BT 2013 Annual Report Download - page 164

28. Related party transactions
Key management personnel comprise executive and non-executive directors and members of the Operating Committee . Compensation of key
management personnel is disclosed in note 6.
Amounts paid to the group’s retirement benefit plans are set out in note 19.
During 2012/13 the group purchased services in the normal course of business and on an arm’s length basis from Tech Mahindra, which was a
principal associate of the group at the beginning of the year. The net value of services purchased was £99m (2011/12: £253m, 2010/11: £258m).
The group disposed of its remaining interest in Tech Mahindra in December 2012. The amount outstanding and payable for services at 31 March
2013 was £nil (2011/12: £51m, 2010/11: £61m).
29. Financial commitments and contingent liabilities
Financial commitments were as follows:
2013 2012
At 31 March £m £m
Capital commitments 355 433
Programme rights commitments 888 –
Total 1,243 433
At 31 March 2013 programme rights commitments, mainly relating to Premier League football broadcast rights, are those for which the licence
period has not yet started.
Future minimum operating lease payments for the group were as follows:
2013 2012
£m £m
Payable in the year ending 31 March:
2013 – 429
2014 412 403
2015 386 378
2016 374 366
2017 362 357
2018 361 356
Thereafter 5,287 5,304
Total future minimum operating lease payments 7,182 7,593
Operating lease commitments were mainly in respect of land and buildings which arose from a sale and operating leaseback transaction in a prior
period. Leases have an average term of 19 years (2011/12: 20 years) and rentals are fixed for an average of 19 years (2011/12: 20 years).
Other than as disclosed below, there were no contingent liabilities or guarantees at 31 March 2013 other than those arising in the ordinary course
of the group’s business and on these no material losses are anticipated. The group has insurance cover to certain limits for major risks on property
and major claims in connection with legal liabilities arising in the course of its operations. Otherwise, the group generally carries its own risks.
The group has provided guarantees relating to certain leases entered into by Telefonica UK Limited (formerly O2 UK Limited) prior to the demerger
of mmO2 from BT on 19 November 2001. mmO2 plc (part of the Telefonica group) has given BT a counter indemnity for these guarantees. There
was no exposure as at 31 March 2013 (2011/12: US$118m, approximately £74m), although this could increase by US$90m (2011/12: US$228m),
approximately £59m (2011/12: £143m), in the event of credit default in respect of amounts used to defease future lease obligations. The
guarantee lasts until Telefonica UK Limited has discharged all its obligations, which is expected to be when the lease ends on 30 January 2017.
The group does not believe that there is any single current court action that would have a material adverse effect on the financial position or
operations of the group. During 2012/13 the aggregate volume and value of legal actions to which the group is party remained broadly the same as
at the end of 2011/12.
Financial statements
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