Vodafone 1999 Annual Report Download

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Vodafone Home
http://www.vodafone.com/download/investor/reports/annual99/Index.htm30/03/2007 00:04:51

Table of contents

  • Page 1
    Vodafone Home http://www.vodafone.com/download/investor/reports/annual99/Index.htm30/03/2007 00:04:51

  • Page 2
    ... 20.61p 13.63p 51 Dividends per share 6.36p 5.53p 15 Proportionate turnover £3,837m £2,874m 34 Proportionate EBITDA £1,218m £919m 33 Proportionate customers at year end 10,445,000 5,844,000 79 http://www.vodafone.com/download/investor/reports/annual99/ResultsOfYear.htm30/03...

  • Page 3
    ... and value of its services. The most exciting development for the Group in the year was the announcement in January 1999 of its intended merger with AirTouch Communications, Inc. of San Francisco, California. http://www.vodafone.com/download/investor/reports/annual99/ChaimansStatement.htm (1 of...

  • Page 4
    ...California and found its staff to be just as enthusiastic as Vodafone's. I believe the combination will be a winning formula. Having recently held a General Meeting, there is not a great deal of business to conduct at this year's Annual General Meeting. However, as the Company's share and ADR prices...

  • Page 5
    ... in the wireless information age that we expect to develop over the next few years. Chris Gent, Chief Executive On 15 January 1999 it was announced that Vodafone and AirTouch had agreed to join forces to create the world's largest mobile telecommunications group. The merger with AirTouch will...

  • Page 6
    CEO's Statement BACK TO TOP http://www.vodafone.com/download/investor/reports/annual99/CEO_Statement.htm (2 of 2)30/03/2007 00:07:15

  • Page 7
    ... greater use of the network in the evenings and at weekends. During the year, the company launched a new entry level tariff for high off-peak users and adjusted 'Pay As You Talk' tariffs, offering even more value for money to Vodafone customers. The 'Pay As You Talk' (PAYT) pre-paid service...

  • Page 8
    ...other UK operators, the Vodafone Short Message Service is available on all tariffs and the pre-paid PAYT service alone now accounts for over 50% of messages, as many of its users are young people who make greater use of text messages to communicate. http://www.vodafone.com/download/investor/reports...

  • Page 9
    ...key shopping malls. Many of the new flagship stores are in locations such as Oxford Street, London, Bluewater Park in Kent, and the Trafford Centre, Manchester. In August 1998, Vodafone Retail opened the doors of its virtual store, making 24 hour shopping via the internet a reality for its customers...

  • Page 10
    ...assist in the administration of multi-phone accounts. In April 1999, Vodafone Corporate and Cable & Wireless Communications announced that Vodafone Corporate had acquired the Cable & Wireless UK cellular service provider business and that they had entered into an agreement to jointly offer corporate...

  • Page 11
    ...on the Amsterdam Stock Exchange through an Initial Public Offering. The Vodafone Group's shareholding will remain unchanged at 70%. The French mobile phone market continued to show good growth after the dramatic increase in customers reported in the http://www.vodafone.com/download/investor/reports...

  • Page 12
    ...opting for this type of product accounted for 55% of the 2,000,000 customer base, which grew by over 104% in the last financial year. Celtel, in which the Group has a 36.8% shareholding, is one of two GSM network http://www.vodafone.com/download/investor/reports/annual99/international_operations.htm...

  • Page 13
    ...of the forty eight satellites required have been launched and full commercial service is planned for the third quarter of 1999. AirTouch has a 5.2% interest in Globalstar. BACK TO TOP http://www.vodafone.com/download/investor/reports/annual99/international_operations.htm (3 of 3)30/03/2007 00:07:43

  • Page 14
    ..., most notably in the centre of Bristol. Vodafone Retail's stores have joined a national UK scheme aimed at the environmentally friendly return and recycling of old mobile telephone handsets and batteries. The stores act as collection points for the general public to return old, disused or broken...

  • Page 15
    ... services provide wide ranging benefits to serve the special needs of a number of different sections of the community, including the disabled, police community initiatives and a variety of innovative 'Watch' schemes aimed at preventing crime. BACK TO TOP http://www.vodafone.com/download/investor...

  • Page 16
    ....3m in the year, whilst total proportionate customers increased by 79% to 10,445,000. International businesses increased proportionate turnover by 61% to £1,666.9m as proportionate customers increased by 102% to 4,870,000. http://www.vodafone.com/download/investor/reports/annual99/financial_review...

  • Page 17
    ... - 104 40 100 79 102 UK Australia Egypt France Germany Greece Malta Netherlands New Zealand South Africa Sweden Uganda and Fiji TOTAL TOTAL International Total Group operating profit Total Group operating profit increased by 40% to £962.6m. In the UK, total operating profit rose by 14% to £643...

  • Page 18
    ...also disposed of the business and net assets of its French service provider business, which was operated by Vodafone SA, in November 1998. Interest The Group's net interest cost increased by £33.0m as net borrowings increased by £391.0m to finance international acquisitions. Taxation The effective...

  • Page 19
    ... future turnover and profit performance are the potential for growth of the mobile telecommunications markets, the Group's market share, revenue per customer, the costs of providing and selling existing services and start up costs of new businesses. The global market for mobile telecommunications...

  • Page 20
    ... the Group's accounting policy. The balance sheet also excludes any value attributable to future income streams that are anticipated from existing customers. Equity shareholders' funds increased by £532.1m to £814.6m, mainly due to retained profits of £439.9m and the benefit of scrip dividends of...

  • Page 21
    ...those used by companies with high credit ratings for net interest cover, market capitalisation to net debt and net cash flow to net debt, which establish internal limits for the maximum level of debt that the Group may have outstanding. Total Group interest, excluding that of associated undertakings...

  • Page 22
    .... Whilst the Group may be exposed to credit losses in the event of non-performance by these counterparties, it considers the possibility of material loss to be minimal because of these control procedures. BACK TO TOP Shareholder returns http://www.vodafone.com/download/investor/reports/annual99...

  • Page 23
    ... to provide services to customers. The Group initiated a comprehensive millennium programme, which seeks to ensure that the Group does not experience difficulties resulting from failures of hardware, software and electronic http://www.vodafone.com/download/investor/reports/annual99/financial_review...

  • Page 24
    ...committee chaired by a director of that company. The programme is monitored on a monthly basis by the Executive Committee of Vodafone Group Plc. The Group is operating to policies which seek to ensure that the businesses and all operations of the Group meet the definition of Year 2000 conformity, as...

  • Page 25
    ... the next financial year and other longer term plans, the directors are satisfied that, at the time of approving the financial statements, it is appropriate to adopt the going concern basis in preparing the financial statements. BACK TO TOP http://www.vodafone.com/download/investor/reports/annual99...

  • Page 26
    ..., the Institute of Physics and is a Foreign Associate of the US National Academy of Engineering. Sir Alec will become a Director Emeritus, an advisory position without formal Chris Gent http://www.vodafone.com/download/investor/reports/annual99/board_of_directors_and_secre.htm (1 of 5)30/03/2007...

  • Page 27
    ... from the Board on completion Peter Bamford Director Aged 45, he was appointed to the Board in April 1998. He is Chief Executive of Vodafone UK Limited, with responsibility for the Group's UK operations. Before joining the Company in http://www.vodafone.com/download/investor/reports/annual99...

  • Page 28
    ... Group's overseas operations, and is a director of many of the Group's overseas operating companies. Julian will be Chief Executive, Europe, Middle East and Africa region, after the merger with AirTouch. Sir David Scholey CBE Nonexecutive Director http://www.vodafone.com/download/investor/reports...

  • Page 29
    ...aged 54, he was appointed to the Board in 1985. He is a director of several Group companies, including the Group's international holding company Vodafone Europe Holdings BV, and he also deals with US investor relations. Ken will be the Financial Director of Vodafone AirTouch Plc. Sir David, aged 63...

  • Page 30
    P20 Board of Directors and Secretary merger with AirTouch. http://www.vodafone.com/download/investor/reports/annual99/board_of_directors_and_secre.htm (5 of 5)30/03/2007 00:08:30

  • Page 31
    ... Meeting to be held in 2000 or 24 August 2000, whichever is the earlier, to purchase up to 315,072,629 ordinary shares of the Company. Results and dividends The consolidated profit and loss account is set out here in the financial statements . http://www.vodafone.com/download/investor/reports...

  • Page 32
    ...1999. Research and development The Group continues an active research and development programme for the enhancement of mobile telecommunications. Directors' interests in the shares of Vodafone Group Plc The Remuneration Report of the Board details the directors' interests in the shares of Vodafone...

  • Page 33
    ... of their length of service, to acquire Vodafone Group Plc shares on an advantageous basis. These schemes are highly regarded by staff and over 50% of staff currently participate in one or both of them. • V oda fone Group Profit Sha ring Sc he m e - This enables staff to contribute up to...

  • Page 34
    Directors Report employees of Award Scheme age to encourage young employees to develop their confidence and important skills such as communication, planning and working in teams. A programme of business related further education is also sponsored by the Group and programmes exist to help employees ...

  • Page 35
    ... Limited has a holding of 5.8%, Schroder Investment Management Limited has a holding of 5.1%, Legal and General Investment Management Limited has a holding of 3.1%, and the Prudential Corporation group of companies has a holding representing 3.0%. http://www.vodafone.com/download/investor/reports...

  • Page 36
    ... of Association, approved by shareholders at the Extraordinary General Meeting held on 24 May 1999, provide that every director who was elected or last re-elected at or before the Annual General Meeting held in the third calendar year before the current year shall automatically retire. The Board...

  • Page 37
    ..., including the approval of Group commercial strategy, major capital projects, the adoption of any significant change in accounting policies or practices and material contracts not in the ordinary course of business. The directors have access to the advice and services of the company secretary and...

  • Page 38
    ... deficiency in the Group's system of internal financial control during the period covered by this report. Relations with shareholders The Company holds briefing meetings with its major institutional shareholders in the UK, the USA and in Continental Europe, usually twice each year after the interim...

  • Page 39
    Corporate Governance Financial and other information is made available on the Company's internet web site which is regularly updated. http://www.vodafone.com/download/investor/reports/annual99/corporate_governance.htm (4 of 4)30/03/2007 00:09:10

  • Page 40
    ... performance criteria. In relation to awards for the year ended 31 March 1999, the condition is that the growth in earnings per share must exceed the growth in the UK retail price index by an average of 3 per cent per year for the two http://www.vodafone.com/download/investor/reports/annual99...

  • Page 41
    ... the basis that options over the Company's shares may be granted once each year at, for directors, a multiple of one times taxable earnings subject to an overall maximum holding equivalent to four times taxable earnings at the date of grant. The savings related share option scheme permits employees...

  • Page 42
    ... relate to the market value of the original award of shares expected to be made under the Vodafone Group Short Term Incentive Plan for the year ended 31 March 1999. Pension benefits earned by the directors in the year to 31 March 1999 N a m e of D ir e ct or C C Gent Tr a n sfe r va lu e of in cr...

  • Page 43
    ... benefits for D Channing Williams are for the period to 31 March 1999 when he retired from the Board. Directors' interests in the shares of Vodafone Group Plc Share options The following information summarises the directors' options under the Vodafone Group Savings Related Share Option Scheme...

  • Page 44
    ...(1998 - £3,344,769). The closing middle market price of Vodafone Group Plc's shares at the year end was 1151p, its highest closing price in the year having been 1225.5p and its lowest closing price having been 551p. Long Term Incentive Plan http://www.vodafone.com/download/investor/reports/annual99...

  • Page 45
    ... J M Horn-Smith who acquired 9,000 ordinary shares of Panafon SA, the Group's Greek subsidiary company, upon its flotation in December 1998. He owned 9,000 ordinary shares of Panafon SA at the end of the financial year. By Order of the Board http://www.vodafone.com/download/investor/reports/annual99...

  • Page 46
    Remuneration Report of the Board Stephen Scott Secretary 8 June 1999 http://www.vodafone.com/download/investor/reports/annual99/remuneration_report_of_the_board.htm (7 of 7)30/03/2007 00:09:24

  • Page 47
    ... systems of internal financial controls and for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. http://www.vodafone.com/download/investor/reports/annual99/statement_of_directors_responsib...

  • Page 48
    ...Report of the Auditors Auditors' report to the members of Vodafone Group Plc We have audited the financial statements, which have been prepared under the historical cost convention and the accounting policies, and the detailed information disclosed in respect of any directors' remuneration and share...

  • Page 49
    P31b Report of the Auditors Deloitte & Touche Chartered Accountants and Registered Auditors Hill House 1 Little New Street London EC4A 3TR 8 June 1999 http://www.vodafone.com/download/investor/reports/annual99/report_of_the_auditors.htm (2 of 2)30/03/2007 00:09:44

  • Page 50
    Consolidated Profit and Loss Account for the year ended 31 March 1999 Consolidated Profit and Loss Account for the year ended 31 March 1999 1999 £m 3,302.3 57.7 -------- 3,360.0 -------- 849.3 (2.6) -------- 846.7 115.9 -------- Total Group operating profit: Group and share of associated ...

  • Page 51
    ...The financial statements and notes to the accounts were approved by the Board of directors on 8 June 1999 and were signed on its behalf by: C C GENT K J HYDON Chief Executive Financial Director http://www.vodafone.com/download/investor/reports/annual99/consolidated_balance_sheet.htm30/03/2007 00:09...

  • Page 52
    ... share capital Issue of shares to minorities Purchase of shares from minorities Debt due within one year: (Decrease)/increase in commercial paper programme (Decrease)/increase in uncommitted bank borrowings Debt due after more than one year: Increase in bank loans Repayment of debt acquired Net...

  • Page 53
    Consolidated Cash Flow for the year ended 31 March 1999 http://www.vodafone.com/download/investor/reports/annual99/consolidated_cash_flow.htm (2 of 2)30/03/2007 00:10:12

  • Page 54
    ... and Losses for the year ended 31 March 1999 1999 £m Profit for the financial year Currency translation 636.7 5.9 -------- Total recognised gains and losses relating to the year 642.6 -------- 1998 £m 418.8 (147.2) -------- 271.6 -------- http://www.vodafone.com/download/investor/reports/annual99...

  • Page 55
    ...-off directly to reserves Goodwill transferred to the profit and loss account in respect of business disposals Scrip dividends Other Net movement in equity shareholders' funds Opening equity shareholders' funds Closing equity shareholders' funds http://www.vodafone.com/download/investor/reports...

  • Page 56
    ... The Group financial statements consolidate the financial statements of the Company and its subsidiaries and include the Group's share of results of associated undertakings for financial statements made up to 31 March 1999. Foreign currencies http://www.vodafone.com/download/investor/reports...

  • Page 57
    ... pension costs charged to the profit and loss account represent contributions payable in respect of the period. Research and development Expenditure on research and development is written-off in the year in which it is incurred. Scrip dividends http://www.vodafone.com/download/investor/reports...

  • Page 58
    ... acquisition, establishment and installation of base stations. Investments The consolidated financial statements include investments in associated undertakings using the equity method of http://www.vodafone.com/download/investor/reports/annual99/statement_of_accounting_policies.htm (3 of 4)30/03...

  • Page 59
    ... Policies accounting. An associated undertaking is a company in which the Group owns a material share of the equity and, in the opinion of the directors, can exercise significant influence in its management. The profit and loss account includes the Group's share of the operating profit or loss...

  • Page 60
    Notes on Company Balance Sheet Notes to the Consolidated Financial Statements 1. Segmental analysis 2. Operating profit 3. Disposal of fixed asset investments 4. Net interest payable 5. Tax on profit on ordinary activities 6. Equity dividends 7. Earnings per share 8. Intangible fixed assets 9. ...

  • Page 61
    Notes on Company Balance Sheet 23. Capital commitments 24. Contingent liabilities 25. Analysis of cash flows 26. Analysis of net debt 27. Directors 28. Employees 29. Pensions http://www.vodafone.com/download/investor/reports/annual99/Notes_Con_Fin_Stat.htm (2 of 2)30/03/2007 00:11:56

  • Page 62
    ....8 -------- Capital and reserves Called up share capital Share premium account Capital reserve Profit and loss account 35 18 19 155.0 96.1 87.9 1,432.8 -------- Total equity shareholders' funds 1,771.8 -------- C C GENT K J HYDON 8 June 1999 Chief Executive Financial Director 154.3 78.0 87.9 1,181...

  • Page 63
    ...Company Balance Sheet 30. Fixed asset investments 31. Debtors 32. Creditors: amounts falling due within one year 33. Creditors: amounts falling due after more than one year 34. Deferred taxation 35. Profit and loss account 36. Contingent liabilities http://www.vodafone.com/download/investor/reports...

  • Page 64
    ... Vodafone Corporate Limited Vodafone Connect Limited Vodafone (NI) Limited Vodafone Retail (Holdings) Limited Vodafone Retail Limited Peoples Phone Limited Astec Communications Limited Vodafone Europe Holdings BV(2) Vodafone Malta Limited Vodafone Gibraltar Limited(2) Vodafone Financial Services...

  • Page 65
    ... BV Libertel BV Libertel Verkoop en Services BV Data Holdings SA Panafon SA Panavox SA(9) Vodafone Finance Limited Vodafone Group Services Limited Vodafone Investments Limited Vodafone Paging (Holdings) Limited Vodafone Paging Limited Vodafone Satellite Services Limited Vodafone Value Added and Data...

  • Page 66
    ... Dawes Telecommunications Limited Misrfone Telecommunications Company(2) SAE Mobile Telecom Group Limited(2) Page UK Limited(2) Société Française du Radiotéléphone SA(2) Vodafone Fiji Limited(2) 20 £632,601 31.12.98 England Cellular network operator Holding company Paging service provider...

  • Page 67
    ... Germany USA E-Plus Mobilfunk GmbH (2) Cellular network operator Development of satellite telecommunications service 17 3 Globalstar L.P.(3) 1. To nearest whole percentage. 2. Indirectly held. 3. Indirectly held partnership interest. http://www.vodafone.com/download/investor/reports/annual99...

  • Page 68
    ...Accounting Principles ("UK GAAP") that are significant to Vodafone Group Plc. The principles are set out below. Net income and earnings per ordinary share 1999 £m 1998 £m 418.8 Net income as reported in accordance with UK GAAP Items (decreasing)/increasing net income: Goodwill amortisation Profit...

  • Page 69
    ...the net assets at the date of investment. Under UK GAAP, the treatment followed by the Group prior to the implementation of FRS 10 was to write-off the excess of the purchase consideration over the fair value of the stake acquired in the associated undertaking against shareholders' funds in the year...

  • Page 70
    ... cost and the pension prepayment. Employee share trusts Under UK GAAP, the tax benefits receivable in relation to employee share trust arrangements are shown as a component of the tax charge for the year. Under US GAAP this tax benefit is allocated to shareholders' equity. Dividends Under UK...

  • Page 71
    ... information is provided as supplemental data to facilitate a more detailed understanding and assessment of the consolidated financial statements prepared in accordance with UK GAAP. UK GAAP requires consolidation of entities controlled by the Group and the equity method of accounting for...

  • Page 72
    ... Number Proportionate customers Number Number Turnover Profit on ordinary activities before taxation Taxation Profit on ordinary activities after taxation Basic earnings per share Dividends for the year Balance sheet Fixed assets Other net liabilities Total net assets Equity shareholders' funds...

  • Page 73
    ... in the USA its annual report on Form 20-F (which corresponds to the 10-K for a US corporation) and other information as required. A copy of the Form 20-F may be obtained by writing to the Investor Relations Department, Vodafone Group Plc, The Courtyard, 2-4 London Road, Newbury, Berkshire RG14 1JX...

  • Page 74
    ...is a direct purchase and sale plan for depository receipts, with a dividend reinvestment facility. For additional information, please call 1-800-345-1612, The Bank of New York's Global BuyDIRECT number, or write to: The Bank of New York Shareholder Relations Department Global BuyDIRECT Church Street...

  • Page 75
    ... and trustees Bank of New York Nominees - ADRs 36,264 16,457 595 21 701 594 34 1 -------- 54,667 -------- With the exception of nominee companies, most of which are institutional investors, stated shareholdings are only those directly held. Consolidation of share accounts Shareholders whose total...

  • Page 76
    ... the Financial Times Cityline service on 0336 435555. Calls are charged at 50p per minute. Internet website This Annual Report and other information on the Vodafone Group is available on the Company's website at http://www. vodafone.co.uk. http://www.vodafone.com/download/investor/reports/annual99...

  • Page 77
    ... be obtained from Investor Relations, The Courtyard, 2-4 London Road, Newbury, Berkshire RG14 1JX, England. Neither Vodafone AirTouch Plc, nor any of its officers, or any other person, accepts liability for any loss howsoever caused arising directly or indirectly from the use of information in this...