ArcelorMittal South Africa 2007 Annual Report Page 184 Notes to the group and company annual financial statements continued for the year ended 31 December 2007 35.  CONTINGENT LIABILITIES continued Applying the applicable accounting policies (note 3.28, page 94) and the measurement and recognition criteria of IAS 37, Provisions, Contingent Liabilities and Contingent Assets, no provision has been raised. Barnes Fencing filed a complaint that the company’s pricing practices involving low carbon wire rod products amounted to price discrimination. It is alleged that the company charged the complainants substantially more for the product and that other respondents also benefited from more favourable payment terms. Barnes Fencing applied for orders for the company to terminate these practices and applied for the imposition of an administrative penalty of 10% to be levied on the 2006 local revenue of low carbon wire rod products. The company successfully opposed the first referral made by Barnes Fencing and as a result, the Competition Tribunal agreed to amend the founding documents accordingly. The company subsequently filed its answering affidavit on 26 April 2007. Barnes Fencing since applied for intervention in the process by including additional complaints against the company concerning alleged contravention of section 5 and section 8 in terms of the Competition Act. The Competition Commission’s final replying affidavit is still outstanding and more clarity will be obtained once it has been received. No provision has been raised and no contingent liability quantified. General Export Incentive Scheme The contingent liability of R92 million disclosed in 2006 was extinguished as part of the settlement arrangement described in note 28. Contingent asset retirement obligation As described in note 4 and 5, IAS 16, Property, plant and equipment, and IAS 37, Provisions, Contingent Liabilities and Contingent Assets, requires that the present value of the future cost of retiring an operating site and its constituent property, plant and equipment, should be included in the carrying amount of the site’s fixed assets. These costs are depreciated over the useful life of the specific assets constituted on an operating site. Other than for certain clearly determinable instances, future costs to retire operational and their underlying assets cannot be reliably estimated. The strategic plans underpinning the future operation of sites are generally evergreen in nature. 36.  SHARE-BASED PAYMENTS 36.1  Cash-settled share appreciation rights During the year the group and company offered share appreciation rights to a limited number of key employees for retention purposes. The objective of the plan is to place the employees in the same position as if they had been granted share options. However, the share appreciation rights involve a cash payment to the employees equal to the gain that would have been made by exercising the notional options and immediately selling the shares in the market. The rights vest and benefit accrues to the employees having completed a specified service period from the grant date. The payment of the accrued benefit occurs 30 days after the vesting date. Each individual right is priced off the average daily closing price of an ArcelorMittal South Africa Limited share over a 60-day trading period. The rights are valued using a Binomial Matrix option model.