Interim results for the 26 weeks ended 31 July 2010

 

16 September 2010

 

Notes to the condensed consolidated financial statements (UNAUDITED)

for the 26 weeks ended 31 July 2010

15. Contingent assets and liabilities

Kingfisher paid €138m tax to the French tax authorities in the year ended 31 January 2004 as a consequence of the Kesa Electricals demerger and recorded this as an exceptional tax charge. Kingfisher appealed against the tax liability and the tribunal found in favour of Kingfisher in June 2009. As a result a full refund, along with repayment supplement, was received in September 2009. The French tax authorities have appealed against this decision and therefore no income has yet been recognised relating to this receipt.

Kingfisher plc has an obligation to provide a bank guarantee for £50m (2009/10: £50m) to the liquidators of Kingfisher International France Limited in the event that Kingfisher plc’s credit rating falls below ‘BBB’. The obligation arises from an indemnity provided in June 2003 as a result of the demerger of Kesa Electricals. At 30 January 2010 the amount was £50m.

The Group has arranged for certain bank guarantees to be provided to third parties in the ordinary course of business. The total amount outstanding at the end of the period is £39m (2009/10: £36m). At 30 January 2010 the total amount was £36m.

The Group is subject to claims and litigation arising in the ordinary course of business and provision is made where liabilities are considered likely to arise on the basis of current information and legal advice.