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112 Vodafone Group Plc Annual Report 2010
Notes to the consolidated nancial statements continued
The carrying amounts of trade and other payables approximate their fair value. The fair values of the derivative financial instruments are calculated by discounting the future
cash flows to net present values using appropriate market interest and foreign currency rates prevailing at 31 March.
2010 2009
£m £m
Included within “Derivative financial instruments”:
Fair value through the income statement (held for trading):
Interest rate swaps 330 381
Foreign exchange swaps 95 37
425 418
Fair value hedges:
Interest rate swaps 35 17
460 435
26. Acquisitions
The aggregate cash consideration in respect of purchases of interests in subsidiaries and joint ventures, net of cash acquired, is as follows:
£m
Cash consideration paid:
Vodacom Group Limited 1,577
Other acquisitions completed during the year 26
Acquisitions of non-controlling interests 150
Acquisitions completed in previous years (20)
1,733
Net overdrafts acquired 44
1,777
Total goodwill acquired was £1,185 million and included £1,193 million in relation to Vodacom, £27 million in relation to other acquisitions completed during the year and a
reduction of £35 million resulting from amendments to provisional purchase price allocations on acquisitions completed in previous periods. In addition, there was a
reduction of £102 million in relation to the merger of Vodafone Hutchison Australia.
Vodacom Group Limited (‘Vodacom’)
On 20 April 2009 the Group acquired an additional 15% stake in Vodacom for cash consideration of ZAR 20.6 billion (£1.6 billion). On 18 May 2009 Vodacom became a
subsidiary following the listing of its shares on the Johannesburg Stock Exchange and concurrent termination of the shareholder agreement with Telkom SA Limited, the
seller and previous joint venture partner. During the period from 20 April 2009 to 18 May 2009 the Group continued to account for Vodacom as a joint venture, proportionately
consolidating 65% of the results of Vodacom.
The results of the acquired entity have been consolidated in the income statement from 18 May 2009. From 18 May 2009 the acquired entity contributed £90 million to the
profit attributable to equity shareholders of the Group.
The purchase price allocation is set out in the table below:
Fair value
Book value adjustments Fair value
£m £m £m
Net assets acquired:
Identifiable intangible assets(1) 271 2,931 3,202
Property, plant and equipment 1,603 –1,603
Other investments 25 –25
Inventory 56 –56
Trade and other receivables 870 –870
Cash and cash equivalents 58 –58
Current and deferred taxation liabilities (140) (834) (974)
Short and long-term borrowings (1,312) –(1,312)
Trade and other payables (897) 8(889)
Net identifiable assets acquired 534 2,105 2,639
Goodwill(2) 1,193
Total asset acquired 3,832
Non-controlling interests (973)
Revaluation gain (860)
Value of investment held prior to acquisition (422)
Total consideration(3) 1,577
Notes:
(1) Identifiable intangible assets of £3,202 million consist of licences and spectrum fees of £1,454 million and other intangible assets of £1,748 million.
(2) The goodwill is attributable to the expected profitability of the acquired business and the synergies expected to arise after the Group’s acquisition of Vodacom.
(3) Includes £5 million of directly attributable costs.