Vodafone 2007 Annual Report Download - page 115

Vodafone Group Plc Annual Report 2007 113
Financials
13. Investments in joint ventures
Principal joint ventures
Unless otherwise stated, the Company’s principal joint ventures all have share capital consisting solely of ordinary shares, which are indirectly held, and the
country of incorporation or registration is also their principal place of operation. They have the same year end date as the Company, unless otherwise stated,
and have been included in the Consolidated Financial Statements. Summarised financial information of joint ventures is disclosed in note 37. On 11 February,
the Group announced its intention to acquire a controlling interest in Hutchison Essar Limited (“Hutchison Essar”) and to grant an option to a Bharti Group
company to buy its 5.60% direct interest in Bharti. As a result of the terms of this agreement, the Group considers that it does not have the power to exercise
joint control and, consequently, has transferred its investment in Bharti Airtel Limited to Other Investments.
Country of
incorporation or Percentage(1)
Name Principal activity registration shareholdings
Polkomtel S.A.(3) Mobile network operator Poland 19.6
Safaricom Limited(4) Mobile network operator Kenya 35.0(2)
Vodacom Group (Pty) Limited Holding company South Africa 50.0
Vodafone Fiji Limited Mobile network operator Fiji 49.0(2)
Vodafone Omnitel N.V.(5) Mobile network operator Netherlands 76.9(6)
Notes:
(1) Rounded to nearest tenth of one percent.
(2) The Group holds substantive participating rights which provide it with a veto over the significant financial and operating policies of these entities and which ensure it is able to exercise joint control over
these entities with the respective majority shareholder.
(3) Latest statutory financial statements were drawn up to 31 December 2006. Accounts are drawn up to 31 March 2007 for inclusion in the Consolidated Financial Statements.
(4) The Group also holds two non-voting shares.
(5) The principal place of operation of Vodafone Omnitel N.V. is Italy.
(6) The Group considered the existence of substantive participating rights held by the minority shareholder provide that shareholder with a veto right over the significant financial and operating policies of
Vodafone Omnitel N.V., and determined that, as a result of these rights, the Group does not have control over the financial and operating policies of Vodafone Omnitel N.V., despite the Group’s 76.9%
ownership interest.
Effect of proportionate consolidation of joint ventures
The following presents, on a condensed basis, the effect of including joint ventures in the Consolidated Financial Statements using proportionate consolidation:
2007 2006 2005
£m £m £m
Revenue 6,232 5,756 5,423
Cost of sales (3,077) (2,832) (2,805)
Gross profit 3,155 2,924 2,618
Selling, distribution and administrative expenses (1,121) (885) (619)
Impairment losses (4,900) (3,600) –
Operating (loss)/profit (2,866) (1,561) 1,999
Net financing costs 46 27 64
(Loss)/profit before tax (2,820) (1,534) 2,063
Income tax expense (614) (711) (782)
(Loss)/profit for the financial year (3,434) (2,245) 1,281
2007 2006
£m £m
Intangible assets 14,137 20,985
Property, plant and equipment 2,166 2,506
Other non-current assets 291 27
Non-current assets 16,594 23,518
Cash and cash equivalents 47 87
Other current assets 1,015 1,148
Current assets 1,062 1,235
Total assets 17,656 24,753
Total equity shareholders’ funds 17,754 23,402
Minority interests 815
Total equity 17,762 23,417
Non-current liabilities 333 535
Current liabilities (439) 801
Total liabilities (106) 1,336
Total equity and liabilities 17,656 24,753