BT 2014 Annual Report Download - page 179

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176 Financial statements
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 5.
Amounts paid to the group’s retirement benet plans are set out in note 19.
In the comparative periods when Tech Mahindra was the group’s principal associate, the net value of services purchased was £99m in 2012/13
(untilDecember 2012) and £253m in 2011/12.
29. Financial commitments and contingent liabilities
Financial commitments were as follows
At 31 March
2014
£m
2013
£m
Capital commitments 400 355
Programme rights commitments 1,657 888
Total 2,057 1,243
At 31 March 2014 programme rights commitments, mainly relating to 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
2014
£m
2013
£m
Payable in the year ending 31 March
2014 –412
2015 396 386
2016 397 374
2017 368 362
2018 365 361
2019 363 358
Thereafter 4,949 4,929
Total future minimum operating lease payments 6,838 7,182
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 18 years (2012/13 19 years) and rentals are xed for an average of 18 years (2012/13 19 years).
Other than as disclosed below, there were no contingent liabilities or guarantees at 31 March 2014 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.
Under the Broadband Delivery UK programme, grants received by the group may be subject to re-investment or repayment to the customer
depending on the level of take-up.
The group has provided guarantees relating to certain leases entered into by Telefónica UK Limited (formerly O2 UK Limited) prior to the demerger of
mmO2 from BT on 19November 2001. mmO2 plc (part of the Telefónica Group) has given BT a counter indemnity for these guarantees. There was
no exposure as at 31March 2014 (2012/13 nil), although this could increase by US$40m (2012/13 US$90m), approximately £24m (2012/13
£59m), in the event of credit default in respect of amounts used to defease future lease obligations. The guarantee lasts until Telefónica UK Limited
has discharged all its obligations, which is expected to be when the lease ends on 30January 2017.
The group does not believe that there is any single current court action that would have a material adverse eect on the nancial position or
operations of the group. During 2013/14 the aggregate volume and value of legal actions to which the group is party reduced.