Notes to the financial statements
27 Commitments and contingencies
The Group has entered into commercial leases on certain land and buildings, vehicles and equipment. There are no material renewal options, escalation clauses or purchase options included in the lease contracts. There are no contingent rentals or operating leases or material sub-leases. There are no significant restrictions placed upon the lessee by entering into these leases. Excluding land and buildings, these leases have an average life of between three and seven years.
During the year ended 31 March 2014, certain assets at the Severnside facility were sold for cash consideration of £7.4 million. This equipment has been leased back under an operating lease with a six year term. There are no purchase option clauses or any contingent lease rentals.
Future minimum rentals payable under non-cancellable operating leases as at 31 March are as follows:
|
2014 £m |
2013 £m |
|||
|---|---|---|---|---|
|
Within one year |
21.0 |
23.6 |
||
|
After one year but not more than five years |
33.0 |
43.8 |
||
|
More than five years |
13.9 |
14.5 |
Finance leases
The Group finance leases principally comprise certain items of plant and equipment at the Davidstow site. The initial lease term is for 10 years with a further renewal term of 7 years. There are no purchase options and escalation clauses and there is no sub-leasing of the assets or contingent rentals. Future minimum payments under finance leases together with the present value of the net minimum lease payments are as follows:
|
2014 |
2013 |
|||||||
|---|---|---|---|---|---|---|---|---|
|
Minimum payments £m |
Present value of payments £m |
Minimum payments £m |
Present value of payments £m |
|||||
|
Within one year |
1.9 |
1.8 |
2.5 |
2.4 |
||||
|
After one year but not more than two years |
– |
– |
3.2 |
3.1 |
||||
|
After two years but not more than five years |
– |
– |
– |
– |
||||
|
After more than five years |
– |
– |
– |
– |
||||
|
Total minimum lease payments |
1.9 |
1.8 |
5.7 |
5.5 |
||||
|
Less: amounts representing finance charges |
(0.1) |
– |
(0.2) |
– |
||||
|
Present value of minimum lease payments |
1.8 |
1.8 |
5.5 |
5.5 |
||||
Trading guarantees
The Group has provided guarantees and counter-indemnities which totalled £4.0 million at 31 March 2014 (2013: £4.1 million). These guarantees are made principally by Philpot Dairy Products Limited, a subsidiary company, to customers as performance bonds and to the Rural Payment Agency in relation to EU subsidies claimed.