|
30. Financial
commitments, contingent liabilities and subsequent events
| |
|
2004 |
|
2003 |
|
| |
|
£m |
|
£m |
|
|
|
|
|
|
| Contracts
placed for capital expenditure not provided in the accounts |
879 |
|
616 |
|
|
|
|
|
|
| Operating
lease payments payable within one year of the balance sheet
date were in respect of leases expiring: |
|
|
|
|
| |
Within one year |
8 |
|
11 |
|
| |
Between one and
five years |
29 |
|
26 |
|
| |
After five years |
330 |
|
317 |
|
|
|
|
|
|
| Total
payable within one year |
367 |
|
354 |
|
|
|
|
|
|
| Future minimum operating lease
payments for the group at 31 March 2004 were as follows: |
|
2004 |
|
| |
|
£m |
|
|
|
|
|
| Payable in the year ending 31 March: |
|
|
|
| 2005 |
|
367 |
|
| 2006 |
|
361 |
|
| 2007 |
|
362 |
|
| 2008 |
|
367 |
|
| 2009 |
|
369 |
|
| Thereafter |
|
9,088 |
|
|
|
|
|
| Total future minimum operating
lease payments |
|
10,914 |
|
|
|
|
|
Operating lease commitments were mainly
in respect of leases of land and buildings.
At 31 March 2004, other than disclosed below there
were no contingent liabilities or guarantees other than those arising in the
ordinary course of the group’s business and on these no material losses
are anticipated. The group has insurance cover to certain limits for major risks
on property and major claims in connection with legal liabilities arising in
the course of its operations. Otherwise, the group generally carries its own
risks.
The
group has provided guarantees relating to certain leases entered into by O2
UK Limited prior to its demerger with mmO2 on 19 November 2001, mmO2
plc has given BT a counterindemnity for these guarantees. The
maximum likely exposure is US$76 million (£41 million) as at 31 March
2004, although this could increase by a further US$582 million, (£317
million) in the event of credit default in respect of amounts used to defease future lease obligations. The
guarantee lasts until O2 UK Ltd has discharged all its obligations,
which is expected
to
be when the lease ends on 30 January 2017.
The group
has guaranteed part of the bank borrowings of its joint venture Albacom SpA
under the terms of the joint venture’s refinancing in the 2004 financial
year. This expires on the earlier of the loan being repaid or 31 October 2011.
The guarantee is triggered if Albacom fails to meet the repayment schedule under
the terms of the loan and is effectively capped at €34.5 million.
The
company does not believe there are any pending legal proceedings which would
have a material adverse effect on the financial position or results of operations
of the group.
Proceedings
have been initiated in Italy against 21 defendants, including a former BT employee,
in connection with the Italian UMTS auction. Blu, in which BT held a minority
interest, participated in that auction process. The evidential hearings are
continuing, in Rome. If the proceedings are successful, BT could be held liable,
with others, for any damages. The company has concluded that it is not appropriate
to make a provision in respect of any such potential claim.
|
