Qantas 2014 Annual Report Download - page 91

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89
QANTAS ANNUAL REPORT 2014
Reconciliations of the carrying amounts of each class of provision, except for employee benefits, are set out below:
Qantas Group
2014
$M
Opening
Balance
Provisions
Made
Provisions
Utilised
Unwind of
Discount Other1
Closing
Balance Current
Non-
current Total
Reconciliations
Onerous contracts 54 6(35) 1 – 26 23 326
Make good on leased assets 130 77 (23) 3– 187 10 177 187
Insurance, legal and other 297 52 (96) 9(36) 226 62 164 226
Total 481 135 (154) 13 (36) 439 95 344 439
1 Other includes transfers to other balance sheet accounts and disposals of controlled entities.
NATURE AND PURPOSE OF PROVISIONS
Onerous Contracts
An onerous contract is a contract in which the unavoidable cost of meeting the obligations under the contract exceeds the economic
benefit expected to be received. The Qantas Group has raised this provision in respect of operating leases on premises and onerous
customer contracts.
Make Good on Leased Assets
The Qantas Group has leases that require the asset to be returned to the lessor in a certain condition. A provision has been raised for
the present value of the future expected cost at lease expiry.
Insurance, Legal and Other
The Qantas Group self-insures for risks associated with workers compensation. An outstanding claim is recognised when an incident
occurs that may give rise to a claim and is measured at the present value of the cost that the entity expects to incur in settling the
claim. Legal provisions include estimates of the likely penalties to be incurred in relation to claims and litigation in the normal course
of business.
22. CAPITAL AND RESERVES
Qantas Group
2014
$M
2013
$M
ISSUED CAPITAL
Issued and paid-up capital: 2,196,330,250 (2013: 2,241,745,788) ordinary shares, fully paid 4,630 4,693
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at
shareholders’ meetings.
In the event of wind-up, Qantas ordinary shareholders rank after all creditors and are fully entitled to any residual proceeds
onliquidation.
Treasury shares consist of shares held in trust for Qantas employees in relation to equity compensation plans. As at 30 June 2014,
8,230,499 (2013: 23,055,878) shares were held in trust and classified as treasury shares.
RESERVES
Employee compensation reserve 32 49
Hedge reserve (refer to Note 25(C)) (72) 123
Foreign currency translation reserve (41) (44)
Total reserves (81) 128
NATURE AND PURPOSE OF RESERVES
Employee Compensation Reserve
The fair value of equity plans granted is recognised in the employee compensation reserve over the vesting period. This reserve will
be reversed against treasury shares when the underlying shares vest and transfer to the employee. No gain or loss is recognised in
the Consolidated Income Statement on the purchase, sale, issue or cancellation of Qantas’ own equity instruments.
Hedge Reserve
The hedge reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments
related to future forecast transactions.