Annual Report 2010 in PDF - BBA Aviation

Financial statements Notes to the Consolidated Financial Statements – continued
85 Independent Auditor’s
Report to the Members of
BBA Aviation plc in Respect
of the Consolidated
Financial Statements
18. Provisions
Beginning
Exchange
rate Charged Utilised End
86 Consolidated Income of year adjustments in year in year of year
Statement £m £m £m £m £m
87 Consolidated Statement of Restructuring provisions 0.8 – 0.3 (0.9) 0.2
Comprehensive Income
Discontinued operations 19.9 0.1 0.3 (1.5) 18.8
88 Consolidated Balance Sheet
Environmental provisions 0.5 – 0.9 (0.2) 1.2
89 Consolidated Cash Flow
Statement 21.2 0.1 1.5 (2.6) 20.2
90 Consolidated Statement of
Changes in Equity
91 Accounting Policies of
the Group
95 Notes to the Consolidated
Financial Statements
126 Independent Auditor’s
Report to the Members of
BBA Aviation plc in Respect
of the Parent Company
Financial Statements
127 Company Balance sheet
128 Accounting Policies of
the Company
129 Notes to the Company
Financial Statements
134 Principal Subsidiary
Undertakings
135 Five Year Summary
136 Shareholder Information
114 — Consolidated Financial Statements
Restructuring provisions represents costs provided in relation to commitments made at the balance sheet date for reorganisations which are
expected to occur within one year of the balance sheet date. The charges to the restructuring provision relate principally to the closure of some
commercial handling operations and rationalisation costs in the Engine Repair and Overhaul business.
Discontinued operations represents a provision for environmental and other liabilities relating to businesses that have been disposed of by
the Group in prior years. The liabilities have been assessed over a remaining period of 25 years. The provision of £18.8 million is partially of set by
expected recoveries from third parties of £12.8 million (2009: £12.9 million), which are included within trade and other receivables due after one
year in note 12.
Environmental provisions relate to environmental liabilities within businesses that have been acquired by the Group. The liabilities have an
expected life of up to fve years.
2010 2009
Analysed as: £m £m
Current liabilities 0.9 0.8
Non-current liabilities 19.3 20.4
20.2 21.2
19. Pensions and other post-retirement benef ts
The Group operates a number of plans worldwide, of both the funded defned beneft type and the defned contribution type. The normal
pension cost for the Group, including early retirement costs, was £7.7 million (2009: £7.9 million), of which £4.5 million (2009: £4.0 million) was in
respect of foreign schemes. This includes £4.7 million (2009: £4.5 million) relating to defned contribution schemes. The pension costs are
assessed in accordance with the advice of independent qualifed actuaries, where practicable, using a variety of methods and assumptions and
otherwise, in respect of certain foreign schemes, in accordance with local regulations.
The Group’s main UK pension commitments are contained within a f nal salary def ned beneft scheme, the BBA Income and Protection
Plan (IPP), with assets held in a separate trustee-administered fund. Contributions to the scheme are made and the pension cost is assessed using
the projected unit method. The latest actuarial valuation of the scheme was carried out as at 31 March 2009. Following this valuation the
Company agreed to pay additional contributions of £3.75 million per annum from 2011 to 2012 and £4.75 million in each of the years 2013 and
2014 to repair the funding shortfall of £30.8 million calculated at that date. During 2008, the Trustees of the UK defned beneft plan purchased
from Legal & General Group plc an annuity to match the liabilities associated with pensioner members. Since the initial “buy-in”, further tranches
of annuities have been purchased periodically in respect of new pensioner liabilities. The annuity is an investment of the UK plan, and all pension
liabilities and responsibility for future pension payments remain with the plan. The income from the annuity matches the payments to be made
to the pensioner members it covers and removes mortality risk in relation to those members which are the subject of the annuity purchase.
The IPP was closed to new members in 2002. On 1 March 2010, the future service benefts provided by this plan were changed from a f nal
salary to a career average revalued earnings (CARE) basis. At the same time, benefts accrued in the IPP prior to 1 March 2010 were changed so
that these now increase in line with infation rather than future salary increases. This resulted in a curtailment gain during 2010 of £3.1 million.
The Group’s foreign pension schemes mainly relate to a number of funded fnal salary defned beneft pension arrangements in North
America. Pension costs have been calculated by independent qualifed actuaries, using the projected unit method and assumptions appropriate
to the arrangements in place.
The Group’s foreign pension schemes mainly relate to a funded fnal salary defned beneft pension arrangement in North America. Other
plans in North America principally cover healthcare and life assurance benefts. Pension costs have been calculated by independent qualifed
actuaries, using the projected unit method.