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Vodafone Group Plc
Annual Report & Accounts
and Form 20-F
For the year ended 31 March 2002
How are you?

Table of contents

  • Page 1
    How are you? Vodafone Group Plc Annual Report & Accounts and Form 20-F For the year ended 31 March 2002

  • Page 2
    The world's mobile communications leader - enriching customers' lives, helping individuals, businesses and communities be more connected in a mobile world.

  • Page 3
    ... for Shareholders Related Party Transactions Share Price History Markets Memorandum and Articles of Association and Applicable English law Material Contracts Exchange Controls Taxation Documents on Display Other Shareholder Information Contact Details Glossary of Terms Vodafone Group Plc - Form 20...

  • Page 4
    2 Vodafone Group Plc Annual Report & Accounts and Form 20-F Group Financial Highlights Group Financial Highlights Year ended 31 March Turnover 2002 £m 2001 As restated £m Increase % Total Group operating profit before goodwill amortisation and exceptional items 2002 £m 2001(2) As restated £m...

  • Page 5
    ...is provided on pages 150 and 151. This Annual Report contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 with respect to the Group's condition, results of operation and business management and strategy, plans and objectives for...

  • Page 6
    ... in Japan Telecom to a controlling level of 66.7% giving us an effective 69.7% holding in J-Phone Vodafone, our Japanese mobile operator. We increased our stake in Spain, completed the acquisition of Eircell, launched a new GSM network in Albania and disposed of our mobile interests in South Korea...

  • Page 7
    ...of its customer base, have bought camera phones. The rapid adoption rate of the Sha-mail picture messaging service has made it the fastest growing new application yet seen in mobile telecommunications, considerably outperforming SMS. We have always seen this coming financial year as a key transition...

  • Page 8
    ...Plc Annual Report & Accounts and Form 20-F Chief Executive's Statement Chief Executive's Statement continued customers. Our major operators will offer 3G this year but we will not promote 3G specifically. Our marketing will be based around services rather than GPRS or 3G technology. The new data...

  • Page 9
    ... on the Company Annual Report & Accounts and Form 20-F Vodafone Group Plc 7 Information on the Company History and Development of the Company Vodafone Group Plc provides a full range of mobile telecommunications services, including voice and data communications, and is the world's largest mobile...

  • Page 10
    ...Vodafone Group Plc Annual Report & Accounts and Form 20-F Information on the Company Information on the Company continued had a 26% stake, acquiring a controlling interest of approximately 50% in each of the existing operating companies, becoming collectively known as the J-Phone Group. The Group...

  • Page 11
    Information on the Company Annual Report & Accounts and Form 20-F Vodafone Group Plc 9 approximately 1,046 million new ordinary shares to former Eircell shareholders in consideration for their ownership interests. Eircell has subsequently been renamed Vodafone Ireland plc. Acquisition of an ...

  • Page 12
    10 Vodafone Group Plc Annual Report & Accounts and Form 20-F Information on the Company Information on the Company continued g) Disposal of holding in Ruhrgas AG On 30 October 2001, the Group announced that it had reached agreement with E.ON AG for the sale of the Group's 23.6% stake in ...

  • Page 13
    ... on the Company Annual Report & Accounts and Form 20-F Vodafone Group Plc 11 Business strategy The Company has maintained a strategy of focusing on global mobile telecommunications and providing network coverage to allow its customers to communicate using mobile products and services. In early...

  • Page 14
    ...Operator Northern Europe UK Vodafone Ireland Vodafone Netherlands Vodafone Sweden Europolitan Vodafone†Others TOTAL Central Europe Germany Hungary Others TOTAL Southern Europe Greece Italy Malta Portugal Spain Albania Others TOTAL Americas United States Others TOTAL Asia Pacific Japan Australia...

  • Page 15
    ...single Vodafone brand. These businesses formerly traded under the names of Eircell, Libertel and Europolitan, respectively. Below is a summary of the Group's business activities in its major mobile telecommunications markets in Northern Europe. UK's in-house service provider companies accounted for...

  • Page 16
    ... largest mobile network operator, now operating under the brand name Vodafone. Europolitan Holdings AB, which is listed on the Stockholm Stock Exchange, had a market capitalisation of approximately £1.4 billion ($2.0 billion) on 31 March 2002. During the year, Vodafone's registered customer base...

  • Page 17
    ...), the second largest cellular operator in Greece in terms of number of customers. It is listed on the Athens Stock Exchange and its shares also trade in the form of Global Depositary Shares on the London Stock Exchange and are quoted on NASDAQ. At 31 March 2002, it had a market capitalisation of...

  • Page 18
    ...Vodafone Group Plc Annual Report & Accounts and Form 20-F Information on the Company Information on the Company continued Vodafone is the second largest operator in Portugal in terms of total customers, but has maintained its market leadership in the corporate sector with more contract customers...

  • Page 19
    ... operator in the Group to open its 3G network for service, and amongst the first to fully launch services with nationwide service expected to commence in December 2002. J-Phone Vodafone's 3G network will be compatible with international global standards, giving Japanese customers unparalleled access...

  • Page 20
    ... Vodafone Group Plc Annual Report & Accounts and Form 20-F Information on the Company Information on the Company continued to China Mobile's board of directors. The subscription is expected to complete in June 2002. At 31 March 2002, China Mobile had approximately 74,402,000 registered customers...

  • Page 21
    ... the Group's overall strategy for the development of voice and data-related applications. New voice services, including Eurocall, Virtual Home Environment, assisted roaming and prepaid roaming, were all successfully introduced, enabling the Group to both gain new customers in key market segments...

  • Page 22
    ... service 3G networks in its major markets, with J-Phone Vodafone expected to be the first to open in June 2002. J-Phone Vodafone's 3G network will be compatible with international global standards, opening up seamless international roaming into and out of Japan for the first time. The Group's main...

  • Page 23
    Information on the Company Annual Report & Accounts and Form 20-F Vodafone Group Plc 21 In the United States, Verizon Wireless offers a nationwide US footprint under a single brand, operating a common digital technology. Verizon Wireless sells its service directly to customers through its own ...

  • Page 24
    .... A summary of the Company's competition and market share in its main markets (defined as having greater than 500,000 registered proportionate customers) is provided in the following table. Number of competitors Names of competitors Country Service name Northern Europe United Kingdom Ireland...

  • Page 25
    ...service providers. The Director General formally lifted the Market Influence designation on 5 April 2002. The Director General also concluded that charges of mobile operators for the termination of calls to their networks should be reduced by twelve percentage points less than the UK's Retail Prices...

  • Page 26
    24 Vodafone Group Plc Annual Report & Accounts and Form 20-F Information on the Company Information on the Company continued Central Europe Region The results of the cost model are expected to be used as a reference by AGCOM in its review of SMP operators' charges. Separately, on 20 December ...

  • Page 27
    ... corporate head office is in Newbury, United Kingdom. The tangible fixed assets acquired by the Group during the financial year principally relate to the assets of Japan Telecom and the J-Phone Group at acquisition, mainly network infrastructure for fixed line and mobile telecommunications services...

  • Page 28
    26 Vodafone Group Plc Annual Report & Accounts and Form 20-F Information on the Company Information on the Company Five year summary of results continued The selected financial data set out on the following pages should be read in conjunction with the Consolidated Financial Statements of the ...

  • Page 29
    ... Company Annual Report & Accounts and Form 20-F Vodafone Group Plc 27 Notes: (1) Certain prior period comparative information has been restated following the adoption of FRS 19 during the period. Further details are given in note 1 to the Consolidated Financial Statements, "Basis of Consolidated...

  • Page 30
    ... the Group to offer new services and the delivery and performance of GPRS and 3G handsets, network equipment and other key products from suppliers; greater than anticipated prices of new mobile handsets; the ability to realise benefits from entering into partnerships for developing data and internet...

  • Page 31
    Risk Factors Annual Report & Accounts and Form 20-F Vodafone Group Plc 29 Risk Factors Increased competition may reduce market share or revenues. The Group faces intensifying competition. Competition could lead to a decrease in the rate at which the Group adds new customers and to a decrease in ...

  • Page 32
    ... from the introduction of new services. As part of its strategy to increase usage of its networks, the Group is planning to offer new services to its existing customers, including internet and data services accessible over mobile phones, and to increase non-voice service revenues as a percentage of...

  • Page 33
    ... Financial Review and Prospects Annual Report & Accounts and Form 20-F Vodafone Group Plc 31 Operating and Financial Review and Prospects Introduction The following discussion is based on the Consolidated Financial Statements included elsewhere in this Annual Report. Such Consolidated Financial...

  • Page 34
    ... turnover resulting from mobile services provided to contract customers from the billing cycle date to the end of each period is accrued and unearned monthly access charges relating to periods after each accounting period end are deferred. Turnover from sales of prepaid call cards is deferred until...

  • Page 35
    Operating and Financial Review and Prospects Annual Report & Accounts and Form 20-F Vodafone Group Plc 33 Operating Results The statutory consolidated profit and loss account presented on page 74, and the accompanying notes, have been prepared on the basis required by UK GAAP and are summarised ...

  • Page 36
    ... market share, with 2,219,000 net customer additions in the period. One of the key drivers of the recent growth, and the levels of turnover experienced, has been the success of "sha-mail", J-Phone Vodafone's photo-messaging service which has contributed to increases in data and SMS revenues...

  • Page 37
    ... March 2002. The Group's main markets of Germany, Italy, the United Kingdom and, since October 2001, Japan, all experienced increases in mobile data revenues, with SMS revenues continuing to be the principal component of these revenue streams. In J-Phone Vodafone, internet data remains the principal...

  • Page 38
    36 Vodafone Group Plc Annual Report & Accounts and Form 20-F Operating and Financial Review and Prospects Operating and Financial Review and Prospects continued In respect of the Group's investment in China Mobile the review assessed the carrying value against external analyst market valuations....

  • Page 39
    Operating and Financial Review and Prospects Annual Report & Accounts and Form 20-F Vodafone Group Plc 37 The Group's equipment costs and cost of providing financial incentives to service providers and dealers for obtaining new customers amounted to £4,160 million, or 18.2% of turnover, for the...

  • Page 40
    38 Vodafone Group Plc Annual Report & Accounts and Form 20-F Operating and Financial Review and Prospects Operating and Financial Review and Prospects continued ended 31 March 2002, and an increase in the charge for exceptional items from 0.30p per share for the year ended 31 March 2001 to 9.10p...

  • Page 41
    ... to access mobile internet services using phones with an "always-on" capacity, which differentiates the service in Japan from the Group's other main markets. Almost 62% of J-Phone Vodafone's customers now have internet-capable phones, a higher proportion of its customer base than any other operator...

  • Page 42
    40 Vodafone Group Plc Annual Report & Accounts and Form 20-F Operating and Financial Review and Prospects Operating and Financial Review and Prospects continued organic growth in Australia, New Zealand and Fiji, and the Group's share of the results of its associated undertakings in Japan. Japan...

  • Page 43
    ... telecommunications companies established to develop, through a constellation of 48 low-earth orbiting satellites, a cellular telephone service for remote locations not covered by existing mobile communications infrastructures. The Group has the exclusive rights to provide Globalstar service in...

  • Page 44
    ...the ordinary shares on The London Stock Exchange and, as a result, will affect the market price of the ADSs in the United States. The following table sets out, for the periods and dates indicated, the period end, average, high and low Noon Buying Rates for pounds sterling expressed in US dollars per...

  • Page 45
    ... through long term and short term issuances in the capital markets as well as committed bank facilities. The Group's liquidity and working capital may be affected by a material decrease in cash flow from operations due to factors such as increased competition, delays in development of new services...

  • Page 46
    ...been received in part consideration for the trade sale of Orange. Purchase of additional 10% stake in Japan Telecom from AT&T. Issue of 1.825 billion new ordinary shares at 194 pence per share. Acquisition of BT's interests in Japan Telecom and the J-Phone Group. Purchase of BT's interests in Airtel...

  • Page 47
    Operating and Financial Review and Prospects Annual Report & Accounts and Form 20-F Vodafone Group Plc 45 A further analysis of net debt, including a full maturity analysis, can be found in note 31 to the Consolidated Financial Statements, "Analysis of net debt". The Group remains committed to ...

  • Page 48
    ... risk management. Treasury operations are conducted within a framework of policies and guidelines authorised and reviewed annually by the Board of the Company. The Group accounting function provides regular update reports of treasury activity to the Board. The Group uses a number of derivative...

  • Page 49
    Operating and Financial Review and Prospects Annual Report & Accounts and Form 20-F Vodafone Group Plc 47 added during the course of the 2002 financial year, in Italy and Spain. In addition, research and development work in J-Phone Vodafone has been absorbed into the overall programme and ...

  • Page 50
    48 Vodafone Group Plc Annual Report & Accounts and Form 20-F Operating and Financial Review and Prospects Operating and Financial Review and Prospects continued 3G network for 3G service is expected to be J-Phone Vodafone. The Group's major European markets expect to open their 3G networks ...

  • Page 51
    ...executive director of China Mobile (Hong Kong) Limited. Julian Horn-Smith, Group Chief Operating Officer, aged 53, has been a member of the Board of directors since June 1996. He was appointed Group Chief Operating Officer on 1 April 2001, having been Chief Executive of Vodafone's Continental Europe...

  • Page 52
    ... Officer of Telkom SA Ltd, South Africa. He is also a director of National Australia Bank Limited. Alan Harper, Group Strategy Director, aged 45, joined Vodafone in 1995 as Group Commercial Director and he subsequently became Managing Director of Vodafone Ltd, the UK network operating company...

  • Page 53
    ... 2002. Results and dividends The consolidated profit and loss account is set out on page 74 of this Annual Report. The directors have proposed a final dividend for the year of 0.7497p per ordinary share, payable on 9 August 2002 to shareholders on the register of members at close of business on...

  • Page 54
    ... Company The Board's Report to Shareholders on Directors' Remuneration on pages 57 to 68 details the directors' interests in the shares of the Company. Employee education, training and development Learning and development continue to be important elements in ensuring the future success of the Group...

  • Page 55
    ... in a change of control of the Company. Corporate social responsibility A summary of the Group's corporate social responsibility policy is contained on pages 12 and 13 of the Annual Review and Summary Financial Statement, and on page 69 of this Annual Report. Further details are contained in the...

  • Page 56
    ...leadership and control required for a listed company. Actual financial results are presented to each meeting, together with reports from the executive directors in respect of their areas of responsibility. From time to time, the Board receives detailed presentations from non-Board members on matters...

  • Page 57
    ... executive officer and chief financial officer of each Group company detailing the operation of their control systems and highlighting any weaknesses. Regional management, the Audit Committee and the Board review the results of this confirmation. A Group Internal Audit Department, reporting directly...

  • Page 58
    56 Vodafone Group Plc Annual Report & Accounts and Form 20-F Corporate Governance Corporate Governance continued Relations with Shareholders The Company holds briefing meetings with its major institutional shareholders in the UK, the US and in Continental Europe, usually twice each year after ...

  • Page 59
    ... sector comparative measures to achieve maximum alignment between executive and shareholder objectives. The majority of performance-related remuneration is to be provided in the form of equity. Share ownership requirements are to be applied to executive directors. • • The structure of the main...

  • Page 60
    ... General Meeting on 31 July 2002: The overriding objective of the new policy on incentives is to ensure that Vodafone is able to attract, retain and motivate executives of the highest calibre essential to the successful leadership and effective management of a global company at the leading edge of...

  • Page 61
    ...year to executive directors. The Vodafone Group Plc 1999 Long Term Stock Incentive Plan will be the vehicle for the provision of these incentive awards. The price at which shares can be acquired on option exercise will equal the market value of the shares on the day prior to the date of grant of the...

  • Page 62
    60 Vodafone Group Plc Annual Report & Accounts and Form 20-F Board's Report to Shareholders on Directors' Remuneration Board's Report to Shareholders on Directors' Remuneration continued Illustration Based on the analysis of externally provided market data on the total remuneration levels of ...

  • Page 63
    ... points above the growth in the UK Retail Prices Index per annum for the same period. Global market-related remuneration ("GMR") GMR was a core element of the previous remuneration policy through which additional share options were granted under the Vodafone Group 1999 Long Term Stock Incentive...

  • Page 64
    62 Vodafone Group Plc Annual Report & Accounts and Form 20-F Board's Report to Shareholders on Directors' Remuneration Board's Report to Shareholders on Directors' Remuneration continued awarding share options to employees who had not previously participated in the Company's share incentive ...

  • Page 65
    Board's Report to Shareholders on Directors' Remuneration Annual Report & Accounts and Form 20-F Vodafone Group Plc 63 The remuneration of the directors for the year to 31 March 2002 was as follows: Salary/fees 2002 2001 £000 £000 Bonuses 2002 2001 £000 £000 Incentive schemes (1) 2002 2001 ...

  • Page 66
    64 Vodafone Group Plc Annual Report & Accounts and Form 20-F Board's Report to Shareholders on Directors' Remuneration Board's Report to Shareholders on Directors' Remuneration Pensions Pension benefits earned by the directors in the year to 31 March 2002 were: continued Increase in accrued ...

  • Page 67
    ...'s Report to Shareholders on Directors' Remuneration Annual Report & Accounts and Form 20-F Vodafone Group Plc 65 Long Term Incentives Conditional awards of ordinary shares made to executive directors under the Vodafone Group Long Term Incentive Plan and Vodafone Group Plc 1999 Long Term Stock...

  • Page 68
    ...Vodafone Group Plc Annual Report & Accounts and Form 20-F Board's Report to Shareholders on Directors' Remuneration Board's Report to Shareholders on Directors' Remuneration Further details of options outstanding at 31 March 2002 are as follows: Exercisable Market price greater than option price...

  • Page 69
    ... to Shareholders on Directors' Remuneration Annual Report & Accounts and Form 20-F Vodafone Group Plc 67 Details of the options exercised by directors of the Company in the year to 31 March 2002, are as follows: Options exercised during the year (Number) Option price (Pence) Market price at date...

  • Page 70
    68 Vodafone Group Plc Annual Report & Accounts and Form 20-F Board's Report to Shareholders on Directors' Remuneration Board's Report to Shareholders on Directors' Remuneration Interests in share options of the Company at 24 May 2002 continued At 24 May 2002, there had been no change to the ...

  • Page 71
    ... the Group's CSR objectives since the last report, and also outlining plans for the Group's future CSR strategy. A summary of the main points covered in the report is set out below. A copy of the full report is available on request from the Corporate Social Responsibility team, whose contact details...

  • Page 72
    70 Vodafone Group Plc Annual Report & Accounts and Form 20-F Statement of Directors' Responsibilities Statement of Directors' Responsibilities Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the...

  • Page 73
    Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 71 Consolidated Financial Statements Index to the Consolidated Financial Statements Report of independent auditors Consolidated profit and loss accounts Balance sheets Consolidated cash flows Consolidated...

  • Page 74
    ... gains and losses, the related notes 1 to 36 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. These financial statements have been prepared under the accounting policies set out in...

  • Page 75
    ... auditors Annual Report & Accounts and Form 20-F Vodafone Group Plc 73 Opinions In our opinion: â- â- the financial statements expressed in pounds sterling give a true and fair view of the state of affairs of the Company and the Group as at 31 March 2002 and of the loss of the Group for...

  • Page 76
    74 Vodafone Group Plc Annual Report & Accounts and Form 20-F Consolidated profit and loss accounts for the years ended 31 March Consolidated profit and loss accounts for the years ended 31 March Note 2002 $m 2002 £m 2001 as restated £m 2000 as restated £m Turnover: Group and share of joint ...

  • Page 77
    ...(3,747) 190,135 Capital and reserves Called up share capital Share premium account Merger reserve Capital reserve Other reserve Profit and loss account Shares to be issued 23 24 24 24 24 24 6,089 74,163 140,971 - 1,332 (36,488) - 186,067 2,461 1,607 190,135 Total equity shareholders' funds Equity...

  • Page 78
    76 Vodafone Group Plc Annual Report & Accounts and Form 20-F Consolidated cash flows for the years ended 31 March Consolidated cash flows for the years ended 31 March 2002 $m 2002 £m 2001 £m 2000 £m Note Net cash inflow from operating activities Dividends received from joint ventures and ...

  • Page 79
    ... New share capital subscribed, net of issue costs Unvested option consideration Goodwill transferred to the profit and loss account in respect of business disposals Scrip dividends Shares to be issued Other Net movement in equity shareholders' funds Opening equity shareholders' funds Closing equity...

  • Page 80
    78 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 1. Basis of Consolidated Financial Statements Statutory financial information The Consolidated Financial Statements are prepared in ...

  • Page 81
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 79 Turnover Turnover from mobile telecommunications primarily comprises amounts charged to contract customers in respect of monthly access charges, which are invoiced and recorded as part of ...

  • Page 82
    80 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements Other intangible fixed assets continued Purchased intangible fixed assets, including licence fees, are capitalised at cost. Network licence...

  • Page 83
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 81 3. Segmental analysis The Group's business is principally the supply of mobile telecommunications services and products. Other operations primarily comprise fixed line telecommunications ...

  • Page 84
    82 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to Consolidated Financial Statements continued Continuing operations £m 2001 as restated £m 2000 as restated £m Acquisitions £m 2002 £m Total Group operating profit/(loss) ...

  • Page 85
    ... the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 83 Profit/(loss) on ordinary activities before interest Mobile telecommunications: Northern Europe Central Europe Southern Europe Europe Americas Asia Pacific Middle East and Africa Other operations...

  • Page 86
    84 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements continued 2001 as restated £m 2002 £m Net assets/(liabilities) and attributed goodwill (before net borrowings) of subsidiary ...

  • Page 87
    ... Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 85 2002 £m 2001 £m 2000 £m Capital expenditure on intangible and tangible fixed assets (excluding goodwill) Mobile telecommunications: Northern Europe Central Europe Southern Europe Europe Americas...

  • Page 88
    86 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 5. Operating profit continued Continuing operations £m Acquisitions £m 2002 £m 2001 as restated £m 2000 as restated £m Group ...

  • Page 89
    ...Annual Report & Accounts and Form 20-F Vodafone Group Plc 87 Joint ventures and associated undertakings Group turnover includes sales to joint ventures and associated undertakings of £27m (2001: £211m, 2000: £303m), primarily comprising network airtime and access charges. Total operating costs...

  • Page 90
    88 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 7. Net interest payable continued 2002 £m 2001 £m 2000 £m Parent and subsidiary undertakings: Interest receivable and similar income ...

  • Page 91
    ... to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 89 8. Tax on (loss)/profit on ordinary activities 2002 £m 2001 as restated £m 2000 as restated £m United Kingdom Corporation tax charge at 30% (2001: 30%, 2000: 30%) Overseas corporation tax...

  • Page 92
    90 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements continued Differences between UK statutory tax charge and the Group's standard and effective tax charge (a) Reconciliation of expected tax ...

  • Page 93
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 91 9. Equity dividends 2002 Pence per ordinary share 2001 Pence per ordinary share 2000 Pence per ordinary share 2002 £m 2001 £m 2000 £m Additional final dividend payable in respect ...

  • Page 94
    92 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 11. Intangible fixed assets continued Goodwill £m Licence and spectrum fees £m Total £m Cost 1 April 2001(1) Exchange movements ...

  • Page 95
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 93 12. Tangible fixed assets Land and buildings £m Equipment, fixtures and fittings £m Network infrastructure £m Total £m Cost 1 April 2001 Exchange movements Acquisitions of businesses...

  • Page 96
    ... Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 13. Fixed asset investments Joint ventures and associated undertakings continued Group Joint ventures £m Associated undertakings £m Share...

  • Page 97
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 95 The goodwill capitalised in the year in respect of associated undertakings of £6,771m relates primarily to the Group's acquisition of interests in the J-Phone Group, Japan Telecom and ...

  • Page 98
    96 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements continued The Group's share of turnover, profits and losses, assets and liabilities of Verizon Wireless included in the above analysis is ...

  • Page 99
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 97 The Company's fixed asset investments can be analysed as follows: Subsidiary undertakings £m Joint ventures £m Associated undertakings £m Total £m Cost 1 April 2001 Exchange movements...

  • Page 100
    98 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 15. Stocks continued Group 2002 £m 2001 £m Work in progress Goods held for resale 208 305 513 - 316 316 Stocks are reported net of ...

  • Page 101
    ... to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 99 A deferred tax asset of £865m, has been recognised as at 31 March 2002 (2001 as restated: £830m). This asset relates to unvested options (£26m), closure of derivative financial instruments...

  • Page 102
    100 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 19. Creditors: amounts falling due after more than one year continued Group 2002 £m 2001 £m 2002 £m Company 2001 £m Bank loans Other...

  • Page 103
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 101 Other loans falling due after more than one year primarily comprise bond issues by the Company, or its subsidiaries, analysed as follows: Group 2002 £m 2001 £m 2002 £m Company 2001 £m...

  • Page 104
    102 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 20. Financial liabilities and assets Net debt continued 2002 £m 2001 £m Liquid investments Cash at bank and in hand Debt due in one ...

  • Page 105
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 103 Borrowing facilities At 31 March 2002, the Group's most significant committed borrowing facilities comprised a $13.7 billion (£9,621m, 2001: £10,234m) bank facility, which expires in ...

  • Page 106
    104 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 20. Financial liabilities and assets Financial assets continued continued Currency Total £m Floating rate financial assets(1) £m ...

  • Page 107
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 105 21. Financial instruments Fair values of financial assets and liabilities The carrying amounts and estimated fair value of the Group's outstanding financial instruments are set out below...

  • Page 108
    106 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements Hedges continued The Group's policy is to use derivative instruments to hedge against exposure to movements in interest rates and exchange...

  • Page 109
    ... Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 107 22. Provisions for liabilities and charges Deferred taxation(1) £m Post employment benefits £m Other provisions £m Total £m 1 April 2001 Exchange movements Acquisitions (note 26) Profit and loss account...

  • Page 110
    108 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 23. Called up share capital continued Year ended 31 March 2002 Number £m Year ended 31 March 2001 Number £m Authorised Ordinary shares...

  • Page 111
    ... Company, are listed on the New York Stock Exchange. Following the merger with AirTouch, some rights to acquire AirTouch Communications, Inc. 1993 Long Term Stock Incentive Plan options were converted into rights to acquire shares in the Company. No further awards will be granted under this scheme...

  • Page 112
    ...Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 24. Reserves continued Share premium account £m Merger reserve £m Other reserve £m Shares to be issued £m Group Profit and loss account...

  • Page 113
    ...Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 111 26. Acquisitions and disposals The Group has undertaken a number of transactions during the year including the completion of the acquisition of increased stakes in Japan Telecom and the J-Phone Group...

  • Page 114
    ... Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements continued On 12 July 2001, the Group completed the acquisition of an additional aggregate interest of 4.9% in the J-Phone operating companies...

  • Page 115
    ... of long term borrowings to fair value. (11) Recognition of provisions in relation to customer loyalty programme. Impact on cash flow Japan Telecom and the J-Phone Group contributed £808m to the Group's net operating cash flows, paid £111m in respect of returns on investments and servicing of...

  • Page 116
    114 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements Impact on cash flows continued Eircell contributed £163m to the Group's net operating cash flows, paid £12m in respect of taxation and ...

  • Page 117
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 115 27. Leased assets Operating leases Commitments to non-cancellable operating lease payments within one year are as follows: 2002 Land and buildings £m Other assets £m Land and buildings...

  • Page 118
    116 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 28. Capital commitments continued 2002 £m 2001 £m Tangible and intangible fixed asset expenditure contracted for but not provided 816...

  • Page 119
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 117 30. Analysis of cash flows 2002 £m 2001 £m 2000 as restated £m Net cash inflow from operating activities Operating (loss)/profit Exceptional items Depreciation Amortisation of ...

  • Page 120
    118 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 31. Analysis of net debt continued 1 April 2001 £m Cash flow £m Acquisitions (excluding cash & overdrafts) £m Other non-cash changes...

  • Page 121
    ... to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 119 33. Employees During the year ended 31 March 2002, the Group had an average of 67,178 full time employees (2001: 53,325, 2000: 29,465) of which 79% were based in the Group's mobile businesses...

  • Page 122
    ... details on the three principal defined benefit pension schemes, in the United Kingdom, Germany and Japan are shown below. In addition to principal schemes, the Group operates defined benefit schemes in Ireland, Sweden and Italy. Defined contribution style pension schemes are provided in Australia...

  • Page 123
    .... In addition there is an internally funded unapproved defined benefit plan in place for a small number of senior executives. The pension cost of this arrangement is included in the summary information shown above. At 31 March 2001, the market value of the main scheme of £177m was sufficient to...

  • Page 124
    ... long term rate of return % Germany Fair value £m 2.5% 4.5% 2.5% 2.5% 6.0% 2.0% 4.0% 2.0% 0% 6.25% 0% See * below N/a N/a 2.5% Expected long term rate of return % Japan Fair value £m Group Fair value £m Bonds Equities Other assets Total market value of scheme assets Present value of scheme...

  • Page 125
    ... Omnitel Pronto Italia S.p.A. Vodafone AG Vodafone Americas Inc.(3) Vodafone D2 GmbH Vodafone Deutschland GmbH Vodafone Egypt Telecommunications Company SAE Vodafone Europe B.V. Vodafone Finance Limited (4) Vodafone Information Systems GmbH Vodafone International B.V. Cellular network operator...

  • Page 126
    ...(1) shareholdings Vodafone International Holdings B.V. Holding company Vodafone International Inc. Holding company Vodafone Ireland plc (5) Cellular network operator Vodafone Libertel NV Cellular network operator and service provider Vodafone Limited Cellular network operator Vodafone Malta Limited...

  • Page 127
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 125 Principal associated undertakings The Company's principal associated undertakings all have share capital consisting solely of ordinary shares, unless otherwise stated, and are all ...

  • Page 128
    126 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 37. US GAAP information continued Reconciliation with United States accounting principles The following is a summary of the effects of the...

  • Page 129
    ... to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 127 2002 Note $m(1) 2002 £m 2001 as restated £m 2000 as restated £m Shareholders' equity as reported in accordance with UK GAAP Items increasing/(decreasing) shareholders' equity: Goodwill...

  • Page 130
    128 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 37. US GAAP information continued continued (b) Deferral of connection revenues and income Under the Group's UK GAAP accounting policy, ...

  • Page 131
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 129 (f) Income taxes Deferred taxation - Under UK GAAP deferred tax is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax, or a ...

  • Page 132
    ... recommended by the Board to the shareholders in respect of the results for a financial year. Under US GAAP, dividends are included in the financial statements when declared by the Board. (k) Equity accounting UK GAAP requires the investor's share of operating profit or loss, exceptional items and...

  • Page 133
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 131 Consolidated statements of cash flows The consolidated statements of cash flows prepared under UK GAAP differ in certain presentational respects from the format required under SFAS No. 95...

  • Page 134
    132 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 37. GAAP information continued continued Recently issued accounting standards SFAS No. 141, "Business Combinations" and SFAS No. 142, "...

  • Page 135
    ... Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 133 Foreign exchange rate risk The Group's geographical spread exposes it to fluctuations in foreign exchange rates. The Group manages its exposure to foreign currency movements by hedging known future...

  • Page 136
    ... Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 37. US GAAP information continued continued The Vodafone Group Plc 1999 Long Term Stock Incentive Plan was introduced in 1999 to provide share incentives for employees...

  • Page 137
    ... number of pension plans for its employees throughout the world. For non-UK employees the Group provides, in most cases, defined contribution schemes. For employees in the UK, certain businesses acquired as part of the Mannesmann acquisition and in Japan, the Group generally provides defined benefit...

  • Page 138
    136 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 37. US GAAP information continued UK defined benefit pension plan continued The net pension cost, benefit obligations, plan assets and ...

  • Page 139
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 137 German defined benefit pension plan The net periodic pension cost, benefit obligations, plan assets and funded status under US GAAP, translated at the year-end exchange rate of 11.6323 : ...

  • Page 140
    138 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 37. US GAAP information continued Japan defined benefit pension plan continued The net periodic pension cost, benefit obligations, plan ...

  • Page 141
    Notes to the Consolidated Financial Statements Annual Report & Accounts and Form 20-F Vodafone Group Plc 139 Joint ventures and associated undertakings Summary aggregated financial information of the Group's joint ventures, extracted on a 100% basis from accounts prepared under UK GAAP to 31 ...

  • Page 142
    140 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements 37. US GAAP information continued continued Non-consolidated subsidiaries as defined under US GAAP comprise Omnitel throughout the period ...

  • Page 143
    Unaudited Proportionate Financial Information Annual Report & Accounts and Form 20-F Vodafone Group Plc 141 Unaudited Proportionate Financial Information The following tables of unaudited financial information are presented on a proportionate basis. The basis of preparation of information is ...

  • Page 144
    ...associated undertakings is provided in the Notes to the Consolidated Financial Statements in this Annual Report. Two year data on a quarterly basis London Stock Exchange Pounds per ordinary share High Low Frankfurt Stock Exchange Euros per ordinary share High Low NYSE Dollars per ADS Low Financial...

  • Page 145
    Additional Information for Shareholders Annual Report & Accounts and Form 20-F Vodafone Group Plc 143 Shareholders at 31 March 2002 Number of ordinary shares held Number of accounts % of total issued shares Objects and purposes The Company is incorporated under the name Vodafone Group Plc, and ...

  • Page 146
    144 Vodafone Group Plc Annual Report & Accounts and Form 20-F Additional Information for Shareholders Additional Information for Shareholders Rights attaching to the Company's shares Dividends rights continued Liquidation rights In the event of the liquidation of the Company, after payment of ...

  • Page 147
    ... import of capital, including but not limited to, foreign exchange controls on remittance of dividends on the ordinary shares or on the conduct of the Group's operations, except as otherwise set out under "Taxation", below. General meetings and notices Shareholders must provide the Company with an...

  • Page 148
    ... whose "functional currency" is not the US dollar Financial institutions Insurance companies Tax-exempt organisations Traders in securities that elect mark-to-market accounting treatment Broker-dealers United States federal income tax consequences of the ownership of ADSs by a US resident This...

  • Page 149
    ... tax. Other Shareholder Information Financial calendar 2002/03 Annual General Meeting (see below) Interim Results announcement Full year results announcement 31 July 2002 12 November 2002 May 2003 Dividends Full details on the dividend amount per share or ADS and the Group's dividend policy can be...

  • Page 150
    ..., Shareholder Relations Department, Church Street Station, PO Box 11258, New York, NY 10286-1258, USA Telephone: +1 800 233 5601. Share price information The current share price for Vodafone Group Plc can be obtained in the UK by dialling the Financial Times Cityline service on 0906 0035555. Calls...

  • Page 151
    ... mobile telecommunications market. Short Message Service. Revenue The number of registered customers in ventures in which the Company has an ownership interest. Wireless application protocol, a standard for providing mobile phones, pagers and other handheld devices with secure access to e-mail and...

  • Page 152
    ... Offer and Listing 9A Share Price History 9C Markets Location in this document Not applicable Not applicable Business Overview - Five year summary of results Operating and Financial Review and Prospects - Exchange rate information Risk Factors Information on the Company - History and Development of...

  • Page 153
    ...Annual Report & Accounts and Form 20-F Vodafone Group Plc 151 Item Form 20-F caption 10 Additional Information 10B Memorandum and Articles of Association 10C Material Contracts 10D Exchange Controls 10E Taxation 10H Documents on Display 11 12 Quantitative and Qualitative Disclosures About Market...

  • Page 154
    152 Vodafone Group Plc Annual Report & Accounts and Form 20-F Notes Notes

  • Page 155
    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. The paper used was manufactured in the UK at mills with ISO14001 accreditation. It is 75% recycled from de-inked post consumer...

  • Page 156
    Vodafone Group Plc The Courtyard 2-4 London Road Newbury, Berkshire RG14 1JX United Kingdom Registered in England No. 1833679 Tel: +44 (0)1635 33251 Fax: +44 (0)1635 45713 www.vodafone.com Printed in the United Kingdom