Vodafone 2016 Annual Report Download - page 106
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Vodafone Group Plc
Annual Report 2016
104
Notes to the consolidated nancial statements (continued)
5. Investment income and nancing costs
Investment income comprises interest received from short-term investments, bank deposits, government bonds
and results from foreign exchange contracts which are used to hedge net debt. Financing costs mainly arise from
interest due on bonds and commercial paper issued, bank loans and the results of hedging transactions used to
manage foreign exchange and interest rate movements.
2016 2015 2014
£m £m £m
Investment income:
Available-for-sale investments:
Dividends received – – 10
Loans and receivables at amortised cost 293 324 184
Fair value through the income statement (held for trading):
Derivatives – foreign exchange contracts – – 82
Other17559 70
300 883 346
Financing costs:
Items in hedge relationships:
Other loans 171 245 265
Interest rate and cross currency interest rate swaps (96) (123) (196)
Fair value hedging instrument (106) (461) 386
Fair value of hedged item 125 418 (363)
Other nancial liabilities held at amortised cost:
Bank loans and overdrafts2669 842 557
Bonds and other loans3767 677 770
Interest charge/(credit) on settlement of tax issues415 (4) (15)
Equity put rights and similar arrangements5–11 143
Fair value through the income statement (held for trading):
Derivatives – forward starting swaps and futures 146 131 1
Other1433 –6
2,124 1,736 1,554
Net nancing costs 1,824 853 1,208
Notes:
1 Amounts for 2016 include net foreign exchange losses of £433 million (2015: £526 million gain; 2014: £21 million gain) arising from net foreign exchange movements on certain
intercompany balances.
2 The Group capitalised £179 million of interest expense in the year (2015: £142 million; 2014: £3 million) predominantly in relation to interest on India spectrum licence debt with a capitalisation
rate of 10% (2015: 10%)
3 Amounts for 2016 include net foreign exchange losses of £293 million (2015: £250 million; 2014: £201 million).
4 Amounts for 2016 include an increase in provision for potential interest on tax issues. Amounts for 2015 and 2014 includes reductions of the provision for potential interest on tax issues.
5 Includes amounts in relation to the Group’s arrangements with its non-controlling interests.