Vodafone 2013 Annual Report Download - page 126

24. Borrowings
The Group’s sources of borrowing for funding and liquidity purposes come from a range of committed
bank facilities and through short-term and long-term issuances in the capital markets. Our key borrowings
at 31 March 2013 consist of bond and commercial paper issues and bank loans. Details of our committed
facilities can be found on page 157. We manage the basis on which we incur interest on debt between xed
interest rates and oating interest rates depending on market conditions using interest rate derivatives. Fair
value hedges are designated for some of the Group’s bonds where interest rate swaps have been entered
to convert the basis of future cash ows to oating interest rates. The Group enters into foreign exchange
contracts to mitigate the impact of exchange rate movements on certain monetary items.
Carrying value and fair value information
2013 2012
Short-term Long-term Short-term Long-term
borrowings borrowings Total borrowings borrowings Total
£m £m £m £m £m £m
Financial liabilities measured at amortised cost:
Bank loans 2,929 4,281 7, 210 1,635 5,624 7,259
Bank overdrafts 25 – 25 50 – 50
Redeemable preference shares – 1,355 1,355 – 1,281 1,281
Commercial paper 4,054 – 4,054 2,272 – 2,272
Bonds 2 ,13 3 15,698 17, 831 1,289 14,463 15,752
Other liabilities1 23,14 8 753 3,901 1,012 2,417 3,429
Bonds in fair value hedge relationships – 7,0 21 7, 0 21 – 4,577 4,577
12,289 29,108 41,397 6,258 28,362 34,620
Notes:
1 At 31 March 2013 amount includes £1,151 million (2012: £980 million) in relation to collateral support agreements.
2 Amount at 31 March 2013 includes £1,014 million (2012: £840 million) in relation to the options disclosed in note A8, footnote 5. The amount for 2013 includes £899 million (2012: £771 million) in relation to the Piramal
Healthcare option detailed on page 158.
Bank loans include INR 249 billion of loans held by Vodafone India Limited (‘VIL’) and its subsidiaries (the ‘VIL Group’). The VIL Group has a number
of security arrangements supporting certain licences secured under the terms of tri-party agreements between the relevant borrower,
the department of telecommunications, Government of India and the agent representing the secured lenders and certain share pledges of the
shares under VIL. The terms and conditions of the security arrangements mean that should members of the VIL Group not meet all of their loan
payment and performance obligations, the lenders may sell the pledged shares and enforce rights over the certain licences under the terms of the
tri-party agreements to recover their losses, with any remaining sales proceeds being returned to the VIL Group. Each of the eight legal entities
within the VIL Group provide cross guarantees to the lenders in respect to debt contracted by the other seven.
The fair value and carrying value of the Group’s short-term borrowings is as follows:
Sterling equivalent
nominal value Fair value Carrying value
2013 2012 2013 2012 2013 2012
£m £m £m £m £m £m
Financial liabilities measured at amortised cost 9,869 4,915 10,279 4,977 10,156 4,969
Bonds: 2,094 1,267 2,150 1,288 2,133 1,289
1.15% US dollar 100 million bond due August 2012 – 63 – 63 – 63
3.625% euro 1,250 million bond due November 2012 – 1,032 – 1,051 – 1,050
6.75% Australian dollar 265 million bond due
January 2013 – 172 – 174 – 176
Czech koruna oating rate note due June 2013 18 – 18 – 18 –
Euro oating rate note due September 2013 646 – 647 – 645 –
5.0% US dollar 1,000 million bond due
December2013 658 – 679 – 678 –
6.875% euro 1,000 million bond due December 2013 772 – 806 – 792 –
Short-term borrowings 11,963 6,182 12,429 6,265 12,289 6,258
Notes to the consolidated nancial statements (continued)
124 Vodafone Group Plc
Annual Report 2013