Vodafone 2004 Annual Report Download - page 50

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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 in note 34 to the Consolidated Financial
Statements.
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 50 to 53 of this Annual
Report. The “Board’s Report to Shareholders on Directors’ Remuneration”on pages 54
to 63 of this Annual Report will be proposed for approval at the Company’s AGM on
27 July 2004.
Share capital
A statement of changes in the share capital of the Company is set out in note 22 to
the Consolidated Financial Statements.
Purchase by the Company of its own shares
At the AGM of the Company held on 30 July 2003, shareholders gave the Company
permission, until the conclusion of the AGM being held on 27 July 2004, to purchase
up to 6,800,000,000 ordinary shares of the Company. A resolution for permission for
the Company to renew its authority to purchase its own shares will be proposed at the
AGM of the Company to be held on 27 July 2004.
During the period from 1 December 2003 to 31 March 2004, the Company purchased
800 million ordinary shares at a weighted average price, excluding transaction costs,
of 135.3p.
The Companies (Acquisition of Own Shares) (Treasury Shares) Regulations 2003 (“the
Regulations”) allow companies to hold shares acquired by way of market purchase in
treasury, rather than having to cancel them. The Regulations came into force on
1 December 2003. The directors may use the authority to purchase shares and hold
them in treasury (and subsequently sell or transfer them out of treasury as permitted
in accordance with the Regulations) rather than cancel them, subject to institutional
guidelines applicable at the time. The shares purchased by the Company prior to
31 March 2004 are being held in treasury.
No dividends will be paid on shares whilst held in treasury and no voting rights will
attach to the treasury shares.
Results and dividends
The consolidated profit and loss account is set out on page 69 of this Annual Report.
The directors have proposed a final dividend for the year of 1.0780 pence per
ordinary share, payable on 6 August 2004 to shareholders on the register of members
at close of business on 4 June 2004. An interim dividend of 0.9535 pence per
ordinary share was paid during the year, producing a total for the year of
2.0315 pence per ordinary share, a total of approximately £1,378 million. The
Company operates a dividend reinvestment plan, further details on which can be
found on page 128 in this Annual Report.
Subsequent events
Details of material subsequent events are included in note 33 to the Consolidated
Financial Statements included in this Annual Report.
Charitable contributions
During the year ended 31 March 2004, the Company made cash charitable donations
of £13.5 million to the Vodafone Group Foundation (2003: £10.0 million). In addition,
operating companies donated a further £7.2 million (2003: £4.2 million) to local
Vodafone Foundations and a further £2.0 million (2003: £2.6 million) directly to a
variety of causes. These donations total £22.7 million (2003: £16.8 million) and
include donations of £3.0 million (2003: £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 Group’s separate Corporate Social
Responsibility (“CSR”) report.
Political donations
At the Annual General Meeting on 30 July 2003, 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 policy and 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 AGM to be held on 27 July 2004. The amount of
the approval will again be restricted to £100,000 for a period of twelve months
following the AGM.
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 29 days
(2003: 24 days) in aggregate for the Group. The Company did not have any trade
creditors at 31 March 2004.
Research and development
The Group continues to pursue an active research and development programme for
the enhancement of mobile telecommunications. Full details as to the Group’s
research and development programme and activities can be found under
“Business Overview – Research and Development”.
Vodafone Group Plc Annual Report 2004
48
Directors’ Report