This excerpt taken from the VOD 20-F filed Jun 14, 2007.
Investment income and financing costs
Net financing costs before dividends from investments increased by 8.5% to £318 million as an increase in average net debt compared to the 2005 financial year was partially offset by gains on mark to market adjustments on financial instruments in the 2006 financial year.
Potential interest charges arising on the settlement of outstanding tax issues represents the Groups estimate of any interest that may be due to tax authorities when the issues are settled. This charge varies due to the interest rates applied by the tax authorities, the timing of tax payments and the status of discussions on tax issues with the relevant tax authorities. At 31 March 2006, the provision for potential interest charges arising on settlement of outstanding tax issues was £896 million.
The change in the fair value of equity put rights and similar arrangements comprised the fair value movement in relation to the potential put rights held by Telecom Egypt over its 25.5% interest in Vodafone Egypt and the fair
value of a financial liability in relation to the minority partners of Arcor, the Groups non-mobile operation in Germany. Further details in respect of these arrangements are provided in the section titled Performance Financial Position and Resources and in note 24 to the Consolidated Financial Statements.