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Vodafone Group Plc Annual Report 2011 101
Financials
The table below shows the key assumptions used in the value in use calculations.
Assumptions used in value in use calculation
Italy Spain Greece Ireland Portugal Turkey India Ghana
% % % % % % % %
Pre-tax adjusted discount rate 11.9 11.5 14.0 14.5 14.0 14.1 14.2 20.8
Long-term growth rate 0.8 1.6 2.0 2.0 1.5 6.1 6.3 6.3
Budgeted EBITDA(1) (1.0) – 1.2 2.4 (1.2) 16.8 16.5 41.4
Budgeted capital expenditure(2) 9.6 – 11.3 7.8 – 10.6 10.7 – 12.3 9.4 – 11.6 12.4 – 14.1 10.0 – 16.6 12.9 – 22.7 7.3 – 41.3
Notes:
(1) Budgeted EBITDA is expressed as the compound annual growth rates in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating units of the plans used for
impairment testing.
(2) Budgeted capital expenditure is expressed as the range of capital expenditure as a percentage of revenue in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating
units of the plans used for impairment testing.
The table below shows, for Turkey, India and Ghana, the amount by which each key assumption must change in isolation in order for the estimated
recoverable amount to be equal to its carrying value.
Change required for the carrying value
to equal the recoverable amount(1)
Turkey India Ghana
pps pps pps
Pre-tax adjusted discount rate 5.6 1.1 6.9
Long-term growth rate (19.6) (1.0) n/a
Budgeted EBITDA(2) (4.7) (2.2) (8.7)
Budgeted capital expenditure(3) 7.0 2.5 8.9
Notes:
(1) The recoverable amount for Greece, which was impaired at 30 September 2010, equals the carrying value at 31 March 2011.
(2) Budgeted EBITDA is expressed as the compound annual growth rates in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating units of the plans used for
impairment testing.
(3) Budgeted capital expenditure is expressed as the range of capital expenditure as a percentage of revenue in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating
units of the plans used for impairment testing.
The changes in the following table to assumptions used in the impairment review would, in isolation, lead to an (increase)/decrease to the aggregate
impairment loss recognised in the year ended 31 March 2011:
Italy Spain Greece Ireland Portugal All other
Increase Decrease Increase Decrease Increase Decrease Increase Decrease Increase Decrease Increase Decrease
by 2 pps by 2 pps by 2 pps by 2 pps by 2 pps by 2 pps by 2 pps by 2 pps by 2 pps by 2 pps by 2 pps by 2 pps
£bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn £bn
Pre-tax adjusted discount rate (2.4) 1.0 (1.5) 2.2 (0.2) – (0.2) 0.3 (0.3) 0.4 (0.7) –
Long-term growth rate 1.0 (2.4) 2.2 (1.3) – (0.1) 0.2 (0.1) 0.4 (0.3) – (0.7)
Budgeted EBITDA(1) 1.0 (2.0) 1.4 (1.3) – (0.2) 0.2 (0.2) 0.3 (0.3) – –
Budgeted capital expenditure(2) (1.1) 1.0 (1.0) 1.0 (0.1) – (0.1) 0.3 (0.2) 0.2 – –
Notes:
(1) Budgeted EBITDA is expressed as the compound annual growth rates in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating units of the plans used for
impairment testing.
(2) Budgeted capital expenditure is expressed as the range of capital expenditure as a percentage of revenue in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating
units of the plans used for impairment testing.
31 March 2010
The estimated recoverable amount of the Group’s operations in India equalled its respective carrying value at 31 March 2010 and, consequently, any
adverse change in key assumptions would, in isolation, cause a further impairment loss to be recognised. The estimated recoverable amount of the Group’s
operations in Turkey, Germany, Ghana, Greece, Ireland, Italy, Portugal, Romania, Spain and the UK exceeded their carrying value by approximately
£130 million, £4,752 million, £18 million, £118 million, £259 million, £1,253 million, £1,182 million, £372 million, £821 million and £1,207 million respectively.
The table below shows the key assumptions used in the value in use calculations.
Assumptions used in value in use calculation
India Turkey Germany Ghana Greece Ireland Italy Portugal Romania Spain UK
% % % % % % % % % % %
Pre-tax adjusted
discount rate 13.8 17.6 8.9 24.4 12.1 9.8 11.5 10.6 11.5 10.2 9.6
Long-term growth rate 6.3 7.7 1.0 5.2 1.0 1.0 – 0.5 2.1 1.5 1.5
Budgeted EBITDA(1) 17.5 34.4 n/a 20.2 3.9 0.8 (0.1) n/a (2.5) (0.7) 4.9
Budgeted capital
expenditure(2)
13.4 –
30.3
8.3 –
32.5 n/a
8.4 –
39.6
11.1 –
13.6
7.4 –
9.6
8.2 –
11.4 n/a
12.0 –
19.0
9.1 –
10.9
9.3 –
11.2
Notes:
(1) Budgeted EBITDA is expressed as the compound annual growth rates in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating units of the plans used for
impairment testing.
(2) Budgeted capital expenditure is expressed as the range of capital expenditure as a percentage of revenue in the initial ten years for Turkey and Ghana and the initial five years for all other cash generating
units of the plans used for impairment testing.