Strength & Stability - ECS Holdings Limited

30 Commitments
Operating Lease Commitments
At 31 December, the Group has commitments for future minimum lease payments under non-cancellable operating leases as
follows:-
Group
2008 2007
$’000 $’000
Payable:
Within 1 year 4,723 3,580
After 1 year but within 5 years 4,951 5,306
9,674 8,886
The Group leases office premises and warehouse facilities under operating leases. The leases typically run for an initial period of three
years, with an option to renew the lease after that date.
31 Contingent Liabilities (Unsecured)
Guarantees Issued
At 31 December, there were contingent liabilities in respect of the following:-
(a)
(b)
(c)
(d)
Guarantees given to suppliers by the Company in respect of credit facilities extended to certain subsidiaries amounted to
$187,084,000 (2007: $150,388,000), of which the amount utilised was $56,174,000 (2007: $45,900,000). The guarantees
are renewed on a yearly basis.
Guarantees given to financial institutions by the Company in respect of credit facilities extended to certain subsidiaries
amounted to $199,746,000 (2007: $156,016,000), of which the amount utilised was $74,494,000 (2007: $97,522,000).
The guarantees are renewed on a yearly basis.
Guarantees given to financial institutions by the subsidiaries in respect of credit facilities extended to the Company amounted
to $81,400,000 (2007: $87,000,000), of which $81,400,000 (2007: $58,290,000) had been utilised.
A claim was made on a subsidiary, The Value Systems Co., Ltd, which was named as a second defendant in a law suit for
copyright infringement amounting to Baht 170 million (equivalent to $7 million). The Central Intellectual Property and
International Trade Court of Thailand has ruled that the company was not liable for the damages claimed by the plaintiff.
Although the plaintiff has filed an appeal, based on legal opinion obtained, the directors are of the view that the claim has no
merit and accordingly, no provision for the claim is required.
The Group has accounted for these corporate guarantees as insurance contracts. There are no terms and conditions attached to the
guarantee contracts that would have a material effect on the amount, timing and uncertainty of the Company’s future cash flows.
The Company has undertaken to provide continuing financial support to certain subsidiaries to enable them to continue to operate
as going concerns and to meet their obligations as and when they fall due.
p.
94
Notes to the
Financial Statements
These notes form an integral part of the financial statements.
ECS Holdings Limited