Vodafone 2002 Annual Report Download - page 44

Vodafone Group Plc Annual Report & Accounts and Form 20-F Operating and Financial Review and Prospects42
Operating and Financial Review and Prospects continued
Translated into
Pounds per US dollars per
ordinary share ordinary share
Year ended
March 31 Interim Final Total Interim Final Total
1998 0.005 0.006 0.011 0.009 0.009 0.018
1999 0.013* – 0.013 0.020* – 0.020
2000 0.006 0.007 0.013 0.010 0.010 0.020
2001 0.007 0.007 0.014 0.010 0.010 0.020
2002 0.007 0.008** 0.015 0.010 *** ***
* In 1999 there were two interim dividends, the first of £0.006 per
ordinary share and the second of £0.007 per ordinary share. There was
no final dividend.
** The final dividend for the year was proposed on 27 May 2002 payable
on 9 August 2002 to holders of record as of 7 June 2002.
*** The final dividend will be payable in US dollars to ADS holders under the
terms of the deposit agreement.
The Company has historically paid, and its directors expect that the Company will
continue to pay, dividends semi-annually, with the regular interim dividend with
respect to the first six months of the Company’s financial year payable in
February and the regular final dividend with respect to the second six months
of the Company’s financial year payable in August.
In considering the level of dividend to declare and recommend, the Board
takes account of the outlook for earnings growth, operating cash flow generation,
capital expenditure requirements and the possibilities for debt reductions
and share buy-backs. In the current circumstances, the Board believes a
5% increase in the dividend to be appropriate and accordingly it has proposed
a final dividend of 0.7497 pence per share, bringing the total for the year to
1.4721 pence per share.
Inflation
Inflation has not had a significant effect on the Group’s results of operations and
financial condition during the three years ended 31 March 2002.
Exchange rate information
Due to the wide diversity of the Group’s foreign currency investments,
movements in exchange rates had no material impact on the total Group
operating (loss)/profit, before goodwill amortisation, in any of the three years
ended 31 March 2002. The effect of translating the results of overseas
subsidiaries, joint ventures and associated undertakings at exchange rates
prevailing in the year ended 31 March 2001, would have been to increase total
Group operating profit, before goodwill amortisation and exceptional items, for
the year ended 31 March 2002 by £52 million.
Retranslating the goodwill amortisation charge for the year ended 31 March
2002 at the average exchange rates applicable for the year ended 31 March
2001 would have increased the charge by £15 million to £13,485 million, with a
corresponding increase in total Group operating loss.
Cash dividends, if any, will be paid by the Company in respect of ordinary shares
in pounds sterling, and exchange rate fluctuations will affect the US dollar
amounts received by holders of ADSs on conversion by the ADS Depositary of all
such cash dividends paid. Moreover, fluctuations in the exchange rate between
pounds sterling and the US dollar will affect the US dollar equivalent of the pound
sterling price of the ordinary shares on The London Stock Exchange and, as a
result, will affect the market price of the ADSs in the United States.
The following table sets out, for the periods and dates indicated, the period end,
average, high and low Noon Buying Rates for pounds sterling expressed in US
dollars per £1.00, to two decimal places.
Years ended 31 March Period end Average(1) High Low
1998 1.68 1.65 1.70 1.58
1999 1.60 1.65 1.72 1.60
2000 1.59 1.61 1.68 1.55
2001 1.42 1.47 1.60 1.40
2002 1.42 1.43 1.48 1.37
Month High Low
December 2001 1.46 1.42
January 2002 1.45 1.41
February 2002 1.43 1.41
March 2002 1.43 1.41
April 2002 1.46 1.43
May 2002(2) 1.47 1.45
Notes:
(1) The average of the Noon Buying Rates on the last day of each full month
during the period.
(2) In respect of May 2002, for the period from 1 May to 24 May 2002,
inclusive. The Noon Buying Rate was $1.4577 per £1.00 on 24 May 2002.
The following table sets out the average exchange rates of other principal
currencies of the Group.
Year to 31 March Change
Currency 2002 2001 %
Euro 1.63 1.63 –
Japanese yen 179.4 163.8 9.5
Accounting principles
The Consolidated Financial Statements in respect of the year ended 31 March
2002 comply with FRS 19, “Deferred tax”, issued by the Accounting Standards
Board in the United Kingdom in December 2000 and first effective for the Group
in the year ended 31 March 2002. Deferred taxation is now stated on a full
liability basis in accordance with FRS 19 and comparative financial information
has been restated as necessary. The impact of adopting FRS 19 was to increase
the tax charge for the year ended 31 March 2002 and the year ended 31 March
2001 by £521 million and £136 million, respectively, and to reduce the tax
charge for the year ended 31 March 2000 by £53 million. In accordance with