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BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012
notes to the consolidated financial statements
continued
28
PROVISIONS
Onerous leases
and other Dilapidation
£m provisions provisions Total
At 1 January 2011 6.6 7.9 14.5
Increase of provision 3.0 – 3.0
Release of provision (2.8) (1.1) (3.9)
Utilisation of provision (2.0) – (2.0)
Unwinding of discount 0.4 0.4 0.8
At 31 December 2011 5.2 7.2 12.4
Included in current liabilities 1.2 0.6 1.8
Included in non-current liabilities 4.0 6.6 10.6
At 31 December 2011 5.2 7.2 12.4
Increase of provision 0.9 – 0.9
Release of provision (0.8) – (0.8)
Utilisation of provision (1.1) (0.4) (1.5)
Unwinding of discount 0.3 0.5 0.8
At 29 December 2012 4.5 7.3 11.8
Included in current liabilities 0.9 – 0.9
Included in non-current liabilities 3.6 7.3 10.9
Onerous lease and other provisions include provisions related to unused premises. Of this, £4.5 million (2011: £5.2 million) relates to onerous leases
and related costs that will be utilised over the term of the individual leases to which they relate.
Releases of provisions relate to onerous leases that have been subsequently reviewed due to changing circumstances and adjustments to the
ongoing provisions. The release of provisions follows the original treatment, which are released in administrative costs.
Dilapidation provisions relate to obligations under various property leases to ensure that, at the end of the leases, the buildings are in the condition
agreed with the landlords. The provisions will be utilised at the end of the individual lease terms to which they relate.
29
FINANCIAL INSTRUMENTS
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to
stakeholders through the optimisation of debt and equity balance. The capital structure of the Group consists of borrowings as disclosed in note 23,
cash and cash equivalents and equity attributable to owners of the parent, comprising issued capital, reserves and retained earnings.
The Group manages its capital by collating timely and reliable information to produce various internal reports such as capital expenditure and weekly
cash reports, which enable the Board of Directors to assess the Group’s capital, and manage that capital effectively and in line with the Group’s
objectives. The gearing of the Group is constantly monitored and managed to ensure that the ratio between debt and equity is at an acceptable level
and enables the Group to operate as a going concern and maximise stakeholders return.
Gearing ratio
The gearing ratio at the period end is as follows:
29 December 31 December
£m 2012 2011
Debt 594.4 621.5
Cash and cash equivalents (30.5) (30.1)
Net debt 563.9 591.4
Equity 308.9 301.3
Net debt to net debt plus equity percentage 64.6% 66.2%
Debt is defined as long and short term borrowings, as disclosed in note 23 and finance leases payable.
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