Vodafone 1997 Annual Report Download - page 19

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Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 1997
The Group's main interest rate exposure is to sterling interest rates. Interest rates are fixed when net
interest is forecast to have a significant impact on profits. At the end of the year, 66% of the Group's net
borrowings were fixed for a period of at least one year.
A variety of hedging instruments may be used, including spot and forward foreign exchange contracts,
options, swaps, futures and forward rate agreements.
Borrowings
The directors have approved ratios for net interest cover, market capitalisation to net debt and gross cash
flow to net debt, which establish internal limits for the maximum levels of debt. These ratios are
consistent with those used by companies with very high credit ratings. At the end of the year the Group's
net debt had the maturity profile as shown in the table below.
Analysis by repayment year £m
Less than 1 year 157.7
Between 1-2 years -
Between 2-5 years 275.7
More than 5 years 247.2
680.6
Borrowings are denominated principally in sterling as:
● Established UK businesses generate strong sterling cash flow which will be used to repay debt;
● Foreign currency investments are expected to be held for a longer period than monies borrowed to
fund those investments;
● The Group does not hedge its overseas net assets with respect to foreign currency translation
differences since net assets represent a small proportion of the market value of the Group and
overseas operations provide risk diversity.
As foreign currency income streams increase, further borrowing may be made in currencies other than
sterling.
http://www.vodafone.com/download/investor/reports/annual97/3/4.htm (2 of 2)29/03/2007 22:35:23