Vodafone 2012 Annual Report Download - page 141

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139
Vodafone Group Plc
Annual Report 2012
the calculation and on the basis that no tax was due in any event. On 15 November 2010 VIHBV was asked to make a deposit with the Supreme
Court of INR 25 billion (£356million) and provide a guarantee for INR 85 billion (£1.2 billion) pending nal adjudication of the case, which request it
duly complied with. On 23 March 2011 the Indian tax authority also initiated proceedings against VIHBV to impose a penalty of 100% of the alleged
tax liability. VIHBV challenged this demand to the Indian Commissioner of Income Tax and led a writ petition in the Bombay High Court. The
Supreme Court heard the appeal on the issue of jurisdiction as well as on the challenge to quantication during July and August 2011. In January
2012 the Supreme Court handed down its judgment, holding that VIHBV’s interpretation of the Income Tax Act 1961 was correct, that the
transaction was not taxable in India and that, consequently, VIHBV had no obligation to withhold tax from consideration paid to HTIL in respect
ofthetransaction. The Supreme Court quashed the relevant notices and demands issued to VIHBV in respect of withholding tax. Separate
proceedingstaken against VIHBV to seek to treat it as an agent of HTIL in respect of its alleged tax on the same transaction, as well as on the
penalties for the alleged failure to have withheld such taxes, are still technically pending and awaiting adjudication by the Supreme Court and the
Indian Commissioner of Income Tax, and are expected to be quashed as a result of the Supreme Court decision. Similarly, VEL’s writ to quash the
relevant notice is also pending, and should be decided upon at the same time as VIHBV’s writ. In March 2012 the Indian government introduced
proposed legislation (Finance Bill 2012) which seeks to overturn the Supreme Court judgment in VIHBV’s favour with retrospective effect. The
Finance Bill 2012 has been passed by both Houses of the Indian Parliament and awaits Presidential approval which is expected imminently after
which the Bill will become law. VIHBV is considering domestic (Indian) and international remedies available to it. VIHBV believes that neither it nor
anyother member of the Group is liable for such withholding tax, or is liable to be made an agent of HTIL; however, the Finance Bill 2012 introduces
substantial uncertainty, and there can be no assurance that any outcome will be favourable to VIHBV or the Group.
The Group did not carry any provision in respect of this litigation at 31 March 2012 or at previous reporting dates, as it believed it had no obligation to
withhold tax on the acquisition under applicable Indian law at the time of the transaction.
30. Directors and key management compensation
Directors
Aggregate emoluments of the directors of the Company were as follows:
2012 2011 2010
£m £m £m
Salaries and fees 5 5 5
Incentive schemes1433
Other benets2111
10 9 9
Note:
1 Includes the value of the cash in lieu of global long-term incentive plan dividends.
2 Includes the value of the cash allowance taken by some individuals in lieu of pension contributions .
The aggregate gross pre-tax gain made on the exercise of share options in the year ended 31 March 2012 by directors who served during the year
was £nil (2011: £nil, 2010: £1million).
Further details of directors’ emoluments can be found in “Directors’ remuneration” on pages 74 to 87.
Key management compensation
Aggregate compensation for key management, being the directors and members of the Executive Committee, was as follows:
2012 2011 2010
£m £m £m
Short-term employee benets 17 18 21
Post employment benets – dened contribution schemes – 1 1
Share-based payments 26 22 20
43 41 42