Year ended 31 July 2006
26. Provisions
| Environmental
and legal £m |
Wolseley
Insurance £m |
Other
provisions £m |
Total
£m |
|
|---|---|---|---|---|
| At 1 August 2004 | 30 | 33 | 20 | 83 |
| Utilised in the year | – | (9) | (1) | (10) |
| Charge for the year | 2 | 10 | 1 | 13 |
| Transfers | – | – | (3) | (3) |
| New businesses | – | – | – | – |
| Exchange difference | 1 | 1 | – | 2 |
| At 31 July 2005 | 33 | 35 | 17 | 85 |
| Utilised in the year | – | (9) | (3) | (12) |
| Charge for the year | 6 | 23 | 6 | 35 |
| Transfers | 1 | – | (4) | (3) |
| New businesses | 1 | – | 4 | 5 |
| Exchange differences | (2) | (2) | – | (4) |
| At 31 July 2006 | 39 | 47 | 20 | 106 |
Provisions have been analysed between current and non current as follows:
| At 31 July 2006 | Environmental
and legal £m |
Wolseley
Insurance £m |
Other
provisions £m |
Total
£m |
|---|---|---|---|---|
| Current | 8 | 13 | 8 | 29 |
| Non current | 31 | 34 | 12 | 77 |
| Total provisions | 39 | 47 | 20 | 106 |
| At 31 July 2005 | Environmental
and legal £m |
Wolseley
Insurance £m |
Other
provisions £m |
Total
£m |
|---|---|---|---|---|
| Current | 2 | 9 | 11 | 22 |
| Non current | 31 | 26 | 6 | 63 |
| Total provisions | 33 | 35 | 17 | 85 |
Wolseley Insurance provisions represent an estimate, based on historical experience, of the ultimate cost of settling outstanding and potential claims on certain risks retained by the Group (principally US casualty and global property damage).
Environmental and legal liabilities include known and potential legal claims and environmental liabilities arising from past events where it is probable that a payment will be made and the amount of such payment can be reasonably estimated. Included in this provision is an amount of £31 million (2005: £32 million) related to asbestos litigation involving certain Group companies. This liability is fully covered by insurance and accordingly an equivalent insurance receivable has been recorded in ‘Trade and other receivables’ (note 17). The liability has been actuarially determined as at 31 July 2006 based on advice from independent professional advisors. The provision and the related receivable have been stated on a discounted basis using a long-term discount rate of 5.2% (2005: 4.5%). The level of insurance cover available significantly exceeds the expected level of future claims and no profit or cash flow impact is therefore expected to arise in the foreseeable future.
