4)
NET ASSETS 2 521.1 627.7
CAPITAL AND RESERVES
Called up share capital 19 108.1 104.5
Share premium account 20 10.5 3.4
Investment property revaluation reserve 20 1.7 10.9
Revaluation reserve 20 23.1 71.7
Capital redemption reserve 20 0.1 0.0
Profit and loss account 20 377.5 435.4
EQUITY SHAREHOLDERS' FUNDS 521.0 625.9
Equity minority interests 0.1 1.8
521.1 627.7
YORKSHIRE ELECTRICITY GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 March
Note 1996 1995 1994
Lm Lm Lm
Net cash inflow from
operating activities 21(a) 225.8 214.4 278.2
Returns on investments and
servicing of finance
Interest received 25.1 13.5 12.5
Interest paid (45.9) (18.6) (24.5)
Dividends received 114.9 14.4 12.2
Dividends paid (242.5) (239.0) (44.2)
Net cash outflow from returns on
investment and servicing of finance (148.4) (229.7) (44.0)
Taxation
Corporation tax (including ACT) (97.6) (23.4) (40.2)
Tax paid (97.6) (23.4) (40.2)
Investing activities
Payments to acquire tangible fixed assets (101.1) (88.5) (146.2)
Receipts from sale of tangible fixed assets 33.4 2.6 8.8
Purchase of associated undertakings - (11.4) (20.6)
Purchase of other investments (25.0) (30.3) (0.8)
Receipts from sale of
subsidiary undertakings 21(e) 32.5 - -
Loans to associated undertakings 11(c) 2.0 (23.7) (10.3)
Receipts from sale of PSB 52.6 - -
Money market investments with a maturity
greater than 3 months (3.5) 49.7 (31.8)
Net cash outflow from investing activities (9.1) (101.6) (200.9)
Net cash outflow before financing (29.3) (140.3) (6.9)
Financing
Issue of share capital 10.9 2.9 1.3
Repurchase of own shares (0.4) (0.4) -
New borrowings 163.7 196.4 90.9
Repayment of borrowings (47.1) (16.5) (65.9)
Issue/(repayment) of commercial paper 41.3 (8.8) (7.3)
Repayment of government debenture - - (126.0)
Repayment of bills of exchange - - (5.0)
Net cash inflow/(outflow) from financing 21(d) 168.4 173.6 (112.0)
Increase/(decrease) in
cash and cash equivalents 21(b)&(c) 139.1 33.3 (118.9)
/TABLE
YORKSHIRE ELECTRICITY GROUP PLC
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Year ended 31 March
1996 1995 1994
Lm Lm Lm
Profit for the financial year 128.5 160.9 106.9
Unrealised (deficit)/surplus on revaluation
of investment properties (6.6) 8.1 2.8
Gain on deemed disposal of part holding in
associated undertaking 4.8 - -
Surplus on revaluation of investment in NGG 233.2 - -
Surplus on revaluation of investment in PSB 56.1 - -
Total recognised gains and losses for the year 416.0 169.0 109.7
NOTES OF HISTORICAL COST PROFIT
Year ended 31 March
1996 1995 1994
Lm Lm Lm
Reported profit on ordinary activities
before taxation 219.3 217.0 149.0
Investment property disposal 2.6 - -
Adjustment of administrative expenses to cost 6.9 - -
Realisation of investment in PSB 56.1 - -
Historical cost profit on ordinary activities
before taxation 284.9 217.0 149.0
Taxation (89.6) (55.3) (41.1)
Equity minority interests (1.2) (0.8) (1.0)
Dividends on equity shares (535.6) (244.0) (48.7)
Adjustment to restate NGG distribution to cost 274.9 - -
Historical cost (deficit)/profit for the year (66.6) (83.1) 58.2
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
1. ACCOUNTING POLICIES
These financial statements have been prepared in accordance
with applicable accounting standards generally accepted in the
United Kingdom (which differ in certain material respects from
accounting principles generally accepted in the United States
of America - see note 26). The particular accounting policies
adopted are described below.
Basis of preparation
The financial statements have been prepared under the
historical cost convention (as modified by the revaluation of
certain fixed asset investments and investment properties).
Compliance with Statement of Standard Accounting Practice
(SSAP) No. 19 'Accounting for investment properties' requires
departure from the requirements of the Companies Act 1985
relating to depreciation and an explanation of the departure
is given in note 1(v).
Basis of consolidation
The Group financial statements consolidate the financial
statements of the Company and all its subsidiary undertakings.
The results of subsidiaries acquired during the year are
included from the date of acquisition.
The accounts of subsidiary and associated undertakings are
co-terminous with those of Yorkshire Electricity Group plc
apart from those of certain subsidiaries and associated
undertakings which have accounting reference dates between 30
April and 31 December for commercial reasons. Management
accounts made up to 31 March 1996 are used for consolidation
of such subsidiary and associated undertakings.
Associated undertakings
Investments, excluding those classified as subsidiaries, are
regarded as associated undertakings where the Group has a long
term interest in more than 20% of the equity and is in a
position to exercise a significant influence over their
affairs on a continuing basis. These are stated in the
consolidated balance sheet at the Group's share of net assets
after adjustment for goodwill or discount on acquisition. The
consolidated profit and loss account includes the Group's
share of the pre-tax profits and attributable taxation of the
associated undertakings.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
Turnover
Turnover represents the value of electricity and gas
consumption during the year, which includes an estimate of the
sales value of units supplied to customers between the date of
the last meter reading and the year end and the invoice value
of other goods and services provided, exclusive of value added
tax.
Under/over recovery of regulated income
Where there is an over recovery of supply or distribution
business revenues against the regulated maximum allowable
amount, such over recoveries are deferred. The deferred
amount is deducted from turnover and included in creditors.
Where there is an under recovery, no anticipation of any
potential future recovery is made.
Tangible fixed assets and depreciation
(i) Tangible fixed assets
Tangible fixed assets, other than investment properties
are stated at cost less accumulated depreciation.
Interest is capitalised for defined project finance.
(ii) Depreciation
The charge for depreciation is calculated to write off
assets over their estimated useful lives commencing in
the year following acquisition or completion. The lives
of each major class of depreciable asset are as follows:
Distribution assets 40 years
Depreciation is charged at 3%
for 20 years followed by 2%
for the remaining 20 years
Generation assets 20 years
Non-operational assets
Buildings - freehold Up to 60 years
- leasehold Lower of lease
period or remaining
economic life up to
60 years
Fixtures and equipment Up to 10 years
Vehicles and mobile plant Up to 10 years
Freehold land is not depreciated
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
(iii)Capital contributions
Capital contributions on distribution assets are credited
to the profit and loss account over a 40 year period at
a rate of 3% for the first 20 years followed by 2% for
the remaining 20 years.
(iv) Property clawback
Arrangements have been put in place to entitle HM
Government to a proportion of any property gain (above
certain thresholds) accruing as a result of disposals, or
events treated as disposals for clawback purposes,
occurring after 31 March 1990 in relation to land in
which the Company had an interest at that date (and, in
certain circumstances, land in which the Company acquires
an interest thereafter from other members of the
electricity industry) and any buildings on that land.
These arrangements will last until 31 March 2000.
A provision for clawback in respect of property disposals
is made only to the extent that it is probable that a
liability will crystallise. Such a liability will
crystallize when an actual or demmed disposal occurs.
(v) Investment properties
In accordance with SSAP 19 investment properties are
revalued annually and the aggregate surplus or deficit is
transferred to a revaluation reserve with the exception
of any permanent diminution below historic cost which is
taken to the profit and loss account. No depreciation is
provided in respect of investment properties.
The Companies Act 1985 requires all properties to be
depreciated. However, this requirement conflicts with
the generally accepted accounting principle set up in
SSAP 19. The Directors consider that, because these
properties are not held for consumption, but for their
investment potential, to depreciate them would not give
a true and fair view, and that is necessary to adopt SSAP
19 in order to give a true and fair view.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
If this departure from the Act had not been made, the
profit for the financial year would have been reduced by
depreciation. However, the amount of depreciation cannot
reasonably be quantified because depreciation is only one
of many factors reflected in the annual valuation and the
amount which might otherwise have been shown cannot be
separately identified or quantified.
Investments
Fixed asset investments are stated at cost or valuation.
Current asset investments are stated at the lower of cost
and net realisable value. Investment income is included
in the accounts of the year for which it is receivable.
Stocks
Stocks are valued at the lower of cost and net realisable
value. The valuation of work in progress is based on the
cost of labour plus appropriate overheads and the cost of
materials.
Research and development
Research and general development expenditure is written
off in the year in which it is incurred.
Expenditure on the development of specific projects is
carried forward when its recoverability can be foreseen
with reasonable assurance and is amortised in line with
the future life of the project.
Deferred taxation
Deferred taxation arises in respect of items where there
is a timing difference between their treatment for
accounting purposes and their treatment for taxation
purposes. Provision for deferred taxation, using the
liability method, is made to the extent that it is
probable that the liability or asset will crystallise in
the foreseeable future.
Leases
(i) As LESSEE rental costs under operating leases are
charged to the profit and loss account in equal
annual amounts over the periods of the leases.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
(ii) As LESSOR the Group's net investment in finance
leases is stated at the total value of rentals
receivable less finance charges allocated to future
periods.
Total gross earnings from finance leases are allocated so
as to give a constant periodic rate of return on the net
cash investment.
Pension costs
The pension costs incurred in respect of the Electricity
Supply Pension Scheme are charged to the profit and loss
account so as to spread the cost over the employees'
estimated remaining working lives with the Group.
Contributions to the Yorkshire Electricity Pension Plan,
a defined contributions scheme, are charged to the profit
and loss account as incurred.
Goodwill
Goodwill arising on consolidation, representing the
excess of the purchase consideration of the businesses
over the fair value of the net assets acquired, is set
off against reserves in the year of acquisition.
Capital instruments
Capital instruments are initially carried at the amount
of the net proceeds. The finance costs and issue
expenses are allocated to the profit and loss account
over the life of the debt at a constant rate on the
carrying amount.
Reporting the substance of transactions
In accordance with Financial Reporting Standard (FRS) No.
5, transactions entered into by the Group are recorded in
the financial statements taking into account their full
commercial substance.
Currency
References to L, m and p designate United Kingdom pounds
sterling, millions and United Kingdom pence,
respectively.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
2. TURNOVER, OPERATING PROFIT AND NET ASSETS
Turnover for 1995/96 is all in respect of sales from continuing businesses to United
Kingdom customers. Turnover, operating profit and net assets are attributable to the
following activities:
Turnover Operating profit Net assets
31 March 31 March 31 March
1996 1995 1994 1996 1995 1994 1996 1995 1994
Lm Lm Lm Lm Lm Lm Lm Lm Lm
Distribution 334.4 362.3 347.8 164.7 173.3 134.9 520.5 494.6 452.7
Electricity supply 1,308.7 1,343.2 1,220.0 30.5 21.9 14.0 36.9 54.2 (4.0)
Other (including effects of
NGG customer discounts) 63.8 156.8 162.4 (77.0) 32.5 10.4 105.5 114.5 141.4
Less:
Inter-activity sales* (374.6) (403.0) (422.3) - - - - - -
Non-allocated net assets - - - - - - (141.8) (35.6) 107.5
1,332.3 1,459.3 1,307.9 118.2 227.7 159.3 521.1 627.7 697.6
*Inter-activity sales relate mainly to sales by the Distribution business for use of system to the Supply
business and also include transfer pricing sales made between the different businesses.
Turnover in respect of the Supply and Distribution businesses excludes revenues in excess of the regulated
maximum allowed amount.
/TABLE
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
3. OPERATING PROFIT
1996 1995 1994
Lm Lm Lm
(a) Operating profit is stated after charging/(crediting):
Employment costs (note 6(a)) 72.9 93.3 99.1
Depreciation 40.9 39.5 32.9
Profit on sale of tangible assets (2.4) (1.8) (0.3)
Other operating lease rentals 5.4 7.6 8.2
Rationalisation costs - 8.7 43.5
Research and development 1.1 4.2 4.7
Investment property write downs - 3.5 -
Auditors' remuneration
Audit fees 0.1 0.1 0.1
Other fees 0.4 0.2 0.1
(b) Other operating income consists of:
Compensation payment from
Stockholm Stadshus AB - 17.1 -
Investment property rental 5.3 5.5 2.7
Ancillary services 0.1 0.2 -
Participation premium - - 5.7
5.4 22.8 8.4
4. NATIONAL GRID GROUP PLC
At 1 April 1995 the Group held 9.2% of the issued share
capital of National Grid Group plc ("NGG"), formerly National
Grid Holding plc, which was held in the balance sheet at
L71.7m. During the year the majority of the investment was
realised and distributed to shareholders, in addition domestic
customers received a discount. The transactions which
comprise the NGG distribution were:
(a) In December 1995 special dividends of L118.3m (gross)
were paid by NGG to the Group. L15.8m of which was
re-subscribed for additional shares.
(b) In December 1995 NGG became a company listed on the
London Stock Exchange. The Group revalued its investment
to market value of L320.7m.
(c) During December 1995 the Group made a distribution in
specie to its shareholders of approximately 90% of its
interest in NGG's issued ordinary share capital, with a
market value of L289.1m.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
4. NATIONAL GRID GROUP PLC (continued)
(d) Following the Listing of NGG, domestic customers received
a discount of approximately L50 (plus VAT) during the
early part of 1996. This resulted in a reduction in
gross profit of L85.2m.
(e) On 17 November 1995 a specie dividend of NGG's holding in
PSB Holdings Limited ("PSB") was made. Following this
the Group's investment in PSB was recognised at its
estimated market value of L56.1m. Subsequently, on 21
December 1995 this investment was realised.
(f) In order that holders of options in Yorkshire Electricity
shares were not disadvantaged by the above arrangements,
the Directors established a new employee share trust.
The trustee has purchased NGG shares from the Company.
Upon the exercise of options (granted prior to 8 December
1995) under the Savings-Related Share Option Scheme and
Executive Share Option Scheme, the trustee transfers to
the relevant option holder such number of NGG shares (or
if required by the option holder Yorkshire Electricity
shares of equivalent value) as the option holder would
have been entitled to receive had the shares under option
been issued and allotted on the date of the distribution.
This compensation along with other costs related to the
distribution, resulted in a charge to the profit and loss
account for the year of L13.0m. The number of shares
held by the trust at 31 March 1996 was 642,819 NGG
ordinary 10p shares, with a market value of L1,234,212
and 811 Yorkshire Electricity Group plc ordinary 68 2/11p
shares with a market value of L6,593.
The charge to the profit and loss account in respect of
taxation on the above transactions is L37.5m. This comprises
a corporation tax charge arising from the distribution of
L49.4m, tax on NGG dividends of L20.6m, offset by corporation
tax reductions relating to the customer discount and other
expenses of L32.5m.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
5. NET INTEREST PAYABLE
1996 1995 1994
Lm Lm Lm
Interest payable:
On bank loans, overdrafts and other loans (wholly
repayable within five years) (36.4) (13.6) (14.7)
On other loans (9.3) (9.7) (9.2)
Less amounts capitalised - - 5.9
(45.7) (23.3) (18.0)
Interest receivable 25.6 11.5 12.8
(20.1) (11.8) (5.2)
/TABLE
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
6. DIRECTORS AND EMPLOYEES
1996 1995 1994
Lm Lm Lm
(a) Employment costs
The aggregate remuneration of all employees,
including the Directors of the Company,
comprised:
Wages and salaries 87.7 95.7 104.3
Social security costs 9.1 7.9 8.7
Other pension costs 6.7 11.2 14.9
103.5 114.8 127.9
Less: Charged as capital expenditure (30.6) (21.5) (28.8)
Charged to the profit and loss account 72.9 93.3 99.1
(b) Number of employees
(i) The average number of employees (headcount),
including Directors, during the year was:
1996 1995 1994
No. No. No.
Distribution and Electricity Supply 3,482 3,625 3,978
Other 812 1,299 1,786
4,294 4,924 5,764
(ii) The full time equivalent number of
employees, including Directors, as
at 31 March was:
Distribution and Electricity Supply 3,262 3,403 3,680
Other 645 1,164 1,463
3,907 4,567 5,143
(c) Directors
The following table shows the aggregate of
Directors' emoluments and other payments
1996 1995 1994
L'000 L'000 L'000
Fees 170.5 147.2 127.0
Fixed remuneration 597.5 535.0 557.1
Performance-related incentives 155.4 214.0 127.5
Taxable benefits/expenses 122.1 83.2 45.6
Pension contributions 65.8 91.0 80.4
1,111.3 1,070.4 937.6
/TABLE
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
6. DIRECTORS AND EMPLOYEES (continued)
The following table shows emoluments, including bonuses, of individual Directors for the year ended 31 March.
1996 1995 1994
Performance
incentives
Fees/fixed Share Taxable Pension
remuneration Bonus incentive* benefits/expenses contributions Total Total Total
L'000 L'000 L'000 L'000 L'000 L'000 L'000 L'000
Chairman
C Hampson 100.0 - - 32.5 - 132.5 70.9 -
JS Tysoe - - - - - - 34.7 124.7
Executive Directors
JM Chatwin 207.5 12.5 41.5 24.7 22.8 309.0 316.9 262.9
AWJ Coleman 140.0 8.4 28.0 22.2 15.4 214.0 211.4 174.7
GJ Hall 125.0 7.5 25.0 21.9 13.8 193.2 187.9 154.2
PB Morgan 125.0 7.5 25.0 20.8 13.8 192.1 185.8 149.1
Non-Executive Directors
Lady Eccles 21.0 - - - - 21.0 18.9 18.0
JN Hardman 21.0 - - - - 21.0 18.8 18.0
JA Rigg 7.1 - - - - 7.1 18.9 18.0
Sir Philip Beck 17.9 - - - - 17.9 6.2 -
JVH Robins 3.5 - - - - 3.5 - -
DB Clark - - - - - - - 18.0
768.0 35.9 119.5 122.1 65.8 1,111.3 1,070.4 937.6
*Share Incentive - this figure represents the amount payable to the Trustee of the Share Incentive Scheme (described below)
in respect of the year and is based on a multiplier of 1.0, whereas accrued rights in accordance with the Scheme relate in
each case to only 50% of the shares acquired by the Trustee.
/TABLE
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
6. DIRECTORS AND EMPLOYEES (continued)
Mr JM Chatwin was the highest paid Director for both years.
Sir Philip Beck and Mr JVH Robins were appointed as
Non-Executive Directors of the Company on 25 May 1995 and on
25 January 1996 respectively. Mr JA Rigg retired on 1 August
1995, Mr JS Tysoe was Chairman until 30 September 1994. Mr C
Hampson was appointed Chairman from 1 October 1994.
The Directors' remuneration (including taxable benefits but
excluding employer's pension contributions) was in the ranges:
1996 1995 1994
No. No. No.
L 0,001 - L 5,000 1 - -
L 5,001 - L 10,000 1 1 -
L 15,001 - L 20,000 1 3 4
L 20,001 - L 25,000 2 - -
L 30,001 - L 35,000 - 1 -
L 70,001 - L 75,000 - 1 -
L120,001 - L125,000 - - 1
L130,001 - L135,000 1 - 1
L135,001 - L140,000 - - 1
L155,001 - L160,000 - - 1
L165,001 - L170,000 - 2 -
L175,001 - L180,000 2 - -
L190,001 - L195,000 - 1 -
L195,001 - L200,000 1 - -
L230,001 - L235,000 - - 1
L280,001 - L285,000 - 1 -
L285,001 - L290,000 1 - -
10 10 9
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
6. DIRECTORS AND EMPLOYEES (continued)
The beneficial interests of each Director in the ordinary
shares of the Company according to the register kept by the
Company under Section 325 of the Companies Act 1985 are set
out in the tables below.
31 March 1996 1 April 1995
or date of retirement or date of appointment
Sharesave Under Sharesave Under
Issued Scheme option Issued Scheme option
C Hampson 3,000 - - 1,000 - -
JM Chatwin 28,958 629 111,482 34,496 5,100 111,482
AWJ Coleman 12,690 629 61,718 24,092 5,100 61,718
GJ Hall 27,972 629 54,928 32,447 5,100 54,928
PB Morgan 37,947 629 51,289 10,926 5,100 98,158
Lady Eccles 2,933 - - 3,520 - -
JN Hardman 1,867 - - 242 - -
Sir Philip Beck 2,573 - - 88 - -
JVH Robins 1,000 - - - - -
JA Rigg 880 - - 880 - -
Except as indicated below, there have been no changes in the
interests of the Directors in the ordinary shares of the
Company between the year end and 4 June 1996:
Sharesave Under
Issued Scheme option
JM Chatwin 29,376 629 111,482
PB Morgan 38,338 629 51,289
The number of ordinary shares held in trust under the Share
Incentive Scheme and the movements in the year were:
Adjustment
Dividends due to
Investment received consolidation At
At 1 April in respect and of share Paid to 31 March
1995 of 1994/95 reinvested capital Directors 1996
JM Chatwin - 6,151 2,506 (1,278) - 7,379
AWJ Coleman - 4,046 1,643 (840) - 4,849
GJ Hall - 3,561 1,443 (739) - 4,265
PB Morgan - 3,561 1,443 (739) - 4,265
Accrued rights in accordance with the Scheme relate in each
case to only 50% of the number of shares shown above.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
6. DIRECTORS AND EMPLOYEES (continued)
Share options including share options granted to or exercised in 1995/96 by the Directors were as
follows:
Number of share options Market Date from
At 1 April during the year At 31 March Exercise price at date which
1995 Granted Exercised 1996 Price of exercise exercisable Expiry date
JM Chatwin 88,930 - - 88,930# 478.0p - 21/12/95 21/12/02
22,552 - - 22,552# 782.0p - 23/01/98 23/01/05
5,100* - 5,100+ - 175.0p 793.5p 01/03/96 31/08/96
- 629* - 629* 548.0p - 22/03/01 21/09/01
AWJ Coleman 56,465 - - 56,465# 478.0p - 21/12/95 21/12/02
5,253 - - 5,253# 782.0p - 23/01/98 23/01/05
5,100* - 5,100+ - 175.0p 793.5p 01/03/96 31/08/96
- 629* - 629* 548.0p - 22/03/01 21/09/01
GJ Hall 48,759 - - 48,759# 478.0p - 21/12/95 21/12/02
6,169 - - 6,169# 782.0p - 23/01/98 23/01/05
5,100* - 5,100+ - 175.0p 793.5p 01/03/96 31/08/96
- 629* - 629* 548.0p - 22/03/01 21/09/01
PB Morgan 16,771 - 16,771 - 287.0p 828.0p 23/01/94 23/01/01
30,098 - 30,098 - 371.0p 828.0p 28/01/95 28/01/02
42,394 - - 42,394# 478.0p - 21/12/95 21/12/02
8,895 - - 8,895# 782.0p - 23/01/98 23/01/05
5,100* - 5,100+ - 175.0p 793.5p 01/03/96 31/08/96
- 629* - 629* 548.0p - 22/03/01 21/09/01
* Grant of options under the Savings-Related Share Options Scheme.
+ Upon exercise of the Yorkshire Electricity options, the option holder also received 3,858 NGG shares (or Yorkshire
Electricity shares of equivalent value), as described in note 4 (page 13). At the date of exercise NGG shares had
a market value of 195.5p. The total value of the NGG shares has been included in taxable benefits/expenses above.
# Upon exercise of these options, the option holder will receive 0.7566 NGG shares for every Yorkshire Electricity
share option exercised (or Yorkshire Electricity shares of equivalent value). The market value of NGG shares at 29
March 1996 was 194.8p per share.
The opening price of Yorkshire Electricity's ordinary shares on 3 April 1995 was 606.0p per share and the closing
price on 29 March 1996 was 813.0p per share. The lowest and highest market prices per Yorkshire Electricity share
during the year were 604.0p and 954.0p respectively.
/TABLE
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
6. DIRECTORS AND EMPLOYEES (continued)
Further details of Employee Share Schemes generally are set
out in note 19.
Bonus Scheme and Share Incentive Scheme
During 1994/95 Yorkshire Electricity introduced new bonus and
share incentive schemes for Executive Directors. These
schemes were designed to reflect real growth in earnings per
share (eps) and, in the case of the share incentive scheme,
longer-term overall shareholder value. The schemes were
scheduled to operate from 1994 to 1998 and are subject to the
overall discretion of the Remuneration Committee, (inter alia)
to amend the schemes to take account of any changes in
circumstances following adoption.
The bonus scheme operates on an annual basis to reflect real
growth in eps over the previous year based on the audited
accounts of the Company. No bonus is to be paid unless eps
shows real growth over the previous year and payment can range
from 0 to 20 per cent of base salary. Bonus payments do not
form part of pensionable earnings.
The Executive Long Term Share Incentive Scheme (the "Share
Incentive Scheme") was designed to operate so that amounts
calculated by reference to a formula based on real growth in
eps but not exceeding 20 per cent of base salary could be
transferred to independent trustees to be utilised in the
purchase of shares in the market. The formula recognised that
performance in any one year may not necessarily reflect the
longer-term achievements and therefore incorporated provisions
designed to balance the eps over a four-year period. It was
intended that, at the conclusion of the four-year period, a
multiplier would be applied to the total number of shares
accumulated. It was intended that the multiplier would be
determined on the basis of a further formula to establish the
position of Yorkshire Electricity in a league table of
Regional Electricity Companies, such league table reflecting
overall shareholder value through growth in market value over
the period plus dividends. The multiplier used would vary
from 0.5 to 2.0 and it was intended that any shares resulting
from the scheme would only be transferred to the Executive
Directors after the accounts for 1997/98 had been audited.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
6. DIRECTORS AND EMPLOYEES (continued)
Details of the bonus scheme to operate from 1996/97 are set
out in the Report of the Remuneration Committee. It is
proposed that the share incentive scheme should be revised in
accordance with the principles set out in the Report of the
Remuneration Committee. Any accrued rights under the scheme
would therefore be transferred at the end of the year three
and would (if applicable) be incorporated into the number of
shares to be transferred pursuant to the revised arrangements.
The costs of the schemes are charged against profit. The
treatment of the share incentive scheme is complicated by the
output relative performance criteria and each year the
Directors will, on the basis of information available, make
the appropriate provision in the accounts. For the years
1994/95 and 1995/96 provisions are made on the basis of the
existing scheme and, subject to shareholders' approval of the
revised scheme, any adjustments to the provisions required in
relation to the revised scheme for such years will be made in
1996/97. For the second year of the scheme the provision has
been based on a multiplier of 1.0.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
7. TAX ON PROFIT ON ORDINARY ACTIVITIES
1996 1995 1994
Lm Lm Lm
Taxation on profit for the year:
UK corporation tax at 33% (1994 and 1995 - 33%) 53.5 57.4 39.0
Tax on franked investment income 1.8 3.7 3.6
Associated undertakings 0.2 0.9 (1.1)
55.5 62.0 41.5
Adjustment in respect of earlier years:
Parent and subsidiary undertakings (4.5) (6.7) (0.4)
Associated undertakings 1.1 - -
52.1 55.3 41.1
Tax on NGG transactions 37.5 - -
89.6 55.3 41.1
The tax charge for the year has increased as it includes
corporation tax of L49.4m (1995 and 1994 - nil) attributable
to the taxable gain arising from the distribution of NGG
shares. This charge has been included within the Group profit
and loss account for the year so that the full costs of the
distribution are reflected therein.
The tax charge has reduced by L12.3m (1995 - L15.3m; 1994 -
L23.8m) as a result of accelerated capital allowances and
increased by L6.9m (1995 - L5.8m; 1994 - L20.0m) as a result
of provisions disallowed for corporation tax purposes. No
deferred tax has been provided in respect of these items.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
8. DIVIDENDS
1996 1995 1994
Lm Lm Lm
NGG distribution 289.1 - -
Special dividend of 100.00p per 56 9/11p ordinary
share (1995 90.00p per 50p ordinary share;
1994 - nil) 184.9 188.0 -
Interim dividend of 11.88p per consolidated ordinary
share (1995 9.00p; 10.80p on an equivalent basis;
1994 6.90p; 9.41p on an equivalent basis) 18.3 16.6 14.3
Proposed final dividend of 27.30p per consolidated
ordinary share payable on 1 October 1996
(1995 21.42p; 25.70p on an equivalent basis;
1994 16.58p; 22.61p on an equivalent basis) 43.3 39.4 34.4
535.6 244.0 48.7
In January 1996 the share capital was consolidated on the
basis of 5 new 68 2/11p ordinary shares for every six
existing 56 9/11p ordinary shares.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
9. EARNINGS PER ORDINARY SHARE
During the year the Company paid a special dividend of L184.9m
and at the same time carried out a consolidation of its share
capital. These transactions were designed and intended to
achieve the same overall effect on the Company's capital
structure as a general buy-back of shares but in a way in
which all shareholders could participate. Accordingly, the
Directors consider it appropriate to present the Company's
earnings per share on the basis that in substance a share
buy-back has occurred. The weighted average number of shares
in issue during the period has been calculated on this basis.
Earnings per share are based on the earnings in the year of
L128.5m (1995 - L160.9m; 1994 - L106.9m) and calculated on the
weighted average number of 178,601,814 ordinary shares in
issue (1995 - 203,383,198; 1994 - 207,450,851).
The earnings per share would have been 83.4p (1995 - 105.2p;
1994 - 70.3p) if it had been calculated on the basis that the
share consolidation had occurred at the commencement of the
period.
Earnings per share, pre NGG exceptional items, is based on
earnings of L145.9m and calculated on the weighted average
number of 178,601,814 ordinary shares in issue. The earnings
figure has been adjusted for the NGG exceptional items as
shown in the profit and loss account.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
10. TANGIBLE FIXED ASSETS
Deduct:
Non Op Capital
Investment Distri- Land and Contri-
Properties Generation bution Buildings Other butions Total
Lm Lm Lm Lm Lm Lm Lm
Cost or valuation
At 1 April 1995 75.1 129.0 1,007.7 46.6 125.2 (202.9) 1,180.7
Additions 1.8 1.1 84.5 6.6 23.6 (26.2) 91.4
Disposals (28.8) - (3.7) (1.4) (5.2) 0.1 (39.0)
Reclassification 2.7 (1.7) - (2.3) 1.3 - -
Revaluation adjustment (6.6) - - - - - (6.6)
At 31 March 1996 44.2 128.4 1,088.5 49.5 144.9 (229.0) 1,226.5
Depreciation
At 1 April 1995 - 6.2 369.8 11.4 77.8 (43.6) 421.6
Disposals - - (3.7) (0.3) (4.1) 0.1 (8.0)
Reclassification - (0.2) - - 0.2 - -
Charge for the year - 6.3 27.1 0.9 12.6 (6.0) 40.9
At 31 March 1996 - 12.3 393.2 12.0 86.5 (49.5) 454.5
Net book amount
At 31 March 1996 44.2 116.1 695.3 37.5 58.4 (179.5) 772.0
At 31 March 1995 75.1 122.8 637.9 35.2 47.4 (159.3) 759.1
Included in fixed assets at 31 March 1996 are assets in the
course of construction amounting to L16.7m (31 March 1995
L14.7m) and land of L6.3m (31 March 1995 L5.6m) which are not
depreciated. Capitalised net interest of L10.9m (31 March
1995 L10.9m) is included in fixed assets at 31 March 1996.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
10. TANGIBLE FIXED ASSETS (continued)
The net book amount of non-operational land and buildings
comprises:
31 March 31 March
1996 1995
Lm Lm
Freehold 28.4 25.8
Long leasehold 9.1 9.4
37.5 35.2
Investment Properties are revalued annually by employees of
the Group who are members of either the Royal Institution of
Chartered Surveyors or the Incorporated Society of Valuers and
Auctioneers. The basis of the valuation is open market value
in existing use. The aggregate surplus or deficit is
transferred to a revaluation reserve with the exception of any
permanent diminution below historic cost which is taken to the
profit and loss account. In compliance with the requirements
of SSAP 19 no depreciation or amortisation is provided in
respect of freehold and leashold investment properties. If
the properties included at valuation had been included at
historical cost this would have resulted in a decrease in
value of L1.7m (31 March 1995 L10.9m).
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
11. FIXED ASSET INVESTMENTS
(a) Fixed asset investments
31 March 31 March
1996 1995
Lm Lm
National Grid Group plc at valuation 24.4 71.7
Subsidiary undertakings - -
Associated undertakings 14.0 29.9
Other investments at cost 65.8 31.3
Own shares 0.1 -
104.3 132.9
(b) National Grid Group plc and other investments
NGG Other
Lm Lm
At 1 April 1995 71.7 31.3
Additions 15.8 11.3
Reclassification from associated undertaking - 23.2
Revaluation 233.2 -
Distribution to shareholders (289.1) -
Compensation to option holders (7.2) -
At 31 March 1996 24.4 65.8
The Company's shareholding in National Grid Group plc at 31
March 1995 was at Directors' valuation, with the original cost
of the shareholding being nil. During the year, the
shareholding was revalued to its market value prior to the
distribution in specie of approximately 90% to shareholders.
The historic cost of the shares held as at 31 March 1996 was
L1.3m. The shares are listed on the London Stock Exchange and
the market value at 29 March 1996 was L22.5m.
The Group's interest in Ionica L3 Ltd has been reclassified as
an invesment following the reduction in its shareholding to
below 20% (see note 11(c)).
During the year, the Group invested a further L11.0m in the
Armada Gas Field.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
11. FIXED ASSET INVESTMENTS (continued)
(c) Associated undertakings
Share of
net assets Loans Total
Lm Lm Lm
At 1 April 1995 3.2 35.9 39.1
Additions at cost - 7.2 7.2
Reclassification 21.4 (21.4) -
Deemed sale proceeds 6.3 - 6.3
Loss for the year (6.0) - (6.0)
Repaid - (9.2) (9.2)
Dividends received (0.2) - (0.2)
Reclassification to other
investments (23.2) - (23.2)
At 31 March 1996 1.5 12.5 14.0
Provisions
At 1 April 1995 - (9.2) (9.2)
Utilised in year - 1.2 1.2
Reclassification as provisions
for liabilities and charges - 8.0 8.0
At 31 March 1996 - - -
Net book value
At 31 March 1996 1.5 12.5 14.0
At 31 March 1995 3.2 26.7 29.9
During the year the Group reduced its interest in Ionica L3
Ltd from 27.14% to 19.3%, as a consequence of not
participating in the latest issue of equity finance, giving
rise to a deemed disposal. The deemed sale proceeds, being
the difference between the carrying amount of net assets of
the associate attributable to the Group's interest before the
reduction and after the reduction was L6.3m. This resulted in
a gain on the deemed disposal of L4.8m, after attributing
goodwill previously written off against reserves of L1.5m.
On 7 May 1995 the business and certain assets of our retailing
joint venture, Homepower Retail Ltd were sold. The brought
forward provision against the investment in associated
undertakings relates to the investment in Homepower Retail
Ltd, part of which has now been reclassified as provisions for
liabilities and charges (note 17).
The aggregate net losses retained for associated undertakings
were L36.8m (31 March 1995 L30.8m).
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
11. FIXED ASSET INVESTMENTS (continued)
(d) Principal subsidiary and associated undertakings
The principal subsidiary and associated undertakings
incorporated and operating in the United Kingdom (unless
otherwise indicated) at 31 March 1996 are shown below:
Class of % equity
capital held Principal activities
Principal subsidiary undertaking
Scarcroft Insurance Ltd (Registered
in Guernsey) Ordinary 100% Insurance
Yorkshire Electric Power Ltd Ordinary 100% Holding company
for generation activities
Regional Power Generators Ltd Ordinary 75%* Operation of CCGT
generation station
Yorkshire Energy Ltd Ordinary 100%* Gas investment and supply
Cyril Exelby Ltd Ordinary 100% Electrical and mechanical
construction and design
Scarcroft Leasing Ltd's (various) Ordinary 100% Leasing
Scarcroft Investments Ltd Ordinary 100% Holding company
Scarcroft Holdings Ordinary 100% Holding company
YE Gas Ltd Ordinary 100% Supply of gas
Yorkshire Cogen Ltd Ordinary 100%* Construction and operation
of CHP generating plants
Principal associated undertaking
Yorkshire Windpower Ltd Ordinary 50%* Construction and operation
of windfarms
Torch Communications Ltd Ordinary 50%* Development of
telecommunications services
Shareholdings in the companies marked * are held by subsidiaries of Yorkshire
Electricity Group plc.
12. STOCKS
31 March 31 March
1996 1995
Lm Lm
Raw materials and consumables 3.2 4.0
Work in progress 1.1 1.3
4.3 5.3
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
13. DEBTORS
31 March 31 March
1996 1995
Lm Lm
Amounts falling due within one year:
Trade debtors 188.6 208.9
Amounts owed by group undertakings - -
Amounts owed by associated undertakings 0.2 0.4
Credit sale instalments not yet due 0.1 0.8
Other debtors 22.7 8.8
Prepayments and accrued income 11.0 3.2
Dividends receivable 0.7 10.0
Purchase of electricity 1.2 -
Investment in finance leases 1.3 4.2
225.8 236.3
Amounts falling due after more than one year:
ACT recoverable on proposed dividends 11.4 7.4
Credit sale instalments not yet due 0.1 0.1
Investment in finance leases 15.1 55.7
252.4 299.5
Included in trade debtors are the following
amounts for unbilled consumption 99.3 88.7
The cost of assets acquired for the purpose of leasing under
finance leases was L3.1m (1995 - L21.8m). Rentals
receivable were L9.4m (1995 - L13.6m).
14. INVESTMENTS
31 March 31 March
1996 1995
Lm Lm
Money market investments 287.4 178.0
/TABLE
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
15. CREDITORS
31 March 31 March
1996 1995
Lm Lm
Creditors (amounts falling due within one year):
Bank loans and overdrafts 7.6 3.2
Loan stock 2007 (note 16) 3.0 3.0
Secured loans (note 16) - 4.8
Unsecured loans (note 16) 2.2 -
Payments received in advance 54.7 30.4
Other trade creditors 16.8 10.9
Bills of exchange - 44.0
Amounts owed to group undertakings - -
Commercial paper 77.5 36.2
Purchase of electricity 74.9 60.4
Corporation tax 56.8 84.3
Taxation and social security 5.3 9.2
Other creditors 21.9 21.1
Accruals and deferred income 52.4 49.9
Over recovery of regulated income 13.0 4.7
Proposed dividend 43.3 39.4
Amounts owed to associated undertakings - 1.2
429.4 402.7
Creditors (amounts falling due after more
than one year):
10 year 8-5/8% Eurobond (note 16) 148.6 -
25 year 9-1/4% Eurobond (note 16) 196.5 196.4
Secured long term loans (note 16) - 92.5
Unsecured long term loans (note 16) 78.6 15.6
Amounts owed to group undertakings - -
423.7 304.5
/TABLE
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
16. LOANS AND DEBENTURES
Loans outstanding are repayable as follows:
Unsecured loans and Secured loans and
loan stocks loan stocks
31 March 31 March 31 March 31 March
1996 1995 1996 1995
Lm Lm Lm Lm
Within one year, or on demand 5.2 3.0 - 4.8
Between one and two years 4.6 - - 5.1
Between two and five years 28.7 9.8 - 14.9
Over five years 390.4 202.2 - 72.5
428.9 215.0 - 97.3
31 March 31 March
1996 1995
Lm Lm
Unsecured loans and loan stocks:
10 year 8-5/8% Eurobond 148.6 -
25 year 9-1/4% Eurobond 196.5 196.4
7.52% credit facility due 1999-2002 15.0 -
6.55% credit facility due 1997-2000 15.0 15.0
0% unsecured loan due 2004 0.6 0.6
Unsecured loan stock LIBOR minus 0.5% due 2007 3.0 3.0
Fixed rate 8.05% due 2009 50.2 -
428.9 215.0
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
16. LOANS AND DEBENTURES (continued)
The unsecured loan stock 2007 may be redeemed at not less than
six months notice in writing.
In July 1995 the Group raised L150m by means of a 10 year 8-5/8% Eurobond Issue.
31 March 31 March
1996 1995
Lm Lm
Secured loans and loan stocks:
Floating rate (LIBOR plus 0.85% - 0.95%) - 43.3
Fixed rate (8.05%) - 52.4
Subordinated convertible loan stock (15%) due 2014 - 1.6
- 97.3
The subordinated convertible loan stock was redeemed at par.
As part of its risk management policy, the Group employs a
range of financial instruments for current and future
borrowing requirements and income streams. This includes
agreements under which counterparties have undertaken to pay
amounts to the Group equal to variable interest obligations in
consideration of amounts payable by the Group equivalent to
fixed rates of interest. The agreements have a notional value
of L89.0m and are at fixed rates varying between 6.64% and
10.98%. The time remaining to maturity on the agreements
varies between 2 and 9 years.
17. PROVISIONS FOR LIABILITIES AND CHARGES
Pensions Other
Lm Lm
Balance at 1 April 1995 3.1 44.3
Utilised/paid in the year (1.1) (17.4)
Provided in the year - 10.4
Reclassification from investments (note 11) - 8.0
Balance at 31 March 1996 2.0 45.3
/TABLE
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
17. PROVISIONS FOR LIABILITIES AND CHARGES (continued)
Other provisions comprise:
31 March 31 March
1996 1995
Lm Lm
Rationalisation costs 17.2 31.9
Third party claims 4.7 5.0
Homepower related costs 8.0 -
Other 15.4 7.4
45.3 44.3
Following the pension scheme valuation (note 22) the pensions
provision is being released to the profit and loss account in
accordance with SSAP 24.
L8m of the provision against the investment in Homepower
Retail Ltd has been reclassified from investments to
provisions for liabilities and charges. This is due to the
fact that costs will be incurred directly by the Company
rather than by Homepower Retail Ltd.
18. DEFERRED TAXATION
No provision for deferred tax is required at 31 March 1996 (31
March 1995: nil). Total potential deferred tax liabilities
computed at the current rate of corporation tax of 33% (1995 -
33%) are as follows:
31 March 31 March
1996 1995
Lm Lm
Capital allowances in excess of depreciation 197.3 178.0
Capital gains tax on revalued assets 4.0 -
Other timing differences (7.6) (14.0)
193.7 164.0
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
19. CALLED UP SHARE CAPITAL
31 March 31 March
1996 1995
Lm Lm
Authorised:
220,000,000 ordinary shares of 68 2/11p each
(1995 264,000,000 ordinary shares of 56 9/11p each) 150.0 150.0
Allotted and fully paid:
158,555,100 ordinary shares of 68 2/11p each
(1995 183,898,175 ordinary shares of 56 9/11p each) 108.1 104.5
609,111 shares of 56 9/11p and 302,202 shares of 68 2/11p were
allotted through the year as a result of the exercise of
options in special circumstances under the Savings-Related
Share Option Scheme (note 19(b)). 426,662 shares of 56 9/11p
and 40,396 shares of 68 2/11p were allotted through the year
as a result of the exercise of options under the Executive
Share Option Scheme (note 19(c)).
In January 1996 the share capital was consolidated on the
basis of five new 68 2/11p ordinary shares for every six
existing 56 9/11p ordinary shares. 350,366 fractional shares
of a nominal value of 11 4/11p, arising as a consequence of
the consolidation were repurchased by the Company on 22
January 1996, at an aggregate cost of L420,439 (being 120p for
each fractional share). The fractional shares represented
0.03% of the issued share capital of the Company existing
immediately prior to the consolidation.
Between 1 March 1996 and 31 March 1996, 4,159,273 shares of 68
2/11p were allotted as a result of the maturity of the 1990
Sharesave Scheme.
Employee share schemes
Under arrangements put in place for employees the number of
participants and the number of share options under each of the
share schemes at 31 March 1996 were:
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
19. CALLED UP SHARE CAPITAL (continued)
(a) The Yorkshire Electricity Profit Sharing Scheme
Under the Free and Matching Offer at privatisation the shares
were held in trust for two years (until December 1992) unless
the employee ceased employment on account of injury,
disability or redundancy or the employee reached state
pensionable age. At this stage shares purchased under the
matching offer were transferred to the shareholder. The free
shares remained in trust for a further three years. On 11
December 1995 the shares were transferred to the shareholder.
(b) Savings-Related Share Option Scheme
Participants 240
Shares subject to options to purchase 192,289
Price per share L1.75
Date of grant 11 December 1990
Period of option At the end of 5 years
Options exercised in special
circumstances* 951,709
* Special circumstances include leaving employment because of
injury, disability or redundancy, or at contractual retirement
age or state pensionable age.
During the year a new grant of options under the
Savings-Related Share Option Scheme was made as follows:
Sharesave Scheme 1996
Participants 2,767
Shares subject to options to purchase 1,534,193
Price per share L5.48
Date of grant 16 February 1996
Period of option At the end of 5 years
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
19. CALLED UP SHARE CAPITAL (continued)
(c) Executive Share Option Scheme
Options outstanding:
31 March 1996 31 March 1995
Price per Period of No. of No. of No. of No. of
Date granted share option participants shares participants shares
23 January 1991 L2.87 3-10 yrs - - 1 16,771
28 January 1992 L3.71 3-10 yrs - - 1 30,098
21 December 1992 L4.78 3-10 yrs 27 563,633 49 977,652
23 January 1995 L7.82 3-10 yrs 5 45,636 5 45,636
26 January 1996 L6.85 3-10 yrs 18 116,066 - -
During the year:
1 participant exercised options over 16,771 shares at an
option price of L2.87 per share.
1 participant exercised options over 30,098 shares at an
option price of L3.71 per share.
22 participants exercised options over 414,019 shares at an
option price of L4.78 per share.
(d) Long Term Incentive Scheme
Under the Long Term Incentive Scheme shares are held in
trust until 1998 when the relevant number of shares will
be transferred to the Executives. The operation of the
Scheme is described in note 6. The costs of the trust
are charged to the profit and loss account. The number
of shares held in trust at 31 March 1996 was 23,951 at an
aggregate market value of L194,722. The dividends on
these shares were received by the trust.
(e) The YEG (NGG) Trust
The purpose and operation of the trust are explained in
note 4(f).
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
20. RESERVES
(a) Reconciliation of movement in equity shareholders' funds
31 March 31 March
1996 1995
Lm Lm
Profit for the financial year 128.5 160.9
Dividends (535.6) (244.0)
Retained deficit for the financial year (407.1) (83.1)
Other recognised gains and losses for the year 287.5 8.1
Shares issued 10.9 2.9
Purchase of own shares (0.3) (0.4)
Goodwill 4.1 1.8
Net decrease in shareholders' funds for the year (104.9) (70.7)
Equity shareholders' funds at 1 April 625.9 696.6
Equity shareholders' funds at 31 March 521.0 625.9
(b) Reserves
Investment
Share property Capital Profit and
premium revaluation Revaluation redemption loss
account reserve reserve reserve account Total
Lm Lm Lm Lm Lm Lm
Balance at 1 April 1995 3.4 10.9 71.7 - 435.4 521.4
Movement/(deficit) for
the financial year 7.3 (6.6) - - (407.1) (406.4)
Revaluation of NGG - - 233.2 - - 233.2
Revaluation of PSB - - 56.1 - - 56.1
Realisation of NGG
revaluation - - (281.8) - 281.8 -
Realisation of PSB
revaluation - - (56.1) - 56.1 -
Amortisation of bond
finance costs (0.2) - - - 0.2 -
Investment property
disposal - (2.6) - - 2.6 -
Release of associate
goodwill - - - - 1.5 1.5
Release of
subsidiary goodwill - - - - 2.6 2.6
Gain on deemed
disposal - - - - 4.8 4.8
Purchase of own shares - - - 0.1 (0.4) (0.3)
Balance at 31 March 1996 10.5 1.7 23.1 0.1 377.5 412.9
The profit for the financial year dealt with in the accounts
of the Company was L135.1m (1995 - L154.8m; 1994 - L88.3m).
As allowed by section 230(1) of the Companies Act 1985, the
Company has not presented its own profit and loss account.
The Company's profit and loss account was approved by the
Board on 13 June 1996. The cumulative goodwill set off to
reserves is L3.9m (1995 - L8.0m; 1994 L9.8m).
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
21. CASH FLOW STATEMENT
(a) Reconciliation of operating profit to net cash inflow
from operating activities
1996 1995 1994
Lm Lm Lm
Operating profit 118.2 227.7 159.3
Depreciation 40.9 39.5 32.9
Investment property write downs - 3.5 -
Profit on sale of tangible assets (2.4) (1.8) (0.3)
Release on subsidiary goodwill 2.6 - -
Compensation of option holders 7.2 - -
(Decrease)/increase in provisions (9.5) (7.4) 25.2
Decrease/(increase) in debtors 9.7 (47.0) (2.8)
Increase/(decrease) in creditors 58.4 (0.4) 57.4
Decrease in stocks 0.7 0.3 6.5
Net cash inflow from operating activities 225.8 214.4 278.2
(b) Analysis of changes in cash and cash equivalents during the year
1996 1995 1994
Lm Lm Lm
Balance at 1 April 104.8 71.5 190.4
Net cash inflow/(outflow) 139.1 33.3 (118.9)
Balance at 31 March 243.9 104.8 71.5
(c) Analysis of cash and cash equivalents as shown in the balance
sheet
Increase/(decrease) in year
1996 1995 1996 1995 1994
Lm Lm Lm Lm Lm
Cash at bank and in hand 1.1 7.5 (6.4) (12.0) (14.1)
Money market investments 250.4 144.5 105.9 44.8 (88.4)
Bank loans and overdrafts (7.6) (3.2) (4.4) 6.5 (3.4)
Bills of exchange - (44.0) 44.0 (6.0) (13.0)
243.9 104.8 139.1 33.3 (118.9)
In accordance with FRS 1 investments and borrowings maturing over three
months after their inception are excluded from cash and cash equivalents.
The amounts excluded are:
1996 1995 1994
Lm Lm Lm
Money market investments 37.0 33.5 83.2
/TABLE
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
21. CASH FLOW STATEMENT (continued)
(d) Analysis of changes in financing during the year
1996
Secured
and
Commercial Share unsecured
Paper capital loans
Lm Lm Lm
Balance at 1 April 1995 36.2 107.9 312.3
Cash flows from financing 41.3 10.9 116.6
Amortisation of bond finance costs - (0.2) -
Balance at 31 March 1996 77.5 118.6 428.9
1995
Secured
and
Commercial Share unsecured
Paper capital loans
Lm Lm Lm
Balance at 1 April 1994 45.0 105.0 132.4
Cash flows from financing (8.8) 2.9 179.9
Balance at 31 March 1995 36.2 107.9 312.3
1994
Secured
and
Bills of Government Commercial Share unsecured
exchange debenture Paper capital loans
Lm Lm Lm Lm Lm
Balance at 1 April 1993 5.0 126.0 52.3 103.7 107.4
Cash flows from financing (5.0) (126.0) (7.3) 1.3 25.0
Balance at 31 March 1994 0.0 0.0 45.0 105.0 132.4
In addition to the above, L0.4m(1995 - L0.4m; 1994 - nil) has
been set off against profit and loss reserves in connection
with the purchase of own shares.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
21. CASH FLOW STATEMENT (continued)
(e) Analysis of net inflow of cash and cash equivalents in
respect of the disposal of subsidiary undertakings
1996
Lm
Cash consideration 32.5
Cash balances of subsidiary undertakings -
Net inflow of cash and cash equivalents in respect of the
disposal of subsidiaries 32.5
22. PENSION COMMITMENTS
Most of the Group's employees are members of the Electricity
Supply Pension Scheme which provides pension and other related
benefits based on final pensionable pay to employees
throughout the Electricity Supply Industry. The assets of the
Scheme are held in a separate trustee administered fund. The
pension cost to the Group for the year was L6.7m (1995 -
L11.2m; 1994 - L14.9m).
The latest actuarial valuation of the Group's section of the
Scheme was carried out as at 31 March 1995. The projected
unit method was used for the valuation, the principal
actuarial assumptions adopted being an investment return of 9%
per annum, salary increases (exclusive of merit awards) of
6.5% per annum, price inflation of 5% per annum and equity
dividend growth of 4.5% per annum.
At the date of the latest actuarial valuation the market value
of the Group's section of the Scheme was L576.4m and the
actuarial value of the assets was sufficient to cover 106.4%
of the benefits that had accrued to members. The resultant
past service surplus of L33.8m is being utilised partly to pay
benefits to members from 1 April 1996, with the remaining
balance (net of the capital cost of ex gratia and
supplementary pensions) being released to the profit and loss
account over the expected remaining working lives of members.
Contributions payable by the Group to the Scheme during the
year were L7.8m (1995 - L11.6m; 1994 - L15.4m). The balance
outstanding to the Scheme at 31 March 1996 was L0.1m (31 March
1995 L0.0m).
The next actuarial valuation is due as at 31 March 1998.
From 1 April 1995 new employees are only eligible to join the
Yorkshire Electricity Pension Plan, which is a defined
contribution scheme. The contributions payable by the Group
to the Scheme during the year were L0.0m (1995 - L0.0m).
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
23. LEASE OBLIGATION
The Group has the following annual commitments under operating
leases for equipment and vehicles which expire:
31 March 31 March
1996 1995
Lm Lm
Within one year 2.2 1.1
In the second to fifth year inclusive 1.4 3.8
3.6 4.9
Operating lease rentals charged to the profit and loss account were:
1996 1995 1994
Lm Lm Lm
Land and buildings 0.4 0.4 0.4
Plant and machinery 5.0 7.2 7.8
5.4 7.6 8.2
24. COMMITMENTS
(a) Capital commitments
31 March 31 March
1996 1995
Lm Lm
Contracted 30.0 29.6
(b) Other commitments
The Group has long term contracts in both its gas and
generation businesses for the supply of gas. These
contracts are for a total of 1,241m therms and for
periods of up to 12 years. The Company has a contract
with its subsidiary, Regional Power Generators Ltd
relating to the purchase of electricity which expires in
2008.
25. POST BALANCE SHEET EVENTS
Yorkshire Electricity sold its 50% shareholding in Torch
Telecom, a joint venture with Kingston Communications of Hull,
on 9 October 1996. This resulted in a profit to the Group of
L14.5m.
After the year end the Company completed the sale of most of
its investment properties for L27.7m.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
26. SUMMARY OF DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES IN THE UNITED KINGDOM AND THE UNITED STATES OF
AMERICA
The financial statements are prepared in accordance with
generally accepted accounting principles in the United Kingdom
("UK GAAP"), which differ in certain material respects from
those generally accepted accounting principles in the United
States of America ("US GAAP"). The differences that are
material to Yorkshire Electricity relate to the following
items and the necessary adjustments are shown in the tables
that follow:
Accounting for the National Grid transactions
(a) In October 1995, the shareholders of the National Grid
Group, consisting of the 12 Regional electrical companies
(RECs) and Her Majesty's Government (owning one special
share) agreed to seek a listing for the NGG shares on the
London Stock Exchange. As part of the agreement among
the shareholders of NGG, each REC agreed to provide a
one-off discount to each of their respective domestic
customers (see note 4) and, in order to compensate the
RECs for the cost of the discount and other costs
associated with the listing, NGG paid a special dividend
shortly before the listing.
Under UK GAAP, the discount was reported as a deduction
of turnover and the special dividend was included in
dividends from fixed asset investments. Under US GAAP,
the discount and dividend would have been recorded on a
net basis in the income statement.
(b) On 17 November 1995, a specie dividend of NGG's holding
in PSB was made. The company recorded the receipt of the
PSB shares through the dividend at no value. Following
this the Group's investment was revalued to the estimated
market value through the revaluation reserve.
Subsequently on 21 December 1995 the investment was
realised and the revaluation surplus was transferred in
reserves to the profit and loss account.
Under US GAAP the fair value of the interest in PSB would
be recorded as dividend income in the income statement.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
26. SUMMARY OF DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES IN THE UNITED KINGDOM AND THE UNITED STATES OF
AMERICA (continued)
(c) In December 1995 the Group made a distribution in specie
to its shareholders of approximately 90% of its interest
in NGG's issued ordinary share capital. The amount of
revaluation surplus which was realised upon distribution
of the shares was transferred through reserves to the
profit and loss account.
Under US GAAP the realised gain upon distribution of the
shares would be reported in the income statement.
(d) In order not to disadvantage holders of options in
Yorkshire Electricity shares the amount of NGG shares
each option holder would have been entitled to receive
had the shares under option been issued were put in trust
to distribute to the option holders upon exercise of the
option. The Group recorded an expense for the value of
these NGG shares.
Under US GAAP this would be an equity transaction and
would not be reflected on the income statement.
Deferred Taxation
Under UK GAAP, deferred taxation is provided at the rates at
which the taxation is expected to become payable. No
provision is made for amounts which are not expected to
become payable in the foreseeable future. Under US GAAP,
deferred taxation is provided on all temporary differences
under the liability method at rates at which the taxation
would be payable in the relevant future years.
Dividends from fixed asset investments
Under UK GAAP, dividends from the National Grid Group and
other fixed asset investments have been recorded in the profit
for the year to which they pertain. Under US GAAP, dividends
are recorded in the financial statements of the year in which
they are declared.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
26. SUMMARY OF DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES IN THE UNITED KINGDOM AND THE UNITED STATES OF
AMERICA (continued)
Dividends payable
Under UK GAAP, dividends are recorded in the financial
statements for the year to which they pertain. Under US GAAP,
dividends are recorded in the financial statements in the
period in which they are declared.
Stock-based compensation expense
Under UK GAAP, on the granting of share options, no amounts
are normally attributed to employee remuneration. Under US
GAAP, upon the granting of share options to employees, the
employer recognises as employee compensation the difference
between the market value of the shares and the amount the
employees are required to pay.
Pension Costs
Under both UK GAAP and US GAAP pension costs are provided so
as to provide for future pension liabilities. However, there
are differences in the prescribed methods of valuation which
give rise to GAAP adjustments to the pension cost and the
pension prepayment.
Investment properties
Under UK GAAP, investment properties are revalued annually in
the balance sheet to open market value and are not
depreciated. Under US GAAP investment properties are recorded
at cost and their cost less residual value is depreciated over
their estimated useful lives in a systematic and rational
manner.
Goodwill
Under UK GAAP, it is acceptable to eliminate purchased
goodwill directly against reserves. Under US GAAP goodwill is
recorded as an asset and amortised to earnings over its
estimate life.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
26. SUMMARY OF DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES IN THE UNITED KINGDOM AND THE UNITED STATES OF
AMERICA (continued)
Statement of Cash Flows
The group's statement of cash flows is prepared in accordance
with UK Financial Reporting Standard 1 (FRS 1), the objectives
and principles of which are similar to those set out in US
GAAP under Statement of Financial Accounting Standards No. 95,
"Statement of Cash Flows" (SFAS 95). The significant
differences between FRS 1 and SFAS 95 relate to
classification. Under FRS1, a reconciliation of profit from
operations to flows from operating activities is presented in
a note, and cash paid for interest and income taxes are
presented separately from cash flows from operating
activities. Under SFAS 95, cash flows from operating
activities are based on net profit, include interest and
income taxes, and are presented on the face of the statement.
UK GAAP requires cash and cash equivalents to be presented net
of overdrafts, SFAS 95 treats overdrafts within financing
activities.
The approximate effect of the differences between UK GAAP and
US GAAP on profit for the financial year, equity shareholders'
funds and total assets are as follows:
1996 1995 1994
Lm Lm Lm
Profit for the financial year under UK GAAP 128.5 160.9 106.9
Items increasing / (decreasing) profit:
Realised gain on NGG shares 215.8 - -
Dividend from NGG of PSB shares 56.1 - -
NGG share expense related to option holders 8.7 - -
Deferred taxation (23.1) (23.2) (9.0)
Dividends from fixed asset investments 11.6 (0.6) (1.6)
Tax credits on dividends receivable (2.3) 0.1 0.1
Stock-based compensation (0.6) (1.5) (1.4)
Pension costs (2.8) 6.4 (1.0)
Investment properties 1.6 (0.5) (0.3)
Goodwill (0.1) (0.2) (0.3)
Net income under US GAAP 393.4 141.4 93.4
YORKSHIRE ELECTRICITY GROUP PLC
NOTES TO THE ACCOUNTS
Year ended 31 March 1996
26. SUMMARY OF DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
IN THE UNITED KINGDOM AND THE UNITED STATES OF AMERICA (continued)
1996 1995
Lm Lm
Equity shareholders' funds under UK GAAP 521.0 625.9
Items increasing / (decreasing) shareholders' equity:
Deferred taxation (164.3) (137.4)
Dividends from fixed asset investments (0.7) (10.0)
Dividends payable 43.3 39.4
Pension costs 6.5 9.3
Investment properties (3.5) (11.7)
Provision for stock based compensation (1.6) (5.4)
Goodwill - 7.3
Other (1.8) -
Stockholders' equity under US GAAP 398.9 517.4
1996 1995
Lm Lm
Total assets under UK GAAP 1,421.5 1,382.3
Items increasing / (decreasing) total assets:
ACT Recoverable (11.4) (7.4)
Dividends from fixed asset investments (0.7) (10.0)
Pension costs 4.6 6.3
Investment properties (3.5) (11.7)
Goodwill - 7.3
Other (1.8) -
Total assets under US GAAP 1,408.7 1,366.8
YORKSHIRE ELECTRICITY GROUP PLC
SUMMARISED GROUP PROFIT AND LOSS ACCOUNT
Six months ended 30 September 1996
(Unaudited) (Audited)
6 months ended 12 months ended
30 Sept 30 Sept 31 March
1996 1995 1996
(Excluding NGG
Exceptional Items)
Lm Lm Lm
Turnover - continuing operations 608.3 620.1 1,426.0
Operating profit - continuing operations 94.8 112.0 216.4
Share of (losses)/profits of associated
undertakings (1.7) 1.6 (3.5)
Income from investments 0.6 8.0 8.9
Loss on disposal of subsidiary
undertakings - - (2.5)
Profit on ordinary activities
before interest 93.7 121.6 219.3
Net interest payable (12.9) (11.0) (20.1)
Profit on ordinary activities
before taxation 80.8 110.6 199.2
Taxation 17.8 27.3 52.1
Profit on ordinary activities
after taxation 63.0 83.3 147.1
Equity minority interests 0.6 0.4 1.2
Profit for the period 62.4 82.9 145.9
Ordinary dividend on equity shares 25.1 18.2 61.6
Special dividend on equity shares - - 184.9
Retained profit/(deficit) for the period 37.3 64.7 (100.6)
Earnings per ordinary share 39.3p 45.0p 81.7p
Ordinary dividend per ordinary share 15.80p 11.88p 39.18p
YORKSHIRE ELECTRICITY GROUP PLC
GROUP BALANCE SHEET
Six months ended 30 September 1996
30 Sept 30 Sept 31 March
1996 1995 1996
Lm Lm Lm
FIXED ASSETS
Tangible assets 768.4 776.5 772.0
Investments 105.4 140.8 104.3
873.8 917.3 876.3
CURRENT ASSETS
Stocks 5.0 4.4 4.3
Debtors 210.2 255.9 252.4
Investments 364.2 429.1 287.4
Cash at bank and in hand 33.1 6.8 1.1
612.5 696.2 545.2
CREDITORS: amounts falling due
within one year (463.3) (427.6) (429.4)
NET CURRENT ASSETS 149.2 268.6 115.8
TOTAL ASSETS LESS CURRENT LIABILITIES 1,023.0 1,185.9 992.1
CREDITORS: amounts falling due
after more than one year (422.4) (450.2) (423.7)
Provisions for liabilities and charges (41.4) (41.9) (47.3)
NET ASSETS 559.2 693.8 521.1
CAPITAL AND RESERVES
Called up share capital 108.5 104.7 108.1
Share premium account 12.2 4.1 10.5
Investment property revaluation reserve 1.7 10.9 1.7
Revaluation reserve 18.1 71.7 23.1
Capital redemption reserve 0.1 - 0.1
Profit and loss account 417.9 500.2 377.5
EQUITY SHAREHOLDERS' FUNDS 558.5 691.6 521.0
Equity minority interests 0.7 2.2 0.1
559.2 693.8 521.1
/TABLE
YORKSHIRE ELECTRICITY GROUP PLC
SUMMARISED GROUP CASH FLOW STATEMENT
Six months ended 30 September 1996
12 months
6 months ended ended
30 Sept 30 Sept 31 March
1996 1995 1996
(Restated) (Restated)
Lm Lm Lm
Cash flow from operating activities 110.6 175.4 228.1
Returns on investments and servicing of
finance - (1.1) 94.1
Taxation 7.3 (19.4) (97.6)
Capital expenditure and financial investment (14.1) (49.1) (38.1)
Acquisitions and disposals - - 32.5
Equity dividends paid - - (242.5)
Cash flow before use of liquid resources
and financing 103.8 105.8 (23.5)
Management of liquid resources (79.1) (301.9) (153.6)
Financing 6.9 188.8 168.4
Increase/(decrease) in cash 31.6 (7.3) (8.7)
YORKSHIRE ELECTRICITY GROUP PLC
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Six months ended 30 September 1996
12 months
6 months ended ended
30 Sept 30 Sept 31 March
1996 1995 1996
Lm Lm Lm
Profit for the period 62.4 82.9 128.5
Unrealised deficit on revaluation of
investment properties - - (6.6)
Gain on deemed disposal of part holding in
associated undertaking - - 4.8
(Deficit)/surplus on revaluation of investment
in NGG (4.1) - 233.2
Surplus on revaluation of investment in PSB 3.0 - 56.1
Total recognised gains and losses
for the period 61.3 82.9 416.0
YORKSHIRE ELECTRICITY GROUP PLC
NOTES
Six months ended 30 September 1996
1. BASIS OF PREPARATION
The interim results to 30 September 1996 and 30 September 1995
are unaudited. The interim financial statements, which were
approved by the Directors on 10 December 1996, were prepared
on the historical cost basis (as modified by the revaluation
of certain fixed assets) consistent with the accounting
policies adopted for the year ended 31 March 1996 as set out
in the Company's Annual Report and Accounts.
The financial information contained in this interim statement
does not constitute statutory accounts within the meaning of
Section 240 of the Companies Act 1985. The results for the
year ended 31 March 1996 are abridged from the full accounts
for that year, which contain an unqualified auditor's report
and have been delivered to the Registrar of Companies. To
facilitate comparison, the results for the year ended 31 March
1996 are presented before NGG exceptional items, which arose
in the second half of 1995/96. The summarised Cash Flow
Statement has been prepared in accordance with FRS1 (Revised).
Comparative figures for September 1995 and March 1996 have
been restated on the same basis.
2. DIVIDEND
An interim dividend of 15.80p (net) per ordinary share will be
paid on 25 March 1997. The shares will be marked ex-dividend
on 27 January 1997 and the record date will be 4 February
1997.
3. TAXATION
The taxation charge is derived by applying the forecast
effective rate for the year.
4. EARNINGS PER SHARE
Earnings per share are based on earnings for the period of
L62.4m (1995: L82.9m) and calculated on 158.9m shares being
the weighted average number in issue during the interim period
to 30 September 1996 (1995: 184.1m). A consolidation of
shares took place in January 1996 and the earnings per share
figure for 1995 would have been 54.0p (153.4m shares) if it
had been calculated on the basis that the consolidation had
occurred at the commencement of the period.
YORKSHIRE ELECTRICITY GROUP PLC
NOTES
Six months ended 30 September 1996
5. ANALYSIS OF TURNOVER AND OPERATING PROFIT BY BUSINESS
ACTIVITY:
Turnover Operating profit
Sept Sept Sept Sept
1996 1995 1996 1995
Lm Lm Lm Lm
Distribution 142.8 155.8 60.1 77.0
Supply 545.1 566.6 24.1 21.1
Other businesses 99.4 78.7 10.6 13.9
Inter activity sales (179.0) (181.0) - -
Total 608.3 620.1 94.8 112.0
Share of associated undertakings (1.7) 1.6
Income from investments 0.6 8.0
Profit before interest and tax 93.7 121.6
6. SUMMARY OF DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES IN THE UNITED KINGDOM AND THE UNITED STATES OF
AMERICA
The financial statements are prepared in accordance with
generally accepted accounting principles in the United
Kingdom ("UK GAAP"), which differ in certain material
respects from those generally accepted accounting principles
in the United States of America ("US GAAP"). The
differences that are material to Yorkshire Electricity
YORKSHIRE ELECTRICITY GROUP PLC
NOTES
Six months ended 30 September 1996
6. SUMMARY OF DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES IN THE UNITED KINGDOM AND THE UNITED STATES OF
AMERICA (continued)
relate to the following items and the necessary adjustments
are shown in the tables that follow:
6 months to 12 months
30 Sept 30 Sept 31 March
1996 1995 1996
Lm Lm Lm
Profit for the financial year under
UK GAAP 62.4 82.9 128.5
Items increasing/(decreasing) profit:
Realised gain on NGG shares 0.5 - 215.8
Dividend from NGG of PSB shares 3.0 - 56.1
NGG share expense related to option holders - - 8.7
Deferred taxation (10.6) (10.9) (23.1)
Dividends from fixed asset investments 0.9 12.5 11.6
Tax credits on dividends receivable (0.2) (2.5) (2.3)
Investment properties 0.9 (0.7) 1.6
Goodwill - (0.1) (0.1)
Stock-based compensation (0.3) - (0.6)
Pension costs 0.2 (1.5) (2.8)
Net income under US GAAP 56.8 79.7 393.4
6 months to 12 months
30 Sept 30 Sept 31 March
1996 1995 1996
Lm Lm Lm
Equity shareholders' funds under
UK GAAP 558.5 691.6 521.0
Items increasing/(decreasing)
shareholders' equity:
Deferred taxation (173.5) (148.3) (164.3)
Dividends from fixed asset investments - - (0.7)
Dividends payable - - 43.3
Investment properties (2.6) (12.4) (3.5)
Goodwill - 7.2 -
Provision for stock-based compensation (0.9) (5.2) (1.6)
Pension costs 6.7 7.8 6.5
Other (1.8) - (1.8)
Stockholders' equity under US GAAP 386.4 540.7 398.9
/TABLE
YORKSHIRE ELECTRICITY GROUP PLC
NOTES
Six months ended 30 September 1996
6. SUMMARY OF DIFFERENCES BETWEEN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES IN THE UNITED KINGDOM AND THE UNITED STATES OF
AMERICA (continued)
6 months to 12 months
30 Sept 30 Sept 31 March
1996 1995 1996
Lm Lm Lm
Total assets under UK GAAP 1,486.3 1,613.5 1,421.5
Items increasing/(decreasing) total
assets:
Dividends from fixed asset investments - - (0.7)
ACT recoverable - - (11.4)
Investment properties (2.6) (12.4) (3.5)
Goodwill - 7.2 -
Pension costs 6.7 5.4 4.6
Other (1.8) - (1.8)
Total assets under US GAAP 1,488.6 1,613.7 1,408.7