Vodafone 2013 Annual Report Download - page 125

VIHBV has not received any formal demand for taxation following the Finance Act 2012, but it did receive a letter on 3 January 2013 reminding
it of the tax demand raised prior to the Indian Supreme Court judgment and purporting to update the interest element of that demand in a total
amount of INR 142 billion (£1.6 billion). The 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 penalties of up to 100% of the assessed withholding tax for the alleged failure to have withheld such taxes,
remain pending despite the issue having been ruled upon by the Indian Supreme Court. Should a further demand for taxation be received by VIHBV
or any member of the Group as a result of the new retrospective legislation, the Group believes it is probable that it will be able to make a successful
claim under the BIT. Although this would not result in any outow of economic benet from the Group, it could take several years for VIHBV
to recover any deposit required by an Indian Court as a condition for any stay of enforcement of a tax demand pending the outcome of VIHBV’s BIT
claim. However, VIHBV expects that it would be able to recover any such deposit. VIHBV is exploring with the Indian Government whether
a mechanism exists under Indian law which would allow the parties to explore the possibility of a negotiated resolution of this dispute, but there
is no certainty that such a mechanism exists or that a resolution acceptable to both VIHBV and the Indian Government could be reached.
The Group did not carry a provision for this litigation or in respect of the retrospective legislation at 31 March 2013 or at previous reporting dates.
Indian regulatory cases
Litigation remains pending in the Telecommunications Dispute Settlement Appellate Tribunal (‘TDSAT’), High Courts and the Supreme Court
in relation to a number of signicant regulatory issues including mobile termination rates (‘MTRs’), spectrum and licence fees, licence extension and
3G intra-circle roaming (‘ICR’).
22. Reconciliation of net cash ow from operating activities
The table below shows how our prot for the year translates into cash ows generated from our
operating activities.
2013 2012 2011
£m £m £m
Prot for the nancial year 673 7,003 7,870
Adjustments for:
Share-based payments 134 143 156
Depreciation and amortisation 7, 70 0 7, 8 59  7, 876 
Loss on disposal of property, plant and equipment 92 47 91
Share of result in associates (6,477) (4,963) (5,059)
Impairment losses 7,700 4,050 6,150
Other income and expense (468) (3,705) 16
Non-operating income and expense (10) 162 (3,022)
Investment income (305) (456) (1,309)
Financing costs 1,788 1,932 429
Income tax expense 2,582 2,546 1,628
Decrease/(increase) in inventory 72 24 (107)
Increase in trade and other receivables (184) (689) (387)
Increase in trade and other payables 430 871 1,060
Cash generated by operations 13,727 14,824 15,392
Tax paid (3,033) (2,069) (3,397)
Net cash ow from operating activities 10,694 12,755 11,995
23. Cash and cash equivalents
The majority of the Group’s cash is held in bank deposits or in money market funds which have a maturity
of three months or less to enable us to meet our short-term liquidity requirements.
2013 2012
£m £m
Cash at bank and in hand 1,396 2,762
Money market funds 3,494 3,190
Repurchase agreements 2,550 600
Short-term securitised investments 183 586
Cash and cash equivalents as presented in the statement of nancial position 7,623 7,138
Bank overdrafts (25) (50)
Cash and cash equivalents as presented in the statement of cash ows 7,598 7,088
Cash and cash equivalents are held by the Group on a short-term basis with all having an original maturity of three months or less. The carrying
amount approximates their fair value.
123 Vodafone Group Plc
Annual Report 2013
Overview Business review Performance Governance Financials Additional
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