annual_report_2019_en

2019 Annual Report (^135)
29 Provisions
(CNY million) Note 2019 2018
Provision for warranties (b) 5,740 5,517
Onerous contracts with customers 1,692 1,129
Onerous contracts with suppliers (c) 4,548 306
Others (d) 3,569 3,292
15,549 10,244
(a) Movement in provisions during the year is shown as below:
(CNY million)
Provision for
warranties
Onerous
contracts
with
customers
Onerous
contracts
with
suppliers
Others Total
At January 1, 2019 5,517 1,129 306 3,292 10,244
Provisions made 5,696 1,049 4,482 447 11,674
Provisions utilised (5, 511) (486) (239) (113) (6,349)
Exchange adjustments 38 – (1) (57) (20)
At December 31, 2019 5,740 1,692 4,548 3,569 15,549
(b) Provision for warranties
Provision for warranties relates mainly to products sold during the year and is determined based on estimates
made from historical warranty data associated with similar products and the amount of products covered by
warranty at the end of the reporting period and their corresponding remaining warranty periods. Most claims are
expected to be settled within one year.
(c) Provision for onerous contracts with suppliers
The Group has entered into certain non-cancellable procurement agreements in its normal course of business.
As a result of the Event as disclosed in note 5(c), the Group has needed to make changes to its procurement
plan and provision has been made for the estimated losses on executing or terminating certain procurement
agreements in accordance with the accounting policy set out in note 3(p). The provision is charged to “Cost of
sales”.
(d) Others
Others are mainly provisions for outstanding claims, cases and disputes.