ANNUAL REPORT 2011 AVESCO GROUP PLC
www.avesco.com
41
Group
At 30 September 2011 Borrowings and loans (note 24) Trade and other payables
At 30 September 2010 Borrowings and loans (note 24) Trade and other payables
Less than 1 year £000s
5,730 5,516 22,369
Between 1 and 2 years £000s
3,344
14,656 -
Between 2 and 5 years £000s
10,978 31,179 --
819 -
In addition to the above, the Group will make interest payments on its loan, whilst the loan remains outstanding, at the rate of 3 percent above LIBOR. Note that the balances for trade and other payables above exclude social security and other taxes as these are not classified as financial liabilities.
Management does not believe that there is a risk that the actual repayment schedule will be significantly different from the information presented in the table above given that repayments are dictated by contractual obligations. As at 30 September the Group had the following undrawn borrowing facilities:
2011 Group
Loan and overdraft facilities Finance lease facilities
£000s 13,729
10,950 24,679
The Group is subject to various covenants on its credit facilities and compliance with these covenants is reviewed by management. No breaches of the covenants occurred during the current or prior periods and current forecasts suggest no breaches are expected to occur.
There are no restrictions on the loans and overdraft facilities. The finance lease facilities are available for all appropriate asset purchases. The loan and overdraft facilities expires in June 2015, with the exception of £640,000 of overdraft facilities which expire in September 2012 and £1,100,000 of overdraft facilities which have no expiry date.
Further details of cash and cash equivalents can be found in note 22. 3.2 Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of net debt. This is calculated as total borrowings (including ‘current and non- current borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents and bank overdrafts.
During the year net debt has decreased, primarily as a result of payment of existing debt and a focus on cash generation. 2011 Total borrowings
Less: cash and cash equivalents Net debt
4. Critical accounting estimates and judgments
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
a) Taxation provisions The Group is subject to taxes in numerous jurisdictions. Significant judgement is often required in determining the worldwide provision for tax. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current tax provision, deferred tax provisions and income statement in the period in which such determination is made.
£000s 19,640
(7,501) 12,139
2010
£000s 20,621
(6,896) 13,725
2010
£000s 5,582
2,391 7,973
Over
5 years £000s
22 -
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