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98 Vodafone Group Plc Annual Report 2011 Notes to the consolidated financial statements continued 10. Impairment Impairment losses The net impairment losses recognised in the consolidated income statement, as a separate line item within operating profit, in respect of goodwill and licences and spectrum fees are as follows: 2011 (1) 2010 2009 Cash generating unit Reportable segment £m £m £m Italy Italy 1,050 – – Spain Spain 2,950 – 3,400 Greece Other Europe (2) 800 – – Ireland Other Europe (2) 1,000 – – Portugal Other Europe (2) 350 – – Turkey Other Europe – (200) 2,250 India India – 2,300 – Ghana Other Africa, Middle East and Asia Pacific – – 250 6,150 2,100 5,900 Notes: (1) Impairment charges for the year ended 31 March 2011 relate solely to goodwill. (2) Total impairment losses in the Other Europe segment were £2,150 million in the year ended 31 March 2011. Year ended 31 March 2011 The impairment losses were based on value in use calculations. The pre-tax adjusted discount rates used in the most recent value in use calculation in the year ended 31 March 2011 are as follows: Pre-tax adjusted discount rate Italy 11.9% Spain 11.5% Greece 14.0% Ireland 14.5% Portugal 14.0% During the year ended 31 March 2011 the goodwill in relation to the Group’s investments in Italy, Spain, Greece, Ireland and Portugal was impaired by £1,050 million, £2,950 million, £800 million, £1,000 million and £350 million, respectively. The impairment charges were primarily driven by increased discount rates as a result of increases in government bond rates. In addition, business valuations were negatively impacted by lower cash flows within business plans, reflecting weaker country-level macro economic environments. The pre-tax risk adjusted discount rates used in the previous value in use calculations at 31 March 2010 are disclosed below. Year ended 31 March 2010 The net impairment losses were based on value in use calculations. The pre-tax adjusted discount rates used in the value in use calculation in the year ended 31 March 2010 were as follows: Pre-tax adjusted discount rate India 13.8% Turkey 17.6%
Financials Vodafone Group Plc Annual Report 2011 99 During the year ended 31 March 2010 the goodwill in relation to the Group’s operations in India was impaired by £2,300 million primarily due to intense price competition following the entry of a number of new operators into the market. The pre-tax risk adjusted discount rate used in the previous value in use calculation at 31 March 2009 was 12.3%. In addition, impairment losses of £200 million, previously recognised in respect of intangible assets in relation to the Group’s operations in Turkey, were reversed. The reversal was in relation to licences and spectrum and was as a result of favourable changes in the discount rate. The cash flow projections within the business plans used for impairment testing were substantially unchanged from those used at 31 March 2009. The pre-tax risk adjusted discount rate used in the previous value in use calculation at 31 March 2009 was 19.5%. Year ended 31 March 2009 The impairment losses were based on value in use calculations. The pre-tax adjusted discount rates used in the value in use calculation in the year ended 31 March 2009 were as follows: Pre-tax adjusted discount rate Spain 10.3% Turkey 19.5% Ghana 26.9% During the year ended 31 March 2009 the goodwill in relation to the Group’s operations in Spain was impaired by £3,400 million following a fall in long-term cash flow forecasts resulting from the economic downturn. In addition, the goodwill and other intangible assets in relation to the Group’s operations in Turkey was impaired by £2,250 million. At 30 September 2008 the goodwill was impaired by £1,700 million following adverse movements in the discount rate and adverse performance against previous plans. During the second half of the 2009 financial year, impairment losses of £300 million in relation to goodwill and £250 million in relation to licences and spectrum resulted from adverse changes in both the discount rate and a fall in the long-term GDP growth rate. The cash flow projections within the business plans used for impairment testing were substantially unchanged from those used at 30 September 2008. The goodwill in relation to the Group’s operations in Ghana was also impaired by £250 million following an increase in the discount rate. Goodwill The carrying value of goodwill at 31 March was as follows: 2011 2010 £m £m Germany 12,200 12,301 Italy 13,615 14,786 Spain 7,133 10,167 32,948 37,254 Other 12,288 14,584 45,236 51,838
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Vodafone Group Plc Annual Report Fo
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Highlights of the year ■ Grouprev
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Distribution abroadrangeofcustomers
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Revenue (1) Adjustedoperatingprofit
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+23% Vodafone total shareholder ret
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A growing industry Data traffic has
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Group organic service revenue growt
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Our business in India has grown fro
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Business Review review Focus on key
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Business Review review Network tria
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Business review Mobile Wi-Fi R201 A
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27% Group revenue from emerging mar
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Business review Focus on key areas
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Business review Deliver value and e
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Business review Apply rigorous capi
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Our strong brand and increased cust
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Energy efficiency Solar and wind po
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83,900 Average employees 29 Nationa
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Performance increases in government
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Africa, Middle East and Asia Pacifi
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Performance 2010 financial year com
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Performance Revenue increased by 0.
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Performance EBITDA increased by 38.
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Performance Principal risk factors
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Selected financial data Vodafone Gr
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Vodafone, the Vodafone logo, Vodafo
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