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Escher Group Holdings plc
Annual report 2011
52
for the year ended 31 December 2011
Notes to the consolidated financial statements
continued
23. Commitments and guarantees
(a) Commitments
(i) Operating leases
The Group leases offices in Dublin, Boston, Singapore and South Africa under non-cancellable operating lease agreements.
The leases have varying terms and renewal rights.
The leases do not contain any escalation clauses or terms pertaining to contingent rent.
Lease rentals in respect of these offices, amounting to US$0.4 million (2010: US$0.2 million), are included in the income statement.
Future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Group
Company
2011
US$’000
2010
US$’000
2011
US$’000
2010
US$’000
Land and buildings
Within one year
405
374
—
—
Between two and five years
441
662
—
—
846
1,036
—
—
(ii) Capital commitments
The Group had no capital commitments at 31 December 2011 (2010: US$ nil).
(b) Guarantees
At the year end, the company is a participant in a Group banking arrangement under which all surplus cash balances are held as
collateral for bank facilities advanced to Group members. In addition, the company has issued an unlimited guarantee to the bank
to support these Group facilities. Total Group borrowings under these facilities amounted to US$8.4m at 31 December 2011.
The fair value of this guarantee is considered to be US$nil (2010: US$nil). The guarantees were released following the
refinancing of the company in January 2012 (see note 25 for further details).
24. Related party disclosures
The amounts due to and from companies of the Group at each year end are as follows:
Company
2011
US$’000
2010
US$’000
Amounts owed by Group undertakings
Escher Group Limited
15,126
—
NG Postal Finco Limited
599
—
Escher Group (Irl) Limited
5,063
5,000
20,788
5,000
Amounts owed to Group undertakings
Escher Europe Limited
2,925
—
Escher UK Limited
743
—
NG Postal FinCo Limited
—
5,000
Escher Group Limited
—
1,115
3,668
6,115
The company did not make any sales to or purchase from any Group entities during the year (2010: US$ nil).
Debentures
The Group owes a debenture to Bacchantes Limited, a company represented by Michael Smurfit Jnr., who is a Director of
the company. The par value of the debenture at 31 December 2011 was US$3.3 million (2010: US$5.0 million). The debenture
attracts interest at 5.1% per annum, which is rolled up for payment on redemption. Accrued interest at 31 December 2011 was
US$0.1 million (2010: US$3.2 million). During the year, shares to the value of US$0.6 million were issued in part payment of this
debenture (see note 18 for further details). The debenture was repaid in full on 5 January 2012.