NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2024 (CURRENCY – SINGAPORE DOLLARS UNLESS OTHERWISE STATED) C11 Provisions (continued) Group Warranties Onerous contracts Closure costs Restoration costs Total $’000 $’000 $’000 $’000 $’000 2023 At 1 January 2023 190,847 98,028 963 47,308 337,146 Charged to profit or loss 65,939 29,327 – 811 96,077 Additions – – – 279 279 Utilised (29,484) (23,602) (27) (56) (53,169) Reclassification – (821) – – (821) Translation difference (1,479) (1,199) – (76) (2,754) At 31 December 2023 225,823 101,733 936 48,266 376,758 Group 2024 2023 $’000 $’000 Provisions: Within 1 year 339,066 337,663 After 1 year 39,921 39,095 378,987 376,758 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 0.1 year to 15 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 2024 is expected to be incurred over the applicable warranty periods. 181 CORPORATE OVERVIEW PERFORMANCE REVIEW SUSTAINABILITY FINANCIAL REPORT
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