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Vodafone Group Plc Annual Report & Accounts and Form 20-F 2003
76
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Consolidated Financial Statements
Statutory financial information
The Consolidated Financial Statements are prepared in accordance with applicable accounting standards and in conformity with generally accepted
accounting principles in the United Kingdom (“UK GAAP”), which differ in certain material respects from accounting principles generally accepted in the
United States of America (“US GAAP”) – see note 37.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Amounts in the Consolidated Financial Statements are stated in pounds sterling (£), the currency of the country in which the Company is incorporated. The
translation into US dollars of the Consolidated Financial Statements as of, and for the financial year ended, 31 March 2003, is for convenience only and has
been made at the Noon Buying Rate for cable transfers as announced by the Federal Reserve Bank of New York for customs purposes on 31 March 2003.
This rate was $1.5790:£1. This translation should not be construed as a representation that the pound sterling amounts actually represented have been, or
could be, converted into dollars at this or any other rate.
Restatement
In the Annual Report & Accounts and Form 20-F for the year ended 31 March 2002, the Group restated the results for the year ended 31 March 2001 and
31 March 2000 following the adoption of FRS 19, “Deferred tax”, and the change in the basis of presentation of the geographical analysis of results.
2. Accounting policies
The Group’s material accounting policies are described below. For a discussion on the Group’s critical accounting policies see “Operating and Financial
Review and Prospects – Critical Accounting Policies”elsewhere in this Annual Report.
Accounting convention
The Consolidated Financial Statements are prepared under the historical cost convention and in accordance with applicable accounting standards of the
United Kingdom Accounting Standards Board and pronouncements of its Urgent Issues Task Force.
Basis of consolidation
The Consolidated Financial Statements include the accounts of the Company, its subsidiary undertakings and its share of the results of joint ventures and
associated undertakings for financial statements made up to 31 March 2003. A listing of the Company’s principal subsidiary undertakings and associated
undertakings is given in note 36.
The acquisition of the remaining stake in Vizzavi and the acquisition of increased stakes in certain existing subsidiary undertakings and associated
undertakings, have all been accounted for as acquisitions in accordance with FRS 6, “Acquisitions and Mergers”.
Foreign currencies
Transactions in foreign currencies are recorded at the exchange rates ruling on the dates of those transactions, adjusted for the effects of any hedging
arrangements. Foreign currency monetary assets and liabilities are translated into sterling at year end rates.
The results of international subsidiary undertakings, joint ventures and associated undertakings are translated into sterling at average rates of exchange.
The adjustment to year end rates is taken to reserves. Exchange differences, which arise on the retranslation of international subsidiary undertakings’, joint
ventures’ and associated undertakings’ balance sheets at the beginning of the year, and equity additions and withdrawals during the financial year, are dealt
with as a movement in reserves.
Other translation differences are dealt with in the profit and loss account.
Turnover
Group turnover comprises turnover of the Company and its subsidiary undertakings. Total Group turnover comprises Group turnover plus the Group’s share of
the turnover of its associated undertakings and joint ventures and is stated after excluding sales taxes, discounts and sales between Group companies.
Turnover from mobile telecommunications comprises amounts charged to customers in respect of monthly access charges, airtime usage, messaging, the
provision of other mobile telecommunication services, including data services and information provision, fees for connecting customers to a mobile network,
revenues from the sale of equipment, including handsets, and revenues arising from the Group’s franchise agreements entered into with partner networks.
Access charges and airtime used by contract customers are invoiced and recorded as part of a periodic billing cycle and recognised as turnover over the
related access period, with unbilled turnover resulting from services already provided from the billing cycle date to the end of each period accrued and