Vodafone 2014 Annual Report Download - page 165

29. Commitments
A commitment is a contractual obligation to make a payment in the future, mainly in relation to leases and
agreements to buy assets such as network infrastructure and IT systems. These amounts are not recorded
in the consolidated statement of nancial position since we have not yet received the goods or services from the
supplier. The amounts below are the minimum amounts that we are committed to pay.
Accounting policies
Leases are classied as nance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the asset to the
lessee. All other leases are classied as operating leases.
Assets held under nance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value
of the minimum lease payments as determined at the inception of the lease. The corresponding liability to the lessor is included in the statement
of nancial position as a nance lease obligation. Lease payments are apportioned between nance charges and reduction of the lease obligation
so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in the income statement.
Rentals payable under operating leases are charged to the income statement on a straight-line basis over the term of the relevant lease.
Benetsreceived and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.
Operating lease commitments
The Group has entered into commercial leases on certain properties, network infrastructure, motor vehicles and items of equipment.
The leaseshave various terms, escalation clauses, purchase options and renewal rights, none of which are individually signicant to the Group.
Future minimum lease payments under non-cancellable operating leases comprise:
2014
Restated
2013
£m £m
Within one year 1,128 1,094
In more than one year but less than two years 841 914
In more than two years but less than three years 678 721
In more than three years but less than four years 557 612
In more than four years but less than ve years 477 519
In more than ve years 2,051 2,243
5,732 6,103
The total of future minimum sublease payments expected to be received under non-cancellable subleases is £313 million (2013: £314 million).
Capital commitments
Company and subsidiaries Share of joint operations Group
2014
£m
Restated
2013
£m
2014
£m
Restated
2013
£m
2014
£m
Restated
2013
£m
Contracts placed for future capital expenditure not
provided in the nancial statements12,307 1,715 28 18 2,335 1,733
Note:
1 Commitment includes contracts placed for property, plant and equipment and intangible assets.
Grupo Corporativo Ono, S.A. (‘Ono’)
On 17 March 2014, Vodafone agreed to acquire Ono for a total consideration equivalent to €7.2 billion (£6.0 billion) on a debt and cash free basis.
Ono has the largest next-generation network in Spain and the acquisition enables Vodafone to take advantage of the rapid increase in the adoption
of unied communications products and services in the Spanish market. The acquisition, which is subject to customary terms and conditions
including anti-trust clearances by the relevant authorities, is expected to complete in calendar Q3 2014.
Annual Report 2014 163Overview Strategy review Performance Governance Financials Additional information