Notes to the accounts
for the year ended 31 December 2007
36. Commitments and contingent liabilities
| (a) Commitments | 2007 £mn |
2006 £mn |
|---|---|---|
| Documentary credits | 13.8 | 3.6 |
| Undrawn loan facilities | 107.5 | 100.6 |
| Investment call commitments | 17.2 | 55.6 |
| Other commitments | 6.6 | 6.6 |
| 145.1 | 166.4 |
| (b) Contingent liabilities | 2007 £mn |
2006 £mn |
|---|---|---|
| Assets pledged as collateral security | 26.1 | 21.1 |
| Guarantees and irrevocable letters of credit | 66.6 | 38.0 |
| 92.7 | 59.1 |
(c) Future capital expenditure
At 31 December 2007, there was £0.4 million (2006: £11.9 million) capital expenditure contracted but not provided in the accounts.
(d) Litigation
Certain Group undertakings are the subject of current or pending legal actions; the Directors believe that none of these actions, either individually or in aggregate, is likely to have a material adverse effect on the Group's financial position.
(e) (i) Operating leases - as lessee
At 31 December, the Group's commitments under non-cancellable operating leases were:
| 2007 | 2006 | |||
|---|---|---|---|---|
| Offices £m |
Office equipment £m |
Offices £m |
Office equipment £m |
|
| Commitment expiring in: | ||||
| Less than 1 year | 25.4 | 0.5 | 22.1 | 0.5 |
| 1-5 years | 90.8 | 0.7 | 89.0 | 0.9 |
| More than 5 years | 70.9 | - | 57.1 | - |
| 187.1 | 1.2 | 168.2 | 1.4 | |
Leases in respect of office properties are negotiated for an average term of 3.4 years (2006: 3.6 years) and rentals are fixed for an average of 2.8 years (2006: 2.7 years). Leases in respect of office equipment are negotiated for an average term of 1.6 years (2006: 2.8 years) and rentals are fixed for an average of 1.5 years (2006: 2.5 years).
(ii) Operating leases - as lessor
The Group sublets certain of its properties around the world. At 31 December, the future minimum lease payments under non-cancellable operating leases were:
| 2007 | 2006 | |
|---|---|---|
| Offices £mn |
Offices £mn |
|
| Commitment expiring in: | ||
| Less than 1 year | 2.5 | 2.8 |
| 1-5 years | 11.3 | 6.6 |
| More than 5 years | 12.0 | 2.2 |
| 25.8 | 11.6 |
Subleases in respect of office properties are negotiated for an average term of 5.0 years (2006: 4.9 years) and rentals are fixed for an average of 3.3 years (2006: 4.9 years).
(f) Other
The Group has a contractual obligation to reinstate certain leasehold premises before expiry of the lease in 2018. The Directors believe that this obligation cannot be provided for because it cannot be measured reliably.
Obligations of certain Group companies under the Euroclear settlement system are secured by charges on assets held on their behalf from time to time within that system and by cash deposits placed.
In the ordinary course of business, subsidiary undertakings have custody of customers' securities, act as trustees and issue indemnities on behalf of customers who have lost certificates of title.
The Company and subsidiary undertakings have also provided letters of comfort to regulatory authorities and others that subsidiary undertakings will be capitalised adequately and will meet their contractual obligations.