18 Borrowings
Group
The following analysis provides information about the contractual terms of the group’s borrowings:
Terms and debt repayment schedule
The principal economic terms and conditions of outstanding borrowings were as follows:
Abbreviations used in the above table are defined at the bottom of his page.
Borrowings are unsecured. Funding raised in currencies other than sterling is generally swapped to sterling to match funding costs to income and assets.
Finance lease obligations
Finance lease obligations are payable as follows:
On 31 March 2009, the group closed out a finance lease which had a maturity date of 2014. The carrying value of the lease on 31 March 2009 was £60.9 million.
Interest rates implicit in the minimum lease payments were fixed on completion of the infrastructure build when the primary period of the lease commenced. In addition, contingent rentals were either payable or receivable, which adjusted the minimum lease payments to reflect changes in future market rates of interest. These contingent rentals were recognised as an increase or reduction in the finance expense in the period to which they related. Contingent rentals recognised as a reduction in finance expense in the year totalled £2.3 million (2008: £2.6 million).
The net finance charge for the year, after adjusting for contingent rentals, was £2.7 million (2008: £3.2 million) (see note 6) and the effective borrowing rate (after adjusting for contingent rentals) for the year was 3.928 per cent (2008: 5.048 per cent). The average lease term was six years as at 31 March 2008.
The group’s obligations under finance leases were unsecured at 31 March 2008. The directors considered the fair value of the group’s lease obligations approximate to their carrying value at 31 March 2008.
The company has no finance lease obligations.
Company
The following analysis provides information about the contractual terms of the company’s borrowings:
Borrowings are unsecured.
Notes:
Currency
GBP pound sterling
EUR euro
USD United States dollar
JPY Japanese yen
Index-linked debt
IL Index-linked debt – This debt is adjusted for movements in the Retail Price Index with reference to a base RPI established at trade date
RPI The UK general index of retail prices (for all items) as published by the Office for National Statistics (Jan 1987=100) as published by HM Government