Annual Report and Accounts 2006 - Optos

Notes to the Company Financial Statements
continued
10 Provisions
2006 2005
$’000 $’000
At 1 October – –
Arising during the year 879 –
Utilised (36) –
At 30 September 843 –
Social security contributions on share options
Social security contributions on share options are calculated based on the number of options vested at the balance sheet date valued at market rate less exercise price.
It is expected that the costs will be incurred during the exercise period to 31 December 2012.
11 Obligations under finance leases and hire-purchase contracts
2006 2005
$’000 $’000
Amounts payable:
Within one year 211 231
Between one and two years 129 122
Between two and five years 34 44
374 397
Less: finance charges allocated to future periods (23) (42)
351 355
Finance leases and hire-purchase contracts are shown as:
Current 191 173
Non-current 160 182
351 355
Upon placement of P200 equipment at a customer site, the healthcare professional enters into a three-year lease agreement with a third-party provider of vendor
finance. Optos enters into a matching financing agreement with the third-party provider of vendor finance involving the transfer of P200 equipment to the finance
provider, with legal title being transferred back to Optos at the end of the period. As the significant risks and rewards of ownership are retained by Optos, the proceeds
received from the third-party providers of vendor finance are recorded as finance lease obligations which are repayable by instalments and are secured over the
related P200 assets.
12 Other financial commitments
At 30 September 2006, the Company had annual commitments under non-cancellable operating leases as set out below:
Land
and Buildings
2006 2005
$’000 $’000
Operating leases which expire:
In less than one year – 30
In two to five years – 218
In over five years 294 189
294 437
Optos plc Annual Report & Accounts 2006 71