Notes to the consolidated financial statements - Note 32

    2013
R’000		     2012
R’000		  
32. Provisions          
  Long-term portion 371 353     340 289  
  Short-term portion 363 136     308 261  
    734 489     648 550  

      Onerous
contracts
R’000		   Insurance
liabilities
R’000		   Dismantling
and site
restoration
R’000		   Customer
loyalty
programme
R’000		   Other
R’000		   Total
R’000		  
  Balance at June 30 2011   88 165   211 878   145 238   37 211   27 379   509 871  
  Created   75 997   107 365   34 756   35 765   13 851   267 734  
  Utilised   (43 466)   (72 525)   (23 644)   (25 664)   (15 014)   (180 313)  
  Net acquisition of businesses   7 925   –   –   –   360   8 285  
  Exchange rate adjustments   9 207   –   25 780   6 478   1 508   42 973  
  Balance at June 30 2012   137 828   246 718   182 130   53 790   28 084   648 550  
  Created   13 606   144 266   31 376   68 675   20 627   278 550  
  Utilised   (80 380)   (116 576)   (17 854)   (27 536)   (6 232)   (248 578)  
  Net acquisition of businesses   147   –   694   –   2 201   3 042  
  Exchange rate adjustments   15 448   –   27 530   7 932   2 015   52 925  
  Balance at June 30 2013   86 649   274 408   223 876   102 861   46 695   734 489  

 

Onerous contracts

Onerous contracts are identified through regular reviews of the terms and conditions of contracts as well as on the acquisition of businesses. A provision for onerous contracts is calculated as the present value of the portion which management deem to be onerous in light of the current market conditions, discounted using market-related rates. An annual expense is recognised over the life of the contracts.

Insurance liabilities

Insurance liabilities include amounts provided for: unearned premiums, which represent the proportion of premiums written in the current year which relate to risks that have not expired by the end of the financial year and are calculated on a time proportionate basis; deferred acquisition costs, which are recognised on a basis consistent with the related provisions for unearned premiums; claims, which are calculated on the settlement amount outstanding at year end; and claims incurred but not reported, for claims arising from events that occurred before the close of the accounting period but which had not been reported to the Group by that date, and are calculated based on the preceding six years’ insurance premium revenue multiplied by percentages specified in the Short Term Insurance Act.

Provision for cost of dismantling and restoration of site

A provision is raised for the estimated costs of dismantling and removing items and restoring the site on which they are located. The change in the liability arising as a result of unwinding the discount is recognised in the income statement as a finance charge. The dismantling of the plant and recommissioning of buildings is expected to coincide with the end of the useful life of the plant and lease periods.

Customer loyalty programme

This is a customer loyalty programme introduced by certain operations within the Group, whereby customers can earn points for redemption in the form of gift certificates and products of the operations.
The provision is calculated based on the points outstanding at year end.

Other

Consists of various individually insignificant provisions.

Notes to the consolidated financial statements - Note 32