Vodafone 2005 Annual Report Download - page 60

Directors’ Report
58 |Governance
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
subsidiaries 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 of directors supports high standards of corporate
governance and its statement on corporate governance is set out on pages 60 to 63 of
this Annual Report. The “Board’s Report to Shareholders on Directors’ Remuneration”
on pages 65 to 74 of this Annual Report will be proposed for approval at the
Company’s AGM to be held on 26 July 2005.
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 27 July 2004, shareholders gave the Company
permission, until the conclusion of the AGM to be held on 26 July 2005, to purchase
up to 6,600,000,000 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 26 July 2005.
During the period from 1 April 2004 to 31 March 2005, the Company purchased
2,985 million ordinary shares at a weighted average price, excluding transaction costs,
of 133.30 pence.
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 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 2005 are being held in treasury.
No dividends have been paid on shares whilst held in treasury and no voting rights
attach to the treasury shares.
Results and dividends
The consolidated profit and loss account is set out on page 78 of this Annual Report.
The directors have proposed a final dividend for the year of 2.16 pence per ordinary
share, payable on 5 August 2005 to shareholders on the register of members at close of
business on 3 June 2005. An interim dividend of 1.91 pence per ordinary share was
paid during the year, producing a total for the year of 4.07 pence per ordinary share, a
total of approximately £2,658 million. The Company operates a dividend reinvestment
plan, further details of which can be found on page 141 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 2005, the Company made cash charitable donations
of £26 million to the Vodafone Group Foundation (2004: £14 million), which included
a £1 million donation to support the humanitarian rescue operation following the Asian
Tsunami disaster. In addition, Group subsidiaries donated a further £4 million (2004:
£7 million) to local Vodafone Foundations and a further £3 million (2004: £2 million)
directly to a variety of causes, including a £1 million donation to the National Autistic
Society by Vodafone UK. These donations total £33 million (2004: £23 million) and
include donations of £2 million (2004: £3 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 Corporate Responsibility (“CR”) report and in the Vodafone
Foundation Yearbook which are available on the Company’s website,
www.vodafone.com.
Political donations
At the AGM on 27 July 2004, the Board of directors sought and obtained shareholders’
approval to enable the Group 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
AGM. Although the Group 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 Board of directors sought the approval on a
precautionary basis, to avoid any possibility of unintentionally breaching the Act.
The Group 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 26 July 2005. The amount of the
approval will again be restricted to an aggregate amount of £100,000 (£50,000 in
respect of donations to EU Political Organisations and £50,000 in respect of EU
Political Expenditure) 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 22 days (2004: 29 days) in aggregate for
the Group. The Company did not have any trade creditors at 31 March 2005.
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”.
Directors’ interests in the shares of the Company
The “Board’s Report to Shareholders on Directors’ Remuneration”details the directors’
interests in the shares of the Company.
Directors’ interests in contracts
None of the current directors had a material interest in any contract of significance to
which the Company or any of its subsidiary undertakings was a party during the
financial year.