Annual Report

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50 Ausgrid and Controlled Entity Notes to financial statements For the year ended 30 June 2015 14. TRADE AND OTHER PAYABLES Consolidated Entity & Ausgrid Trade payables 89.4 119.0 Interest payable 273.0 277.8 Accruals 29.5 24.9 Other payables 58.7 53.8 2015 $M 2014 $M 450.6 475.5 Details regarding credit risk, liquidity risk and market risk including a maturity analysis of the above payables are disclosed in Note 18. 15. BORROWINGS Current liabilities Consolidated Entity & Ausgrid Bank Overdraft 1.2 – Current portion of loans 409.3 527.7 Non‐current liabilities 2015 $M 2014 $M 410.5 527.7 Finance lease liabilities 17.2 – Non‐current portion of loans 8 564.4 8 168.6 8 581.6 8 168.6 Loans are unsecured and repayable in full on various maturity dates. For more information about Ausgrid’s exposure to interest rate and foreign currency risks, see Note 18. For more information about finance leases, see Note 25. 16. PROVISIONS Insurance $M Dividends $M Employee Benefits $M Restructuring $M Consolidated Entity & Ausgrid Opening Balance at 1 July 2014 18.8 381.7 687.5 36.9 90.0 1 214.9 – additional provisions 5.7 294.8 268.5 57.9 6.3 633.2 – amounts used (4.9) (381.7) (304.6) (29.3) (11.7) (732.2) – amounts reversed (0.7) – (172.7) (18.1) (8.4) (199.9) Closing Balance at 30 June 2015 18.9 294.8 478.7 47.4 76.2 916.0 Other $M Total $M Current 2.8 294.8 309.3 47.4 24.2 678.5 Non‐current 16.1 – 169.4 – 52.0 237.5 Balance at 30 June 2015 18.9 294.8 478.7 47.4 76.2 916.0 Current 4.0 381.7 367.1 36.9 37.1 826.8 Non‐current 14.8 – 320.4 – 52.9 388.1 Balance at 30 June 2014 18.8 381.7 687.5 36.9 90.0 1 214.9
Ausgrid – <strong>Annual</strong> <strong>Report</strong> 2014/15 51 (i) Insurance This insurance provision relates to workers compensation and general insurance. Ausgrid is a self‐insurer through its insurance provision for workers’ compensation and meets all liabilities under the Workers’ Compensation legislation in NSW and other States. The liabilities cover claims incurred but not yet reported and the anticipated fund management fees in respect of the management of those claims. During the year, a consulting actuary undertook the annual investigation of Ausgrid’s estimated liability for workers’ compensation as at 30 June 2015. The liability is measured as the present value of future payments at 30 June 2015 and was estimated to be $16.9 million (2014: $16.5 million). This includes the liability for dust related diseases which is estimated at $6.1 million (2014: $7.5 million). (ii) Dividends Provision is made for the amount of any dividend and other payments determined by the Directors and approved by the shareholding Ministers prior to 30 June 2015 but not distributed at reporting date. The dividend has regard to the annual performance agreement (Statement of Corporate Intent) with NSW Treasury. The dividend is calculated in accordance with TPP14‐04 Financial Distribution Policy for Government Businesses. The dividend payable of $294.8 million (2014: $381.7 million) was approved by the shareholding Ministers before 30 June 2015 and was calculated based on forecast profit adjusted for certain non‐cash items. (iii) Employee benefits The provision for employee benefits relates to amounts accruing to employees up to reporting date in respect of employee benefits including defined benefits superannuation obligations, annual leave, pre 1993 sick leave and long service leave. Amounts provided for in relation to defined benefits superannuation obligations, long service leave and preserved sick leave are based on an actuarial assessment and associated formulae provided for intervening periods between assessments as outlined in Note 1(t) and 1(u). All other employee benefit amounts expected to be settled in 12 months have been measured at the amounts expected to be paid when the liabilities are settled. The non‐current provision for employee benefits also include $113.1 million (2014: $235.1 million) relating to the Defined Benefits Superannuation liability. (iv) Restructuring provision Ausgrid are undertaking a detailed review of its organisational structure which commenced on 1 July 2012 as part of the NSW electricity industry reform program. The impact of this review will result in a significant reorganisation and centralisation of functions, including the consolidation of some roles and the reconsideration of future workforce plans. A provision for restructure has been raised relating to individual employee redundancies at 30 June 2015 covering redundant Network business roles and redundant roles post the end of the Transition Services Agreement (TSA). The provision also includes restructuring costs relating to an Early Retirement Scheme approved by the Australian Taxation Office. The Early Retirement Scheme is part of a "Mix & Match" program. The program allows eligible network employees to leave through an Early Retirement Scheme and create vacancies for TSA staff, whose roles were redundant at the end of the TSA. The Australian Taxation Office approved the Program on 3 July 2013. (v) Other Provision for site remediation A provision for site remediation was created to cover all asbestos and contaminated land remediation costs to be incurred during subsequent years. The provision as at 30 June 2015 was estimated to be $13.2 million (2014: $13.9 million). The provision is the best estimate of the present value of the expenditure required to settle the obligation at the reporting date, based on current legal requirements and technology. Future costs are reviewed annually and any changes are reflected in the present value of the provision at the end of the reporting period. Provision for removal and disposal of equipment (restoration provision) A provision for removal and disposal of system equipment was created in 2004/05 to cover future end of life removal costs where there is a legislative obligation to perform this. The provision as at 30 June 2015 was estimated to be $42.7 million (2014: $44.0 million). The provision is the best estimate of the present value of the expenditure required to settle the restoration obligation at the reporting date, based on current legal requirements and technology. Future restoration costs are reviewed annually and any changes are reflected in the present value of the restoration provision at the end of the reporting period. The amount of the provision for future restoration costs is capitalised and is depreciated in accordance with the policy set out in Note 1(w). The unwinding of the effect of discounting on the provision is recognised as a finance cost.
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