Notes to the Company Financial Statements
Notes 6-10
- 6. Share capital
- 7. Share-based payments
- 8. Reserves and reconciliation of movements in equity shareholders’ funds
- 9. Equity dividends
- 10. Contingent liabilities
10. Contingent liabilities
| 2008 £m |
2007 £m |
|
|---|---|---|
| Performance bonds | 30 | 87 |
| Credit guarantees – third party indebtedness | 4,208 | 1,278 |
| Other guarantees and contingent liabilities | 255 | 10 |
Performance bonds
Performance bonds require the Company to make payments to third parties in the event that the Company or its subsidiary undertakings do not perform what is expected of them under the terms of any related contracts.
Company performance bonds include £26 million (2007: £57 million) in respect of undertakings to roll out third generation networks in Spain.
Credit guarantees – third party indebtedness
Credit guarantees comprise guarantees and indemnities of bank or other facilities.
During the year ended 31 March 2008, a subsidiary of the Company granted put options exercisable between 8 May 2010 and 8 May 2011 to members of the Essar group of companies that, if exercised, would allow the Essar group to sell its 33% shareholding in Vodafone Essar to the Group for US$5 billion or to sell between US$1 billion and US$5 billion worth of Vodafone Essar shares to the Group at an independently appraised fair market value. The Company has guaranteed payment of up to US$5 billion related to these options.
At 31 March 2008, the Company had also guaranteed debt of Vodafone Finance K.K. amounting to £1,303 million (2007: £1,117 million) and issued guarantees in respect of notes issued by Vodafone Americas, Inc. amounting to £163 million (2007: £161 million). The Japanese facility expires by March 2011 and the majority of Vodafone Americas, Inc. bond guarantees expire by July 2008.
Other guarantees and contingent liabilities
Other guarantees principally comprise of a guarantee relating to a bid for a second licence in Qatar of £57 million (2007: nil) and a commitment to the Spanish tax authorities of £197 million (2007: nil).
Legal proceedings
Details regarding certain legal actions which involve the Company are set out in note 32 to the Consolidated Financial Statements.