Page 53 - NZPM Annual Report 2017

The Group has entered into interest rate swaps to protect against the effect of interest rate movements on the
interest expense associated with a portion of its long-term borrowings. Swaps currently in place, $6,000,000
(2016: $8,000,000) cover approximately 92.3% (2016: 94.1%) of the secured bank loans outstanding. The
Group has contracted to pay a fixed rate of interest in return for receiving payments based on a variable rate
of interest. The fixed interest rates average 6.01% (2016: 6.52%). The variable rates are set at the 90 day bank
bill settlement rate, which at balance date was 2.00% (2016: 2.56%). The contracts require settlement of net
interest receivable or payable each 90 days as appropriate, and are settled on a net basis.

On the 1 November 2016 the Group closed out $2,000,000 of interest rate swaps for a payment of $214,450
(2016: $4,000,000 for a payment of $548,000).

17. PROVISIONS
2017 2016
$’000 $’000

(i) Employee entitlements
Balance at the beginning of the year 2,431 2,289
Additional provisions made during the year 3,319 2,666
Provisions used during the year (2,647) (2,524)
Balance at the end of the year 3,103 2,431

Classified as:
Current 2,594 1,997
Non-current 509 434
3,103 2,431

The provision for employee entitlements relates to employee benefits such as accrued annual leave, long
service leave, employee bonuses and sick leave. Most of the liability is expected to be incurred over the next
twelve months. A provision is also maintained for the payment of a retiring allowance for directors, $173,204
(2016: $115,139), in accordance with the Constitution.

2017 2016
$’000 $’000
(ii) Site restoration
Balance at the beginning of the year 80 215
Provisions used during the year 0 (135)
Balance at the end of the year 80 80

Classified as:
Non-current 80 80

An obligation exists to restore certain sites to their original condition. The estimated future obligations include
the cost of removing the fixtures and restoring the affected areas.

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