Notes to the consolidated financial statements Note 30

    2017
R’000
  2016
R’000
 
30. PROVISIONS        
  Long-term portion 513 792   397 970  
  Short-term portion 223 945   358 319  
    737 737   756 289  

    Onerous 
contracts 
R’000 
Dismantling 
and site 
restoration 
R’000 
Customer 
loyalty 
programme 
R’000 
Other 
R’000 
Total 
R’000 
 
  Balance at July 1 2015  67 774  344 015  99 669  96 285  607 743    
   Created  806  166 865  25 031  53 173  245 875    
   Utilised  (31 649) (65 400) (18 832) (60 039) (175 920)   
   Net acquisition of businesses  –  2 149  (178) (1 533) 438    
   Exchange rate adjustments  7 338  27 912  17 159  17 136  69 545    
   Effect of discounting  1 383  7 225  –  –  8 608    
   Balance at June 30 2016  45 652  482 766  122 849  105 022  756 289    
   Created  –  135 464  51 655  80 674  267 793    
   Utilised  (3 394) (129 674) (39 976) (48 021) (221 065)   
   Net acquisition of businesses  –  4 668  –  13 600  18 268    
   Exchange rate adjustments  (5 894) (62 975) (12 435) (10 227) (91 531)   
   Effect of discounting  1 096  6 887  –  –  7 983    
   Balance at June 30 2017  37 460  437 136  122 093  141 048  737 737   
 

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 deems 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.

Provision for cost of dismantling and site restoration

A provision is raised for the estimated costs of dismantling and removing items, and restoring the property 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 provision for restructuring and various other individually insignificant provisions


Notes to the consolidated financial statements Note 30