Carphone Warehouse 2007 Annual Report Download - page 65

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www.cpwplc.com
22 Provisions
Insurance Reorganisation Sales Other Total
£’000 £’000 £’000 £’000 £’000
At 1 April 2006 9,404 22,267 67,432 24,435 123,538
Acquisitions (see note 14) – – – 7,910 7,910
Utilised in the period (29,106) (13,094) (130,622) (10,489) (183,311)
Released in the period – (5,749) – – (5,749)
Charge to income statement 29,858 5,700 131,648 731 167,937
Foreign exchange – (29) (157) (203) (389)
At 31 March 2007 10,156 9,095 68,301 22,384 109,936
Insurance Reorganisation Sales Other Total
£’000 £’000 £’000 £’000 £’000
At 2 April 2005 7,026 6,799 28,758 15,246 57,829
Acquisitions – – – 14,589 14,589
Utilised in the period (26,722) (4,911) (67,070) (6,444) (105,147)
Released in the period – (1,921) – (1,029) (2,950)
Charge to income statement 29,100 22,288 105,610 1,962 158,960
Foreign exchange – 12 134 111 257
At 1 April 2006 9,404 22,267 67,432 24,435 123,538
Provisions are categorised as follows:
Insurance:
Insurance provisions represent the anticipated costs of all policyholder claims notified but not settled and claims incurred but not reported at the balance sheet
date. Insurance provisions are expected to be utilised within one year.
Reorganisation:
Reorganisation provisions at the start of the period relate principally to a store closure programme launched in the period ended 30 March 2002, the costs
associated with the ongoing implementation of shared service functions, and the reorganisation programme started in the prior period to integrate Onetel with the
rest of the Group. The costs of the Onetel integration were estimated at £22.3m (see note 4), principally being redundancy and other employee costs, contract
termination costs, and network and customer migration costs. These costs have been substantially incurred in the period ended 31 March 2007 and the remaining
costs are expected to be incurred in the period ending 29 March 2008. The release in the period relates to redundancies and contract termination costs, which
were over-estimated at 1 April 2006. The impact of this release is offset by further provision for network and customer migration costs, which were under-estimated
at 1 April 2006.
Sales:
Sales provisions relate to “cash-back” and similar promotions, product warranties, product returns, and network operator performance penalties. Sales provisions
are expected to be used within the following 12 to 24 months.
Other:
Other provisions relate to dilapidations and similar property costs, and all other provisions, principally being the anticipated costs of unresolved tax issues and legal
disputes, and costs associated with onerous contracts.
23 Share capital
2007 2006 2007 2006
million million £’000 £’000
Authorised
Ordinary shares of 0.1p each 1,500 1,500 1,500 1,500
Allotted, called-up and fully paid
Ordinary shares of 0.1p each 896 888 896 888
Movements in share capital in the period arose from the exercise of share options.
61
Financial Statements