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10. Impairment continued Sensitivity to changes in assumptions Other than as disclosed below, management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value of any cash generating unit to exceed its recoverable amount. 31 March 2008 As of 31 January 2008, the date of the Group’s annual impairment test, the estimated recoverable amount of the Group’s operations in Germany and Italy exceeded their carrying value by £2,700 million and £3,400 million respectively. The table below shows the key assumptions used in the value in use calculation and 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 in both cases. Assumptions used in value in Change required for carrying value use calculation to equal the recoverable amount Germany Italy Germany Italy % % Percentage points Percentage points Pre-tax adjusted discount rate 10.2 11.5 1.6 2.7 Long term growth rate 1.2 0.1 (1.7) (3.0) Budgeted EBITDA (1) (2.2) 1.4 (2.0) (4.2) Budgeted capital expenditure (2) 7.5 to 8.7 5.8 to 9.5 4.2 6.6 Notes: (1) Budgeted EBITDA is expressed as the compound annual growth rates in the initial five years of the Group’s approved management plans. (2) Budgeted capital expenditure is expressed as the range of capital expenditure as a percentage of revenue in the initial five years of the Group’s approved management plans. 31 March 2007 Germany The estimated recoverable amount of the Group’s operations in Germany equalled its carrying value and, consequently, any adverse change in a key assumption could have caused a further impairment loss to be recognised. The last value in use calculation during the year ended 31 March 2007 was based on the following assumptions: • • • • Pre-tax risk adjusted discount rate of 10.6%; Long term growth rate of 1.2%; Budgeted EBITDA, expressed as the compound annual growth rates in the initial five years of the Group’s approved management plans, of (4.2)%; and Budgeted capital expenditure, expressed as the range of capital expenditure as a percentage of revenue in the initial five years of the Group’s approved management plans, of 7.5-7.0%. Italy The estimated recoverable amount of the Group’s operations in Italy equalled its carrying value and, consequently, any adverse change in a key assumption could have caused a further impairment loss to be recognised. The last value in use calculation during the year ended 31 March 2007 was based on the following assumptions: • • • • Vodafone – Financials Notes to the Consolidated Financial Statements continued Pre-tax risk adjusted discount rate of 11.5%; Long term growth rate of 1.0%; Budgeted EBITDA, expressed as the compound annual growth rates in the initial five years of the Group’s approved management plans, of (3.8)%; and Budgeted capital expenditure, expressed as the range of capital expenditure as a percentage of revenue in the initial five years of the Group’s approved management plans, of 11.4-8.7%. 106 Vodafone Group Plc Annual Report 2008
11. Property, plant and equipment Land and Equipment, fixtures buildings and fittings Total £m £m £m Cost: 1 April 2006 1,112 25,731 26,843 Exchange movements (22) (839) (861) Arising on acquisition – 172 172 Additions 87 3,322 3,409 Transfer to other investments (1) (268) (269) Disposals (9) (692) (701) Reclassifications (4) 4 – Other 77 – 77 31 March 2007 1,240 27,430 28,670 Exchange movements 201 3,898 4,099 Arising on acquisition 14 1,150 1,164 Additions 94 3,988 4,082 Disposals (10) (761) (771) Reclassifications (109) 109 – 31 March 2008 1,430 35,814 37,244 Accumulated depreciation and impairment: 1 April 2006 353 12,830 13,183 Exchange movements (7) (349) (356) Charge for the year 72 2,939 3,011 Transfer to other investments – (31) (31) Disposals (4) (605) (609) Other 28 – 28 31 March 2007 442 14,784 15,226 Exchange movements 77 2,456 2,533 Charge for the year 79 3,348 3,427 Disposals (10) (667) (677) Reclassifications (66) 66 – 31 March 2008 522 19,987 20,509 Net book value: 31 March 2007 798 12,646 13,444 31 March 2008 908 15,827 16,735 The net book value of land and buildings and equipment, fixtures and fittings includes £110 million and £51 million, respectively (2007: £49 million and £116 million) in relation to assets held under finance leases (see note 24). Included in the net book value of land and buildings and equipment, fixtures and fittings are assets in the course of construction, which are not depreciated, with a cost of £28 million and £1,013 million, respectively (2007: £13 million and £998 million). Property, plant and equipment with a net book value of £1,503 million (2007: £73 million) has been pledged as security against borrowings. Vodafone Group Plc Annual Report 2008 107
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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
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As many of the cost reduction initi
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Mobile telecommunications KPIs 2007
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Outlook 2009 financial year Adjuste
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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 and 100: A reconciliation of adjusted operat
Page 101 and 102: 5. Investment income and financing
Page 103 and 104: Deferred tax Analysis of movements
Page 105 and 106: 9. Intangible assets Licences and s
Page 107: Key assumptions used in the value i
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
Page 151 and 152: EMAPA Eastern Europe Poland The NRA
Page 153 and 154: Impact Impact of of foreign acquisi
Page 155 and 156: Item Form 20-F caption Location in
Page 157 and 158: Definition of Terms 3G broadband 3G
Page 159 and 160:
Contact Details Investor Relations
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