Tesco 2006 Annual Report Download - page 92

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90 Tesco plc
Notes to the financial statements continued
Note 31 Leasing commitments continued
Finance lease receivables – Group as lessor
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 receivables minimum lease receivables
2006 2005 2006 2005
£m £m £m £m
Within one year 7–6–
Between two and five years 12 – 11 –
Total minimum lease receivables 19 – 17 –
Less unearned finance income (2) –
Net lease receivables 17 –
Analysed as:
Current finance lease receivables 6 –
Non-current finance lease receivables 11 –
17 –
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 is 3 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 4.6% (2005 – nil) per annum.
The fair value of the Group’s finance lease receivables at 25 February 2006 is estimated at £16m (2005 – nil).
Operating lease commitments – Group as lessee
Future minimum rentals payable under non-cancellable operating leases are as follows:
2006 2005
£m £m
Within one year 315 220
Between two and five years 1,105 771
After five years 3,795 2,808
Total minimum lease payments 5,215 3,799
Operating lease payments represent rentals payable by the Group for certain of its retail, distribution and office properties.
The leases have varying terms, purchase options, escalation clauses and renewal rights.
Operating lease receivables – Group as lessor
The Group both rents out its Investment properties and also sub-lets various leased buildings under operating leases. At the Balance
Sheet date, the following future minimum lease payments are contractually receivable from tenants:
2006 2005
£m £m
Within one year 84 79
Between twoand five years 234 204
After fiveyears283 247
Total minimum lease payments 601 530