176 / 280
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS
CONTINUED
For the year ended 31 May 2014
174
BLUE LABEL INTEGRATED ANNUAL REPORT 2014
2014
R’000
2013
R’000
15.
PROVISIONS
Unredeemed electricity provision
Opening balance
19 029
6 260
Additions
617 853
535 279
Used during the year
(619 378)
(522 510)
17 504
19 029
Less:
Amounts included in current portion of provisions
(17 504)
(19 029)
—
—
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
Opening balance
—
—
Acquisition of subsidiary
7 406
—
Additions
—
—
Used during the year
(421)
—
6 985
—
Less:
Amounts included in current portion of provisions
(6 273)
—
712
—
The onerous contracts relate to line subscriptions for which the Group is contracted to incur unavoidable
charges that are expected to exceed the related economic benefits to be received. A provision is raised due
to the uncertainty associated with the amount of net outflow for each subscription.
The provision will be used over the period of each subscription, ranging from one to 24 months.