i

Notes on the Condensed Interim Statements
for the period 1 April 2016 to 30 September 2016
2. Basis of preparation (continued)
(ii) Exceptional items and certain re-measurements (continued)
Certain re-measurements are re-measurements arising on certain commodity, interest rate and currency contracts which are accounted
for as held for trading or as fair value hedges in accordance with the Group’s policy for such financial instruments. This excludes
commodity contracts not treated as financial instruments under IAS 39 where held for the Group’s own use requirements which are not
recorded until the underlying commodity is delivered.
(iii) Other additional disclosures
As permitted by IAS 1 ‘Presentation of financial statements’, the Group’s income statement discloses additional information in respect of
joint ventures and associates, exceptional items and certain re-measurements to aid understanding of the Group’s financial performance
and to present results clearly and consistently.
3. Summary of significant new accounting policies and reporting changes
In the period, the Group has adopted the amendments to IFRS 11 ‘Accounting for acquisitions of interests in joint operations’ which were
effective on 1 January 2016. These clarify that the acquisition of an interest in a joint operation will be accounted for in accordance with
IFRS 3 Business Combinations. Adopting this standard has not had an impact on these financial statements.
The following issued standards have not yet been adopted by the Group:
i) IFRS 15 ‘Revenue from contracts with customers’ is effective on 1 January 2018 (and thus to the Group from 1 April 2018), subject to
European Union (EU) endorsement;
ii) IFRS 16 ‘Leases’ is effective on 1 January 2019 (1 April 2019 to the Group), subject to EU endorsement;
iii) IFRS 9 ‘Financial instruments’ which will be effective on 1 January 2018 (1 April 2018 to the Group), subject to EU endorsement.
The Group has commenced initial assessment of the impact of these standards on the consolidated financial statements. However, at this
stage, it is not yet practicable to quantify the impact these standards will have. The assessment of IFRS 15 will consider matters such as
bundled goods and services, the allocation of transaction price to performance obligations, treatment of customer acquisition costs and
contracts with variable consideration. The assessment of IFRS 16 will require, with certain exceptions, obligations associated with
contracts currently designated as operating leases to be recognised on balance sheet as lease liabilities. The definition of a lease has also
been modified which may impact which contracts the Group accounts for as leases. Further comment will be provided on the Group’s
assessment of these matters in the financial statements for the year to 31 March 2017.
In addition to these, there are a number of other amendments and annual improvement project recommendations that are not yet
effective but which have been endorsed by the EU. These are not anticipated to have a material impact on the Group’s consolidated
financial statements.
4. Critical accounting judgements and key sources of estimation uncertainty
In the process of applying the Group’s accounting policies, management necessarily makes judgements and estimates that have a
significant effect on the amounts recognised in the financial statements. Changes in the assumptions underlying the estimates could result
in a significant impact to the financial statements. The Group’s key accounting judgement and estimation areas are noted with the most
Significant Financial Judgement areas as specifically discussed by the Audit Committee being highlighted separately.
4.1 Significant Financial Judgements – Estimation Uncertainties
The preparation of these Financial Statements has specifically considered the following Significant Financial Judgements all of which are
areas of estimation uncertainty.
(i)
Impairment testing and valuation of certain Non-Current Assets – Estimation Uncertainty
The Group annually reviews the carrying amounts of its goodwill, other intangible assets and specific property, plant and equipment
assets to determine whether any impairment of the carrying value of those assets requires to be recorded. In conducting its reviews, the
Group makes judgements and estimates in considering the recoverable amount of the respective assets or cash-generating units (CGUs).
The specific assets under review in the period ended 30 September 2016 are goodwill, thermal power generation assets, wind farm CGUs,
gas storage assets and exploration and production (E&P) assets. As permitted by IAS 34 Interim Financial Reporting, the Group has focused
on reviewing the key changes in estimates and assumptions as applied in the preparation of the financial statements to 31 March 2016.
Changes to the estimates and assumptions on factors such as regulation and legislation changes, power, gas, carbon and other commodity
prices, volatility of gas prices, plant running regimes and load factors, expected 2P reserves, discount rates and other inputs could impact
the assessed recoverable value of assets and CGUs and consequently impact the Group’s income statement and balance sheet.
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