Vodafone 2004 Annual Report Download - page 104
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Vodafone Group Plc Annual Report 2004
102
Notes to the Consolidated Financial Statements continued
27. Contingent liabilities
Group Company
2004 2003 2004 2003
£m £m £m £m
Performance bonds 667 1,921 200 1,137
Credit guarantees – third party indebtedness 97 72 1,498 2,462
Other guarantees and contingent liabilities 29 31 17 17
Performance bonds
Performance bonds require the Company, or certain of its subsidiary undertakings, to make payments to third parties in the event that the Company or
subsidiary undertaking does not perform what is expected of it under the terms of any related contracts.
Group performance bonds include £434 million (2003: £710 million) in respect of undertakings to roll out second and third generation networks in Germany
while the Company and Group performance bonds include £145 million (2003: £1,085 million) in respect of undertakings to roll out third generation networks in
Spain. The majority of the German performance bonds expire by December 2005 and for Spain by June 2005.
Credit guarantees – third party indebtedness
Credit guarantees comprise guarantees and indemnities of bank or other facilities including those in respect of the Group’s associated undertakings and
investments.
At 31 March 2004, the Company had guaranteed debt of Vodafone K.K. and Vodafone Finance K.K. amounting to £nil (2003: £267 million) and £1,177 million
(2003: £1,200 million), respectively, and issued guarantees in respect of notes issued by Vodafone Americas, Inc. amounting to £320 million (2003: £995
million). The Japanese facility expires by January 2007 and the majority of Vodafone Americas, Inc. bond guarantees by July 2008.
Other guarantees and contingent liabilities
Other guarantees principally comprise commitments to support disposed entities.
In addition to the amounts disclosed above, the Group has guaranteed financial indebtedness and issued performance bonds for £53 million (2003: £125
million) in respect of businesses which have been sold and for which counter indemnities have been received from the purchasers.
The Group also enters into lease arrangements in the normal course of business, which are principally in respect of land, buildings and equipment. Further
details on the minimum lease payments due under non-cancellable operating lease arrangements can be found in note 26.
Save as disclosed within “Risk Factors and Legal Proceedings – Legal proceedings”, the Company and its subsidiaries are not involved in any legal or arbitration
proceedings (including any governmental proceedings which are pending or known to be contemplated) which are expected to have, or have had in the twelve
months preceding the date of this document, a significant effect on the financial position or profitability of the Company and its subsidiaries.