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Vodafone – Financials Notes to the Consolidated Financial Statements continued 4. Operating profit/(loss) Operating profit/(loss) has been arrived at after charging/(crediting): 2008 2007 2006 £m £m £m Net foreign exchange (gains)/losses (27) 6 – Depreciation of property, plant and equipment (note 11): Owned assets 3,400 2,994 3,069 Leased assets 27 17 10 Amortisation of intangible assets (note 9) 2,482 2,100 1,625 Impairment of goodwill (note 10) – 11,600 23,515 Research and development expenditure 234 222 206 Staff costs (note 35) Operating lease rentals payable: 2,698 2,466 2,310 Plant and machinery 43 35 35 Other assets including fixed line rentals 1,117 984 933 Loss on disposal of property, plant and equipment 70 43 69 Own costs capitalised attributable to the construction or acquisition of property, plant and equipment (245) (244) (256) The total remuneration of the Group’s auditor, Deloitte & Touche LLP, and its affiliates for services provided to the Group is analysed below: 2008 2007 2006 £m £m £m Audit fees: Parent company 1 1 1 Subsidiary undertakings 5 4 3 6 5 4 Fees for statutory and regulatory filings (1) 1 2 – Audit and audit-related fees 7 7 4 Other fees: Taxation 1 1 1 Corporate finance transactions – – 1 Other (2) 1 2 2 2 3 4 Total fees 9 10 8 Notes: (1) Amounts for 2008 and 2007 include mainly audit fees in relation to Section 404 of the US Sarbanes-Oxley Act of 2002. (2) Amounts for 2007 and 2006 include fees mainly relating to the preparatory work required in advance of the implementation of Section 404 of the US Sarbanes-Oxley Act of 2002 and general accounting advice. The total remuneration includes £nil (2007: £nil, 2006: £1 million) in respect of the Group’s discontinued operations in Japan. In addition to the above, the Group’s joint ventures and associated undertakings paid fees totalling £2 million (2007: £2 million, 2006: £2 million) and £3 million (2007: £4 million, 2006: £4 million), respectively, to Deloitte & Touche LLP and its affiliates during the year. Deloitte & Touche LLP and its affiliates have also received amounts totalling less than £1 million in each of the last three years in respect of services provided to pension schemes and charitable foundations associated to the Group. A description of the work performed by the Audit Committee in order to safeguard auditor independence when non-audit services are provided is set out in “Corporate Governance” on page 69. 98 Vodafone Group Plc Annual Report 2008
5. Investment income and financing costs 2008 2007 2006 £m £m £m Investment income: Available-for-sale investments: Dividends received 72 57 41 Other (1) − 86 − Loans and receivables at amortised cost (2) 451 452 153 Fair value through the income statement (held for trading): Derivatives – foreign exchange contracts 125 160 159 Other (3) 66 − − Equity put rights and similar arrangements (5) − 34 − Financing costs: Items in hedge relationships: 714 789 353 Other loans 612 548 510 Interest rate swaps 61 (9) (118) Dividends on redeemable preference shares 42 45 48 Fair value hedging instrument (635) 42 213 Fair value of hedged item Other financial liabilities held at amortised cost: 601 (47) (186) Bank loans and overdrafts 347 126 126 Other loans (4) 390 276 78 Potential interest charge on settlement of tax issues 399 406 329 Equity put rights and similar arrangements (5) 143 32 161 Finance leases 7 4 7 Fair value through the income statement (held for trading): Derivatives – forward starting swaps and futures 47 71 (48) Other (6) − 118 − 2,014 1,612 1,120 Net financing costs 1,300 823 767 Notes: (1) Amount for 2007 includes a gain resulting from refinancing of SoftBank related investments received as part of the consideration for the disposal of Vodafone Japan on 27 April 2006. (2) Amount for 2007 includes £77 million of foreign exchange gains arising from hedges of a net investment in a foreign operation. (3) Includes foreign exchange gain on certain intercompany balances and investments held following the disposal of Vodafone Japan to SoftBank. (4) Amount for 2008 includes £72 million of foreign exchange losses arising from hedges of a net investment in a foreign operation. (5) Includes amounts in relation to the Group’s arrangements with its minority partners in India, its fixed line operations in Germany and, in respect of prior years, Telecom Egypt. Further information is provided in “Option agreements and similar arrangements” on page 58. (6) Amount for 2007 includes foreign exchange losses on certain intercompany balances and investments held following the disposal of Vodafone Japan to SoftBank. Vodafone Group Plc Annual Report 2008 99
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Vodafone Group Plc Annual Report Fo
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Vodafone - Executive Summary Highli
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Total shareholder return April 2007
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Messaging revenue increased by 8.1%
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As well as driving growth in our ex
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Services Voice Messaging Data Fixed
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Strategy Vodafone’s five key stra
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EMAPA Deliver strong growth in emer
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Voice Voice services continue to ma
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• • Access & transmission netwo
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Research and development (“R&D”
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It also allows an open exchange of
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Sponsorships Vodafone’s global sp
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Voice services continue to make up
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The Group offers a number of produc
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Enables customers to utilise the se
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Strategic KPIs Year ended 31 March
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Adjusted operating profit increased
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Mobile telecommunications KPIs Germ
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Germany Adjusted operating profit f
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Mobile telecommunications KPIs 2008
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Associates 2008 2007 Verizon Wirele
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The Group’s share of results from
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Mobile telecommunications KPIs Germ
Page 49 and 50: As many of the cost reduction initi
Page 51 and 52: Mobile telecommunications KPIs 2007
Page 53 and 54: Outlook 2009 financial year Adjuste
Page 55 and 56: Expected benefits from investment i
Page 57 and 58: Equity dividends The table below se
Page 59 and 60: Funding The Group’s consolidated
Page 61 and 62: Corporate Responsibility The Board
Page 63 and 64: Vodafone requires manufacturers of
Page 65 and 66: 8 9 10 11 12 13 14 8. Nick Land §
Page 67 and 68: Corporate Governance The Board of t
Page 69 and 70: Re-election of directors Although n
Page 71 and 72: provisions of the Companies Act 198
Page 73 and 74: Directors’ Remuneration Dear Shar
Page 75 and 76: How the executive directors were pa
Page 77 and 78: Grants made and payouts received in
Page 79 and 80: Audited information Remuneration fo
Page 81 and 82: Long term incentives Performance sh
Page 83 and 84: Beneficial interests The directors
Page 85 and 86: Directors’ Statement of Responsib
Page 87 and 88: Critical Accounting Estimates The G
Page 89 and 90: Taxation The Group’s tax charge o
Page 91 and 92: Consolidated Balance Sheet at 31 Ma
Page 93 and 94: Notes to the Consolidated Financial
Page 95 and 96: determined had no impairment loss b
Page 97 and 98: Capital market and bank borrowings
Page 99: A reconciliation of adjusted operat
Page 103 and 104: Deferred tax Analysis of movements
Page 105 and 106: 9. Intangible assets Licences and s
Page 107 and 108: Key assumptions used in the value i
Page 109 and 110: 11. Property, plant and equipment L
Page 111 and 112: 13. Investments in joint ventures P
Page 113 and 114: 16. Inventory 2008 2007 £m £m Goo
Page 115 and 116: 20. Share-based payments The Compan
Page 117 and 118: 21. Transactions with equity shareh
Page 119 and 120: would reduce or increase profit bef
Page 121 and 122: Bank loans also include INR66 billi
Page 123 and 124: 25. Post employment benefits Backgr
Page 125 and 126: 26. Provisions Asset retirement Oth
Page 127 and 128: Pro forma full year information The
Page 129 and 130: 30. Reconciliation of net cash flow
Page 131 and 132: 33. Directors and key management co
Page 133 and 134: 37. New accounting standards The Gr
Page 135 and 136: Audit Report on the Company Financi
Page 137 and 138: Notes to the Company Financial Stat
Page 139 and 140: 5. Creditors 2008 2007 £m £m Amou
Page 141 and 142: 9. Equity dividends 2008 2007 £m
Page 143 and 144: Shareholders and other interested p
Page 145 and 146: any connected person) is a sharehol
Page 147 and 148: This section describes, primarily f
Page 149 and 150: Vodafone - Additional Information R
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EMAPA Eastern Europe Poland The NRA
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Impact Impact of of foreign acquisi
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Item Form 20-F caption Location in
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Definition of Terms 3G broadband 3G
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Contact Details Investor Relations
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