i

Notes on the Condensed Interim Statements
for the period 1 April 2016 to 30 September 2016
18. Capital Commitments
March
2016
£m
898.4
September
2016
£m
September
2015
£m
Capital Expenditure
Contracted for but not provided 959.6 1,138.2
19. Related Party Transactions
The following trading transactions took place during the period between the Group and entities which are related to the Group but which
are not members of the Group. Related parties are defined as those in which the Group has joint control or significant influence over.
Sale of
goods and
services
Purchase of
goods and
services
Amounts
owed from
Amounts
owed to
Sale of
goods and
services
Purchase of
goods and
services
Amounts
owed from
Amounts
owed to
Sep 2016 Sep 2016 Sep 2016 Sep 2016 Sep 2015 Sep 2015 Sep 2015 Sep 2015
Equity accounted joint ventures: £m £m £m £m £m £m £m £m
Scotia Gas Networks Ltd 22.1 (78.4) 10.1 0.9 25.8 (78.4) 14.8 -
Seabank Power Ltd 2.5 (59.3) - 8.4 7.2 (60.0) 1.9 12.6
Marchwood Power Ltd 9.7 (72.8) 2.9 17.9 8.1 (56.2) 2.5 6.7
Clyde Windfarm (Scotland) Ltd 2.8 - 0.5 - - - - -
Other Joint Ventures 3.5 - 4.1 - 4.4 - 3.8 -
Associates 0.6 (23.9) 3.9 4.0 0.3 (23.8) 2.0 -
The Group’s gas supply activity incurs gas distribution charges from Scotia Gas Networks while the Group also provides services to Scotia
Gas Networks in the form of a management service agreement for corporate services and stock procurement services. The transactions
with Seabank Power Limited and Marchwood Power Limited relate to the contracts for the provision of energy or the tolling of energy
under power purchase arrangements. The amounts outstanding are trading balances, are unsecured and will be settled in cash. The
transactions with Clyde Windfarm (Scotland) Limited relate to contracts for the provisions of energy under power purchase agreements,
and the build of an extension to the existing operating wind farm. No guarantees have been given or received. No provisions have been
made for doubtful debts in respect of the amounts owed by related parties.
20. Seasonality of operations
Certain activities of the Group are affected by weather and temperature conditions and seasonal market price fluctuations. As a result of
this, the amounts reported for the interim period may not be indicative of the amounts that will be reported for the full year due to
seasonal fluctuations in customer demand for gas, electricity and services, the impact of weather on demand, renewable generation
output and commodity prices, market changes in commodity prices and changes in retail tariffs. In Networks, the volumes of electricity
and gas distributed or transmitted across network assets are dependent on levels of customer demand which are generally higher in
winter months. In Retail, notable seasonal effects include the impact on customer demand of warmer temperatures in the first half of the
financial year. In Wholesale, there is the impact of lower customer demand on commodity prices, the weather impact on renewable
generation such as hydro and wind and other seasonal effects. The impact of temperature on customer demand for gas is more volatile
than the equivalent demand for electricity.
21. Post Balance Sheet Events
On 17 October 2016, SSE plc announced it had entered into an agreement to sell a 16.7% equity stake in Scotia Gas Networks Limited
('SGN') to wholly owned subsidiaries of the Abu Dhabi Investment Authority (ADIA), for a headline consideration, before costs and
adjustments, of £621.0m based on an effective economic date of 1 April 2016. The transaction was completed on 26 October with the
consideration being settled in cash. The sale follows a review announced by SSE in May 2016. SSE will retain a 33.3% equity stake in SGN.
75