Vodafone 2001 Annual Report Download

Download and view the complete annual report

Please find the complete 2001 Vodafone annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 68

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68

Annual Report & Accounts
For the year ended 31 March 2001
Vodafone Group Plc

Table of contents

  • Page 1
    Vodafone Group Plc Annual Report & Accounts For the year ended 31 March 2001

  • Page 2
    Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001

  • Page 3
    1 Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 hello Welcome to the world's largest mobile community â„¢

  • Page 4
    ... Annual Review & Summary Financial Statement 2001 comprise the full Annual Report and Accounts of Vodafone Group Plc for the year ended 31 March 2001, prepared in accordance with the Companies Act 1985. This document contains certain forward-looking statements concerning future performance, costs...

  • Page 5
    ... the results of AirTouch Communications, Inc. from 30 June 1999, the date of closure of the merger, the results of Verizon Wireless from 3 April 2000, the date on which the Group's US wireless assets were contributed to the joint venture partnership, and the results of Mannesmann AG from 12 April...

  • Page 6
    ... and formation of Verizon Wireless. After making adjustments for acquisitions completed in the year, primarily the increased stakes in Airtel Móvil S.A. in Spain, the J-Phone Group in Japan and the acquisition of shareholdings in Swisscom Mobile SA and China Mobile (Hong Kong) Limited, underlying...

  • Page 7
    ...% and 28%, respectively, with the balance being primarily due to the acquisition of increased stakes in the J-Phone Group and the acquisition of a 2.18% stake in China Mobile (Hong Kong) Limited during the year. The Middle East and Africa region reported an increase in pro forma proportionate EBITDA...

  • Page 8
    ... increasing the Group's stake to 73.8%. Vodafone issued 3,097,446,624 new listed ordinary shares to the transferring Airtel shareholders, representing a transaction value of approximately £7.9 billion for the acquired shares. Additionally, a 25% equity interest in Swisscom Mobile SA was acquired...

  • Page 9
    ... price suffered as market sentiment moved away from technology and telecommunications stocks. Nevertheless, investor support is demonstrated by the strong demand for the recent placing of the Company's shares, which raised over £3.5 billion. Vodafone Group Plc Annual Report & Accounts for the year...

  • Page 10
    .... Further details of the Group's charitable activities are contained in the separate report on corporate social responsibility, Vodafone future. P olitica l d on a tion s No political donations were made during the year. Cr e d itor p a ym e n t te r m s It is the Group's policy to agree terms of...

  • Page 11
    ... Company has an International Employee Communications Forum at which employee representatives from subsidiary companies in Europe are able to discuss the progress of the Group and matters affecting more than one country. Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001...

  • Page 12
    ...by the Group's business. Cor p or a te s ocia l r e s p on s ib ility A review of the Group's corporate social responsibility policy is contained on pages 24 and 25 of the Annual Review and further details are contained in the separate report on corporate social responsibility, Vodafone future. Au...

  • Page 13
    ...March 2001. Their biographical details are set out brieï¬,y on pages 28 and 29 of the Annual Review. The acquisition of Mannesmann AG and the formation of Verizon Wireless in April 2000, have resulted in a year of change for the Board. Following the formation of Verizon Wireless, Arun Sarin resigned...

  • Page 14
    ... borrowings and investments, is distributed electronically on a daily basis. The Board reviews a half yearly report detailing any significant legal actions faced by Group companies. The Group Policy Committee monitors legal, environmental and regulatory matters and approves appropriate responses or...

  • Page 15
    ... the year under review and to the date of approval of the annual report and accounts. Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 Re la tion s w ith s h a r e h old e r s The Company holds briefing meetings with its major institutional shareholders in the UK, the...

  • Page 16
    ...date of vesting will be exercisable at the market price at the time of grant. Com p on e n ts of e xe cu tive d ir e ctor s ' r e m u n e r a tion Overview The components of executive directors' remuneration packages are salary, on which pension benefits are calculated, short term incentives, long...

  • Page 17
    ... a holding of not less than 500,000 shares. Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 (iii) the sum of the local market-related remuneration which is made up of basic salary, STIP, LTIP award and the Executive Share Option Scheme allocation; and (iv) the Black...

  • Page 18
    ... Vodafone Group 1998 Sharesave Scheme. This is an Inland Revenue approved scheme open to all UK permanent employees. Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 The maximum that can be saved each month is £250 and savings plus interest may be used to acquire shares...

  • Page 19
    ... until the end of the initial three years. Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 Re m u n e r a tion for th e ye a r to 31 Ma r ch 2001 Salary/Fees 2001 2000 £000 £000 Bonuses 2001 2000 £000 £000 Incentive schemes 2001 2000 £000 £000 (1) Benefits...

  • Page 20
    ...ye a r to 31 Ma r ch 2001 Increase in accrued pension during the year £000 Transfer value of increase in accrued pension £000 Accumulated total accrued pension at year end £000 Chris Gent Peter Bamford Thomas Geitner (2) Julian Horn-Smith Ken Hydon Arun Sarin (3) Vodafone Group Plc Annual Report...

  • Page 21
    ... of awards under the Vodafone Group 1999 Long Term Stock Incentive Plan is based on the purchase price of the Company's ordinary shares on 14 April 2000 of 312.5p. 4. The value at 31 March 2001 is calculated using the closing middle market price of the Company's ordinary shares of 193p. Arun Sarin...

  • Page 22
    ... held at date of resignation Number Options held at 31 March 2001 Number Date from which exercisable Latest expiry date Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 Paul Hazen (1) Chris Gent (2) Peter Bamford Thomas Geitner Julian Horn-Smith Ken Hydon Arun Sarin...

  • Page 23
    ... representing ten ordinary shares in the Company, which are traded on the New York Stock Exchange. The number and option price have been converted into the equivalent amounts for the Company's ordinary shares, with the option price being translated at the average exchange rate for the year of $1.48...

  • Page 24
    ... period 1 April to 29 May 2001, except that Julian Horn-Smith and Ken Hydon acquired one share each through Vodafone Group Personal Equity Plans and the following directors acquired interests in shares of the Company under the Vodafone Group Profit Sharing Scheme, as follows: Interests in Ordinary...

  • Page 25
    ... are also responsible for the 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. Vodafone Group Plc Annual Report & Accounts for the year ended...

  • Page 26
    ... 60, which have been prepared under the accounting policies set out on pages 29 and 30, and the detailed information disclosed in respect of directors' remuneration and share options set out in the Board's Report to Shareholders on Directors' Remuneration on pages 14 to 22. We have also audited the...

  • Page 27
    ... (362) (3,286) -------- 7,873 -------- Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 Less: Share of joint ventures Share of associated undertakings (98) (8,891) -------- 15,004 -------- Group turnover Continuing operations Acquisitions 1 6,637 8,367 -------- 15,004...

  • Page 28
    ... CON SOL I DATED B AL AN CE SHEET a t 3 1 M a r c h 2 0 0 1 Note 2001 £m 2000 £m F ixe d a s s e ts Intangible assets Tangible assets Investments Investments in joint ventures: Share of gross assets Share of gross liabilities Loans to joint ventures Vodafone Group Plc Annual Report & Accounts...

  • Page 29
    ... ow fr om fi n a n cin g Issue of ordinary share capital Issue of shares to minorities Capital element of finance lease payments Debt due within one year: (Decrease)/increase in short term debt Repayment of debt acquired Issue of new bonds Debt due after one year: Increase/(decrease) in bank loans...

  • Page 30
    ... D L OS S ES for the year ended 31 March 2001 2001 £m 2000 £m (Loss)/profit for the financial year: Group Share of joint ventures Share of associated undertakings (8,658) (32) (1,073) -------- (9,763) -------- 914 14 (441) -------- 487 -------- Vodafone Group Plc Annual Report & Accounts for...

  • Page 31
    ... US businesses contributed to the Verizon Wireless joint venture have been treated as having been disposed, and the Group's interest in the new venture is included within fixed asset investments as an interest in an associated undertaking. Vodafone Group Plc Annual Report & Accounts for the year...

  • Page 32
    ... in the balance sheet and the Group's share of the turnover of the joint venture is disclosed in the profit and loss account. Other investments, held as fixed assets, comprise equity shareholdings and other interests. They are stated at cost less provision for any impairment. Dividend income is...

  • Page 33
    ...lys is The Group's business is principally the supply of mobile telecommunications services and products. Other operations primarily comprise fixed line telecommunications businesses acquired as part of the acquisition of Mannesmann AG and the Vizzavi Europe joint venture. Analyses of turnover, pro...

  • Page 34
    ... analyses are as follows: Joint ventures 2001 £m 2000 £m 2001 £m Associated undertakings 2000 £m Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 Share of turnover Mobile telecommunications: Continental Europe United Kingdom United States Asia Pacific Middle...

  • Page 35
    ... Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 2001 £m 2000 £m Depreciation of tangible fixed assets Owned assets Leased assets Amortisation of goodwill Amortisation of other intangible fixed assets Research and development Payments under operating leases...

  • Page 36
    ... payable and similar charges Share of joint ventures and associated undertakings net interest payable Net interest payable Included in Group interest receivable in the above analysis are amounts received on loans to businesses held for resale on completion of the acquisition of Mannesmann AG...

  • Page 37
    ... Current tax - Current year Current tax - Prior year Transfer to/(from) deferred taxation Tax on exceptional non-operating items Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 Parent and subsidiary undertakings Share of joint ventures Share of associated undertakings...

  • Page 38
    ... £m Licence and spectrum fees £m Total £m Cost 1 April 2000 Exchange movements Acquisitions (note 22) Additions Reclassifications from associated undertakings (note 10) Disposals 31 March 2001 Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 22,197 2,561 87,185...

  • Page 39
    ... ------- The goodwill capitalised in the year in respect of associated undertakings of £25,536m relates primarily to the Group's acquisition of interests in Verizon Wireless, Swisscom Mobile SA, and in respect of associated undertakings acquired as part of the Mannesmann AG transaction. Reclassi...

  • Page 40
    ... undertakings comprises: Joint ventures 2001 £m 2000 £m Associated undertakings 2001 2000 £m £m Share of turnover of joint ventures and associated undertakings Share of assets Fixed assets Current assets Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 98 ------- 65...

  • Page 41
    ...a Nil cost to the Group. Further detail is provided within note 19 to the accounts. Fixed asset investments also include 7,039,587 shares in Vodafone Group Plc held by the Vodafone Group Employee Trust to satisfy the potential award of shares under the Group's Long Term Incentive Plan and Short Term...

  • Page 42
    ... £m Bank loans, other loans and overdrafts Commercial paper Finance leases Trade creditors Amounts owed to associated undertakings Taxation Other taxes and social security costs Other creditors Accruals and deferred income Proposed dividend Vodafone Group Plc Annual Report & Accounts for the year...

  • Page 43
    ... 794 481 1,681 3,876 -------- 6,832 -------- Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 The maturities of the Group's other financial liabilities at 31 March was as follows: In more than one year but not more than two years In more than two years but not more than...

  • Page 44
    ...nancial assets £m Other non-interest bearing financial assets £m Currency Total £m Equity investments £m At 31 March 2001: Sterling Euro US Dollar Other Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 Gross financial liabilities At 31 March 2000: Sterling Euro...

  • Page 45
    ... estimated by discounting the future cash ï¬,ows to net present values using appropriate market interest and foreign currency rates prevailing at the year end. Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 H e d ge s The Group's policy is to use derivative instruments...

  • Page 46
    ... These losses are only available for offset against future profits arising from the same trade within these companies. In addition, the Group's share of losses of United Kingdom and international joint ventures that are available for offset against future trading profits in these entities is £10m...

  • Page 47
    ... g th e ye a r Number Nominal value £m Proceeds £m Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 UK share option schemes US share option schemes and restricted stock awards Total for share option schemes and restricted stock awards Scrip dividends Shares issued as...

  • Page 48
    ... to acquire Vodafone Group Plc shares. No further awards will be granted under this scheme. The Vodafone Group Savings Related and Sharesave Schemes, Vodafone Group Executive Schemes and Vodafone Group Plc 1999 Long Term Stock Incentive Plan are described in the Board's Report to Shareholders on...

  • Page 49
    ... classes of share issued by the company as regards return of capital. 22 Acq u is ition s a n d d is p os a ls The Group has undertaken a number of transactions during the year including completion of the acquisition of Mannesmann AG, contribution of the Group's US cellular operations to Verizon...

  • Page 50
    ... Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 1,060 3,091 665 13 - - - - (1,060)(4) 485(5) (648)(7) 76(8) - 254(6) - 301(9) - 3,830 17 390 Current assets Stocks Debtors Assets held for resale Cash at bank and in hand Current liabilities Overdrafts Short term...

  • Page 51
    ...Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 A consolidated profit and loss account for Mannesmann AG for the period from 1 January 2000 to 12 April 2000 was not prepared by the company. In order to provide information which highlights the impact of the acquisition...

  • Page 52
    ... Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 Net assets Proceeds on disposal of conï¬,icted properties and interests in fixed assets The share of assets/(liabilities) acquired on formation of Verizon Wireless were: Book value at acquisition £m Accounting policy...

  • Page 53
    ... exchange rates for the years of £1 = ESP273.66 and £1 = ESP252.66, respectively. Oth e r a cq u is ition s The Group undertook a number of other acquisitions during the year as summarised below: Consideration £m Fair value of net assets acquired £m Goodwill capitalised £m Swisscom Mobile SA...

  • Page 54
    ... of these network infrastructure assets are not included in the Group's balance sheet. 24 Ca p ita l com m itm e n ts 2001 £m 2000 £m Tangible and intangible fixed asset expenditure contracted for but not provided 861 -------- 442 -------- Details of business acquisitions completed after...

  • Page 55
    ... S.A. in December 2000 and the acquisition of a minority interest in Swisscom Mobile SA in March 2001. In addition, the formation of Verizon Wireless in April 2000 involved the contribution of the Group's US wireless assets to a US partnership. Further details of these transactions are included in...

  • Page 56
    ... schemes, share options and interests in shares is shown in the Board's Report to Shareholders on Directors' Remuneration on pages 14 to 22. Following approval by the Board, on 19 June 2000 Vodafone Americas Asia Inc. (formerly AirTouch Communications, Inc.), a subsidiary undertaking of the Company...

  • Page 57
    ... funds that are converted into pension benefits at the time of retirement. For non-UK employees the Group provides, in most cases, defined contribution schemes. For employees in the UK and certain businesses acquired as part of the Mannesmann acquisition, the Group generally provides defined bene...

  • Page 58
    ... at bank and in hand 33 24,180 4 -------- 24,184 (65,843) -------- (41,659) -------- 61,999 7,554 -------- 7,554 (11,610) -------- (4,056) -------- 51,360 Cr e d itor s : amounts falling due within one year Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 34 N e t cu...

  • Page 59
    ...Nil and £16m). The Company's subsidiary and associated undertakings, joint ventures and other investments are detailed on pages 59 and 60. Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 33 De b tor s 2001 £m 2000 £m Due within one year: Amounts owed by subsidiary...

  • Page 60
    ...d 35 Cr e d itor s : amounts falling due after more than one year 2001 £m 2000 £m Other loans Accruals and deferred income 4,835 428 -------- 5,263 -------- 2001 £m 4,694 - -------- 4,694 -------- 2000 £m Other loans are repayable as follows: Vodafone Group Plc Annual Report & Accounts for...

  • Page 61
    ...50.1 Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 Vodafone Deutschland GmbH Vodafone International B.V. Vodafone International Holdings B.V. Vodafone International Inc. Vodafone Limited Vodafone Malta Limited Vodafone Network Pty Limited Vodafone New Zealand Limited...

  • Page 62
    ... 2.2 7.5 11.7 Germany China Japan Korea China Mobile (Hong Kong) Limited (4) (1) To nearest tenth of one percent. (2) The Group has not consolidated or equity accounted for its ownership interest in Atecs Mannesmann AG during the year since the rights conferred by the Group's shareholding do not...

  • Page 63
    ... 2000 £m Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 N e t (los s )/ in com e a s r e p or te d in a ccor d a n ce w ith UK G AAP Items (increasing)/decreasing net loss: Goodwill and other intangibles amortisation Deferral of connection income Reorganisation costs...

  • Page 64
    ... the equity method of accounting. Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 De fe r r a l of con n e ction r e ve n u e s a n d in com e Under Vodafone's UK GAAP accounting policy, connection revenues and related costs are recognised upon activation of a mobile...

  • Page 65
    ...in own shares to be shown as a deduction from equity. Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 P r op os e d d ivid e n d s Under UK GAAP, final dividends are included in the financial statements when recommended by the Board of directors to the shareholders in...

  • Page 66
    ... AirTouch Communications, Inc. or the acquisition of Mannesmann AG, except insofar as such costs and savings have been included in the financial statements of the Vodafone Group for each of the periods presented. P r o for m a p r op or tion a te tu r n ove r Mobile telecommunications: Continental...

  • Page 67
    Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 2001 We want to keep the environmental impact of the documents in our annual report package to a minimum. We have therefore given careful consideration to the production process. For the first time this year we have not ...

  • Page 68
    Vodafone Group Plc The Courtyard, 2-4 London Road, Newbury, Berkshire RG14 1JX, United Kingdom Telephone: +44 (0)1635 33251 Fax: +44 (0)1635 45713 Registered in England No. 1833679 www.vodafone.com Printed in the United Kingdom