National Grid 2014 Annual Report Download - page 128

23. Provisions
We make provisions when an obligation exists, resulting from a past event and it is probable that cash will be paid to settle it, but
theexact amount of cash required can only be estimated.
The main estimates relate to environmental remediation and decommissioning costs for various sites we own or have owned and
other provisions, including restructuring plans and lease contracts we have entered into that are now loss making.
Our strategy in action
We are committed to the protection and enhancement of the environment. However, we have acquired, owned and operated a
number of businesses which have, during the course of their operations, created an environmental impact. Therefore we have a
provision that reflects the expected cost to remediate these sites. Current operations will seldom result in new sites with significant
expected costs being added to the provision.
Provisions are recognised where a legal or constructive obligation exists at the reporting date, as a result of a past event, where the
amount of the obligation can be reliably estimated and where the outflow of economic benefit is probable.
Provision is made for decommissioning and environmental costs, based on future estimated expenditures, discounted to present values.
An initial estimate of decommissioning and environmental costs attributable to property, plant and equipment is recorded as part of the
original cost of the related property, plant and equipment.
Changes in the provision arising from revised estimates or discount rates or changes in the expected timing of expenditures that relate
toproperty, plant and equipment are recorded as adjustments to their carrying value and depreciated prospectively over their remaining
estimated useful economic lives; otherwise such changes are recognised in the income statement.
The unwinding of the discount is included within the income statement as a financing charge.
Environmental
£m
Decommissioning
£m
Restructuring
£m
Emissions
£m
Other
£m
Total
provisions
£m
At 1 April 2012 1,158 112 70 23 368 1,731
Exchange adjustments 45 5 – 1 14 65
Additions 92 –31 183 207
Unused amounts reversed (55) (20) (5) (3) (4) (87)
Unwinding of discount 59 – – – 16 75
Utilised (101) (16) (43) (14) (57) (231)
At 31 March 2013 1,198 81 53 8 420 1,760
Exchange adjustments (79) (7) –(1) (25) (112)
Additions 11 84 86 742 230
Unused amounts reversed (14) –(1) –(3) (18)
Unwinding of discount 57 – – – 16 73
Utilised (101) (14) (59) –(114) (288)
At 31 March 2014 1,072 144 79 14 336 1,645
2014
£m
2013
£m
Current 282 308
Non-current 1,363 1,452
1,645 1,760
Notes to the consolidated
financial statements continued
126 National Grid Annual Report and Accounts 2013/14