Tesco 2008 Annual Report Download - page 96

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Note 32 Leasing commitments
Finance lease commitments – Group as lessee
The Group has finance leases for various items of plant, equipment, fixtures and fittings. There are also a small number of buildings which are held under
finance leases. The fair value of the Group’s lease obligations approximate to their carrying value.
Future minimum lease payments under finance leases and hire purchase contracts, together with the present value of the net minimum lease payments
are as follows:
Present value of
Minimum lease payments minimum lease payments
2008 2007 2008 2007
£m £m £m £m
Within one year 62 38 51 36
Greater than one year but less than five years 181 109 156 90
After five years 130 130 59 57
Total minimum lease payments 373 277 266 183
Less future finance charges (107) (94)
Present value of minimum lease payments 266 183
Analysed as:
Current finance lease payables 51 36
Non-current finance lease payables 215 147
266 183
Finance lease receivables – Group as lessor
In 2006, the Group entered into finance leasing arrangements with UK staff for certain of its electronic equipment as part of the Computers for Staff scheme.
The average term of finance leases entered into was three years. The interest rate inherent in the leases is fixed at the contract date for all of the lease term.
The average effective interest rate contracted approximates to 2.6% (2007 – 4.0%) per annum. The fair value of the Group’s finance lease receivables at
23 February 2008 is estimated at £5m (2007 – £12m).
Future minimum lease receivables under finance leases together with the present value of the net minimum lease receivables are as follows:
Present value of
Minimum lease payments minimum lease payments
2008 2007 2008 2007
£m £m £m £m
Within one year 5756
Greater than one year but less than five years –6–6
Total minimum finance lease receivables 513 512
Less unearned finance income –(1)
Net finance lease receivables 512
Analysed as:
Current finance lease receivables 56
Non-current finance lease receivables –6
512
Tesco PLC Annual Report and
Financial Statements 2008
94
Notes to the Group financial statements continued
www.tesco.com/annualreport08