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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