| NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS l NOTE 4.5 |
|
| 4.5 |
Provisions
| Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Provisions are not recognised for future operating expenses.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.
The increase in the provision due to the passage of time is recognised as an interest expense. |
| |
Un-
redeemed
electricity
provision
R’000 |
Onerous
contracts
R’000 |
Retail
platform
clawback
provision
R’000 |
Total
R’000 |
|
| Opening balance |
18 874 |
2 617 |
|
21 491 |
|
| Additions |
769 354 |
|
9 411 |
778 765 |
|
| Used during the year |
(767 199) |
|
(4 997) |
(772 196) |
|
| Reversed |
|
(2 617) |
(515) |
(3 132) |
|
| Closing carrying amount |
21 029 |
|
3 899 |
24 928 |
|
Unredeemed electricity provision
The unredeemed electricity provision raised represents the value of electricity vouchers sold and unredeemed as at year-end, payable by the Group to the municipalities on redemption by the end customer.
Redemption is dependent on activation by customers. This is expected to occur within the first quarter of the following financial year.
Onerous contracts
The onerous contracts related to line subscriptions for which the Group was contracted to incur unavoidable charges that were expected to exceed the related economic benefits to be received. A provision was raised due to the uncertainty associated with the amount of net outflow for each subscription.
As at 31 May 2016, the Group holds no line subscriptions that give rise to onerous contracts.
Retail platform clawback provision
The retail platform clawback provision represents the estimated value payable as a clawback on deficient debtors for amounts already received on goods sold through a third-party platform provider.
The provision will be utilised within nine months of the following financial year per the contractual terms of the clawback arrangement. |
| NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS l NOTE 4.5 |
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