Onerous contracts
Onerous contracts are identified through
regular reviews of the terms and conditions
of contracts as well as on acquisition of
businesses. A provision for onerous contracts
is calculated as the present value of the
portion which management deem 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.
Insurance liabilities
Insurance liabilities include unearned premiums
that represent that part of the current
year’s premiums that relate to risk
periods that extend to the following year;
claims which are calculated on the settlement
amount outstanding at year end; and claims
incurred but not reported which are maintained
at 7% of net premium income, for claims
arising from events that occurred before
the close of the accounting period, but
which had not been reported to the Group
by that date.
Provision for cost of dismantling and restoration
of site
A provision is raised for the estimated
costs of dismantling and removing items
and restoring the site 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.
Other
Consists of various individually insignificant
amounts.
