Vodafone 2010 Annual Report Download - page 123

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Financials
Vodafone Group Plc Annual Report 2010 121
Fair value hedges
The Company’s policy is to use derivative instruments (primarily interest rate swaps) to convert a proportion of its fixed rate debt to floating rates in order to hedge the interest
rate risk arising, principally, from capital market borrowings.
The Company designates these as fair value hedges of interest rate risk with changes in fair value of the hedging instrument recognised in the profit and loss account for the
period together with the changes in the fair value of the hedged item due to the hedged risk, to the extent the hedge is effective. The ineffective portion is recognised
immediately in the profit and loss account.
Share-based payments
The Group operates a number of equity settled share-based compensation plans for the employees of subsidiaries using the Company’s equity instruments. The fair value
of the compensation given in respect of these share-based compensation plans is recognised as a capital contribution to the Company’s subsidiaries over the vesting period.
The capital contribution is reduced by any payments received from subsidiaries in respect of these share-based payments.
Dividends paid and received
Dividends paid and received are included in the Company financial statements in the period in which the related dividends are actually paid or received or, in respect of the
Company’s final dividend for the year, approved by shareholders.
Pensions
The Company is the sponsoring employer of the Vodafone Group pension scheme, a defined benefit pension scheme. The Company is unable to identify its share of the
underlying assets and liabilities of the Vodafone Group pension scheme on a consistent and reasonable basis. Therefore, the Company has applied the guidance within FRS
17 to account for defined benefit schemes as if they were defined contribution schemes and recognise only the contribution payable each year. The Company had no
contributions payable for the years ended 31 March 2010 and 31 March 2009.
3. Fixed assets
Shares in Group undertakings
£m
Cost:
1 April 2009 70,208
Additions 489
Capital contributions arising from share-based payments 150
Contributions received in relation to share-based payments (119)
Disposals (12)
31 March 2010 70,716
Amounts provided for:
1 April 2009 5,271
Amounts provided for during the year 360
31 March 2010 5,631
Net book value:
31 March 2009 64,937
31 March 2010 65,085
At 31 March 2010 the Company had the following principal subsidiaries:
Country of Percentage
Name Principal activity incorporation shareholding
Vodafone European Investments Holding company England 100
Vodafone Group Services Limited Global products and services provider England 100
4. Debtors
2010 2009
£m £m
Amounts falling due within one year:
Amounts owed by subsidiaries 116,521 126,010
Taxation recoverable 200 44
Other debtors 184 280
116,905 126,334
Amounts falling due after more than one year:
Deferred taxation 12 18
Other debtors 1,902 2,334
1,914 2,352