• Chairman's statement
• Business review
  • Our business and its markets
  • Corporate objectives
  • Operating review
  • Financial review
  • Principal risks and uncertainties
• Board of Directors
• Operating Board
• Governance
  • Statement of corporate governance
  • Remuneration report
  • Statement of Directors' responsiblities
• Financial statements
  • Group income statement
  • Statements of recognised income and expense
  • Balance sheets
  • Cash flow statements
  • Notes to the financial statements
  • Five year financial record
• Additional shareholder information
• Financial calendar

Depreciation and amortisation

The full year depreciation and amortisation charge of £481 million was £19 million lower than in 2007, of which £12 million related to Sainsbury’s Bank which is no longer consolidated.

Capital expenditure

Net capital expenditure amounted to £799 million (2007: £631 million) in the year, which included £308 million on new store development (2007: £244 million) and £424 million on extensions and refurbishments (2007: £368 million). In addition during the year, freehold properties amounting to £168 million were acquired (2007: £64 million), in line with the Group’s plans to buy freeholds of trading sites where it believes there are potential long-term development opportunities. This expenditure has been more than offset by cash receipts of £219 million (2007: £106 million) in relation to corporate property transactions, resulting in net capital expenditure for the year of £799 million. Core capital expenditure is forecast to be in the region of £800 million for the next financial year, with an additional net £100 million relating to the Group’s active property management inclusive of the £273 million investment in the British Land JV.

Capital expenditure for the 52 weeks to 22 March 2008	2008 £m	2007 £m
New store development	308	244
Extensions and refurbishments	424	368
Other - including supply chain and IT	118	57
Core retail capital expenditure	850	669
Freehold properties	168	64
Proceeds from property transactions	(219)	(106)
Net retail capital expenditure	799	627
Sainsbury’s Bank	-	4
Net Group capital expenditure	799	631

Summary balance sheet

Total equity as at 22 March 2008 was £4,935 million (2007: £4,349 million). Gearing reduced year on year to 30 per cent (2007: 32 per cent), which primarily reflects the improvement in the pension scheme position. The Group expects net debt to be between £1.6 billion and £1.7 billion at the end of 2009.

Summary balance sheet at 22 March 2008	2008 £m	2007 £m
Non-current assets	8,505	7,661
Inventories	681	590
Trade and other receivables	206	197
Cash and cash equivalents	719	1,128
Debt	(2,222)	(2,508)
Net debt	(1,503)	(1,380)
Trade and other payables and provisions	(2,954)	(2,719)
Net assets	4,935	4,349

Pensions

The retirement benefit obligations as at 22 March 2008 have been calculated on a consistent basis with the previous year where appropriate, with updates provided on market based assumptions.

As at 22 March 2008, the retirement benefit obligations less the fair value of plan assets was a surplus of £503 million (2007: deficit of £97 million). The net surplus after deferred tax was £366 million (2007: deficit of £55 million). The movement into surplus mainly reflects favourable market conditions around bond yields, which have increased the discount rate on liabilities.

Pensions	2008 £m	2007 £m
Present value of funded obligations	(3,668)	(4,395)
Fair value of plan assets	4,171	4,298
	503	(97)
Present value of unfunded obligations	(8)	(6)
Retirement benefit asset/(obligations)	495	(103)
Deferred income tax asset (liability)/asset	(129)	48
Net retirement benefit asset/(obligations)	366	(55)