NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2022 (CURRENCY - SINGAPORE DOLLARS UNLESS OTHERWISE STATED) C11 Provisions (continued) Group Warranties $’000 Onerous contracts $’000 Closure costs $’000 Restoration costs $’000 Total $’000 2021 At 1 January 2021 181,741 118,695 1,033 35,090 336,559 Charged/(write-back) to profit or loss 46,865 85,490 – (109) 132,246 Additions – – – 14,208 14,208 Utilised (31,375) (81,353) (56) (530) (113,314) Disposal of subsidiaries (13) – – – (13) Translation difference 9 1,705 – 33 1,747 At 31 December 2021 197,227 124,537 977 48,692 371,433 Group 2022 $’000 2021 $’000 Provision: Within 1 year 298,624 331,837 After 1 year 38,522 39,596 337,146 371,433 Recognition and measurement Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. (i) Warranties The warranty provision represents the best estimate of the Group’s contractual obligations at the reporting date. Under the terms of the revenue contracts with key customers, the Group is obligated to make good, by repair or replacement, engineering or manufacturing defects that become apparent within the warranty period from the date of sale. The warranty obligation varies from 0.5 year to 10 years. The Group’s experience of the proportion of its products sold that requires repair or replacement differs from year to year as every contract is customised to the specification of the customers. The estimation of the provision for warranty expenses is based on the Group’s past claim experience over the duration of the warranty period and the industry average in relation to warranty exposures and represents the best estimates of the costs expected to incur per dollar of sales. The warranty provision made as at 31 December 2022 is expected to be incurred over the applicable warranty periods. (ii) Onerous contracts Provision for onerous contracts on uncompleted contracts is recognised immediately in profit or loss when it is determinable. CORPORATE OVERVIEW PERFORMANCE REVIEW SUSTAINABILITY FINANCIAL REPORT 185
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