Vodafone 2015 Annual Report Download - page 184

1. Basis of preparation (continued)
Fair value hedges
The Company’s policy is to use derivative instruments (primarily interest rate swaps) to convert a proportion of its xed rate debt to oating 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 prot 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 prot and loss account.
Cash ow hedges
Cash ow hedging is used by the Company to hedge certain exposures to variability in future cash ows. The portion of gains or losses relating
to changes in the fair value of derivatives that are designated and qualify as effective cash ow hedges is recognised in other comprehensive income;
gains or losses relating to any ineffective portion are recognised immediately in the income statement. When the hedged item is recognised in the
income statement amounts previously recognised in other comprehensive income and accumulated in equity for the hedging instrument are
reclassied to the income statement. When hedge accounting is discontinued, any gain or loss recognised in other comprehensive income at that
time remains in equity and is recognised in the income statement when the hedged transaction is ultimately recognised in the income statement.
If a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in the income statement.
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 2015 and 31 March 2014.
2. Fixed assets
Accounting policies
Shares in Group undertakings are stated at cost less any provision for impairment.
The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment
may not be recoverable. If any such indication of impairment exists, the Company makes an estimate of the recoverable amount. If the recoverable
amount of the cash-generating unit is less than the value of the investment, the investment is considered to be impaired and is written down to its
recoverable amount. An impairment loss is recognised immediately in the prot and loss account.
Shares in Group undertakings
£m
Cost:
1 April 2014 70,642
Additions:
Capital contributions arising from share-based payments 88
Contributions received in relation to share-based payments (126)
31 March 2015 70,604
Amounts provided for:
1 April 2014 5,705
Amounts provided in the year 101
31 March 2015 5,806
Net book value:
31 March 2014 64,937
31 March 2015 64,798
At 31 March 2015 the Company had the following principal subsidiary:
Name Principal activity Countr yof incorporation Percentage shareholding
Vodafone European Investments Holding company England 100
3. Debtors
2015 2014
£m £m
Amounts falling due within one year:
Amounts owed by subsidiaries 156,933 171,709
Taxation recoverable 161 72
Other debtors 376 772
157,470 172,553
Amounts falling due after more than one year:
Deferred taxation –1
Other debtors 3,676 2,090
3,676 2,091
Vodafone Group Plc
Annual Report 2015
182
Notes to the Company nancial statements (continued)