Notes to the Financial Statements continued for the year ended 31 May 2021
21 Provisions
Lease incentives £m
Loss-making contracts £m
Onerous property costs £m
Other provisions £m
Total £m
Balance as at 31 May 2019 and 1 June 2019
4.1
–
4.1
–
8.2
Provision transferred to right-of-use assets on implementation of IFRS 16
(4.1)
–
(2.6)
–
(6.7)
Provisions created in the year Provisions utilised during the year
– –
0.2
2.1
0.6
2.9
–
(0.7)
–
(0.7)
Balance as at 31 May 2020 and 1 June 2020
–
0.2
2.9
0.6
3.7
– – – –
–
(1.4)
– – –
(1.4)
Reclassification to right-of-use assets
1.7 1.9
–
1.7 2.9
Reclassification
1.0
Provisions created in the year Provisions utilised during the year
(2.7)
(0.8)
(0.4)
(3.9)
Balance as at 31 May 2021
–
1.1
1.7
0.2
3.0
Analysed as follows (2021): Current
– –
1.1
1.1 0.6
0.2
2.4 0.6
–
–
Non-current
Analysed as follows (2020): Current
– –
0.2
1.2 1.7
0.6
2.0 1.7
Non-current
–
–
The lease incentives provision represents capital contributions towards fit-out costs and rent-free incentives. In the prior year on the implementation of IFRS 16, the opening provision of £4.1m has been transferred and offset against the associated right-of-use assets. The loss-making contracts provision represents the estimated remaining net lifetime loss on long-term development and supply contracts and is expected to be completed in 2022. During the year, revenue has been recognised in relation to this long-term contract of £1.8m. The onerous property costs provision relates to vacant premises in Reading and unused floors in the Manchester head office building. In the prior year on the implementation of IFRS 16, the opening provision of £2.6m relating to the onerous rent costs has been transferred and offset against the associated right-of-use asset. The provision of £1.7m (2020: £2.9m) at 31 May 2021 includes £1.2m (2020: £2.5m) of non-rent costs relating to the onerous properties including service charges and insurance and also the estimated costs of disposing or terminating these leases which includes rent incentives, renovation costs and letting fees. The provision at 31 May 2021 also includes estimated dilapidations liabilities of £0.5m (2020: £0.4m) relating to the Group’s leased premises. Both of these provisions are expected to unwind over the period of the relevant leases (2021–2034). Other provisions of £0.2m (2020: £0.6m) include reorganisation costs to which the Group was committed at the Balance Sheet date and are expected to be incurred within the next financial year.
170
NCC Group plc — Annual report and accounts for the year ended 31 May 2021
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