Notes to the combined and consolidated financial statements - Mondi

Notes to the combined and
consolidated financial statements continued
for the year ended 31 December 2009
23 Provisions (continued)
Restoration Acquired Long
and contingent Restructuring service
2008/E million environmental liabilities costs awards Other Total
At 1 January 15 5 10 14 20 64
Charged to combined and
consolidated income statement 1 – – 3 1 7 11
Acquired through business combinations
(see note 30) – (2) – – – (2)
Reclassifications – – 9 – 6 15
Released to combined and
consolidated income statement – (1) – – (1) (2)
Amounts applied (2) – (7) (1) (6) (16)
Currency movements (1) (1) (1) – (3) (6)
At 31 December 12 1 14 14 23 64
Note:
1
Net of unwound discounts.
Maturity analysis of total provisions on a discounted basis:
E million 2009 2008
Current 40 25
Non-current 45 39
Total provisions 85 64
The restoration and environmental provision represents the best estimate of the expenditure required to settle the obligation to
rehabilitate environmental disturbances caused by production operations. A provision is recognised for the present value of such
costs. These costs are expected to be incurred over a period in excess of 20 years.
Included within other provisions are amounts relating to onerous contracts and employee benefits. Of these, E18 million
(2008: E10 million) are due to be incurred within the next 12 months. The residual E12 million (2008: E13 million) will be incurred
over a period longer than one year.
All non-current provisions are discounted using a discount rate relevant in the local countries, based on a pre tax real yield on longterm
bonds over the last five years.
Acquired contingent liabilities arise from business combinations made in 2007.
130 Annual report and accounts 2009 Mondi Group