The way ahead? - Vodafone

114
Vodafone Group Plc
Annual Report 2013
Notes to the consolidated financial statements (continued)
12. Impairment review (continued)
Sensitivity analysis
The table below shows, for India and Romania, the amount by which each key assumption must change in isolation in order for the estimated
recoverable amount to be equal to its carrying value.
Change required for carrying value
to equal the recoverable amount
India Romania
pps pps
Pre‑tax risk adjusted discount rate 1.1 0.3
Long-term growth rate (1.6) (0.4)
Budgeted EBITDA 1 (3.3) (0.6)
Budgeted capital expenditure 2 3.6 1.0
Notes:
1 Budgeted EBITDA is expressed as the compound annual growth rates in the initial five years for all cash‑generating units of the plans used for impairment testing.
2 Budgeted capital expenditure is expressed as a percentage of revenue in the initial five years for all the cash generating units of the plans used for impairment testing.
Year ended 31 March 2011
During the year ended 31 March 2011 impairment charges of £1,050 million, £2,950 million, £800 million, £1,000 million and £350 million were
recorded in respect of the Group’s investments in Italy, Spain, Greece, Ireland and Portugal, respectively. The impairment charges related solely
to goodwill.
The impairment charges were primarily driven by increased discount rates as a result of increases in government bond rates. In addition, business
valuations were negatively impacted by lower cash flows within business plans, reflecting weaker country‑level macroeconomic environments.
The table below shows the pre‑tax adjusted discount rates used in the value in use calculations.
Assumptions used in value in use calculation
Italy Spain Greece Ireland Portugal
% % % % %
Pre‑tax risk adjusted discount rate 11.9 11.5 14.0 14.5 14.0