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Vodafone – Financials Notes to the Consolidated Financial Statements continued 29. Disposals and discontinued operations continued Cash flows from discontinued operations 2007 2006 £m £m Net cash flows from operating activities 135 1,651 Net cash flows from investing activities (266) (939) Net cash flows from financing activities (29) (536) Net cash flows (160) 176 Cash and cash equivalents at the beginning of the financial year 161 4 Exchange loss on cash and cash equivalents (1) (19) Cash and cash equivalents at the end of the financial year – 161 Assets and liabilities of discontinued operations 27 April 2006 £m Intangible assets 3,943 Property, plant and equipment 4,562 Other investments 29 Cash and cash equivalents 124 Inventory 148 Trade and other receivables 1,147 Deferred tax asset 636 Total assets 10,589 Short and long term borrowings (674) Trade and other payables (1) (2,342) Deferred tax liabilities (245) Other liabilities (40) Total liabilities (3,301) Net assets 7,288 Minority interest (87) Net assets disposed 7,201 Total consideration 7,245 Other effects: foreign exchange recycled to the income statement on disposal (794) Other 3 Net loss on disposal (747) £m Net cash inflow arising on disposal: Cash consideration 6,141 Cash to settle intercompany debt 793 Cash and cash equivalents disposed (124) 6,810 Other (12) 6,798 Note: (1) Includes £793 million of intercompany debt. Belgium and Switzerland – Belgacom Mobile S.A. and Swisscom Mobile A.G. During the year ended 31 March 2007, the Group disposed of its 25% interest in Belgacom Mobile S.A. to Belgacom S.A. and its 25% interest in Swisscom Mobile A.G. to Swisscom A.G. These transactions completed on 3 November 2006 and 20 December 2006, respectively. The carrying value of these investments at disposal and the cash effects of the transactions are summarised in the table below: Belgacom Swisscom Mobile Mobile £m £m Net assets disposed 901 1,664 Total cash consideration 1,343 1,776 Other effects (1) (1) (44) Net gain on disposal (2) 441 68 Notes: (1) Other effects include foreign exchange gains and losses transferred to the income statement and professional fees related to the disposal. (2) Reported in other income and expense in the Consolidated Income Statement. 126 Vodafone Group Plc Annual Report 2008
30. Reconciliation of net cash flows from operating activities 2008 2007 2006 £m £m £m Profit/(loss) for the financial year from continuing operations 6,756 (4,806) (17,233) Loss for the financial year from discontinued operations – (491) (4,588) Adjustments for (1) : Share-based payments 107 93 114 Depreciation and amortisation 5,909 5,111 5,834 Loss on disposal of property, plant and equipment 70 44 88 Share of result in associated undertakings (2,876) (2.728) (2,428) Impairment losses – 11,600 28,415 Other income and expense 28 (502) (15) Non-operating income and expense (254) (4) 2 Investment income (714) (789) (353) Financing costs 2,014 1,604 1,123 Income tax expense 2,245 2,293 2,520 Loss on disposal of discontinued operations – 747 – (Increase)/decrease in inventory (78) (23) 23 (Increase)/decrease in trade and other receivables (378) (753) 54 Increase/(decrease) in trade and other payables 460 1,175 (33) Cash generated by operations 13,289 12,571 13,523 Tax paid (2,815) (2,243) (1,682) Net cash flows from operating activities 10,474 10,328 11,841 Note: (1) Adjustments include amounts relating to continuing and discontinued operations. 31. Commitments Operating lease commitments The Group has entered into commercial leases on certain properties, network infrastructure, motor vehicles and items of equipment. The leases have various terms, escalation clauses, purchase options and renewal rights, none of which are individually significant to the Group. Future minimum lease payments under non-cancellable operating leases comprise: 2008 2007 £m £m Within one year 837 718 In more than one year but less than two years 606 577 In more than two years but less than three years 475 432 In more than three years but less than four years 415 367 In more than four years but less than five years 356 321 In more than five years 1,752 1,360 4,441 3,775 The total of future minimum sublease payments expected to be received under non-cancellable subleases is £154 million (2007: £107 million). Capital and other financial commitments Company and subsidiaries Share of joint ventures Group 2008 2007 2008 2007 2008 2007 £m £m £m £m £m £m Contracts placed for future capital expenditure not provided in the financial statements (1) 1,477 1,060 143 89 1,620 1,149 Note: (1) Commitment includes contracts placed for property, plant and equipment and intangible assets. In December 2007, a consortium comprising Vodafone and the Qatar Foundation for Education, Science and Community Development (the “Qatar Foundation”) was named as the successful applicant in the auction to become the second mobile operator in Qatar. Subject to regulatory approvals, the licence is expected to be awarded by 30 June 2008. The licence will be owned by Vodafone Qatar, of which 45% is expected to be owned by the joint venture formed between Vodafone (owning 51%) and the Qatar Foundation (owning 49%), 15% to be owned by Qatari government institutions and the remaining 40% to be made available to Qatari citizens through a public offering expected to be completed in the 2008 calendar year. Following the public offering, the Group expects its effective equity interest in Vodafone Qatar to be 22.95%. The Group also currently expects that Vodafone Qatar will be accounted for as a subsidiary, as Vodafone expects to control management decisions. By 30 June 2008, Vodafone Qatar expects to pay QAR 4,630 million (£626 million), representing 60% of the cost of the mobile licence, with the balance of the licence cost to be paid following completion of the public offering. The Group could be required to fund up to a maximum of QAR 1,551 million (£210 million) of the total licence cost, with the precise amount dependent on the success of the public offering. The remainder of the licence cost will be funded by the other shareholders in Vodafone Qatar. Services are expected to be launched under the Vodafone brand by the end of the 2009 financial year. Vodafone Group Plc Annual Report 2008 127
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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
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Equity dividends The table below se
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Funding The Group’s consolidated
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Corporate Responsibility The Board
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Vodafone requires manufacturers of
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8 9 10 11 12 13 14 8. Nick Land §
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Corporate Governance The Board of t
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Re-election of directors Although n
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provisions of the Companies Act 198
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Directors’ Remuneration Dear Shar
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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 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: Pro forma full year information The
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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