IFRS PRACTICAL IMPLEMENTATION GUIDE AND WORKBOOK

327

Chapter 29 / Provisions, Contingent Liabilities, and Contingent Assets (lAS 37)

Postretirement

Warranty

Total

Enviro nmental

Onerou s Insurance Maintenan ce

contrac ts ~

benefi ts

claims

2006 rehabilitation

claim s

colltracts

Other

.si«:

Rm

--....E!lL

Rm

Rm

Rm

~

Tran slation

28

10

6

63

3

7

9

adjustment s

Liabilities directly associated with

assets classified as held-far-sale

--l22)

----'J!)

---'2) ill

Cill

-

-

-

-

:1l

4112

106

Lllil4

ill

SO

JJ

Balance at end of year

To be incurred Within one year

536

8

96

226

12

11 7 66

I I

Between two to five years More than five years

40

242

2

183 ---.!) 4112

1 14

I

I

129 ill

si 106

--.ill! Lllil4

-.J) JJ

-.J) :1l

-.J) §Q

---.!)

ill

Environmental rehabilitation The provisions relate to factory decommissioning and quarry rehabilitation costs in Pretoria Port– land Cement. Group companies are required to restore quarry and processing sites at the end of their productive lives to an acceptable condition con sistent with the group' s environmental policies and statutory regulations. The expected cost of any committed decommissioning or restoration programme, discounted to its net present value , is provided at the beginning of each project. Onerous contracts The provisions include closure provisions for previously discontinued operations, con sisting mainly of future rental costs on unoccupied leased properties. The provision is calc ulated based on the dis– counted present value of contractual rental costs less estimated future rental rece ipts. Insurance claims The provision arises from outstanding cla ims in Barloworld Insurance Limited which manages the group's insurance programme. Maintenance contracts This relates to deferred revenue on maintenance and repair contracts on equipment, forklift trucks , and motor vehicles. Assumptions include the estimation of maintenance and repair costs over the life cycle of the asset s concerned. Postretirement benefits The provisions comprise mainly postretirement benefits for existing and former employees. Actu – arial valuations were used to determine the value of the provi sions where necessary. The actuarial valuations are based on assumptions which include emp loyee turnover, mortality rate s, di scount rates , the expected long-term rate of return of retirement plan assets, hea lthcare inflation cost, and rates of in– crease in compensation costs. Warranty claims The provisions relate principally to warranty claims on capital equipment, spare parts, and service. The estimate is based on claims notified and past experience . 9.3 BARLOWORLD Notes to th e Consolida ted Annua l Financia l Statements for th e Year Ended September 30 31. Contingent Liabilities

2006 Rm 622

2005 Rm 296

2004 Rm 194

Bills, lease, and hire-purchaseagreements discounted with recourse, other guaranteesand claims Litigation, current or pending, is not consideredlikely to have a material adverse effect on the group Buy-back and repurchasecommitments not reflectedon the balance sheet The related assets are estimatedto have a value at least equal to the repurchase commitment There are no material contingent liabilities in join venture companies.

222

1,250

1,07 1