TIDMVOD
RNS Number : 6066G
Vodafone Group Plc
07 June 2013
7 June 2013
Vodafone Group Plc ("Vodafone" or the "Company")
2013 Annual Report
2013 Notice of Annual General Meeting
In accordance with Listing Rule 9.6.1, Vodafone has uploaded a
copy of each of the above documents to the National Storage
Mechanism.
The 2013 Annual Report is available at vodafone.com/ar2013 and
the 2013 Notice of Annual General Meeting is available at
vodafone.com/agm.
A condensed set of Vodafone's financial statements and
information on important events that have occurred during the
financial year ended 31 March 2013 and their impact on the
financial statements were included in Vodafone's preliminary
results announcement released on 21 May 2013. That information,
together with the information set out below, which is extracted
from the 2013 Annual Report, constitute the material required by
Disclosure and Transparency Rule 6.3.5 which is required to be
communicated to the media in full unedited text through a
Regulatory Information Service. This announcement is not a
substitute for reading the full 2013 Annual Report. Page and note
references in the text below refer to page numbers in the 2013
Annual Report and notes to the financial statements.
PRINCIPAL RISK FACTORS AND UNCERTAINTIES
1. Our business could be adversely affected by a failureor
significant interruption to our telecommunications networks or IT
systems.
We are dependent on the continued operation of
telecommunications networks. As the importance of mobile and fixed
communication in everyday life increases, as well as during times
of crisis, organisations and individuals look to us to maintain
service. Major failures in the network or our IT systems may result
in service being interrupted resulting in serious damage to our
reputation and consequential customer and revenue loss.
There is a risk that an attack on our infrastructure by a
malicious individual or group could be successful and impact the
availability of critical systems. Our network is also susceptible
to interruption due to a physical attack and theft of our network
components as the value and market for network components increases
(for example copper, batteries, generators and fuel).
2. We could suffer loss of consumer confidence and/or
legalaction due to a failure to protect our customer
information.
Mobile networks carry and store large volumes of
confidentialpersonal and business voice traffic and data. We host
increasingquantities and types of customer data in both enterprise
and consumer segments. We need to ensure our service environments
are sufficiently secure to protect us from loss or corruption of
customer information. Failure to protect adequately customer
information could have a material adverse effect on our reputation
and may lead to legal action against the Group.
3. Increased competition may reduce our market share and
profitability.
We face intensifying competition where all operators are looking
to secure a share of the potential customer base. Competition could
lead to a reduction in the rate at which we add new customers, a
decrease in the size of our market share and a decline in our
average revenue per customer, if customers choose to receive
telecommunications services or other competing services from
alternate providers. Competition can also lead to an increase in
customer acquisition and retention costs. The focus of competition
in many of our markets has shifted from acquiring new customers to
retaining existing customers, as the market for mobile
telecommunications has become increasingly mature.
4. Regulatory decisions and changes in the regulatoryenvironment
could adversely affect our business.
We have ventures in both emerging and mature markets, spanninga
broad geographical area including Europe, Africa, Middle East, Asia
Pacific and the US. We need to comply with an extensive range of
requirements that regulate and supervise the licensing,
construction and operation of our telecommunications networks and
services. Pressure on political and regulatory institutions both to
deliver direct consumer benefit and protect consumers' interests,
particularly in recessionary periods, can lead to adverse impacts
on our business. Financial pressureson smaller competitors can
drive them to call for regulators to protect them. Increased
financial pressures on governments may lead them to target foreign
investors for further taxes or licence fees.
5. Our existing service offerings could become disadvantaged as
compared to those offered by converged competitors or other
technology providers.
In a number of markets we face competition from providers
whohave the ability to sell converged services (combinations of
fixed line, broadband, public Wi-Fi, TV and mobile) on their
existing infrastructure which we cannot either replicate or provide
at a similar price point. Additionally, the combination of services
may allow competitors to subsidise the mobile component of their
offering. This could lead to an erosion of our customer base and
reduce the demand for our core services and impact our future
profitability.
Advances in smartphone technology places more focus on
applications, operating systems, and devices rather than the
underlying services provided by mobile operators. The development
of applications which make use of the internet as a substitute for
some of our more traditional services, such as messaging and voice,
could erode revenue. Reduced demand for our core services of voice,
messaging and data and the development of services by application
developers, operating system providers, and handset suppliers could
significantly impact our future profitability.
6. Severely deteriorating economic conditions could impact one
or more of our markets.
Economic conditions in many of the markets where we
operate,especially in Europe, continue to deteriorate or stagnate.
Theseconditions, combined with the impact of austerity measures,
resultin lower levels of disposable income and may result in
significantly lower revenue as customers give up their mobile
devices or move to cheaper tariffs.
There is also a possibility of one or more countries exiting the
eurozone, causing currency devaluation in certain countries and
possibly leading to a reduction in our revenue and impairment of
our financial and non-financial assets. This may also lead to
further adverse economic impacts elsewhere.
7. Our business may be impacted by actual or perceived health
risks associated with the transmission of radio waves from mobile
telephones, transmitters and associated equipment.
Concerns have been expressed that the electromagnetic
signalsemitted by mobile telephone handsets and base stations may
pose health risks. We are not aware that such health risks have
been substantiated, however, in the event of a major scientific
finding supporting this view this might result in prohibitive
legislation being introduced by governments (or the European
Union), a major reduction in mobile phone usage (especially by
children), a requirement to move base station sites, significant
difficulty renewing or acquiring site leases, and/or major
litigation. An inadequate response to electromagnetic fields
('EMF') issues may result in loss of confidence in the industry and
Vodafone.
8. Failure to deliver enterprise service offerings may adversely
affect our business.
By expanding our enterprise service offerings through thegrowth
of Vodafone Global Enterprise, the acquisitions of CWW
andTelstraClear, and the establishment of cloud, hosting and
international carrier services, the Group increasingly provides
fixed and mobile communication services to organisations that may
provide vital national services. These organisations rely on our
networks and systems 24 hours a day, 365 days a year to deliver
their products and services to their customers. A failure to build
and maintain our infrastructure to the required levels of
resilience for enterprise customers and to deliver to our
contracted service level agreements may result in a costly business
impact and cause serious damage to our reputation.
9. We depend on a number of key suppliers to operate our
business.
We depend on a limited number of suppliers for
strategicallyimportant network and IT infrastructure and associated
supportservices to operate and upgrade our networks and provide key
services to our customers. Our operations could be adversely
impacted by the failure of a key supplier who could no longer
support our existing infrastructure, by a key supplier commercially
exploiting their position in a product area following the corporate
failures of/the withdrawal from a specific market by competitors,
or by major suppliers significantly increasing prices on long-term
programmes where the cost or technical feasibility of switching
supplier becomes a significant barrier.
10. We may not satisfactorily resolve major tax disputes.
We operate in many jurisdictions around the world and from time
to time have disputes on the amount of tax due. In particular, in
spite of the positive India Supreme Court decision relating to an
ongoing tax case in India, the Indian government has introduced
retrospective tax legislation which would in effect overturn the
court's decision and has raised challenges around the pricing of
capital transactions.Such or similar types of action in other
jurisdictions, including changes in local or international tax
rules or new challenges by tax authorities, may expose us to
significant additional tax liabilities which would affect the
results of the business.
11. Changes in assumptions underlying the carrying value of
certain Group assets could result in impairment.
Due to the substantial carrying value of goodwill
underInternational Financial Reporting Standards, revisions to
theassumptions used in assessing its recoverability, including
discount rates, estimated future cash flows or anticipated changes
in operations, could lead to the impairment of certain Group
assets. While impairment does not impact reported cash flows, it
does result in a non-cash charge in the consolidated income
statement and thus no assurance can be given that any future
impairments would not affect our reported distributable reserves
and, therefore, our ability to make dividend distributions to our
shareholders or repurchase our shares.
RELATED PARTY TRANSACTIONS
The Group has a number of related parties including joint
ventures (refer to note 14), associates (refer to note 15), pension
schemes (refer to note A5 for the Group's contributions), directors
and Executive Committee members(refer to note 4 for amounts paid to
them).
Transactions with joint ventures and associates
Related party transactions with the Group's joint ventures and
associates primarily comprise fees for the use of products and
services including network airtime and access charges, and cash
pooling arrangements.
No related party transactions have been entered into during the
year which might reasonably affect any decisions made by the users
of these consolidated financial statements except as disclosed
below. Transactions between the Company and its joint ventures are
not material to the extent that they have not been eliminated
through proportionate consolidation or disclosed below.
2013 2012 2011
GBPm GBPm GBPm
------------------------------------------------- ------ ------ ------
Sales of goods and services to associates 241 195 327
Purchase of goods and services from associates 105 107 171
Purchase of goods and services from joint
ventures 329 207 206
Net interest receivable from joint ventures(1) (14) (7) (14)
------------------------------------------------- ------ ------ ------
Trade balances owed:
by associates 21 15 52
to associates 19 18 23
by joint ventures 119 9 27
to joint ventures 27 89 67
Other balances owed by joint ventures(1) 337 365 176
------------------------------------------------- ------ ------ ------
Note:
1 Amounts arise primarily through Vodafone Italy, Vodafone
Hutchison Australia, Indus Towers and Cornerstone, and represent
amounts not eliminated on consolidation. Interest is paid in line
with market rates.
Amounts owed by and owed to associates are disclosed within
notes 17 and 18. Dividends received from associates are disclosed
in the consolidated statement of cash flows.
Transactions with directors other than compensation
During the three years ended 31 March 2013, and as of 20 May
2013, neither any director nor any other executive officer, nor any
associate of any director or any other executive officer, was
indebted to the Company.
During the three years ended 31 March 2013, and as of 20 May
2013, the Company has not been a party to any other material
transaction, or proposed transactions, in which any member of the
key management personnel (including directors, any other executive
officer, senior manager, any spouse or relative of any of the
foregoing or any relative of such spouse) had or was to have a
direct or indirect material interest.
DIRECTORS' RESPONSIBILITY STATEMENT
As set out above, this statement is repeated here solely for the
purposes of complying with Disclosure and Transparency Rule 6.3.5.
This statement relates to and is extracted from the 2013 Annual
Report. It is not connected to the extracted information presented
in this announcement or the preliminary results announcement
released on 21 May 2013.
"The Board confirms to the best of its knowledge:
-- the consolidated financial statements, prepared in accordance
with IFRS as issued by the IASB and IFRS as adopted by the EU, give
a true and fair view of the assets, liabilities, financial position
and profit or loss of the Group; and
-- the directors' report includes a fair review of the
development and performance of the business and the position of the
Group together with a description of the principal risks and
uncertainties that it faces.
The directors are responsible for preparing the annual report in
accordance with applicable law and regulations. Having taken advice
from the Audit and Risk Committee, the Board considers the report
and accounts, taken as a whole, as fair, balanced and
understandable and that it provides the information necessary for
shareholders to assess the Company's performance, business model
and strategy.
Neither the Company nor the directors accept any liability to
any person in relation to the annual report except to the extent
that such liability could arise under English law. Accordingly, any
liability to a person who has demonstrated reliance on any untrue
or misleading statement or omission shall be determined in
accordance with section 90A and schedule 10A of the Financial
Services and Markets Act 2000.
By Order of the Board
Rosemary Martin
Company Secretary
21 May 2013"
This document contains "forward-looking statements" within the
meaning of the US Private Securities Litigation Reform Act of 1995
with respect to the Group's financial condition, results of
operations and businesses and certain of the Group's plans and
objectives. Forward-looking statements are sometimes, but not
always, identified by their use of a date in the future or such
words as "will", "anticipates", "aims", "could", "may", "should",
"expects", "believes", "intends", "plans" or "targets". By their
nature, forward-looking statements are inherently predictive,
speculative and involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results and
developments to differ materially from those expressed or implied
by these forward-looking statements. A review of the reasons why
actual results and developments may differ materially from the
expectations disclosed or implied within forward-looking statements
can be found under "Forward-looking statements" on pages 185 and
186 of the 2013 Annual Report. All subsequent written or oral
forward-looking statements attributable to the Company or any
member of the Group or any persons acting on their behalf are
expressly qualified in their entirety by the factors referred to
above. No assurances can be given that the forward-looking
statements in this document will be realised. Subject to compliance
with applicable law and regulations, Vodafone does not intend to
update these forward-looking statements and does not undertake any
obligation to do so.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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