Vodafone 1999 Annual Report Download - page 24

Financial Review
equipment or of services due to any date change around the transition into the new millennium and beyond. The
millennium programme covers the cellular, paging and data networks, billing and administrative functions, as well as
buildings, power, security, air conditioning and other similar functions. Critical suppliers are being checked for assurance
that the continuity of supply of products and services will be maintained by them.
The millennium programme is being implemented by each subsidiary within the Group whose activities are being
managed through an executive steering 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 set out in DISC PD2000-1:1998 ‘A Definition of Year 2000 Conformity
Requirements’ issued by the British Standards Institute. The Group’s planned remediation and millennium testing
activities were successfully completed for all essential systems by the target date of 31 December 1998. Rollout of these
systems is already largely complete with a target end date in the second quarter of 1999. Activities still to be completed in
1999 include transition and contingency planning, business scenario testing and completing millennium activities for all
non-critical systems.
It is the Group’s policy that all developments and all new systems and applications which may be affected must be
demonstrated to be Year 2000 compliant on entering service and that changes to existing systems do not adversely affect
the compliance status achieved. It is also the Group’s policy to monitor, through its board representation, the steps taken
by its principal associated undertakings and investments to be Year 2000 compliant. Representatives of some of these
companies have attended conferences organised by the Group to address Year 2000 issues.
The Group incurred costs in relation to Year 2000 compliance of approximately £14m in the financial year to 31 March
1999, and £4m in the previous financial year, although many costs are not separately identifiable as millennium
modifications are often embodied in software purchased and developed in the normal course of business. The Group is
satisfied that the total future amount will not be material to the future profitability or liquidity of the Group.
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Introduction of the single European currency
The Group recognises the importance of Economic and Monetary Union (EMU), particularly for its businesses operating in
countries which either introduced the single European currency, the Euro, on 1 January 1999 or are committed to the
introduction of Euro at a future date.
The Executive Committee of Vodafone Group Plc has established a steering group to assess the impact of EMU on the
Group and to monitor the progress of the Group’s subsidiaries on relevant strategic and operational issues.
The Group’s subsidiaries that operate in countries where the Euro was introduced on 1 January 1999 have prepared and
are implementing detailed EMU project plans. In countries committed to adopting the Euro at a later date, preliminary
assessments have been carried out. The financial cost of preparations for EMU are not material to the Group.
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Basis of preparation of the financial statements
The financial review complies with the ‘Operating and Financial Review’ statement issued by the Accounting Standards
Board. During the year the following Financial Reporting Standards (‘FRS’) issued by the Accounting Standards Board
became effective and have been adopted in these financial statements:
FRS 10 – Goodwill and Intangible Assets;
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