National Grid 2016 Annual Report Download - page 140

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. The evaluation of the likelihood
ofthe contingent events has required best judgement by management regarding the probability of exposure to potential loss. Should
circumstances change following unforeseeable developments, the likelihood could alter.
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 2014 1,072 144 79 14 336 1,645
Exchange adjustments 95 8 – 2 28 133
Additions 25 7 9 7 57 105
Unused amounts reversed (5) –(2) –(5) (12)
Unwinding of discount 57 3 1 – 12 73
Utilised (80) (25) (48) –(56) (209)
At 31 March 2015 1,16 4 137 39 23 372 1,735
Exchange adjustments 29 3 – 1 9 42
Additions 30 22 10 133 96
Unused amounts reversed (15) (8) (1) –(3) (27)
Unwinding of discount 58 4 1 – 10 73
Utilised (97) (17) (19) (7) (60) (200)
At 31 March 2016 1,16 9 141 30 18 361 1,719
2016
£m
2015
£m
Current 236 235
Non-current 1,483 1,500
1,719 1,735
Notes to the consolidated financial statements
– analysis of items in the primary statements continued
138 National Grid Annual Report and Accounts 2015/16 Financial Statements