Notes to the financial statements
For the 52 weeks ended 1 March 2008
24. Provisions
| Onerous leases £m |
Insurance provisions £m |
Other £m |
Total £m |
|
|---|---|---|---|---|
| At 4 March 2007 | (40.8) | (29.3) | (12.2) | (82.3) |
| Charged to the income statement | (10.2) | (9.9) | (5.8) | (25.9) |
| Acquired through business combination (note 7) | (2.5) | – | (2.4) | (4.9) |
| Utilised during the period | 4.3 | 7.8 | 4.6 | 16.7 |
| Discount unwind | (2.2) | – | (0.1) | (2.3) |
| At 1 March 2008 | (51.4) | (31.4) | (15.9) | (98.7) |
Analysed as:
| 2008 £m |
2007 £m |
|
|---|---|---|
| Current | (26.1) | (25.2) |
| Non-current | (72.6) | (57.1) |
| (98.7) | (82.3) |
The onerous lease provision covers potential liabilities for onerous lease contracts for stores that have either closed, or where projected future trading revenue is insufficient to cover the lower of exit cost or value-in-use. The provision is based on the present value of expected future cash flows relating to rents, rates and other property costs to the end of the lease terms net of expected sublet income. The majority of this provision is expected to be utilised over the period to 2011.
Provision is made at the year-end for the estimated costs of claims incurred by Home Retail Group’s captive insurance company but not settled at the balance sheet date, including the costs of claims that have arisen but have not yet been reported to Home Retail Group. The estimated cost of claims includes expenses to be incurred in settling claims. The majority of this provision is expected to be utilised over the period to 2011.
Other provisions include legal claims and other sundry provisions. The majority of this provision is expected to be utilised within one year.
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