Vodafone Group Plc Annual Report for the year ended 31 March 2012

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Vodafone Group Plc Annual Report 2012 116 Notes to the consolidated financial statements (continued) 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 2012 The estimated recoverable amounts of the Group’s operations in Italy, Spain, Greece and Portugal equalled their respective carrying values and, consequently, any adverse change in key assumption would, in isolation, cause a further impairment loss to be recognised. The estimated recoverable amounts of the Group’s operations in India and Romania exceeded their carrying values by approximately £2,060 million and £66 million respectively. The table below shows the key assumptions used in the value in use calculations. Assumptions used in value in use calculation Germany Italy Spain Greece Portugal India Romania % % % % % % % Pre-tax adjusted discount rate 8.5 12.1 10.6 22.8 16.9 15.1 11.5 Long-term growth rate 1.5 1.2 1.6 1.0 2.3 6.8 3.0 Budgeted EBITDA 1 2.3 (1.2) 3.9 (6.1) 0.2 15.0 0.8 Budgeted capital expenditure 2 8.5–11.8 10.1–12.3 10.3–11.7 9.3–12.7 12.5–14.0 11.4–14.4 12.0–14.3 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 the range of capital expenditure as a percentage of revenue in the initial five years for all cash generating units of the plans used for impairment testing. 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 Pre-tax 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. The changes in the following table to assumptions used in the impairment review would, in isolation, lead to an (increase)/decrease to the aggregate impairment loss recognised in the year ended 31 March 2012: India pps Romania pps Italy Spain Greece Portugal Increase Decrease Increase Decrease Increase Decrease Increase Decrease by 2pps by 2pps by 2pps by 2pps by 2pps by 2pps by 2pps by 2pps £bn £bn £bn £bn £bn £bn £bn £bn Pre-tax adjusted discount rate (2.22) 2.45 (1.42) 0.90 (0.03) 0.06 (0.23) 0.25 Long-term growth rate 2.45 (2.16) 0.90 (1.31) 0.04 (0.01) 0.25 (0.18) Budgeted EBITDA 1 1.70 (1.64) 0.30 (0.28) 0.04 (0.01) 0.22 (0.20) Budgeted capital expenditure 2 (1.00) 0.94 (0.93) 0.90 (0.05) 0.07 (0.13) 0.14 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 cash generating units of the plans used for impairment testing. 31 March 2011 The estimated recoverable amounts of the Group’s operations in Italy, Spain, Greece, Ireland and Portugal equalled their respective carrying values and, consequently, any adverse change in key assumptions would, in isolation, cause a further impairment loss to be recognised. The estimated recoverable amounts of the Group’s operations in Turkey, India and Ghana exceeded their carrying values by approximately £1,481 million, £977 million and £138 million, respectively. The table below shows the key assumptions used in the value in use calculations. Assumptions used in value in use calculation Italy Spain Greece Ireland Portugal Turkey India Ghana % % % % % % % % Pre-tax adjusted discount rate 11.9 11.5 14.0 14.5 14.0 14.1 14.2 20.8 Long-term growth rate 0.8 1.6 2.0 2.0 1.5 6.1 6.3 6.3 Budgeted EBITDA 1 (1.0) – 1.2 2.4 (1.2) 16.8 16.5 41.4 Budgeted capital expenditure 2 9.6–11.3 7.8–10.6 10.7–12.3 9.4–11.6 12.4–14.1 10.0–16.6 12.9–22.7 7.3–41.3 Notes: 1 Budgeted EBITDA is expressed as the compound annual growth rates in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating units of the plans used for impairment testing. 2 Budgeted capital expenditure is expressed as the range of capital expenditure as a percentage of revenue in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating units of the plans used for impairment testing.
Vodafone Group Plc Annual Report 2012 117 The table below shows, for Turkey, India and Ghana, 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 the carrying value to equal the recoverable amount 1 Turkey India Ghana pps pps pps Pre-tax adjusted discount rate 5.6 1.1 6.9 Long-term growth rate (19.6) (1.0) n/a Budgeted EBITDA 2 (4.7) (2.2) (8.7) Budgeted capital expenditure 3 7.0 2.5 8.9 Notes: 1 The recoverable amount for Greece, which was impaired at 30 September 2010, equals the carrying value at 31 March 2011. 2 Budgeted EBITDA is expressed as the compound annual growth rates in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating units of the plans used for impairment testing. 3 Budgeted capital expenditure is expressed as a percentage of revenue in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating units of the plans used for impairment testing. 11. Property, plant and equipment Equipment, Land and fixtures buildings and fittings Total £m £m £m Cost: 1 April 2010 1,577 46,845 48,422 Exchange movements (16) (678) (694) Additions 122 4,604 4,726 Disposals (21) (3,001) (3,022) Reclassifications 69 (732) (663) 31 March 2011 1,731 47,038 48,769 Exchange movements (89) (2,933) (3,022) Arising on acquisition 2 5 7 Additions 140 4,562 4,702 Disposals (29) (1,458) (1,487) Disposals of subsidiaries and joint ventures – (604) (604) Other (53) (45) (98) 31 March 2012 1,702 46,565 48,267 Accumulated depreciation and impairment: 1 April 2010 633 27,147 27,780 Exchange movements (4) (114) (118) Charge for the year 99 4,273 4,372 Disposals (19) (2,942) (2,961) Other – (485) (485) 31 March 2011 709 27,879 28,588 Exchange movements (33) (1,652) (1,685) Charge for the year 98 4,265 4,363 Impairment losses – 81 81 Disposals (23) (1,252) (1,275) Disposals of subsidiaries and joint ventures – (400) (400) Other – (60) (60) 31 March 2012 751 28,861 29,612 Net book value: 31 March 2011 1,022 19,159 20,181 31 March 2012 951 17,704 18,655 The net book value of land and buildings and equipment, fixtures and fittings includes £58 million and £233 million respectively (2011: £131 million and £155 million) in relation to assets held under finance leases. 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 £2,037 million respectively (2011: £38 million and £2,375 million). Property, plant and equipment with a net book value of £893 million (2011: £972 million) has been pledged as security against borrowings. Business review Performance Governance Financials Additional information
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Risk overview Vodafone Group Plc An
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Corporate governance Vodafone Group
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Vodafone Group Plc Annual Report for the year ended 31 March 2012

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