Vodafone 2006 Annual Report Download - page 112

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110 Vodafone Group Plc Annual Report 2006
Notes to the Consolidated Financial Statements
continued
26. Provisions for liabilities and charges continued
Asset retirement obligations
In the course of the Group’s activities, a number of sites and other assets are utilised which are expected to have costs associated with exiting and ceasing their use. The associated
cash outflows are generally expected to occur at the dates of exit of the assets to which they relate, which are long term in nature.
Legal
The Group is involved in a number of legal and other disputes, including notification of possible claims. The directors of the Company, after taking legal advice, have established
provisions after taking into account the facts of each case. The timing of cash outflows associated with legal claims cannot be reasonably determined. For a discussion of certain
legal issues potentially affecting the Group, refer to note 31 “Contingent liabilities”.
Other provisions
Other provisions primarily comprise amounts provided for property and restructuring costs. The associated cash outflows for restructuring costs are substantially short term in
nature. The timing of the cash flows associated with property is dependent upon the remaining term of the associated lease.
27. Trade and other payables 2006 2005
£m £m
Included within non-current liabilities:
Other payables 61 14
Derivative financial instruments 148 48
Accruals and deferred income 357 376
566 438
Included within current liabilities:
Trade payables 2,248 3,013
Amounts owed to associated undertakings 29 8
Other taxes and social security payable 412 314
Derivative financial instruments 71 31
Other payables 440 470
Accruals and deferred income 4,277 4,197
7,477 8,033
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing operating expenses.
The fair values of the derivative financial instruments are calculated by discounting the future cash flows to net present values using appropriate market interest and foreign currency
rates prevailing at the year end.
Included within “Derivative financial instruments” is the following:
2006 2005
£m £m
Fair value hedges:
Interest rate swaps 148 48
Fair value through the income statement:
Interest rate swaps 218
Foreign exchange swaps 69 12
Foreign exchange forwards –1
71 31
219 79