Vodafone 2003 Annual Report Download - page 52

Vodafone Group Plc Annual Report & Accounts and Form 20-F 2003
50
DIRECTORS’ REPORT
Review of the Group’s Business
The Group is involved principally in the provision of mobile telecommunications
services. A review of the development of the business of the Company and its
subsidiary, joint venture and associated undertakings is contained elsewhere in
this Annual Report. Details of the Company’s principal subsidiary undertakings,
associated undertakings and investments can be found on pages 120 and 121
of this Annual Report.
Future developments
The Group is currently involved in the expansion and development of its mobile
telecommunications and related businesses as described elsewhere in this
Annual Report.
Corporate governance
The directors are committed to business integrity and professionalism. As an
essential part of this commitment the Board supports high standards of
corporate governance and its statement on Corporate Governance is set out on
pages 53 to 55 of this Annual Report. The Board’s Report to Shareholders on
Directors’ Remuneration on pages 56 to 66 of this Annual Report will be
proposed for approval at the Company’s Annual General Meeting on 30 July
2003.
Share capital
A statement of changes in the share capital of the Company is set out in note 23
to the Consolidated Financial Statements, “Called up share capital” on pages
104 and 105.
Purchase by the Company of its own shares
At the Annual General Meeting of the Company held on 31 July 2002,
shareholders gave the Company permission, until the conclusion of the Annual
General Meeting to be held in 2003 or until 31 October 2003, whichever is the
earlier, to purchase up to 3,000,000,000 ordinary shares of the Company. A
resolution for permission for the Company to renew and increase its authority to
purchase its own shares will be proposed at the Annual General Meeting of the
Company to be held on 30 July 2003.
The Companies (Acquisition of Own Shares) (Treasury Shares) Regulations 2003
(“the Regulations”) will allow companies to hold such shares acquired by way of
market purchase in treasury, rather than having to cancel them. The Regulations
will come into force on 1 December 2003. Once the Regulations take effect, the
Company would consider holding any of its own shares that it purchases
pursuant to the authority as treasury stock. This may give the Company the
ability to re-issue treasury shares quickly and cost-effectively, and could provide
the Company with additional flexibility in the management of its capital base. The
Financial Services Authority has commenced a consultation procedure to review
any changes that may need to be made to the Listing Rules in the light of the
Regulations. The Company will adhere to any changes which are made to the
Listing Rules as a result of this process.
No dividends will be paid on shares whilst held in treasury and no voting rights
will attach to the treasury shares. Whilst in treasury, the shares will be treated as
if cancelled.
Results and dividends
The consolidated profit and loss account is set out on page 72 of this Annual
Report.
The directors have proposed a final dividend for the year of 0.8983p per ordinary
share, payable on 8 August 2003 to shareholders on the register of members at
close of business on 6 June 2003. An interim dividend of 0.7946p per ordinary
share was paid during the year, producing a total for the year of 1.6929p per
ordinary share, a total dividend payment of approximately £1,154 million. The
Company operates a dividend reinvestment plan, further details of which can be
found on page 144 in this Annual Report.
Subsequent events
Details of material subsequent events are included in note 35 to the
Consolidated Financial Statements, “Subsequent events”included in this Annual
Report.
Charitable contributions
During the 2002 financial year, the Vodafone Group Foundation was created to
consolidate and strengthen the commitment to local communities around the
world. Professor Sir Alec Broers serves as Chairman of the trustees.
During the year ended 31 March 2003, the Company made cash charitable
donations of £10.0 million to the Vodafone Group Foundation. In addition,
operating companies donated a further £4.2 million to local Vodafone
Foundations and a further £2.6 million directly to a variety of causes, including
£1.0 million to the Italian earthquake victims. These donations total £16.8 million
and include donations of £3.2 million made as required by the terms of certain
network operating licences.
More details regarding the activities of the Vodafone Group Foundation and local
Vodafone Foundations can be found in the Company’s separate report on
corporate social responsibility.
Political donations
At the Annual General Meeting on 31 July 2002, the directors sought and
obtained shareholders’ approval to enable the Company to make donations to EU
Political Organisations or incur EU Political Expenditure, under the relevant
provisions of the Political Parties, Elections and Referendums Act 2000 (“the
Act”). The approval given restricted such expenditure to an aggregate limit of
£100,000 in the period of 12 months following the date of the Annual General
Meeting. Although the Company had, and has, no intention of changing its
current practice of not making political donations and will not do so without the
specific endorsement of shareholders, the directors sought the approval on a
precautionary basis, to avoid any possibility of unintentionally breaching the Act.
The Company has made no political donations during the year.
The directors propose, again on a precautionary basis, to seek a renewal of
shareholders’ approval at the Annual General Meeting to be held on 30 July
2003.
Creditor payment terms
It is the Group’s policy to agree terms of transactions, including payment terms,
with suppliers and, provided suppliers perform in accordance with the agreed
terms, it is the Group’s normal practice that payment is made accordingly.
The number of days outstanding between receipt of invoices and date of
payment, calculated by reference to the amount owed to trade creditors at the
year end as a proportion of the amounts invoiced by suppliers during the year,
was 24 days (2002: 36 days) in aggregate for the Group. The Company did not
have any trade creditors at 31 March 2003.