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Notes to the Consolidated Financial Statements (continued) 19. Current liabilities – provisions 2012 $’000 Consolidated 2011 $’000 Annual leave 20,402 14,838 Long service leave 15,644 13,685 Other 2,694 457 Warranties 2,525 2,366 41,265 31,347 Movements in provisions and amounts not expected to be settled within 12 months Please refer to note 20 for details. 20. Non-current liabilities – provisions 2012 $’000 Consolidated 2011 $’000 Warranties 5,625 4,732 Long service leave 6,416 4,430 Make good provisions 2,929 1,487 Other - - Warranties 14,970 10,649 Ongoing provision is made for estimated customer claims in respect of extended warranties provided on certain retail vehicle sales. Warranties provided are typically offered up to a three year period; therefore the reported balance is expected to settle over the next three years. Management estimates the provision based on historical warranty claim information and any recent trends that suggest future claims could differ from historical amounts. Make Good Provision At the end of the respective lease term, the Group is required to restore various leased business premises to their condition at the time of entering the lease, subject to fair wear and tear. A provision has been recognised for the present value of the estimated expenditure required to restore various leasehold sites to this condition. These costs have been capitalised as part of the cost of the leasehold and are amortised over the shorter of the term of the lease or the useful life of the leasehold assets. Movements in provisions Movements in each class of provision during the financial year, other than provisions relating to employee benefits, are set out below: Warranties 2012 $’000 Make Good/ Other 2011 $’000 At 1 July 2011 7,098 1,944 Additional provisions recognised 4,552 3,679 Payments / other sacrifices of economic benefits (3,500) - At 30 June 2012 8,150 5,623 Current 2012 2,525 2,694 Non-current 2012 5,625 2,929 8,150 5,623 Current 2011 2,366 457 Non-current 2011 4,732 1,487 7,098 1,944 98 Automotive Holdings Group
2012 Annual Report For the year ended June 2012 Amounts not expected to be settled within the next 12 months The current provision for employee benefits includes accrued annual leave, vesting sick leave and long service leave. For long service leave it covers all unconditional entitlements where employees have completed the required period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The entire amount of the provision is presented as current, since the Group does not have an unconditional right to defer settlement for any of these obligations. However, based on past experiences, the Group does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The amount of leave that is not expected to be taken or paid within the next 12 months is $28,836,000 (2011: $22,819,000). 21. Interest-bearing loans and borrowings Current 2012 $’000 Consolidated 2011 $’000 Finance company loans 501,946 382,134 Lease liability 3,567 7,650 Hire purchase liability 9,479 4,249 Other loans - 225 514,992 394,258 Finance company loans Finance company loans (floorplan facilities) are in respect of vehicles provided to the Group (note 1(o)) and are secured over these vehicle inventories. The Group has total floorplan facilities amounting to $563,220,000 (2011: $487,810,000). At 30 June 2012 $501,946,000 (2011: $382,134,000) of these facilities were used. The weighted average interest rate applicable at 30 June 2012 on these loans was 5.86% (2011: 6.89%). Lease and hire purchase liabilities Lease and hire purchase liabilities are fully secured. Other loans $Nil (2011: $225,000) is the current component of a franchise supported working capital loan between Auckland Automotive Collection Limited and UDC Finance Limited. Interest is charged on the loan at an average rate of 6.27% (2011: 6.25%). Non-current 2012 $’000 Consolidated 2011 $’000 Other loans 101,089 71,160 Lease liability 17,838 19,405 Hire purchase liability 19,674 15,904 Amounts owing to manufacturer 400 400 139,000 106,868 Other Loans $100,000,000 (2011: $70,000,000) are commercial bills secured over certain properties, plant and equipment, receivables, cash and inventories of the Group. Interest is charged at an average rate of 4.87% (2011: 4.95%) for the period of the current bills in place. $500,000 (2011: $500,000) are commercial loans with a five year term. Interest is charged at a variable rate of 7.50% at 30 June 2012 (2011: 8.65%). $396,279 (2011: $390,390) is a franchise supported working capital loan between Auckland Automotive Collection Limited and UDC Finance Limited. Interest is charged at an average rate of 6.27% (2011: 6.25%). $106,216 (2011: $154,448) is a loan between Auckland Automotive Collection Limited and UDC Finance Limited for minor capital works. Interest is charged at an average rate of 6.27% (2011: 6.25%). $86,065 (2011: $115,378) is a supplier loan to fund minor capital works in fixed operations. Automotive Holdings Group 99
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