Vodafone 2004 Annual Report Download - page 110

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Vodafone Group Plc Annual Report 2004
108
Notes to the Consolidated Financial Statements continued
Additional disclosures in respect of FRS 17
The most recent full formal actuarial valuations for defined benefit schemes have been updated by qualified independent actuaries for the financial year ended
31 March 2004 to derive the FRS 17 disclosures below.
Major assumptions used
UK Germany Japan Other(2)
2004 2003 2002 2004 2003 2002 2004 2003 2002 2004 2003 2002
%%%%%%%%%%%%
Rate of inflation 2.5 2.5 2.5 2.0 1.5 2.0 –––2.0 1.8 2.0
Rate of increase in salaries 4.5 4.5 4.5 3.0 3.5 4.0 –(1) –(1) –(1) 3.0 3.5 4.2
Rate of increase in pensions
in payment 2.5 2.5 2.5 2.0 1.5 2.0 N/a N/a N/a 2.0 1.9 2.2
Rate of increase in deferred
pensions 2.5 2.5 2.5 –––N/a N/a N/a 2.0 1.9 2.2
Discount rate 5.5 5.4 6.0 5.3 5.3 6.3 2.3 1.5 2.5 4.8 5.3 6.2
Notes:
(1) Rate of increase in salaries in Japan is calculated in line with company specific experience.
(2) Figures shown for other schemes represent weighted average assumptions of individual schemes.
The expected rates of return at 31 March were:
UK Germany Japan Other
2004 2003 2002 2004 2003 2002 2004 2003 2002 2004 2003 2002
%%%%%%%%%%%%
Bonds 4.8 5.5 6.0 4.5 4.8 N/a 1.0 N/a N/a 4.6 4.9 5.5
Equities 7.5 8.0 8.0 6.8 7.3 N/a 4.0 N/a N/a 6.8 7.8 8.5
Other assets 4.0 4.5 6.0 2.0 2.8 6.0 –3.0 4.4 2.0 3.5 5.3
Charges that would have been made to the profit and loss account and consolidated statement of total
recognised gains and losses on compliance with FRS 17 and on the basis of the assumptions stated above
UK Germany Japan Other Total
2004 2003 2004 2003 2004 2003 2004 2003 2004 2003
£m £m £m £m £m £m £m £m £m £m
Operating profit:
Current service cost 32 24 821 10 12 44 40 94 97
Past service cost –––––51116
Gains and losses on curtailments –––––10 –1–11
Total charge to operating profit 32 24 821 10 27 45 42 95 114
Finance costs/(income):
Interest cost 22 19 910 126638 37
Expected return on pension scheme assets (22) (22) (5) (1) ––(2) (3) (29) (26)
Total (credit)/charge to finance (income)/costs –(3) 491243911
Total charge to loss before taxation 32 21 12 30 11 29 49 45 104 125
Consolidated statement of total recognised gains and
losses:
Actual return less expected return on pension
scheme assets (56) 95 (3) 1––(7) 14 (66) 110
Experience (gains) and losses arising on the
scheme liabilities ––3(7) (1) 1(3) (1) (1) (7)
Changes in assumptions underlying the present
value of the plan liabilities 16 37 11 11 (5) 16 (2) 520 69
Actuarial (gains)/losses on assets and liabilities (40) 132 11 5(6) 17 (12) 18 (47) 172
Exchange rate movements ––(1) 11 (3) 1(5) 4(9) 16
Total (gains)/losses recognised in statement of
total recognised gains and losses (40) 132 10 16 (9) 18 (17) 22 (56) 188
32. Pensions continued