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NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS
CONTINUED
For the year ended 31 May 2015
154
BLUE LABEL INTEGRATED ANNUAL REPORT 2015
2014
R’000
15.
PROVISIONS
Unredeemed electricity provision
Opening balance
17 504
19 029
Additions
687 421
617 853
Used during the year
(686 051)
(619 378)
18 874
17 504
Less:
Amounts included in current portion of provisions
(18 874)
(17 504)
—
—
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
6 985
—
Acquisition of subsidiary
—
7 406
Additions
3 621
—
Used during the year
(6 647)
(421)
Reversed
(1 342)
—
2 617
6 985
Less:
Amounts included in current portion of provisions
(2 617)
(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 which in no case exceeds 12 months.
2015
R’000