Vodafone 2004 Annual Report Download - page 125

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Fixed asset investments
Under US GAAP, SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities”, requires certain disclosures to be made of the Group’s fixed
asset investments, all of which are classified as available for sale.
UK GAAP net book
value(1) Unrealised gains Unrealised losses Fair value
£m £m £m £m
31 March 2004 1,049 241 – 1,290
31 March 2003 1,127 7 (144) 990
Note:
(1) Determined using the weighted average cost basis.
During the year, the Group realised proceeds of £123 million (2003: £575 million; 2002: £319 million), realising gross gains on sale of £4 million and gross
losses on sale of £34 million (2003: £3 million; 2002: £9 million).
Stock based compensation
For the purposes of US GAAP reporting, the Group accounts for stock based compensation in accordance with APB 25. The Group also adopts the disclosure
only provisions of SFAS No. 148.
The Company currently uses a number of share plans to grant options and share awards to its directors and employees described in Note 22.
Movements in ordinary share options and ADS options outstanding during the years ended 31 March 2004, 2003 and 2002 are summarised as follows:
Number of ADS options Number of ordinary share options
2004 2003 2002 2004 2003 2002
(millions) (millions) (millions) (millions) (millions) (millions)
At 1 April 21.0 43.8 55.1 1,110.9 488.3 211.0
Granted 2.2 6.5 4.1 192.0 700.9 332.8
Exercised (4.6) (2.7) (7.4) (36.6) (9.7) (13.2)
Forfeited (0.9) (26.6) (8.0) (82.3) (68.6) (42.3)
At 31 March 17.7 21.0 43.8 1,184.0 1,110.9 488.3
Exercisable at 31 March 9.2 11.7 39.7 107.0 90.7 82.1
Weighted average exercise price:
Granted during year $20.34 $13.71 $29.31 £1.19 £0.99 £1.56
Exercised during year $15.03 $10.00 $14.14 £1.00 £0.82 £0.77
Forfeited during year $34.17 $33.61 $41.00 £1.34 £1.46 £1.79
Outstanding at 31 March $22.97 $22.32 $29.74 £1.16 £1.23 £1.71
Exercisable at 31 March $28.29 $25.20 $29.64 £2.13 £1.45 £1.33
SFAS No.148 establishes a fair value based method of accounting for stock based compensation plans and encourages the recognition of the compensation
cost on this basis in the income statement. Where the cost is not recognised on the basis of fair value, the pro forma effect of the valuation method on net loss
must be disclosed. The disclosure only provisions of SFAS No.148 have been adopted, as follows:
ADS options Ordinary share options
2004 2003 2002 2004 2003 2002
Weighted average fair value $5.92 $4.49 $8.24 £0.37 £0.28 £0.56
Weighted average assumptions:
Volatility 39.19% 34.83% 36.02% 37.93% 34.82% 36.07%
Expected dividend yield 0.82% 0.62% 0.58% 0.81% 0.63% 0.57%
Risk-free interest rate 3.82% 5.02% 5.37% 3.75% 4.97% 5.45%
Expected option lives (years) 3.5 3.5 3.5 3.4 3.5 3.5
Annual Report 2004 Vodafone Group Plc
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