Vodafone Group Plc Annual Report for the Year Ended 31 March 2018: Financials
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90 Vodafone Group Plc Annual Report 2018 Reporting our financial performance Focus on clear, effective and concise reporting We continue to review the format of our consolidated financial statements with the aim of making them clearer and easier to follow. This year we have added the following highlights to help you navigate to the information that is important to you: Vodafone to acquire €3.2 billion Liberty Global’s operations in (€2.2 billion net of tax) Germany, the Czech Republic, Re-measurement loss on Vodafone India Hungary and Romania Future adoption of IFRS 9, Re-measurement of Subsequent events IFRS 15 and IFRS 16 Vodafone India We have updated the disclosures in note 1 We include details of the €3,170 million pre-tax On 9 May 2018, Vodafone announced that “Basis of preparation” relating to the timetable re-measurement loss in respect of Vodafone it had agreed to acquire Liberty Global’s and potential impact of adopting IFRS 9 India in note 7 “Discontinued operations and operations in Germany, the Czech Republic, “Financial Instruments” and IFRS 15 “Revenue assets held for sale” which led to an overall Hungary and Romania for an enterprise value of from Contracts with Customers” in the 2019 €2,245 million (net of tax) reduction in the €18.4 billion. See note 31 “Subsequent events” financial year and the adoption of IFRS 16 carrying value of Vodafone India at 31 March for further details. “Leases” in the 2020 financial year. 2018. The year ended 31 March 2017 included an impairment change of €4,515 million (€3,675 million net of tax) as set out in note 4 “Impairment”. 110 For more information 128 For more information 168 For more information 91 Directors’ statement 106 Notes to the consolidated financial statements: 178 Other unaudited of responsibility 106 1. Basis of preparation Cash flows financial information: 93 Audit report on the Income statement 143 18. Reconciliation of net 178 Prior year operating results consolidated and cash flow from operating 113 2. Segmental analysis 183 Company financial parent company activities statements financial statements 116 3. Operating profit 143 19. Cash and cash equivalents 183 Company statement of 117 4. Impairment losses 102 Consolidated financial 144 20. Borrowings financial position statements: 122 5. Investment income and 147 21. Liquidity and capital 184 Company statement of financing costs 102 Consolidated income resources changes in equity statement 123 6. Taxation Financials 149 22. Capital and financial risk 185 Notes to the Company 102 Consolidated statement 128 7. Discontinued operations management financial statements: of comprehensive income and assets and liabilities Employee remuneration 185 1. Basis of preparation 103 Consolidated statement held for sale 153 23. Directors and key of financial position 130 8. Earnings per share 187 2. Fixed assets management 104 Consolidated statement 130 9. Equity dividends compensation 187 3. Debtors of changes in equity Financial position 154 24. Employees 188 4. Other investments 105 Consolidated statement 188 5. Creditors of cash flows 131 10. Intangible assets 155 25. Post employment benefits 133 11. Property, plant and 189 6. Called up share capital equipment 159 26. Share-based payments 189 7. Share-based payments 135 12. Investments in associates Additional disclosures 189 8. Reserves and joint arrangements 161 27. Acquisitions and disposals 190 9. Equity dividends 138 13. Other investments 162 28. Commitments 190 10. Contingent liabilities 139 14. Trade and other 164 29. Contingent liabilities and legal proceedings receivables and legal proceedings 190 11. Other matters 140 15. Trade and other payables 167 30. Related party transactions 141 16. Provisions 168 31. Subsequent events 142 17. Called up share capital 169 32. Related undertakings 177 33. Subsidiaries exempt from audit Vodafone Group Plc Annual Report 2018 91 Directors’ statement of responsibility The Directors are responsible for preparing the financial statements in Overview accordance with applicable law and regulations and keeping proper accounting records. Detailed below are statements made by the Directors in relation to their responsibilities, disclosure of information to the Company’s auditors, going concern and management’s report on internal control over financial reporting. Financial statements and accounting records Directors’ responsibility statement Company law of England and Wales requires the Directors to prepare Each of the Directors, whose names and functions are listed on pages financial statements for each financial year which give a true and fair 48 and 49 confirm that, to the best of their knowledge: view of the state of affairs of the Company and of the Group at the end Strategic Report – the consolidated financial statements, prepared in accordance with of the financial year and of the profit or loss of the Group for that period. IFRS as issued by the IASB and IFRS as adopted by the EU, give a true In preparing those financial statements the Directors are required to: and fair view of the assets, liabilities, financial position and profit – select suitable accounting policies and apply them consistently; of the Group; – make judgements and estimates that are reasonable and prudent; – the parent company financial statements, prepared in accordance with United Kingdom generally accepted accounting practice, give – present information, including accounting policies, a true and fair view of the assets, liabilities, financial position and profit in a manner that provides relevant, reliable, comparable and of the Company; and understandable information; – the Strategic Report includes a fair review of the development and – state whether the consolidated financial statements have been performance of the business and the position of the Group, together prepared in accordance with International Financial Reporting with a description and robust assessment of the principal risks and Standards (‘IFRS’) as adopted for use in the EU and Article 4 of the uncertainties that it faces. EU IAS Regulations. The Directors also ensure that the consolidated Governance financial statements have been prepared in accordance with IFRS The Directors are also responsible under section 172 of the Companies as issued by the International Accounting Standards Board (‘IASB’); Act 2006 to promote the success of the Company for the benefit of its – state for the Company’s financial statements whether applicable members as a whole and in doing so have regard for the needs of wider UK accounting standards have been followed; and society and stakeholders, including customers, consistent with the Group’s core and sustainable business objectives. – prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company and the Group will Having taken advice from the Audit and Risk Committee, the Board continue in business. considers the report and accounts, taken as a whole, is fair, balanced and understandable and that it provides the information necessary The Directors are responsible for keeping proper accounting records for shareholders to assess the Company’s position and performance, which disclose with reasonable accuracy at any time the financial business model and strategy. position of the Company and of the Group and to enable them to ensure Neither the Company nor the Directors accept any liability to any that the financial statements comply with the Companies Act 2006 person in relation to the Annual Report except to the extent that and for the consolidated financial statements, Article 4 of the EU IAS Financials such liability could arise under English law. Accordingly, any liability Regulation. They are also responsible for the system of internal control, to a person who has demonstrated reliance on any untrue or misleading for safeguarding the assets of the Company and the Group and, hence, statement or omission shall be determined in accordance with section for taking reasonable steps for the prevention and detection of fraud 90A and schedule 10A of the Financial Services and Markets Act 2000. and other irregularities. The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Other information Other 92 Vodafone Group Plc Annual Report 2018 Directors’ statement of responsibility (continued) Disclosure of information to the auditors Cash flow and liquidity reviews Having made the requisite enquiries, so far as the Directors are aware, The business planning process provides outputs for detailed cash flow there is no relevant audit information (as defined by section 418(3) of the and liquidity reviews, to ensure that the Group maintains adequate Companies Act 2006) of which the Company’s auditors are unaware and liquidity throughout the forecast periods. The prime output is a one year the Directors have taken all the steps they ought to have taken to make liquidity forecast which is prepared and updated on a daily basis which themselves aware of any relevant audit information and to establish that highlights the extent of the Group’s liquidity based on controlled cash the Company’s auditors are aware of that information. flows and the headroom under the Group’s undrawn revolving credit facility (‘RCF’). Going concern The key inputs into this forecast are: The Group’s business activities, performance, position, principal risks and