Vodafone 2006 Annual Report Download - page 115

Vodafone Group Plc Annual Report 2006 113
Financials
South Africa – VenFin Limited
On 26 January 2006, the Group announced that its offer to acquire a 100% interest in VenFin Limited (“VenFin”) had become wholly unconditional. VenFin’s principal asset was a 15%
stake in Vodacom Group (Pty) Limited (“Vodacom”). At 31 March 2006, the Group held an effective economic interest in VenFin of 98.7% and an effective voting interest of 99.3%.
The combined cash consideration for the Group’s 98.7% economic interest in VenFin was ZAR15.8 billion (£1,458 million).
Book Fair value Fair
value adjustments value
£m £m £m
Net assets acquired:
Intangible assets 24 600 624(1)
Property, plant and equipment 216 – 216
Inventory 8–8
Trade and other receivables 74 – 74
Cash and cash equivalents 14 – 14
Deferred tax liabilities (1) (180) (181)
Short and long-term borrowings (36) – (36)
Current tax liabilities (20) – (20)
Trade and other payables (110) – (110)
169 420 589
Minority interests (9)
Goodwill 878
Total cash consideration (including £7 million of directly attributable costs) 1,458
Net cash outflow arising on acquisition:
Cash consideration 1,458
Cash and cash equivalents acquired (14)
1,444
Note:
(1) Intangible assets consist of licences and spectrum fees of £391 million and other intangibles of £233 million.
The goodwill is attributable to the profitability of the acquired business and the synergies expected to arise within that business after the Group's acquisition of VenFin.
Results of the acquired entities have been proportionately consolidated in the income statement from the date of acquisition.
From the date of acquisition, the acquired part of the entity contributed a loss of £30 million to the net loss of the Group.
On 20 April 2006, the Group completed the compulsory acquisition of the remaining minority shareholdings in VenFin, from which date the Group holds 100% of the issued share
capital of VenFin. As a result, the Group holds 50% of the share capital of Vodacom.
Across the acquisitions mentioned above, the weighted average life of licences and spectrum fees is 10 years, the weighted average life of other intangible assets is five years and
the weighted average of total intangibles is eight years.
Turkey – Telsim Mobil Telekomunikasyon
On 24 May 2006, the Group completed the acquisition of substantially all the assets and business of Telsim Mobil Telekomunikasyon (“Telsim”) from the Turkish Savings Deposit
and Investment Fund. The cash paid on this date was US$4.67 billion (£2.6 billion). It is impracticable to provide further information due to the proximity of the acquisition date to
the date of approval of the Consolidated Financial Statements.
Pro forma full year information
The following unaudited pro forma summary presents the Group as if all of the businesses acquired in the year to 31 March 2006 had been acquired on 1 April 2005 or 1 April 2004,
respectively. The pro forma amounts include the results of the acquired companies, amortisation of the acquired intangibles assets recognised on acquisition and the interest expense
on debt incurred as a result of the acquisition. The pro forma amounts do not include any possible synergies from the acquisition. The pro forma information is provided for comparative
purposes only and does not necessarily reflect the actual results that would have occurred, nor is it necessarily indicative of future results of operations of the combined companies.
2006 2005
£m £m
Revenue 29,924 27,709
(Loss) /profit for the financial year (21,870) 6,239
(Loss) /profit attributable to equity shareholders (21,966) 6,131
Pence per share Pence per share
Basic (loss)/earnings per share from continuing and discontinued operations (35.09) 9.26
Diluted (loss)/earnings per share from continuing and discontinued operations(1) (35.09) 9.23
Note:
(1) In the year ended 31 March 2006, there are no dilutive ordinary shares as the Group recorded a loss for the financial year.