Tesco 2006 Annual Report Download - page 91

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89Tesco plc
Note 30 Commitments and contingencies
Capital commitments
On 25 February 2006 there were commitments for capital expenditure contracted for, but not provided, of £1,578m
(2005 – £416m), principally relating to the store development programme.
Contingent liabilities
The Company has irrevocably guaranteed the liabilities as defined in section 5(c) of the Republic of Ireland (Amendment Act) 1986,
of various subsidiary undertakings incorporated in the Republic of Ireland.
Tesco Personal Finance, in which the Group owns a 50% joint venture share, has commitments, described in its own financial
statements as at 31 December 2005, of formal standby facilities, credit lines and other commitments to lend, totalling £6.0bn
(2005 – £5.2bn). The amount is intended to provide an indication of the volume of business transacted and not of the underlying
credit or other risks.
For details of assets held under finance leases, which are pledged as security for the finance lease liabilities, see note 11.
There are a number of contingent liabilities that arise in the normal course of business which if realised are not expected to result
in a material liability to the Group. In connection with the railway tunnel collapse at Gerrards Cross, the Group is currently assessing
anumber of potential claims. Due to the nature of those claims it is not currently possible to assess their potential impact, therefore
no provision has been made. The final outcome is not expected to be material to the Group.
Note 31 Leasing commitments
Finance lease commitments – Group as lessee
Future minimum lease payments under finance leases and hire purchase contracts, together with the present value of the net
minimum leasepayments are as follows:
Present value of
Minimum lease payments minimum lease payments
2006 2005 2006 2005
£m £m £m £m
Within one year 23 12 20 11
Between twoand five years 37 32 27 23
After five years 132 126 57 54
Total minimum lease payments 192 170 104 88
Less future finance charges (88) (82)
Present value of minimum lease payments 104 88
Analysed as:
Current finance lease payables 20 11
Non-current finance lease payables 84 77
104 88
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.