Annual Report Accounts 2000

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Vodafone AirTouch Plc

Annual Report & Accounts
For the year ended 31 March 2000
Picture of
Jeffrey Dietel
to be supplied
Annual Report & Accounts for the year ended 31 March 2000
Vodafone AirTouch Plc Annual Report & Accounts for the year ended 31 March 2000
our vision
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Vodafone AirTouch Plc Annual Report & Accounts for the year ended 31 March 2000 1
Our vision is to be the world’s leading

wireless telecommunications and information
provider, bringing more services and more
value to more customers than any other.
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2 Vodafone AirTouch Plc Annual Report & Accounts for the year ended 31 March 2000
Contents
Financial Highlights 3
Business Review 4
Financial Review 10
Directors’ Report 15
Corporate Governance 18
Remuneration Report of the Board 20
Statement of Directors’ Responsibilities 27
Report of the Auditors 27
Consolidated Profit and Loss Account 28
Consolidated Balance Sheet 29
Consolidated Cash Flow 30
Consolidated Statement of Total Recognised Gains and Losses 31
Movement in Equity Shareholders’ Funds 31
Statement of Accounting Policies 32
Notes to the Consolidated Financial Statements 34
Company Balance Sheet 53
Notes to the Company Balance Sheet 54
Subsidiary Undertakings 56
Joint Ventures, Associated Undertakings and Investments 57
United States Accounting Principles 58
Unaudited Pro Forma Financial Information 60
This publication includes the Business and Financial Reviews, the Directors’ Report, the Corporate Governance Statement, the
Remuneration Report, the Financial Statements and the Report of the Auditors for the year ended 31 March 2000. An interview with
the Chief Executive and the Chairman’s Statement are contained in a separate report entitled Annual Review and Summary Financial
Statement 2000.
This publication and the Annual Review and Summary Financial Statement 2000 comprise the full Annual Report and Accounts of
Vodafone AirTouch Plc for the year ended 31 March 2000, prepared in accordance with the Companies Act 1985.
Statements in this document relating to future status or circumstances, including statements regarding future performance, costs, revenues, cash flows, earnings, divestments, growth, market
share and other trend projections and the synergistic benefits of transactions, are forward-looking statements. These statements may generally, but not always, be identified by the use of
words such as “anticipates”, “should”, “expects”, “estimates”, “believes” or similar expressions. By their nature, forward-looking statements involve risk and uncertainty because they relate
to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-
looking statements due to many factors, many of which are outside Vodafone AirTouch’s control, including the ability to obtain regulatory approvals (including new licences) without onerous
conditions, the risk of negative impacts on Vodafone AirTouch’s credit ratings, the potential costs, including tax costs, of divesting Orange plc and Mannesmann AG industrial businesses,
general economic conditions, competition, technical difficulties and the need for increased capital expenditure (such as that resulting from increased demand for usage, new business
opportunities, new licences and deployment of new technologies) and the ability to release benefits from entering into partnerships for developing data and internet services.
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Financial Highlights
Year ended Year ended Percentage
31 March 31 March increase
2000 1999 %
(1)(2)(3)
Pro forma basis
Proportionate customers at year end 39,139,000 25,421,000 54
Proportionate turnover £12,569m £9,185m 37
Proportionate EBITDA
(4)
– before exceptional items £3,948m £3,046m 30
Proportionate total Group operating profit

(4)
– before goodwill and exceptional items £2,708m £2,055m 32
(5)
Non-proportionate profit on ordinary activities before taxation
(4)
– before goodwill and exceptional items £2,474m £1,800m 37
(1)(2)
Statutory basis
Total Group operating profit

(4)
– before goodwill and exceptional items £2,538m £972m 161
Profit on ordinary activities before taxation

(4)
– before goodwill and exceptional items £2,154m £878m 145
(6)
Basic earnings per share
(4)
– before goodwill and exceptional items 4.71p 3.77p 25
– after goodwill and exceptional items 1.80p 4.12p
(6)
Dividends per share 1.335p 1.272p 5
(1) The acquisition of Mannesmann AG received clearance from the European Commission on 12 April 2000. Accordingly, the results of Mannesmann AG are not included in either
the pro forma or statutory profit and loss accounts, or customer information, for the year ended 31 March 2000.
(2) The unaudited pro forma profit and loss accounts and customer information are calculated on the basis that the merger with AirTouch Communications, Inc. took place on 1 April in
each year presented. The audited statutory financial information is calculated on the basis required by accounting standards and includes the results of AirTouch Communications,
Inc. from 30 June 1999, the date of closure of the merger.
(3) Pro forma proportionate customer and financial information excludes E-Plus Mobilfunk GmbH.
(4) Exceptional items comprise the profit on disposal of fixed asset investments, reorganisation costs following the merger with AirTouch Communications, Inc. and exceptional finance
costs incurred in restructuring the Group’s borrowing facilities as a result of the Mannesmann acquisition.
(5) Non-proportionate pro forma profit on ordinary activities before taxation, goodwill and exceptional items is analysed on page 61.
(6) Prior year earnings and dividends per share have been adjusted to give effect to the capitalisation issue on 30 September 1999.
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Business Review
Europe, Middle East & Africa

Following the AirTouch merger on 30 June 1999, the Group’s listed
• Pro forma proportionate customers increased by 71% to subsidiaries include Telecel and Europolitan. These are in addition to
15.6 million. Panafon and Libertel, the latter being listed on the Amsterdam Stock
• Pro forma total Group operating profit before goodwill, Exchange in June 1999. The market capitalisation of these companies
increased by 34% to £1,321m. at the end of the year was as follows:
• Group interest in E-Plus disposed of at a profit of £939m.

Market capitalisation
• Commercial service launched in Hungary and increased Listed in 31 March 2000
ownership interests in Italy, Poland and Romania.
Europolitan Stockholm £5.5bn
• Pro forma proportionate mobile customers increased to over
28.9 million customers (excluding Orange) through the Libertel Amsterdam £4.2bn
Mannesmann acquisition.
Panafon Athens £4.7bn
• In May 2000, creation of new multi-access Internet portal
Telecel Lisbon £2.6bn
company for Europe, operating under the VIZZAVI global
brand name.
On 30 November 1999, the Group’s 50.1% subsidiary, Vodafone
Hungary, commenced commercial service as the third cellular
At 31 March 2000, the EMEA region had network operations in sixteen
network operator in that country.
countries, operating through seven subsidiary network companies and
nine associated undertakings. Pro forma customer and profit growth On 4 February 2000, the Group completed the sale of its 17.24%
during the year, which exclude any impact from the acquisition of interest in E-Plus Mobilfunk GmbH in accordance with an undertaking
Mannesmann AG, for which European Commission clearance was provided to the European Commission as part of the AirTouch merger,
received on 12 April 2000, were strong across the region. giving a profit on disposal of £939m.
EMEA’s proportionate customers increased to 15,662,000 at 31 March On 13 March 2000, Airtel Móvil in Spain was the first EMEA mobile
2000, which represents pro forma growth for the year of 6,492,000 operator to be awarded a third generation (UMTS) licence.
customers (71%). Pro forma proportionate turnover increased by 38% The company is expected to build out its network during 2001,
to £4,437m for the year, whilst pro forma proportionate EBITDA with service launch anticipated in late 2001, subject to infrastructure
increased from £1,127m to £1,492m, growth of 32%. and handset availability.
Pro forma consolidated turnover for the year to 31 March 2000 grew
by 26% from £1,617m to £2,030m, with EMEA’s contribution to pro
forma total Group operating profit, before goodwill, increasing by 34%
Acquisition of Mannesmann
to £1,321m. Following the European Commission’s approval of the acquisition of
Mannesmann AG on 12 April 2000, the Group’s effective interest in
During the year, the Group increased its shareholdings in several of its Mannesmann Mobilfunk and Omnitel Pronto Italia increased to
associates. In August 1999, the Group exercised an option to increase approximately 99.1% and 76.0%, respectively. This resulted in an
its stake in Omnitel Pronto Italia, Italy’s second GSM network, from approximate 13.3 million increase in the region’s total pro forma
17.8% to 21.6% and, in November 1999, the Group increased its stake proportionate customers to over 28.9 million (excluding Mannesmann’s
in MobiFon, Romania’s third GSM operator, from 10.0% to 20.1%. interest in Orange), based on total venture customers of 51.1 million
In December and January, the Group exercised its pre-emption rights at 31 March 2000.
to increase its shareholding in Polkomtel, Poland’s second GSM
operator, from 19.25% to 19.61%. Discussions are underway to achieve the rapid integration of the former
Mannesmann businesses into the existing Vodafone AirTouch portfolio.
With the further consolidation of the distribution chain in a number of This will ensure that initiatives to realise the significant potential
EMEA markets, certain subsidiaries also made strategic acquisitions synergy benefits, both on cost (in areas such as infrastructure and
during the year. In Greece, Panafon acquired a 25% shareholding handset procurement) and revenues (through improved product
in a service provider, Mobitel, subject to regulatory approvals and, offerings across the enlarged European footprint), will start immediately.
in Sweden, Europolitan acquired a dealer chain, Ocom.
In addition to the increased shareholdings in mobile operations, the
Growth in prepaid services has continued and, at 31 March 2000, Group also acquired Mannesmann’s interests in the following fixed line
over 54% of the region’s proportionate customers were connected to businesses – Arcor in Germany, Infostrada in Italy, Cegetel in France
prepaid tariffs, compared with 30% a year earlier. As a result of the and tele.ring in Austria. tele.ring also plans to launch a mobile service
change in mix towards prepaid, and the general trend of lower tariffs in Austria in June 2000, following its successful bid for a new licence,
across the region, ARPU (at constant exchange rates) declined from and will be the fourth mobile operator in the Austrian market.
£354 last year to £318 in the year to 31 March 2000. Average
network churn in the region remained low during the year at 20.5%, Vivendi has indicated its interest in purchasing the Group’s entire 15%
calculated on a pro forma basis. shareholding in Cegetel’s capital stock.
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Business Review continued
VIZZAVI joint venture The success of PAYT is reflected in the average revenue per customer
(ARPU) for the twelve months ended 31 March 2000 which, at £175
On 17 May 2000, the Group and VivendiNet (a joint venture between
(£199 before trade discounts), was up by 10% from £159 (£178 before
Vivendi and Canal+) announced that an agreement had been signed for
trade discounts) at 31 March 1999. PAYT cost to connect for the
the creation of a new joint venture company, VIZZAVI, to establish a
twelve months ended 31 March 2000 was held at £50 in a highly
multi-access Internet portal for Europe. The Group and VivendiNet will
competitive market-place, compared with £43 in the twelve months to
both have a 50% shareholding in VIZZAVI and anticipate making an
31 March 1999.
Initial Public Offering within two years.
The new venture, operating under the VIZZAVI global brand name, will Following a 55,000 reduction in the contract customer base in the first
become the default home page for the Group’s, Vivendi’s and Canal+’s half of the year, revised tariffs and other changes to commercial policy
national operating companies throughout Europe, with access to more resulted in a net second half increase of 38,000, giving a closing
than 70 million customers. The multi-access Internet portal will provide contract customer base of 3,712,000. Cost to connect rose to £94 for
services to customers in a consistent format across different platforms, the 12 months ended 31 March 2000 from £88 for the comparable
including mobile handsets, personal computers, televisions and period, reflecting competitive pressures. ARPU was stable at £421
personal digital assistants. VIZZAVI will have its own technology team to (£554 before trade discounts) for the twelve months ended 31 March
develop the multi-access interfaces, working in close co-operation with 2000 compared to £423 (£553 before trade discounts) at 31 March
the Group’s global mobile platform technology team to ensure a 1999. This reflects tariff reductions being balanced by increased usage.
seamless global service.
Overall average revenue per customer (both contract and PAYT) has
declined from £378 last year to £305 this year due to the effect of the
United Kingdom increase in the PAYT base.
Network churn has fallen in the six months ended 31 March 2000 to
• Market leader with 8.8 million customers and market share 28.3% from 33.2% in the previous six months, reflecting management
of 32%. actions taken in the second half of the year. Overall churn in the 12
• 3.2 million net new customers connected in the year. months ended 31 March 2000 rose to 29.8% from 26.0 % the
previous year.
• UK Group operating profit before goodwill increased to
£706m, up 10%. Vodafone continues to have the widest roaming capability of the UK
• Substantial growth in value added services, with 141 million operators, with agreements in 107 countries and across 234 networks,
messages being sent in March 2000 using the Short Message giving over 170 million customers access to its network. Roaming
Service (SMS). revenues, both from Vodafone customers using their phones overseas
• Successful launch of wireless portal in December 1999. and visitors using the UK network, represented 24% of contract digital
outgoing airtime and access revenues, compared with 23% last year.
• Largest available UK 3G licence acquired in April 2000.
Vodafone continues to invest to improve network quality. £523m was
spent on capital expenditure in the year, enabling the company to
The year saw continued rapid expansion in the UK mobile phone sustain, and in certain areas improve, overall network quality through
market, which grew by 12.4 million new customers compared with a period of significantly increasing demand. During the year over
5.8 million the previous year. There are now over 27 million mobile 1,600 base stations were installed, with 6,700 in operation at
phone customers in the UK and market penetration is 46% compared 31 March 2000.
with 26% at the beginning of the financial year.
Vodafone has maintained its clear leadership in this highly competitive
market-place with a record 3,216,000 net new customers, closing the
year with a customer base of 8,791,000 and a market share of 32%,
Distribution business
5% or 1.4 million customers ahead of its nearest competitor. The Group’s distribution companies continued to drive the majority
of Vodafone’s growth, achieving net growth, excluding service provider
Turnover in the UK increased by 39% from £2,088m to £2,901m. acquisitions, of 198,000 contract customers and two thirds of the
Operating profit, before goodwill, grew by £62m to £706m, an increase growth in PAYT. By the end of March 2000, the Group’s distribution
of 10%, whilst EBITDA increased by 14% to £934m. This growth in companies accounted for 63% of the Vodafone contract customer
profits is after connection costs on record customer growth and base, up from 48% at the end of March 1999.
continued tariff cuts.
The share of the contract customer base connected through the
Group’s distribution businesses was boosted by the acquisition of
Network business
MC Mobile Services, UniqueAir, Scottish Telecommunications (Services)
Prepaid products have driven the growth in the UK mobile market and 3@ Telecom during the year, for an aggregate cost of £84m.
during the year. Vodafone’s Pay As You Talk (PAYT) product has
operated very successfully in this market, achieving 3,233,000 net Market leadership on PAYT has been sustained by continuing to
connections in the year ended 31 March 2000, compared with increase availability through a wide range of retailers. Throughout the
1,648,000 net connections last year. PAYT customers totalled period, Vodafone has continued to work with traditional independent
5,079,000 at 31 March 2000 and represented almost 58% of service providers and dealers to balance growth through these channels
Vodafone’s UK customer base. with that coming from new channels on PAYT.
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Vodafone Retail has shown continued success and grew to 272 shops, Proportionate customers for the United States and Asia Pacific region
with average connections per shop up by 57%. Vodafone Corporate increased by 38%, on a pro forma basis, during the year ended
increased its market share in the overall corporate market. 31 March 2000, to 14,686,000. Pro forma proportionate turnover
increased from £3,807m for the year ended 31 March 1999 to
An option to dispose of the Group’s 20% interest in the Martin Dawes
£5,187m, an increase of 36%, and pro forma proportionate EBITDA,
service provider business was exercised in the year, resulting in a profit
before exceptional items, increased by 38% to £1,522m.
on disposal of £11m. The high level of churn through this service
provider, following the disposal of our shareholding, was adequately Pro forma turnover in the twelve months to 31 March 2000 increased
compensated for by the strong performance of the wholly-owned by 19% to £3,956m, with pro forma total Group operating profit
distribution businesses. increasing by 45% to £915m, before goodwill and exceptional
reorganisation costs of £30m incurred in the US following the merger
During the year, Vodafone Paging improved its share of the highly
with AirTouch. The Group is seeing clear benefits from this expenditure,
competitive subscription paging market through securing several major
which is generating synergies in line with the plan developed before
corporate contracts. The new paging services recently launched have
merger completion.
positioned the company to take the lead in the introduction of two-way
messaging services into the traditional paging market.
US Cellular and PCS operations

Value Added and Data Services business The Group’s mobile operations in the US increased total proportionate
customers on a pro forma basis by 1,873,000 to 10,553,000 at the
Vodafone Value Added and Data Services saw strong growth in the
year end, an increase of 22%. This increase includes over 402,000
Short Message Service (SMS) and continued to lead the UK market in
customers added through the acquisition of CommNet and 214,000 net
the commercial development of data and value added services.
customers connected by the CMT and PCS PrimeCo joint ventures.
At the end of March, 43% of Vodafone’s customers made use of SMS,
compared with 15% at the same time last year. The average number Strong growth in the number of digital customers resulted from the
of messages sent by each customer also increased with a total of 141 continued rollout of the US digital network. 4,196,000 proportionate
million short messages being carried on the network in March 2000, customers were connected to the digital network at 31 March 2000,
compared with 15 million in March 1999. representing 40% of the customer base at the end of the year,
compared with 22% at 31 March 1999. The migration of customers
from analogue to digital networks has been stimulated by incentives,
an extensive advertising campaign and a new range of tariffs.
Future services On average, customers connected to the digital network generate
The UK’s multi-media portal was launched in December 1999 and, higher revenues and a lower level of churn than those connected
by the end of the financial year, had over 60,000 registered customers. to the analogue network.
Additional services are being progressively launched and, by the end
In the twelve months to 31 March 2000, average cost to connect
of May, the UK portal is expected to have over 90,000 customers.
decreased to £141 from £145 (at constant exchange rates) for the
Migration to the new global service delivery platform and Internet
comparable period. The decline in the average cost to connect during
brand is anticipated to take place in July 2000.
the year has been achieved despite the growth in the digital customer
In April, Vodafone was successful in acquiring the largest UK 3G licence base, where handset prices are considerably higher than those for
available to an existing operator, for £5.964 billion. This gives the analogue customers. This, together with the costs incurred in migrating
maximum spectrum available to enable the full development of video, existing customers from analogue to digital, has affected the level of
picture messaging, e-commerce and other data and mobile multi-media profitability.
services. For the first time, Vodafone will have more capacity for its
ARPU for the twelve months to 31 March 2000 on subsidiary US
products and services than any of its UK competitors. In parallel with
networks was £293, 7% lower than the same period last year.
the development of the 3G network, Vodafone is testing and rolling
However, in recent months, the average monthly revenue per customer
out GPRS, which is expected to be in commercial service during
has improved with some markets beginning to see an increase in
the last quarter of the year ending March 2001.
ARPU, as higher usage, and the benefits of customer migration to the
digital network, offset the effects of tariff reductions. Average monthly
United States & Asia Pacific usage per customer increased during the year to 141 minutes,
compared with 122 minutes for the comparable period.
• Proportionate customers at year end of 14.7 million,
a pro forma increase of 38%. Churn on wholly owned US networks during the year ended 31 March
2000 was 29% compared with 27% in the prior year. The effects of
• Pro forma total Group operating profit of £915m before goodwill new retention initiatives, together with the increased number of
and exceptionals, an increase of 45%. customers on the digital network, are beginning to reduce the level of
• Verizon Wireless created on 3 April 2000. churn in US operations.
• Ownership interests increased to over 20% in each of nine Positive measures have also been taken to reduce reliance on
regional Japanese cellular networks. independent retailers to support customer growth. The opening of
new retail shops has continued, improving the distribution of cellular
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services in the US market. During the year, the total number of retail Japan
outlets increased by 222 stores to 316 at 31 March 2000. Customers
During the year, the Group increased its equity interests to more than
connected through wholly owned retail operations are less expensive to
20% in each of Japan’s nine regional mobile telecommunications
connect and, at the present time, churn is at a significantly lower rate.
companies, becoming the second largest shareholder, behind Japan
On 6 January 2000, the outstanding share capital of CommNet was Telecom, in each venture. The total consideration paid for the
acquired. CommNet operates wireless services in the mid-west of the increased ownership interests in the three Digital Phone and six Digital
United States and had over 402,000 customers at acquisition. Tu-Ka companies was £342m. At 31 March 2000, the Group’s
proportionate customers amounted to 1,907,000 with overall customer
On 15 March 2000, AirTouch pre-launched the Group’s global platform growth in ventures in which the Group has an interest being 31% in
for mobile data and Internet services in Michigan, Ohio, Oregon and the year.
Washington. By mid-May, 81,000 customers were connected to the
service, with new activations being made at a rate of between 800 and The nationwide roll-out of the Digital Phone Group’s “J-Phone” brand
1,200 per day. to each of the six former Digital Tu-Ka companies has been very
successful. This will increase the ability of the renamed J-Phone
The US paging business had 3.5 million customers at 31 March 2000 companies to compete in the Japanese mobile telecommunications
and continued to trade profitably during the year. market.
“SkyWalker”, the J-Phone short message service, is proving to be
Bell Atlantic joint venture very popular and is currently used by as many as 80% of J-Phone
On 3 April 2000, Verizon Wireless was created by the combination of customers in the Tokyo area. “J-Sky”, J-Phone’s Internet service,
Vodafone AirTouch’s and Bell Atlantic’s US cellular, PCS and paging was introduced in December 1999 and there are approximately one
assets. Further businesses will be contributed to the joint venture million customers currently connected to this service across the
following the anticipated completion of the merger between Bell Atlantic J-Phone companies.
Corp. and GTE Corp., when Verizon Wireless will rank as the market
leader in the US wireless industry, serving more than 23 million On 30 March 2000, the Group announced that, together with its
customers and covering 96 of the top 100 US markets. The Group will partners, Japan Telecom and British Telecom, it had agreed to
have a 45% shareholding in this new venture and has nominated three restructure its interests in Japan ahead of the third generation
of the seven board members and one executive officer. licence application in April 2000. The Group’s ownership interests
are substantially unchanged by the restructuring.
Verizon Wireless will have the national scale and scope to realise
revenue enhancements, cost savings and capital efficiencies. The
company will achieve cost savings through reduced roaming costs and Satellite services
increased economies of scale in transport, billing volumes, handset All major operational milestones were met for the Group’s satellite
purchases and advertising. Combining common CDMA technology services businesses in the US, Canada and Mexico in 1999, and
platforms will also yield capital efficiencies, simplified integration and commercial service has been launched throughout North America.
superior network quality. Sales of services will be accomplished through a network of agents and
Vodafone AirTouch and Bell Atlantic have announced that they are resellers, including sales channels established through Verizon Wireless.
planning an Initial Public Offering for Verizon Wireless. In March 2000, the Group launched Vodafone Globalstar in Australia,
the country’s first ever fully integrated GSM/satellite mobile service.
Australia, New Zealand and Fiji
The Group’s interests in Australia, New Zealand and Fiji increased their
proportionate customers by 726,000 to 1,795,000 at 31 March 2000,
an increase of 68%. This increase in customers has driven strong Community and Environment
growth in revenue and operating profit.
Responsibility
Vodafone Australia increased its customer base by 48% in the year
ended 31 March 2000 to 1,440,000 customers, 18% of the total Vodafone is one of the world’s largest companies by capitalisation and
Australian digital market. From April 2000, Australian customers were the Company recognises that size confers responsibility as well as
among the first in the world to access an early release of the Group’s opportunity. Modern telecommunications demand coverage and reach
global platform for mobile data and Internet services. and, as a global company, Vodafone’s duty of care extends beyond its
employees, its customers and the communities in which they live to
Strong growth continued in New Zealand and its customer base was standards of social responsibility upon which commercial relationships
473,000 at 31 March 2000, an increase of more than 290,000 depend and to the natural environment.
customers in the year. Since acquiring this operation on 30 October
1998, the customer base has grown by more than 263%. Vodafone The Company is committed to the highest ethical and environmental
Fiji, in which the Group has a 49% shareholding, increased its standards. In a rapidly growing business, now represented in every
customer base by 200% during the year, to 24,000 customers at established market of the world, the improvement of those standards is
31 March 2000. bound to be a continuous process. The year 2000 marks a step change
in approach as Vodafone, AirTouch and Mannesmann are brought
The Group is making necessary preparations to proceed with an Initial together, enabling the Group to learn from the best of each to produce
Public Offering of these interests through Vodafone Pacific and will a sustainable global strategy for all.
continue to monitor market conditions in order to assess the optimal
timing for the Offering.
VOD510 R&A 2000 pp1-9 20/6/00 10:14 am Page 8
Responsibility for the Group’s community and environmental policy Transport and retail
lies with its Executive Committee, chaired by the Chief Executive.
The year 2000 will see the production of a new Vodafone transport
Its successful implementation, therefore, is at the heart of the
policy that aims to combine significant fuel savings with cleaner vehicle
Company’s strategic vision. In the case of joint ventures and associated
operation. In addition, Vodafone is putting a specific retail environmental
undertakings, where the Group does not have operating control, the
code into effect. This will combine significant environmental
Group advises the management of its policies and actively encourages
improvements with saving money on energy and water costs, and
them to adopt policies consistent with its own, offering practical advice
seeking innovative solutions to the issue of solid waste.
wherever appropriate. The Group is determined to properly discharge its
social and environmental responsibility.
Employment and labour standards New Group headquarters building

With over 40,000 employees across the globe, it is inevitable that some Environmental Initiatives
of the Group’s employees work in countries with less well developed Construction of a new headquarters building for Vodafone AirTouch Plc
employment legislation than others. Nevertheless, the Group seeks to recently began in Newbury and the programme incorporates the
maintain high employment standards wherever it operates, and is following environmental initiatives:
building an employment and human rights code that will apply to all
• Energy saving
of the Group’s subsidiaries. Similarly, the Group’s health and safety
The buildings will incorporate a number of innovative energy saving
practice has been designed to provide the best working conditions for
features. It has been estimated that there will be a 50% reduction
all its employees throughout the world.
in energy consumption and a 50% reduction in carbon dioxide
emissions, compared with buildings currently occupied.
Community relations Maximising the use of natural light within the buildings will reduce
the demand for artificial lighting; and the new office interiors will
Those who work for the Group live in widely differing communities.
make use of innovative technology, such as controlling the use of
It is important to employees that their company contributes properly
artificial lighting, to reduce energy demands.
to local needs. Equally, the Group is intent on fostering good community
relations. To that end, the Group supports a wide range of continuing • Water savings
community programmes around the world. This is not only a matter of Water resources will be controlled by the provision of balancing
financial contribution but of real involvement by the Group and its ponds allowing the facility of recycling of grey water.
employees. The Group is increasingly using the special skills that it has
• Refrigeration and air conditioning
developed in the workforce, particularly in less developed countries,
The systems used in present buildings will be replaced with those
where mobile communications can make a real difference. At the same
that neither deplete the ozone layer nor contribute to global
time, the Group continues to have a special interest in the furthering of
warming.
sport and physical recreation and assists a range of organisations,
including the police and those caring for historic buildings. • Integrated transport plan
Vodafone is to implement a comprehensive integrated transport
plan, working with West Berkshire Council in a Transport Quality
Climate change and ozone protection Partnership to achieve its ambitious aims and objectives.
In the UK, Germany and other major markets, governments have agreed
Currently, around 83% of Vodafone employees in Newbury travel to
to make significant cuts in emissions of greenhouse gases in order to
work by car, 77% of them as drivers. The aim is to reduce the
reduce the impact of climate change. The Group is not a major polluter
proportion of drivers to between 55-60% within the next three
but, in common with all responsible energy users, has a policy to
years, by encouraging the use of public transport and other modes
reduce its emissions at least pro rata to the national commitments.
of travel.
To that end, an index of current resource use is being prepared to
provide a benchmark for the measurement of future achievement. With the buildings at maximum capacity, car parking spaces will
only be provided for approximately half of the on site staff.
In the same way, the threat to the ozone layer has precipitated
regulations throughout the world for the phasing out of halons and • Landscaping
CFCs. The Group has, for some time, more than complied with this Over 25,000 trees will be planted to help recreate former woodland
policy. During 1999, use of CFCs in all the companies the Group areas.
controls continued to be phased out, and a new strategy to phase out The planting of suitable trees and the creation of grassland areas,
halons was implemented. In parallel, a programme is being embarked scrub and ponds will also enhance the ecological interest of the
on that will ensure that, for new installations and when replacing worn site. It is hoped this will provide a low-maintenance, natural setting.
out or obsolete equipment, environmentally friendly substitutes will be No excavated material will be taken off site. It will be reused as part
used, wherever they are effective. In particular, the use of both HCFCs of the landscaping, eliminating the need for lorry traffic to and from
and HFCs will be avoided where appropriate alternatives exist. the site.
Adherence to this programme is not only a proper contribution to the
environment but, with good design, will result in significant savings in
energy use.
VOD510 R&A 2000 pp1-9 20/6/00 10:14 am Page 9
Environmental policy and management systems • Health

The Executive Committee believes that positive environmental action For some time, Vodafone AirTouch and the rest of the mobile
goes hand in hand with improving profitability. This interconnection will telephone industry has worked with the World Health Organization
be detailed in the Group environmental and social responsibility policy and its research into any possible health effects of mobile
this year, which will be delivered through a new Group management communications. In the UK, Vodafone welcomed the recent Report
system. It will draw substantially on work already done by individual of the Stewart Inquiry on Mobile Phones and Health which
companies and will encourage local initiative and testing while providing confirmed that ‘the balance of evidence to date does not suggest
a benchmark against which progress can be measured. that mobile phone technologies put the health of the general
population of the UK at risk’. Prior to the publication of the Report,
Procurement and suppliers Vodafone implemented moves to meet the EU recommendations
relating to exposure to radio frequency fields using exposure limits
In addition, the Group is undertaking a programme of research with
for the general public set by ICNIRP. The Company has committed
partners into how suppliers can best be influenced to meet the
for all its installations operated by subsidiary companies worldwide
standards of the Group. In many cases, they have already set out on
to meet these more exacting requirements.
this path but the Group believes that in partnership a great deal more
can be achieved. Whilst acknowledging that the balance of evidence does not
suggest risk, the Stewart Report advocates a precautionary
Specific concerns approach to the use of mobile phones by children. Vodafone
accepts the advice of the Stewart Report that the widespread use
In addition to these general considerations, the Group has
of mobile phones by children for non-essential calls should be
environmental concerns particular to the telecommunications industry.
discouraged. Many parents already seek to ensure that their
children exercise proper restraint in the use of electronic devices
• Waste whether computers, games or mobile telephones.
The Group policy is to reduce the production of waste at source The Stewart Report recommends that the absorption rate of radio
through partnership with suppliers, by re-using waste, wherever frequencies of each handset model be made readily available to
possible, and by recycling waste, wherever practical. consumers so that they can make informed choices. Vodafone fully
A good illustration of this policy in action is Vodafone UK’s supports the introduction of these measures and will work with
participation in the Take Back scheme for mobile telephones, a joint government and industry to determine the most effective way to
industry initiative. Launched in May 1999, its latest data shows that present this technical information to consumers.
over 50,000 handsets have been returned via consumer outlets, Vodafone has led the industry in the UK in establishing an
including all Vodafone UK retail shops. Consideration is now being electromagnetic fields (EMF) advisory unit dealing with enquiries
given to how this scheme can be extended. on this issue.
Under the Vodafone UK ‘Retired Assets Management Programme’,
5-10% of the analogue network’s radio base stations have been
dismantled and recycled with less than 2% going to landfill.
Old mobile telephone exchange equipment is being similarly
processed.
• Mast selection
The Group continues to seek means of making its network
equipment more and more unobtrusive. That commitment is
particularly strong in highly sensitive areas. This year the Group has
pioneered a mast that can be secured in a tree so that the natural
landscape is not affected. An on-going research and development
programme is providing innovative solutions to ensure that
equipment becomes ever more effective and less conspicuous; and
in the UK a specialist Environmental and Planning Team has been
developed to ensure that this issue continues to be addressed
effectively.
VOD510 R&A Fin Review p10-14 20/6/00 10:16 am Page 10
Financial Review
Profit and loss account

The statutory consolidated profit and loss account presented on Taxation
page 28, and the accompanying notes, have been prepared on the The effective rate of taxation for the year, before goodwill and disposals,
basis required by accounting standards and include the results of increased to 32.5% from 28.7% in the year ended 31 March 1999.
AirTouch Communications, Inc. from 30 June 1999, the date the The 3.8% increase in the effective tax rate is primarily the result of
merger completed. the higher tax rates attributable to the former AirTouch operations,
The consolidated profit and loss account does not include any whose results have been included for the nine month period following
adjustments arising from the creation, on 3 April 2000, of Verizon merger completion.
Wireless under a joint venture arrangement with Bell Atlantic, or the
acquisition of Mannesmann AG, for which European Commission Employees
approval was received on 12 April 2000. The Group employed approximately 40,700 people at 31 March 2000,
compared with 13,300 at last year end. This increase includes
Group turnover approximately 20,700 employees who joined the Group following the
Group turnover, including turnover from acquisitions completed in the merger with AirTouch and the completion of other acquisitions in the
year, increased from £3,360m last year to £7,873m. year. 69% of the Group’s employees work outside the United Kingdom.
Turnover from acquisitions, relating primarily to the consolidation of the
former AirTouch businesses for the nine month period since merger
completion, represented £3,375m of this increase. Turnover from
continuing operations increased by 34% from £3,360m to £4,498m, Pro forma profit and loss account
reflecting strong turnover growth in the Group’s operations in the EMEA
Due to the significance of the merger with AirTouch on the results,
and UK regions.
unaudited pro forma consolidated profit and loss accounts have been
presented for the years ended 31 March 2000 and 31 March 1999.
Total Group operating profit
Pro forma information has been calculated on the basis that the
Total Group operating profit, before goodwill and exceptional merger took place on 1 April in each year, as this provides a direct
reorganisation costs, and including the Group’s share of the operating comparison of operating performance.
profit of joint ventures and associated undertakings, was £2,538m.
This represented an increase of £1,566m compared with total Group The pro forma information is presented on pages 60 to 62.
operating profit of £972m last year. Further explanation regarding the basis of preparation of the
unaudited pro forma profit and loss accounts is included on
After goodwill amortisation charges of £1,712m, and exceptional page 60.
reorganisation costs of £30m incurred in the US following the merger
with AirTouch, total Group operating profit fell from £963m to £796m.
Pro forma Group turnover
Profit on ordinary activities before taxation increased to £1,349m from Pro forma Group turnover for the financial year increased by
£935m, primarily due to the profit on the sale of E-Plus Mobilfunk £1,869m to £8,887m, representing pro forma growth of 27%.
GmbH, organic growth from continuing operations and contributions
arising from the acquired AirTouch businesses, offset by goodwill Pro forma turnover in EMEA increased by 26% to £2,030m, with
amortisation. strong turnover growth across the region as pro forma customers in
controlled businesses increased by 52% during the year. The growth in
A more detailed commentary on the results for the year is included in prepaid services has been an important feature of this result, with over
the discussion of the pro forma profit and loss accounts. 54% of the region’s proportionate customers now being connected to
prepaid products.
Profit on disposal of fixed asset investments
Turnover in the UK increased by 39% to £2,901m, reflecting strong
The profit on disposal of fixed asset investments of £954m primarily
PAYT customer growth, the success of data services and increased
comprises a profit of £939m on the disposal of the Group’s 17.24%
minutes’ usage, offset by the impact of tariff reductions.
shareholding in E-Plus. This disposal was a condition to the European
Commission’s approval of the merger with AirTouch. The remaining Customer numbers in the Group’s subsidiaries in the US, Australia and
profit on disposal includes the sale of the Group’s 20% interest in a New Zealand increased by 26% to almost 12,000,000 customers at
UK service provider business, Martin Dawes Telecommunications 31 March 2000, resulting in a £643m increase in pro forma turnover
Limited, and the disposal of the Group’s 50% shareholding in Comfone for the United States & Asia Pacific region to £3,956m.
AG in Switzerland.
Total pro forma proportionate turnover, which reflects the Group’s
ownership interests in its worldwide operations, increased during the
Interest
year by 37% to £12,569m. The Group’s total proportionate customers
Net interest costs in respect of the Group’s net borrowings increased by increased to 39,139,000 at 31 March 2000, representing pro forma
£257m to £333m during the year, before charging £17m of exceptional growth of 54%. The basis of preparation of proportionate customer and
finance costs incurred in restructuring the Group’s borrowing facilities financial information is set out on page 62.
as a result of the Mannesmann acquisition. This increase reflects a
£5,135m increase in net borrowings during the year, mainly due to the
additional debt arising from the merger with AirTouch.
Financial Review continued
Pro forma total Group operating profit Factors affecting future turnover and profit performance are the
potential for growth of mobile telecommunications markets, the
Pro forma total Group operating profit increased by 30% from £2,260m
Group’s market share, revenue per customer, the costs of providing
to £2,942m, before goodwill and exceptional reorganisation costs.
and selling existing services, and start up costs of new businesses
Pro forma total Group operating profit for EMEA, before goodwill, and and products including those dependent on the build and roll-out of
including the Group’s share of associated undertakings, increased by 3G networks.
34% to £1,321m. This growth reflects strong trading throughout the
The global market for mobile telecommunications continues to provide
region, in particular by subsidiaries in Egypt, the Netherlands and
the potential for significant growth. Mobile telephony is expected to
Sweden, and by associated undertakings in Germany, Italy, South Africa
substitute for fixed line networks in both voice and data services for the
and Spain. This was offset by a reduction in operating profit in France
consumer and then be enriched to provide services that have never
due to high connection costs incurred on customer growth in SFR.
been available to users before. In addition, the development of multi-
In the UK, total operating profit, before goodwill, increased by £62m to access Internet portals will provide customers with the communication
£706m. This growth in operating profit is after connection costs on facilities to enhance and improve their lives.
record customer growth, 50% higher than last year, and tariff
reductions.
The United States & Asia Pacific region reported a pro forma increase of
45% in total Group operating profit to £915m, before goodwill, and
Balance sheet
exceptional reorganisation costs of £30m incurred in the US following
Fixed assets
the merger with AirTouch. The increase in operating profit reflects strong
organic growth in Australasia and Japan, the impact of stake increases Total fixed assets have increased in the year from £2,851m to
in Japan and the first full year of results from New Zealand. These £150,851m at 31 March 2000.
factors are offset by the cost of migrating US customers from analogue £41,379m of this increase is in relation to goodwill, net of amortisation
to digital, with 40% of customers now on digital tariffs compared to charges, arising on acquisitions and investments in new businesses
22% last year. completed during the year, which has been capitalised and amortised
Movements in exchange rates had an adverse impact of £21m on the in accordance with the Group’s accounting policies. During the year,
increase in pro forma total Group operating profit. The adverse effect of £21,789m of goodwill (net of amortisation) has been capitalised within
exchange rate movements from the strength of sterling against the Euro intangible fixed assets in relation to acquired subsidiaries, with a
was partially offset by compensating exchange rate movements against further £19,590m being allocated to investments in joint ventures and
the US Dollar and Yen. associated undertakings. Included in these amounts is goodwill arising
on the merger with AirTouch, provisionally calculated as £41.0 billion.
This is being amortised primarily by reference to the unexpired licence
Average exchange rates period and conditions for licence renewal of the underlying acquired
Year to Year to Percentage network businesses, with the amortisation periods ranging between
31 March 31 March change
Currency 2000 1999 %
8 and 40 years.
Euro 1.57 n/a n/a The Group’s investments, which include equity investments and loans
German Mark 3.06 2.89 5.9 advanced to associated undertakings and other investments, increased
Italian Lire 3,032 2,854 6.2 by £121,966m in the year as shown in the table below.
Greek Drachma 514 489 5.1
Japanese Yen 178.2 213.3 (16.5) Movements in fixed asset investments £m
Swedish Krona 13.6 13.2 3.0 At 1 April 1999 372
US Dollar 1.61 1.66 (3.0) Acquisition of Mannesmann AG 101,246
New investments, including goodwill of £19,590m 20,999
Other movements (279)
–––––––––
Pro forma proportionate EBITDA At 31 March 2000 122,338
–––––––––
Pro forma proportionate EBITDA increased by 30% from £3,046m to
£3,948m. Proportionate EBITDA is defined as operating profit before
exceptional reorganisation costs, plus depreciation and amortisation of The investment of £101,246m in respect of Mannesmann AG
subsidiaries, joint ventures, associated undertakings and investments, represents the ordinary shares issued to the shareholders and
proportionate to equity stakes. convertible bond holders of Mannesmann AG at 31 March 2000.
This follows the receipt of valid acceptances representing approximately
98.62% of the issued share capital of the company, and 99.72% of its
convertible bond, at 27 March 2000, the date that the Company’s Offer
Future results closed. The Mannesmann acquisition completed on 12 April 2000, the
date that clearance was received from the European Commission.
There are many factors that will influence the Group’s future
performance, the most significant of these being the integration of the Tangible fixed assets increased by £4,157m during the year, primarily
Mannesmann telecommunications’ businesses into the Group and the in relation to the merger with AirTouch and continued capital investment
further development of the Group’s multi-access Internet portal. in the Group’s worldwide network operations.
Equity shareholders’ funds Debt repayable within one year in the above analysis is net of cash and
other liquid investments amounting to £189m at 31 March 2000.
Total equity shareholders’ funds at 31 March 2000 had increased to
£700m of the gross debt maturing within one year was commercial
£140,833m, compared with £815m at 31 March 1999. The increase
paper, issued under the Group’s US$15 billion commercial paper
includes the issue of new share capital of £140,037m, primarily
programme. This programme is supported by bank facilities with more
in relation to the merger with AirTouch and the acquisition of
than one year to maturity.
Mannesmann, unvested option consideration of £1,165m in respect
of the merger with AirTouch, a profit for the financial year of £487m The Group launched a 1.5 billion eurobond issue in October 1999
(after goodwill amortisation of £1,712m), offset by dividends paid and and a three tranche US$5.25 billion bond in February 2000, with
proposed of £620m and an adverse currency translation adjustment in maturities of between 5 and 30 years, the proceeds from which were
reserves of £1,130m. used to refinance short term borrowings.
Cash flows and net borrowings Future investment

Cash generated from operating activities increased by £1,465m to The Group intends to acquire spectrum to operate 3G services.
£2,510m due primarily to the growth in the Group’s operations and the In April 2000, the largest UK licence available to existing operators
inclusion of the operating cash flows of the former AirTouch businesses was purchased for £5.964 billion. In 2000/2001, 3G licences are
following the merger. Other significant cash inflows included £236m in anticipated to be awarded in Germany, Italy, the Netherlands and
respect of dividends from joint ventures and associated undertakings, Sweden. The cost of obtaining these licences could be significant.
£1,028m from the disposal of fixed asset investments and loan
repayments, and proceeds of £362m on the exercise of share options In 2000/2001, the Group expects to spend in the order of £4 billion on
by employees. capital expenditure, excluding 3G licences. The majority of this will be
expended in the EMEA region where capital expenditure will total
The principal cash outflows during the period related to cash approximately £2.5 billion, the increase being largely due to the
consideration for investment purchases of £4,801m, net capital addition of the Mannesmann telecommunications’ subsidiaries.
expenditure of £1,739m and net interest and other finance charges Expenditure in the UK will be less than £1 billion and will total
of £406m, including dividends paid to minority interests of £93m. approximately £0.3 billion in the United States & Asia Pacific region,
Net capital expenditure of £1,739m is after deducting £279m of the latter being lower than the current year due to the creation of the
cash receipts in relation to the sub-leasing of certain US Verizon Wireless joint venture in April 2000. It is anticipated that capital
communications towers. expenditure in 2001/2002 will be slightly higher as 3G networks are
rolled out.
An analysis of net payments made in respect of investments is set out
in the table below.
Net cash outflow – investments £m

Treasury management and policy
The principal financial risks arising from the Group’s activities are
AirTouch Communications, Inc. 3,534
funding risk, interest rate risk, currency risk and counterparty risk.
CommNet Cellular Inc. 459
The Group’s treasury function provides a centralised service for the
J-Phone Group 342
management and monitoring of these risks for all of the Group’s
Omnitel 112
operations.
Other 354
–––––––––
Treasury operations are conducted with a framework of policies
4,801
––––––––– and guidelines authorised and reviewed annually by the Board.
The Group accounting function provides regular update reports of
treasury activity to the Board. The Group uses a number of derivative
As a result of these cash flows, and acquired indebtedness of
instruments which are transacted, for risk management purposes only,
£2,133m, net debt at the year end was £6,643m, an increase of
by specialist treasury personnel.
£5,135m from 31 March 1999. A maturity analysis of net debt at
31 March 2000 is shown below. There has been no change during the year, or since the year end, to
the types of financial risks faced by the Group or the Group’s approach
to the management of those risks.
Net debt – maturity profile
Analysed by repayment year: £m Funding and liquidity
Less than 1 year 605 The Group has a strong financial position demonstrated by credit
Between 1-2 years 481 ratings of P-1/F1/A2 short term and A/A/A– long term from Moody’s,
Between 2-5 years 1,681 Fitch IBCA Duff & Phelps and Standard and Poor’s, respectively, which
More than 5 years 3,876 reflect the amended ratings of the Group following the acquisition of
––––––––– Mannesmann AG and a UK 3G licence. These ratings enable the Group
6,643 to access a wide range of debt finance including bonds, commercial
–––––––––
paper and committed bank facilities.
The Board has approved ratios consistent with those used by Interest rate management
companies with high credit ratings for net interest cover, market
Under the Group’s interest rate management policy, interest rates are
capitalisation to net debt and net cash flow to net debt, which establish
fixed when net interest is forecast to have a significant impact on
internal limits for the maximum level of debt that the Group may have
profits. Therefore, the term structure of interest rates is managed within
outstanding. Group interest, excluding the Group’s share of interest
limits approved by the Board, using derivative financial instruments
payable by joint ventures and associated undertakings, is covered
such as interest rate swaps, futures and forward rate agreements.
7.3 times by Group EBITDA (before exceptional reorganisation costs
and excluding dividends received from joint ventures and associated At the end of the year, 65% of the Group’s gross borrowings were fixed
undertakings). The Group’s main interest exposures are Sterling, Euro for a period of at least one year. Based on the Group’s net debt at
and US dollar interest rates. 31 March 2000, a one percent rise in market interest rates would
reduce profit before taxation by approximately £22m.
The Group’s policy is to borrow centrally, using a mixture of long term
and short term capital market issues and borrowing facilities, to meet
anticipated funding requirements. These borrowings, together with cash Counterparty risk management
generated from operations, are lent or contributed as equity to Cash deposits and other financial instrument transactions give rise to
subsidiaries. credit risk on the amounts due from counterparties. The Group regularly
monitors these risks and the credit rating of its counterparties and,
The maturity of the undrawn committed facility available to the Group at
by policy, limits the aggregate credit and settlement risk it may have
31 March 2000 is shown below.
with any one counterparty. Whilst the Group may be exposed to credit
losses in the event of non-performance by these counterparties, the
Undrawn committed facility – maturity profile possibility of material loss is considered to be minimal because of these
Analysed by year of expiry: Euro control procedures.
(million)
Within 1 year 9,500
Between 2-5 years 7,500 Shareholder returns
–––––––––
17,000 Basic earnings per share
–––––––––
Basic earnings per share fell from 4.12p last year to 1.80p, after
adjusting the comparative figure for the capitalisation (bonus) issue on
The committed facility comprises a syndicated senior credit facility of 30 September 1999. This includes a reduction of 6.32p per share in
30 billion, which was subsequently reduced to 17 billion on relation to the amortisation of capitalised goodwill, arising primarily
11 March 2000. The portion of the facility maturing within one year from the merger with AirTouch and other acquisitions completed during
may be extended, at the option of the Company, for a further period of the year.
between 6 and 12 months.
Adjusted basic earnings per share, calculated before goodwill and
In addition, Misrfone in Egypt has an EGP2.4 billion committed facility, exceptional items, increased by 25% from 3.77p to 4.71p this year.
which may only be used to fund its operations.
In May 2000, the Company issued US$3.75 billion of Floating Rate
Adjusted basic earnings per share
Notes, of which US$0.75 billion is due in June 2001 and US$3 billion (adjusted for capitalisation issue on 30 September 1999)
in December 2001.
On 26 May 2000, the Company signed an additional US$5 billion, Pence
364 day bank facility, extendable at the option of the Company by a
further 9 months. 5.0
Foreign exchange management 4.0

Foreign currency exposures on known future transactions are hedged,
including those resulting from the repatriation of international dividends
and loans. Forward foreign exchange contracts are the derivative 3.0
instrument most used for this purpose.
The Group’s policy is not to hedge its international net assets with 2.0
respect to foreign currency balance sheet translation exposure, since
net tangible assets represent a small proportion of the market value
1.0
of the Group and international operations provide risk diversity.
However, 66% of gross borrowings were denominated in currencies
other than sterling in anticipation of cash flows from profitable 0
international operations and this provides a partial hedge against 1996 1997 1998 1999 2000
profit and loss account translation exposure.
Dividends Introduction of the single

The proposed final dividend of 0.680p per ordinary share produces a
total for the year of 1.335p, an increase of 5% over last year. Dividend
European currency
cover, before goodwill amortisation, increased to 3.5 times compared The Group has interests in eight of the eleven countries where the Euro
with 3.3 times for the year ended 31 March 1999. was introduced on 1 January 1999 for business-to-business use.
Following a three year transition period, the Euro will be adopted in
those countries for all purposes. Working groups have been established
Share price
by local management in these ‘first wave’ markets to assess the impact
The share price has shown healthy growth since the Company floated on business operations of trading in the Euro and to manage the
in 1988 at an issue price of 170p, which is now equivalent to 11.33p implementation of appropriate change programmes.
following the capitalisation issues in July 1994 and September 1999.
Annual compound growth in the share price over the five year period to The Executive Committee of the Vodafone Group has set up a steering
31 March 2000 was 54%. group to assess the impact of the single currency on the Group and to
monitor progress in the adoption of Euro-compliant business systems.
Current status, together with strategic and operational issues arising,
Share price at 31 March are tracked regularly on a country-by-country basis and reports made
(adjusted for capitalisation issue on 30 September 1999) to the Executive Committee.
Progress in all markets to date is on target, with no significant issues
Pence
outstanding. In EU markets not yet committed to the introduction
350 of the Euro, preliminary assessments have been carried out.
The financial cost of preparation for the adoption of the Euro is
300 not material to the Group.
250
200
Basis of preparation of the
150 financial statements
100 During the year the following Financial Reporting Standards (“FRS”)
issued by the Accounting Standards Board became effective and have
50 been adopted in these financial statements:
FRS 15 – Tangible Fixed Assets; and
0
1996 1997 1998 1999 2000 FRS 16 – Current Tax.
Implementation of these new Standards has not resulted in any
changes to prior year comparatives.
This increase in the share price, which continued through the year
ended 31 March 2000, reflected the general rise in equity prices, The Group’s accounting policies are conservative and appropriate to
the market’s rating of the mobile telecommunications sector and the business.
confidence in the Group’s prospects.
Going concern
Year 2000 After reviewing the Group’s and Company’s budget for the next financial
The Company, through its comprehensive Millennium Programme, year, and other longer term plans, the directors are satisfied that, at the
continues to give high priority to the potential impact of all year time of approving the financial statements, it is appropriate to adopt the
2000 date related issues. At the date of this report, the principal going concern basis in preparing the financial statements.
transition dates, including 31 December 1999, 1 January 2000 and
29 February 2000, have passed without revealing any serious problems
in the Group’s systems and the directors are not aware of any
significant factors relating to any year 2000 date related issue which
have arisen, or that may arise, and which will significantly affect the
activities of the business. Nevertheless, the situation is still being
monitored.
The Group incurred costs in relation to Year 2000 compliance of
approximately £22m in the financial year, and £18m in previous
financial years, although many costs are not separately identifiable as
Millennium modifications are often embodied in software purchased
and developed in the normal course of business.
VOD510 Financial pp15-19 20/6/00 10:18 am Page 15
Directors’ Report
Review of the Group’s business

The Company and its subsidiary, joint venture and associated undertakings are involved principally in the provision of mobile telecommunications
services. A review of the development of the business of the Company and its subsidiary, joint venture and associated undertakings is contained in the
Company’s Annual Review and Summary Financial Statement for the year ended 31 March 2000 (“the Annual Review”) and, in particular, the interview
with the Chief Executive set out on pages 2 to 7, the Chairman’s Statement on pages 23 to 27 and in the business and financial reviews on pages 4 to
14 of this Report. Details of the Company’s principal subsidiary undertakings, joint ventures, associated undertakings and investments can be found on
pages 56 and 57 of this Report.
Future developments
The Group is currently involved in the expansion and development of its cellular telecommunications and related businesses as described in the Annual
Review and, in particular, the interview with the Chief Executive set out on pages 2 to 7, the Chairman’s statement on pages 23 to 27 and in the
business and financial reviews on pages 4 to 14 of this Report.
Corporate governance
The directors are committed to business integrity and professionalism. As an essential part of this commitment the Board supports high standards of
corporate governance and its statement on corporate governance is set out on pages 18 and 19 of this Report. The remuneration policy contained in
the Remuneration Report of the Board on pages 20 to 26 of this Report will be proposed for approval at the Company’s Annual General Meeting on
27 July 2000.
Share capital
A statement of changes in the share capital of the Company is set out in note 18 on pages 44 and 45 of the financial statements.
Purchase by the Company of its own shares

At the Annual General Meeting of the Company held on 21 July 1999, shareholders gave the Company permission, until the conclusion of the Annual
General Meeting to be held in 2000 or 21 October 2000, whichever is the earlier, to purchase up to 1,575,363,145 ordinary shares of the Company.
A resolution for permission for the Company to extend its authority to purchase its own shares will be proposed at the Annual General Meeting of the
Company to be held on 27 July 2000.
Results and dividends

The consolidated profit and loss account is set out on page 28 of the financial statements.
The directors have proposed a final dividend for the year of 0.680p per ordinary share, payable on 11 August 2000 to shareholders on the register of
members at close of business on 9 June 2000. An interim dividend of 0.655p per ordinary share was paid during the year, producing a total for the year
of 1.335p per ordinary share, a total of approximately £620m. A scrip dividend alternative to the cash dividend is available and further details of the
Company’s Scrip Dividend Scheme can be found on page 42 of the Annual Review.
Subsequent events
Details of material subsequent events are included in the Chairman’s statement on pages 23 to 27 of the Annual Review and in note 30 on page 52 of
the financial statements.
Charitable and political contributions

During the year, charitable donations amounting to £0.5m, principally through the Vodafone Group Charitable Trust, were made. The Trust makes
contributions primarily to medical research, the disabled, the socially disadvantaged, education, the arts and environmental causes. Recipients of major
donations during the year included the National Asthma Campaign, Heartline, the Royal National Institute for the Deaf, the Stroke Association, Tommy’s
Campaign, Barnardos and the Knight Foundation for Cystic Fibrosis. The Trust also made donations to registered charities through the sponsorship of
employees who participated in fund-raising events for the charity of their choice. Professor Sir Alec Broers has been the Chairman of the trustees since
31 March 1998.
No political donations were made during the year.
Creditor payment terms

It is the Group’s policy to agree terms of transactions, including payment terms, with suppliers and, provided suppliers perform in accordance with the
agreed terms, it is the Group’s normal practice that payment is made accordingly.
The number of days outstanding between receipt of invoices and date of payment, calculated by reference to the amount owed to trade creditors at the
year end as a proportion of the amounts invoiced by suppliers during the year, was 33 days in aggregate for the Group. The Company did not have any
trade creditors at 31 March 2000.
Directors’ Report continued
Research and development

The Group continues an active research and development programme for the enhancement of mobile telecommunications.
Directors’ interests in the shares of Vodafone AirTouch Plc

The Remuneration Report of the Board on pages 20 to 26 details the directors’ interests in the shares of Vodafone AirTouch Plc.
Directors’ interests in contracts

None of the directors had a material interest in any contract of significance to which the Company or any of its subsidiaries was a party during the
financial year.
Employee involvement
During the year new initiatives have been launched to agree and communicate the Group’s vision and goals amongst employees and to translate these
into a set of behaviours and values which relate to the way the vision and goals are achieved. Our vision is to become the world’s leading wireless
telecommunications and information provider, bringing more customers more services and more value than any other, and our goals are to:
• Expand our geographic presence and control our investments;
• Bind customers to us through a constant introduction of new products and services and a brand that differentiates us from the rest;
• Lead in each local market by customer and brand loyalty, lowest cost position, share of profit pool and employee satisfaction;
• Leverage our global scale and scope to realise synergies which help to achieve the lowest cost position and offer greater value to our customers;
• Lead global technological platform development while positioning ourselves as the strategic partner of choice with technology leading suppliers; and
• Attract the most talented people to work with us.
The goals are intended to be achieved by employees adopting agreed behaviours and values, which are to:
• Put customers first;
• Work as one team;
• Be open and involving;
• Move quickly into action;
• Deliver quality and innovation; and
• Think and act like owners.
These messages have been communicated in conferences, workshops and other forms of employee communications.
The Board places a high priority on employee communications and this is achieved through an increasing number of different channels including
management presentations, team briefing, e-mail and conferences. The Company has, during the year, established an International Employee
Communications Forum at which elected employee representatives from subsidiary companies in Europe are able to discuss the progress of the Group
and employee matters affecting more than one country. The initial meeting of the Forum was held in June 1999.
During the year the Company adopted a new policy to have employee-elected Trustees for the UK based Pension Schemes.
Employee education, training and development

Continuing education, training and development are important to ensure the future success of the Group. Policies have been adopted to assist all
employees to reach their full potential and a wide variety of schemes and programmes are offered, aimed at ensuring that relevant education, training
and development opportunities are available. Many courses are provided by the Group’s Training Services department, which has well equipped technical
and development training facilities and a broad range of expertise.
A programme of business related further education is also sponsored by the Group and programmes exist to help employees meet the training and
qualification requirements of their chosen professional institution, thereby continuing to raise the existing professionalism of the Group.
Directors’ Report continued
Employment policies
The Group’s businesses operate progressive employment policies and all vacancies are filled on the basis of individual competence, experience
and qualifications. Employees at all levels and in all companies are encouraged to make the greatest possible contribution to the Group’s success.
The Group’s employment policies are developed to reflect local legal, cultural and employment requirements.
Equal opportunities
The Group operates an equal opportunities policy. All employees accept the commitment within this policy that the Group will not allow discrimination,
pressure to discriminate or harassment by staff or others acting on the Group’s behalf, in respect of sex, race, marital status, nationality, disability or
religious or political beliefs.
The disabled
The directors are conscious of the special difficulties experienced by the disabled. In addition to giving disabled people full and fair consideration for all
vacancies for which they offer themselves as suitable candidates, efforts are made to meet their special needs, particularly in relation to access and
mobility. Where possible, modifications to workplaces have been made to provide access and, therefore, job opportunities for the disabled.
Every effort is made to continue the employment of people who become disabled, not only in the provision of additional facilities but also training
where appropriate.
Health, safety and welfare

The directors recognise the high standards required to ensure the health, safety and welfare of the Group’s employees at work, its customers and the
general public. The maintenance of safe working conditions is a high priority and a programme of regular risk assessment ensures that there are
continuous improvements in safety performance. Group policies and practices are regularly reviewed with the objective that high standards of health
and safety are achieved and maintained.
Auditors
In accordance with section 384 of the Companies Act 1985, a resolution proposing the reappointment of Deloitte & Touche as auditors to the Company
will be put to the Annual General Meeting.
In addition to their statutory duties, Deloitte & Touche are also employed where their expertise and experience with the Group are important, or where
they win work on a competitive basis. During the year Deloitte & Touche charged £16m (1999 – £4m) for non-audit assignments compared to
£17m (1999 – £6m) charged by six other audit firms employed by the Group. The fees for non-audit assignments include amounts for corporate
finance services in a year of unprecedented merger and acquisition activity (£6m), tax advice (£1m) and IT consultancy and other services (£9m).
Fees for IT consultancy include £3m in respect of a contract awarded by AirTouch Communications, Inc. prior to completion of the merger.
The Audit Committee reviews both the level of the audit fee against other comparable companies, including those in the telecommunications industry,
and the level and nature of non-audit fees, as part of its review of the adequacy and objectivity of the audit process.
Substantial shareholdings
The directors are not aware of any holding in the ordinary share capital of Vodafone AirTouch Plc which, at 29 May 2000, exceeded 3% except that
Hutchison Whampoa Limited had a holding of 3.47%.
Corporate Governance
Introduction
The Combined Code on Corporate Governance requires companies listed on the London Stock Exchange to make a disclosure statement on its
application of the principles of and compliance with the provisions of good governance set out in the Code. The year ended 31 March 2000 was a
momentous year for the Company and the matters described below, and in the Remuneration Report on pages 20 to 26, relate to the position throughout
the year and, generally, prior to completion of the acquisition of Mannesmann AG.
With the minor exceptions explained below, relating to the the question of training for directors and the election of a senior independent director for the
period to 30 June 1999, the Company has been in compliance with the Combined Code provisions throughout the year ended 31 March 2000.
Directors and Organisation

The Company presently has sixteen directors, seven of whom served throughout the year ended 31 March 2000. Their biographical details are set out
briefly on page 28 of the Annual Review. The merger with AirTouch Communications, Inc. in June 1999, the acquisition of Mannesmann AG in April
2000 and the creation of the Company’s joint venture with Bell Atlantic Corp., which was completed in April 2000, have resulted in a year of change for
the Board. On completion of the AirTouch transaction on 30 June 1999, Ian MacLaurin stepped down as Chairman and became Deputy Chairman and
senior non-executive director with Sam Ginn, the Chairman and Chief Executive of AirTouch, becoming Chairman of the Company. Professor Sir Alec
Broers and John Gildersleeve, non-executive directors, resigned from the Board and Michael Boskin, Don Fisher, Paul Hazen and Charles Schwab, all of
whom had served on the AirTouch board, joined as non-executive directors. Arun Sarin, then Chief Operating Officer of AirTouch and Mohan Gyani, the
AirTouch Chief Financial Officer, were appointed to executive positions at the same time.
Mohan Gyani decided to leave the Board on 30 September 1999 and the Company then invited Sir Alec Broers to re-join the Board as a non-executive
director. Sir Alec was re-elected as a director by the shareholders at the Company’s Extraordinary General Meeting on 24 January 2000.
On completion of the joint venture with Bell Atlantic, Arun Sarin resigned as an executive director but accepted an invitation to remain on the Board in a
non-executive capacity.
The Mannesmann acquisition resulted in further changes to the Board after the end of the financial year. Josef Ackermann, Jürgen Schrempp and
Henning Schulte-Noelle, all then members of the Supervisory Board of Mannesmann AG, were appointed as non-executive directors on 1 May 2000.
Sam Ginn and Charles Schwab resigned on 23 May 2000 and Ian MacLaurin was re-appointed Chairman. Paul Hazen was elected as a Deputy
Chairman and the senior non-executive director in succession to Ian MacLaurin. Klaus Esser will join the Board as a Deputy Chairman on 5 June 2000,
the date upon which he steps down from his position with Mannesmann AG. The Company considers all its present non-executive directors, except
Arun Sarin, to be fully independent. The five executive directors are Chris Gent (the Chief Executive), Peter Bamford, Thomas Geitner, Julian Horn-Smith
and Ken Hydon. Thomas Geitner joined the Board on 15 May 2000.
The Company’s Articles of Association, approved by shareholders at the Extraordinary General Meeting held on 24 May 1999, provide that every director
who was elected or last re-elected at or before the Annual General Meeting held in the third calendar year before the current year shall automatically
retire. Accordingly, Ian MacLaurin, Chris Gent and Ken Hydon will be retiring and, being eligible, will offer themselves for re-election at the Company’s
Annual General Meeting to be held on 27 July 2000. Furthermore, five new directors, Thomas Geitner, Josef Ackermann, Klaus Esser, Jürgen Schrempp
and Henning Schulte-Noelle, will be proposed for election. Also, although the Company’s Articles of Association do not require it, Don Fisher will offer
himself for re-election as he is over the age of 70.
The Board, which meets six times each year and on one other occasion in the year to consider strategy, provides the effective leadership and control
required for a listed company. Actual financial results are presented to each meeting, together with reports from the executive directors in respect of
their areas of responsibility. From time to time, the Board receives detailed presentations from non-Board members on matters of significance or on new
opportunities for the Group. Financial budgets and forecasts are regularly discussed at Board meetings. The non-executive directors periodically visit
different parts of the Group and are provided with briefings and information to assist them to perform their duties.
The Board is confident that its members have the knowledge, talent and experience to perform the functions required of a director of a listed company.
Accordingly, it has not introduced a formal training programme for directors. On appointment, all directors are provided with guidance as to their duties,
responsibilities and liabilities as a director of a public and listed company and also have the opportunity to discuss organisational, operational and
administrative matters with the Chairman, the Chief Executive and the Company Secretary. Provision A.1.6 of the Combined Code has, for these reasons,
not been complied with in its strictest sense, although the Company believes that the information and assistance provided to all directors upon
appointment is more than adequate to comply with the spirit of the provision.
The Board has a formal schedule of matters specifically reserved to it for decision, including the approval of Group commercial strategy, major capital
projects, the adoption of any significant change in accounting policies or practices and material contracts not in the ordinary course of business.
The directors have access to the advice and services of the Company Secretary and have resolved to ensure the provision, to any director who believes
it may be required in the furtherance of his or her duties, of independent professional advice at the cost of the Company.
The executive directors, together with certain other Group functional heads, the President of the US/Asia Region and the Chief Executive of Vodafone
Pacific, meet each month as the Executive Committee under the chairmanship of the Chief Executive. This Committee is responsible for the day-to-day
management of the Group’s businesses and it also reviews strategic plans, regional and company operating and financial performance and the central
and administrative functions of the Group.
Committees of the Board

The standing board committees are the Audit Committee, the Nominations Committee and the Remuneration Committee. The Audit Committee, which usually
meets on three occasions in the year, is chaired by Paul Hazen and the other members of the Committee are Ian MacLaurin, Michael Boskin and Sir David
Scholey. Sir Alec Broers and Penny Hughes served on the Committee until 30 June 1999. Under its terms of reference the Committee is required, amongst
other things, to review the scope and extent of the activity of the Group Internal Audit Department, to monitor the relationships with external auditors, to
review the Company’s statutory accounts and other published financial statements and information, to monitor compliance with statutory and listing
requirements for any exchange on which the Group’s shares are quoted and to institute special projects or other investigations as it sees fit.
Corporate Governance continued
The Nominations Committee meets as required and was chaired until his retirement from the Board by Sam Ginn. The responsibility of chairmanship of
this Committee has now passed to Ian MacLaurin. Penny Hughes, Charles Schwab and Chris Gent also served on this Committee during the year.
Sir Alec Broers and Sir David Scholey left the Committee on 30 June 1999. The Committee, which provides a formal and transparent procedure for the
appointment of new directors to the Board, generally engages external consultants to advise on prospective Board appointees.
The Remuneration Committee was chaired by Ian MacLaurin until his re-appointment as Chairman of the Company on 23 May 2000, when the
Chairmanship was transferred to Sir David Scholey. Michael Boskin, Sam Ginn and Don Fisher joined this Committee on 30 June 1999, when Sir Alec
Broers and Penny Hughes stepped down. The Remuneration Report of the Board on pages 20 to 26 provides further information on this Committee.
Internal controls
Introduction
The Board has established procedures necessary to implement in full the Turnbull guidance, “Internal Control: Guidance for Directors on The Combined
Code”, with effect from 1 April 2000. A review of the processes for identifying, evaluating and managing significant risks was undertaken in the second
half of the financial year. This has formed the basis for new procedures that will be kept under continuous review.
For the year ended 31 March 2000, and as permitted by the UK Listing Authority’s transitional arrangements, the Group reports on internal financial
controls applying the Rutteman Working Group guidance. In future, the Group will report on internal controls in line with the Turnbull guidance.
Responsibility for internal financial controls
The Board of directors has overall responsibility for the Group’s system of internal financial control. Although no system of internal financial control can
provide absolute assurance against material misstatement or loss, the Group’s systems have been designed to provide the directors with reasonable
assurance that assets are safeguarded, transactions are authorised and recorded properly, and that material errors and irregularities are either prevented
or detected within a timely period.
Control environment
The directors have established an organisation structure with clear operating procedures, lines of responsibility and delegated authority. The directors
have delegated to executive management the establishment and implementation of financial control systems appropriate for the various businesses.
Assessment of business risk
Major business risks are identified and evaluated by the directors when setting strategy, approving budgets and monitoring progress against budget.
Subsidiary management identifies and evaluates business risks when allocating resources to minimise those risks.
Financial reporting system
The Group’s operating procedures include a comprehensive system for reporting financial information to the directors. The principal elements of this
include the formal review by the directors of:
• Detailed budgets prepared by subsidiary management and reviewed by the executive directors before formal adoption;
• Forecasts, revised on a quarterly basis, compared against budget; and
• Monthly management accounts with a comparison against the latest quarterly forecast and budget.
Main control procedures
Written financial policies and procedures have been issued which specify the minimum requirements for financial and administrative matters within the
Group. These policies and procedures address the areas of significant business risk and include:
• Financial limits on delegated authority; and
• Detailed policies and procedures regulating treasury activities, approved annually.
Associated undertakings are monitored closely through attendance at their board meetings and review of key financial information. It is the Group’s policy
that its auditors be appointed as auditors of associated undertakings, where possible. Detailed post investment reviews of all the Group’s investments are
conducted on a regular basis.
Monitoring process
There are clear procedures for monitoring the system of internal financial control. The significant components of these are:
• Formal annual confirmation by subsidiary managing directors concerning the operation of financial control systems for which they are responsible;
• A Group Internal Audit Department, reporting directly to the Audit Committee, which on a risk assessment basis undertakes periodic examination of
business processes and reports on financial controls throughout the Group; and
• Reports from the external auditors, Deloitte & Touche, on internal controls and relevant financial reporting matters.
Review of effectiveness
The directors believe that the Group’s system of internal financial control provides reasonable, but not absolute, assurance that problems are identified
on a timely basis and dealt with appropriately.
The directors confirm that they have reviewed the effectiveness of the system of internal financial control through the monitoring process set out above
and are not aware of any significant weakness or deficiency in the Group’s system of internal financial control during the period covered by this report.
Relations with shareholders
The Company holds briefing meetings with its major institutional shareholders in the UK, the US and in Continental Europe, usually twice each year after
the interim and preliminary final results’ announcements, to ensure that the investing community receives a balanced and complete view of the Group’s
performance and the issues faced by the business. Telecommunications analysts of stockbrokers are also invited to presentations of the financial results
and to visit the Company in the summer months for discussions on matters relating to the Group’s operations.
The principal communication with private investors is through the provision of the Annual Review & Summary Financial Statement, the Interim Statement
and the Annual General Meeting, an occasion which generally is attended by all the Company’s directors and at which all shareholders are given the
opportunity to question the Chairman and the Board. The proxy votes cast in relation to the resolutions proposed at the 1999 Annual General Meeting
and the proxy voting at the Company’s Extraordinary General Meetings held on 24 May 1999 and 24 January 2000 were disclosed to those in
attendance at the meetings and the Company will follow this policy at future general meetings.
Financial and other information is made available on the Company’s Internet web site, which is regularly updated.
Remuneration Report of the Board
Composition of the Remuneration Committee

The Remuneration Committee of the Board consists only of non-executive directors of the Company and after the completion of the merger with
AirTouch Communications, Inc. comprised Michael Boskin, Don Fisher, Sam Ginn and Sir David Scholey, with Ian MacLaurin as Chairman. Upon the
retirement of Sam Ginn in May 2000 and Ian MacLaurin’s election as Chairman of the Company, Sir David Scholey became Chairman of the Committee.
When appropriate, the Committee invites the views of the Chief Executive and the Group Director of Human Resources and commissions reports from
expert remuneration consultants. The results of market surveys and other analyses from external sources are also made available to the Committee,
which has resolved to review its policy with the Board on a regular basis to ensure it continues to meet the Company’s requirements and to comply
with best practice.
Remuneration policy
The Company requires to employ people of a calibre consistent with those at the leading edge of the telecommunications industry. The executive talent
needed to maximise returns for shareholders in the international business of telecommunications is very scarce and the future performance of the
Company will depend upon its ability to incentivise its employees and to offer remuneration packages which are competitive in value terms when
measured against the best in the industry.
In determining the Company’s broad policy for executive remuneration, and in particular the remuneration package for each of the executive directors,
the Committee aims to provide remuneration which is competitive and appropriate and which ensures the right rewards are given to motivate, incentivise
and retain the senior executives of the Group.
As a result of the merger with AirTouch and the acquisition of Mannesmann, the Company has the highest capitalisation on the London Stock Exchange
and is one of the ten largest companies by capitalisation in the world. It has operations in 25 countries on five continents and, in recognition of the scale
and scope of the business and the responsibilities falling on its senior executives, the Remuneration Committee has undertaken a review of executive
remuneration and has decided to construct packages reflective of the global market in which the Company operates in order to ensure that it can attract
and retain the world class executive talent necessary to continue to deliver the levels of shareholder value which have been achieved in recent years.
Key principles of the Committee’s decision are that for executives with global responsibilities, remuneration levels and practices will be referenced to a
global peer group, that a high and increasing proportion of total remuneration will be contingent upon the achievement of high and demanding levels of
corporate performance and that executives comply with minimum share ownership criteria. The Committee intends that, in future, base salary and short
term incentive plans (at the 100% of base salary target level) will represent approximately 25% of total target remuneration. The remaining 75% of target
pay will be delivered by share option based incentive plans which will incorporate very stretching performance targets. All options under this policy will be
granted at market value and award levels for options will be determined using the Black Scholes formula, an internationally accepted methodology for
valuing share options. Amendments to the Company’s incentive plans to permit the adoption of the Committee’s policy are being proposed at the
Company’s Annual General Meeting.
Salaries and benefits

The remuneration package of the UK based executive directors is made up of a number of elements. Each is paid an annual salary, on which pension
benefits are calculated, and is provided with a car and other benefits. The executive directors participate in the Company’s executive share option
schemes and are entitled to participate in its all-employee share schemes, the Sharesave scheme and the Profit Sharing Scheme, further details of which
are provided on page 23.
In 1998, following approval by shareholders at the Annual General Meeting, two new incentive schemes, a Short Term Incentive Plan (“STIP”) and a
Long Term Incentive Plan (“LTIP”), were introduced. Under the terms of the STIP participants may, subject to the achievement of performance criteria for
the year as set by the Remuneration Committee (for the year to 31 March 2000 the target was the achievement of Group budgeted adjusted earnings
per share, before goodwill amortisation and exceptional items), receive a provisional award of ordinary shares in Vodafone AirTouch Plc. The provisional
award of shares is in two parts: an original award of “Initial Shares” worth up to 25% of salary and an additional award of “Enhancement Shares”, worth
50% of the value of the original award. The Initial Shares will normally be released, subject to the participant remaining with the Group, two years after
the provisional allocation is made. The Enhancement Shares may also be released at this time, although this is conditional upon the achievement of
additional performance criteria. In relation to awards for the year ended 31 March 2000, the condition is that the growth in adjusted basic earnings
per share must exceed the growth in the UK retail price index by an average of 3 per cent per year for the two financial years ending 31 March 2002.
If an executive chooses not to accept the provisional award of shares, the Company may pay, at its discretion, a cash bonus of up to 25% of salary.
For the LTIP, the independent trustee of the Vodafone Group Employee Trust, a discretionary trust, purchases ordinary shares in Vodafone AirTouch Plc
in the market. Shares are then awarded conditionally to eligible executive directors and senior executives at the beginning of a three year period, the
ultimate vesting of the award being conditional upon the achievement of performance criteria set by the Remuneration Committee for that three year
period. If the performance criteria are met, the shares will be transferred from the Trust to the executive directors and senior executives at nil
consideration. Details of the benefits provided to the executive directors under the STIP and the LTIP are in the tables on page 26.
Remuneration Report of the Board continued
All UK based executive directors are contributing members of the Vodafone Group Pension Scheme, which is a scheme approved by the Inland Revenue.
Peter Bamford, whose benefits under the scheme are restricted by Inland Revenue earnings limits, also participates in a defined contribution funded
unapproved retirement benefits scheme in order to bring his benefits into line with those of the other executive directors. Details of the salaries and
benefits of all the directors are set out in the table on page 22. A separate table on page 22 shows the pension benefits earned by the directors in
the year.
Annual salaries are reviewed each year with effect from 1 July and the Remuneration Committee takes into account not only the individual performances
and contributions of each of the executive directors but also the overall performance of the Group, the earnings per share of the Group, the level of
increases awarded to staff throughout the Group and information provided to it on the salaries for similar roles in comparable companies. If the
responsibilities of executive directors change during the year, the Remuneration Committee meets to discuss and review remuneration packages,
including salaries, at that time.
Thomas Geitner, appointed to the Board as an executive director on 15 May 2000, is an employee of Mannesmann AG and has a remuneration package
comprising salary, annual cash bonus, pension, a car and other benefits normally provided to executives of his status in Germany. He will also participate
in the Company’s executive share option scheme.
Bonuses
The Remuneration Committee has not historically approved the payment of special bonuses and it is not its policy to do so. However, the last eighteen
months have included several quite exceptional transactions which have been significant to the successful development of the Group’s strategy.
These transactions have resulted in the Company quadrupling in size and the Remuneration Committee has, therefore, on two occasions authorised
special bonus payments to a small number of the most critical senior executives whose outstanding commitment and effort led to the successful
completion of these transactions and the opportunity to substantially increase shareholder value.
The first bonuses were awarded in July 1999 following the merger with AirTouch. The payments were up to six months’ basic salary. Later in the year, in
the course of the remuneration policy review mentioned earlier, the Committee recognised that the remuneration of senior executives was not set at
internationally competitive levels and, therefore, the opportunity for due reward from the success of acquisitions such as that of Mannesmann AG would
not be provided until the new global remuneration policy was implemented for the future. The Remuneration Committee decided to make special bonus
awards, which were paid in April 2000 after completion of the acquisition, to key executives. For the three executive directors who received the largest
amounts, 50 per cent of the award will be paid in shares which will only be transferred to the executives in two years’ time on the achievement of
significant EBITDA growth performance targets. The cash bonus payments to the three executive directors were £5 million, £2 million and £2 million,
respectively. The other two executive directors each received a cash bonus of £1 million. It is intended that the new global remuneration policy will be the
vehicle to deliver all forms of reward in future and that no further special bonus payments will be made.
Service contracts
The Remuneration Committee has determined that in the cases of UK based executive directors their appointments to the Board will be on the terms of a
contract which can be terminated by the Company at the end of an initial term of two years or at any time thereafter on one year’s notice. Contracts on
such a basis were granted to Julian Horn-Smith on 4 June 1996, to Chris Gent and Ken Hydon on 1 January 1997 and to Peter Bamford on 1 April
1998, each of which is now, therefore, terminable by the Company on one year’s notice. The service contracts of these executive directors contain a
provision increasing the period of notice required from the Company to two years in the event that the contract is terminated by the Company within one
year of a change of control of the Company. The directors are required to give the Company one year’s notice if they wish to terminate their contracts.
Thomas Geitner is employed by Mannesmann AG and he has a fixed term five year contract from 15 May 2000. This is the normal contract arrangement
for Mannesmann AG board members.
Non-executive directors
The remuneration of the non-executive directors, including the Chairman, is established by the Board of directors as a whole and details of each
individual non-executive director’s remuneration are included in the table below. The UK based non-executive directors do not presently participate in any
of the Company’s share schemes or other employee benefit schemes, nor does the Company make any contribution to their pension arrangements.
The appointment of the Chairman is subject to the terms of an agreement between the Company and Ian MacLaurin with a three year term commencing
on 23 May 2000. The Chairman is provided with a car. The appointment of Sam Ginn, during his tenure as Chairman, was subject to the terms of an
agreement under which, in addition to his fee, Sam Ginn was provided with a car and certain other benefits.
The other non-executive directors are engaged on letters of appointment which set out their duties and responsibilities and confirm their remuneration.
Each of these appointments may be terminated at any time by the Company without the payment of compensation.
Remuneration for the year to 31 March 2000

(6)
Salary/fees Bonus Incentive schemes Benefits Total
2000 1999 2000 1999 2000 1999 2000 1999 2000 1999
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Chairman
Sam Ginn ( 1 ) 176 – – – – – 25 – 201 –
Deputy Chairman
Ian MacLaurin 204 166 – – – – 12 9 216 175
Chief Executive
Chris Gent 837 636 325 – 162 162 34 26 1,358 824
Executive directors
Peter Bamford 451 329 – – 83 83 29 25 563 437
Julian Horn-Smith 458 356 150 – 90 90 24 18 722 464
Ken Hydon 454 339 195 – 86 86 27 26 762 451
Arun Sarin ( 2 ) 391 – – – 463 – 17 – 871 –
Mohan Gyani ( 2 ) ( 3 ) 143 – 25 – 1,584 – 6 – 1,758 –
Non-executive directors
Michael Boskin ( 2 ) 39 – – – – – – – 39 –
Professor Sir Alec Broers ( 4 ) 35 50 – – – – – – 35 50
Don Fisher ( 2 ) 39 – – – – – – – 39 –
John Gildersleeve ( 5 ) 13 25 – – – – – – 13 25
Paul Hazen ( 2 ) 39 – – – – – – – 39 –
Penny Hughes 52 29 – – – – – – 52 29
Sir David Scholey 52 50 – – – – – – 52 50
Charles Schwab ( 2 ) 39 – – – – – – – 39 –
Former directors ( 7 ) – 464 – – – 93 – 33 – 590
–––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
3,422 2,444 695 – 2,468 514 174 137 6,759 3,095
–––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
Notes
1. Sam Ginn joined the Board and was appointed Chairman on 30 June 1999.
2. Joined the Board on 30 June 1999. Salary and benefits for Arun Sarin and Mohan Gyani have been translated at the average exchange rate for the year of $1.61 : £1.
3. Salary and benefits for Mohan Gyani are for the period to 30 September 1999 when he resigned from the Board.
4. Information for Professor Sir Alec Broers excludes the period from 1 July 1999 to 8 November 1999 during which he was not a director of the Company.
5. Information for John Gildersleeve is stated for the period to 30 June 1999, when he retired from the Board.
6. These figures relate to the market value of the original award of shares expected to be made under the Vodafone AirTouch Short Term Incentive Plan for the year ended 31 March 2000, except in the case of Arun Sarin
and Mohan Gyani. The amount for Arun Sarin relates to the AirTouch Communications, Inc. Short Term Incentive Plan and the amount for Mohan Gyani was a special payment in respect of his pre-merger contract.
7. Under the terms of the Life President arrangements of Sir Ernest Harrison, a former director, the estimated value of benefits received by him in the year ended 31 March 2000 was £20,000.
Pension benefits earned by the directors in the year to 31 March 2000

Increase in Transfer value Accumulated total
accrued pension of increase in accrued pension
during the year accrued pension at year end
£000 £000 £000
Chris Gent 77 1,087 314

Peter Bamford 3 30 8
Julian Horn-Smith 37 502 175
Ken Hydon 48 742 221
Arun Sarin 14 35 84
Mohan Gyani 5 23 73
Contributions paid to a funded unapproved retirement benefit scheme for the benefit of Peter Bamford amounted to £61,000 in the year.
Notes
1. The pension benefits earned by the directors are those which would be paid annually on retirement, on service to the end of the year, at the normal retirement age. Salaries have been averaged over 3 years in
accordance with Inland Revenue regulations. The increase in accrued pension during the year excludes any increase for inflation. The transfer value has been calculated on the basis of actuarial advice in
accordance with the Faculty and Institute of Actuaries’ Guidance Note GN11. No director elected to pay Additional Voluntary Contributions.
2. In respect of Arun Sarin and Mohan Gyani the amounts have been translated at the average exchange rate for the year of $1.61 : £1.
Directors’ interests in the shares of Vodafone AirTouch Plc

Executive share ownership
The Remuneration Committee believes that share ownership by executive directors increases the link between the interests of the directors and the
interests of the Company’s shareholders.
The Company’s UK executive share option schemes, in which over four hundred of the Group’s directors, executives and senior managers participate,
have been operated on the basis that options over the Company’s shares may be granted once each year at, for directors, a multiple of one times taxable
earnings subject to an overall maximum holding equivalent to four times taxable earnings at the date of grant. The Sharesave scheme permits employees
to save a fixed sum each month, up to a maximum of £250 per month, for three or five years and to use the proceeds of the savings to exercise options
granted at a price 20% below the market price of the shares at the beginning of the savings period. The Profit Sharing Scheme similarly permits eligible
employees to contribute up to 5% of their salary each month, up to a maximum of £665 per month, to enable trustees of the scheme to purchase shares
on their behalf, with an equivalent number of shares being purchased for the employee by the Company. All the UK based executive directors participate
in each of the above share schemes.
The Vodafone AirTouch 1999 Long Term Stock Incentive Plan and the Vodafone AirTouch 1999 Employee Share Purchase Plan were introduced in 1999 to
provide share incentives for employees of AirTouch Communications, Inc. In July 1999, all employees of AirTouch were granted share options under the
Long Term Stock Incentive Plan which vest over a 4 year period. The Share Purchase Plan permits employees to purchase shares at a discount and has
been operated since July 1999.
Share options
The following information summarises the directors’ options under the Vodafone Group Savings Related Share Option Scheme (‘savings related scheme’),
the Vodafone Group 1998 Sharesave Scheme (‘sharesave scheme’), the Vodafone Group Executive Share Option Scheme (‘executive scheme’), all
Inland Revenue approved schemes, the Vodafone Group Share Option Scheme (‘unapproved scheme’), which is not Inland Revenue approved, the
AirTouch Communications, Inc. 1993 Long Term Stock Incentive Plan (‘1993 Plan’) and the Vodafone AirTouch Plc 1999 Long Term Stock Incentive Plan
(‘1999 Plan’). No other directors have options under any of these schemes. Only under the sharesave scheme may shares be offered at a discount in
future grants of options.
Weighted
Options average
held at Options Options Options exercise
1 April 1999 granted exercised held at price at
or date of during during 31 March 31 March Date from Latest
appointment the year the year 2000 2000 which expiry
Number Number Number Number Pence exercisable date
Sam Ginn 41,375,000 – 22,500,000 18,875,000 87.3 1/99 1/07

Chris Gent 2,213,430 387,000 24,285 2,576,145 111.1 7/99 7/09
Peter Bamford 1,352,170 145,500 – 1,497,670 105.3 7/00 7/09
Julian Horn-Smith 1,975,595 111,130 24,285 2,062,440 76.5 7/98 7/09
Ken Hydon 1,866,520 123,500 556,000 1,434,020 90.4 7/00 7/09
Arun Sarin 13,125,000 6,250,000 8,125,000 11,250,000 186.3 12/99 4/02
Mohan Gyani 7,625,000 – 7,625,000 – – – –
Don Fisher 350,000 – – 350,000 41.4 11/94 5/05
Paul Hazen 596,100 – 123,050 473,050 36.2 4/94 5/08
Charles Schwab 709,150 – – 709,150 53.0 11/94 4/06
––––––––– ––––––––– ––––––––– ––––––––––
71,187,965 7,017,130 38,977,620 39,227,475
––––––––– ––––––––– ––––––––– ––––––––––
These options by exercise price were:

Options
held at Options Options Options
1 April 1999 granted exercised held at
Option or date of during during 31 March
price appointment the year the year 2000
Pence Number Number Number Number
Executive scheme and unapproved scheme
38.6 35,000 – – 35,000
46.7 234,000 – 123,500 110,500
48.3 1,280,500 – 432,500 848,000
58.7 4,193,000 – – 4,193,000
155.9 1,520,500 – – 1,520,500
255.0 – 764,000 – 764,000
Savings related scheme and sharesave scheme
28.4 48,570 – 48,570 –
37.2 18,540 – – 18,540
38.6 26,810 – – 26,810
48.0 43,125 – – 43,125
127.1 7,670 – – 7,670
215.6 – 3,130 – 3,130
1993 Plan
21.4 123,050 – – 123,050
24.2 123,050 – 123,050 –
33.9 31,350 – – 31,350
34.8 750,000 – – 750,000
37.6 30,875,000 – 27,000,000 3,875,000
38.5 29,850 – – 29,850
41.9 75,000 – – 75,000
42.2 75,000 – – 75,000
46.6 27,700 – – 27,700
48.1 29,150 – – 29,150
47.7 29,400 – – 29,400
48.4 53,000 – – 53,000
52.2 75,000 – – 75,000
53.4 29,900 – – 29,900
55.6 25,750 – – 25,750
68.3 1,250,000 – 1,250,000 –
69.9 21,150 – – 21,150
82.0 18,350 – – 18,350
96.0 75,000 – – 75,000
97.4 16,800 – – 16,800
100.2 30,000,000 – 10,000,000 20,000,000
107.8 15,800 – – 15,800
125.3 10,700 – – 10,700
147.2 12,250 – – 12,250
214.0 8,000 – – 8,000
1999 Plan
255.3 – 6,250,000 – 6,250,000
––––––––– ––––––––– ––––––––– –––––––––––
71,187,965 7,017,130 38,977,620 39,227,475
––––––––– –––––––––– ––––––––– –––––––––––
Notes
1. All figures restated to take account of the 4:1 capitalisation issue which occurred on 30 September 1999.
2. The share options in respect of the 1993 and 1999 Plans take the form of American Depository Shares, each representing ten ordinary shares in the Company, which are traded on the New York Stock Exchange.
The number and option price have been converted into the equivalent amounts for Vodafone AirTouch ordinary shares, with the option price being translated at the average exchange rate for the year of $1.61:£1.
Options granted at market value under the executive scheme or the unapproved scheme may not be exercised unless, between the date of grant and the
date of first vesting (three years after the date of grant), there has been real growth in the consolidated earnings per share of the Company and options
granted at a discount to market value may not be exercised unless the growth in the consolidated earnings per share of the Company, in the same
period, exceeds the growth in the Index of Retail Prices by 2 per cent. Under the 1998 schemes, the performance criteria are different and options will
only be exerciseable if, over any period of three consecutive financial years following grant, the Company achieves growth in consolidated adjusted
earnings per share which exceeds growth in the Index for that period by an average of 3 per cent per annum.
Under the 1993 Plan, Sam Ginn has 2,261,870 Phantom Stock Units, all of which expire on 28 January 2007, and Don Fisher has 32,460 Phantom
Stock Units, which expire on 1 April 2009.
On 5 July 1999, Arun Sarin was granted a Restricted Stock Award (the “Award”) over 3,040,150 Vodafone AirTouch ordinary shares. The Award is split
into three tranches. The first tranche of 1,040,150 vested immediately on grant, with the second and third tranches vesting on 5 July 2000 and 5 July
2001, for 666,000 and 1,334,000 Vodafone AirTouch ordinary shares respectively.
Details of the options exercised by directors of the Company in the year to 31 March 2000 are as follows:
Options exercised Market price Gross
during the Option at date of pre-tax
year price exercise gain
Number Pence Pence £000
Sam Ginn 137,000 37.6 348.0 426
250,000 37.6 349.5 780
130,000 37.6 342.5 396
250,000 37.6 344.5 767
230,000 37.6 338.5 692
270,000 37.6 339.0 814
200,000 37.6 341.5 608
500,000 37.6 342.0 1,522
670,000 37.6 343.0 2,047
100,000 37.6 312.0 274
500,000 37.6 345.5 1,540
360,000 37.6 347.0 1,114
250,000 37.6 319.0 704
156,000 37.6 336.0 465
50,000 37.6 319.5 141
100,000 37.6 317.0 279
250,000 37.6 324.5 717
1,344,000 37.6 335.5 4,003
250,000 37.6 318.5 702
133,000 37.6 348.0 413
620,000 37.6 346.5 1,914
3,425,000 37.6 281.0 8,333
250,000 37.6 355.5 795
250,000 37.6 369.5 830
2,500,000 37.6 272.0 5,862
1,000,000 37.6 363.0 3,254
2,500,000 37.6 273.5 5,893
4,075,000 37.6 286.0 10,124
250,000 37.6 357.0 799
225,000 37.6 352.5 708
250,000 37.6 366.5 822
500,000 37.6 364.0 1,633
25,000 37.6 353.5 79
250,000 37.6 373.0 838
250,000 37.6 354.0 791
––––––––– –––––––––
22,500,000 61,079
––––––––– –––––––––
Chris Gent 24,285 28.4 276.0 60
––––––––– –––––––––
Julian Horn-Smith 24,285 28.4 258.0 56
––––––––– –––––––––
Ken Hydon 123,500 46.7 275.0 282
432,500 48.3 275.0 982
––––––––– –––––––––
556,000 1,264
––––––––– –––––––––
Arun Sarin 875,000 37.6 285.5 2,171
750,000 37.6 273.5 1,768
1,500,000 37.6 284.0 3,694
5,000,000 100.2 282.5 9,120
––––––––– –––––––––
8,125,000 16,753
––––––––– –––––––––
Mohan Gyani 1,375,000 37.6 273.0 3,238
1,250,000 68.3 273.0 2,559
5,000,000 100.2 273.0 8,644
––––––––– –––––––––
7,625,000 14,441
––––––––– –––––––––
Paul Hazen 123,050 24.2 233.0 257
––––––––– –––––––––
Note
1. All figures restated to take account of the 4:1 capitalisation issue which occurred on 30 September 1999.
2. The share options exercised by Sam Ginn, Arun Sarin, Mohan Gyani and Paul Hazen were in respect of American Depositary Shares, each representing ten ordinary shares of the Company, which are traded on the
New York Stock Exchange. The number, option price and market price have been converted into the equivalent amounts for Vodafone AirTouch ordinary shares, with the option and market prices being translated at
the average exchange rate for the year of $1.61:£1.
The aggregate gross pre-tax gains made on the exercise of share options in the year by the above Company’s directors was £93,910,000
(1999 – £6,963,000). The closing middle market price of Vodafone AirTouch Plc’s shares at the year end was 348.5p, its highest closing price in the
year having been 399.0p and its lowest closing price having been 204.0p (after adjustment for the capitalisation issue on 30 September 1999).
Long Term Incentive Plan

Conditional awards of ordinary shares made to executive directors under the LTIP, and dividends on those shares paid under the terms of the Company’s
scrip dividend scheme, are shown below. No LTIP shares vested during the year for any director.
Number of shares Shares added through
Total interest in conditionally awarded scrip dividend scheme Total interest in
LTIP at 1 April 1999 during the year during the year LTIP at 31 March 2000
Chris Gent 97,000 187,935 895 285,830

Peter Bamford 49,980 96,840 462 147,282
Julian Horn-Smith 54,160 104,930 496 159,586
Ken Hydon 51,565 99,915 478 151,958
Short Term Incentive Plan

Conditional awards of ordinary shares made to executive directors under the STIP, and dividends on those shares paid under the terms of the Company’s
scrip dividend scheme, are shown below. No STIP shares vested during the year for any director.
Original award of
Initial and Enhancement Shares added through
Total interest in shares in respect of scrip dividend scheme Total interest in
STIP at 1 April 1999 the 1998/99 Scheme during the year STIP at 31 March 2000
Chris Gent – 93,970 216 94,186

Julian Horn-Smith – 52,465 120 52,585
Ken Hydon – 49,955 115 50,070
Note
The value of the awards of Initial STIP shares was included in ‘Incentive Schemes’ remuneration in the Annual Report and Accounts for the year ended 31 March 1999.
Beneficial interests
The directors have the following interests, all of which are beneficial, in the ordinary shares of Vodafone AirTouch Plc:
31 March 2000 1 April 1999 31 March 2000 1 April 1999

or date of or date of
appointment appointment
Sam Ginn 1,678,750 1,678,750 Michael Boskin 212,500 212,500

Ian MacLaurin 65,100 32,500 Professor Sir Alec Broers Nil Nil
Chris Gent 641,369 610,865 Don Fisher 2,300,000 1,100,000
Peter Bamford 11,612 5,450 Paul Hazen 161,550 38,500
Julian Horn-Smith 622,928 589,540 Penny Hughes Nil Nil
Ken Hydon 1,093,295 1,082,135 Sir David Scholey 50,000 50,000
Arun Sarin 3,407,350 2,367,200 Charles Schwab 107,500 107,500
There have been no changes in the interests of the directors of Vodafone AirTouch Plc in the ordinary shares of the Company during the period 1 April to
29 May 2000. Through contributions made in April and May 2000, the following directors acquired interests in shares of the Company under the Vodafone
Group Profit Sharing Scheme, as follows:
Interests in Interests in
Ordinary Shares Ordinary Shares
Chris Gent 844 Julian Horn-Smith 936

Peter Bamford 936 Ken Hydon 936
No director had, since 1 April 1999, any interest in the shares of any subsidiary company except Julian Horn-Smith who at the end of the financial year
owned 18,000 ordinary shares of Panafon SA, the Group’s Greek subsidiary company.
By Order of the Board

Stephen Scott
Secretary
29 May 2000
Statement of Directors’ Responsibilities

Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the
Company and the Group as at the end of the financial year and of the profit of the Group for that period. In preparing those financial statements, the
directors are required to:
• select suitable accounting policies and apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed; and
• prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company and the Group will continue
in business.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the
Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for
the systems of internal financial controls and for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Report of the Auditors
Auditors’ report to the members of Vodafone AirTouch Plc

We have audited the financial statements on pages 28 to 57, which have been prepared under the accounting policies set out on pages 32 and 33, and
the detailed information disclosed in respect of directors’ remuneration and share options set out in the Remuneration Report of the Board on pages 20
to 26. We have also audited the financial information prepared in accordance with accounting principles generally accepted in the United States set out
on pages 58 and 59.
We have reviewed the pro forma financial information on pages 60 to 62 which has been prepared in accordance with the bases set out on pages 60
and 62.
Respective responsibilities of directors and auditors
The directors are responsible for preparing the Annual Report & Accounts, including as described above preparation of the financial statements, which
are required to be prepared in accordance with applicable United Kingdom law and accounting standards. The directors are also responsible for the
preparation of the financial information prepared in accordance with accounting principles generally accepted in the United States and the pro forma
financial information prepared in accordance with the bases referred to above. Our responsibilities, as independent auditors, are established by statute,
the Auditing Practices Board, the UK Listing Authority, and by our profession’s ethical guidance.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the
Companies Act 1985. We also report to you if, in our opinion, the directors’ report is not consistent with the financial statements, if the Company has not
kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law or
the Listing Rules regarding directors’ remuneration and transactions with the Company and other members of the Group is not disclosed.
We review whether the Corporate Governance statement on pages 18 and 19 reflects the Company’s compliance with the seven provisions of the
Combined Code specified for our review by the UK Listing Authority, and we report if it does not. We are not required to consider whether the Board’s
statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group’s Corporate Governance procedures or its
risk and control procedures.
We read the other information contained in the Annual Report & Accounts, including the directors’ report on Corporate Governance, and consider whether
it is consistent with the audited financial statements. We consider the implications for our report if we become aware of any apparent misstatements or
material inconsistencies with the financial statements.
Bases of opinions
We conducted our audit in accordance with United Kingdom auditing standards issued by the Auditing Practices Board which are similar to auditing
standards in the United States. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial
statements, and of whether the accounting policies are appropriate to the circumstances of the Company and the Group, consistently applied and
adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
Our review of the pro forma financial information, which was substantially less in scope than an audit performed in accordance with Auditing Standards,
consisted primarily of considering the nature of the adjustments made and discussing the resulting pro forma financial information with management.
Opinions
In our opinion:
• the financial statements give a true and fair view of the state of affairs of the Company and the Group as at 31 March 2000 and of the profit of the
Group for the year then ended and have been properly prepared in accordance with the Companies Act 1985;
• the financial information set out on page 58 has been properly prepared in accordance with accounting principles generally accepted in the United
States; and
• the pro forma financial information has been properly prepared in accordance with the bases set out on pages 60 and 62, which are consistent with
the accounting policies of the Group.
Deloitte & Touche

Chartered Accountants and Registered Auditors
Hill House
1 Little New Street
London EC4A 3TR
29 May 2000
Consolidated Profit and Loss Account

for the year ended 31 March 2000
2000 1999
Note £m £m
Turnover: Group and share of joint ventures

Continuing operations 4,498 3,360
Acquisitions 3,737 –
–––––––– ––––––––
8,235 3,360
Less: Share of joint ventures acquired in the year (362) –

–––––––– ––––––––
7,873 3,360
–––––––– ––––––––
Group turnover
Continuing operations 4,498 3,360
Acquisitions 3,375 –
–––––––– ––––––––
1 7,873 3,360
–––––––– ––––––––
Operating profit
Continuing operations 980 847
Acquisitions 1 –
–––––––– ––––––––
2 981 847
Share of operating profit/(loss) in joint ventures and associated undertakings

Continuing operations 104 116
Acquisitions (289) –
–––––––– ––––––––
Total Group operating profit: Group and share of joint ventures
and associated undertakings 796 963
Disposal of fixed asset investments 3 954 66

–––––––– ––––––––
Profit on ordinary activities before interest 1 1,750 1,029
Net interest payable

Group 4 (350) (76)
Share of joint ventures and associated undertakings 4 (51) (18)
–––––––– ––––––––
Profit on ordinary activities before taxation 1,349 935
Tax on profit on ordinary activities 5 (685) (252)

–––––––– ––––––––
Profit on ordinary activities after taxation 664 683
Equity minority interests (137) (46)

Non-equity minority interests (40) –
–––––––– ––––––––
Profit for the financial year 487 637
Equity dividends 6 (620) (197)

–––––––– ––––––––
Retained (loss)/profit for the Group and its share of joint ventures
and associated undertakings 19 (133) 440
–––––––– ––––––––
Basic earnings per share 7 1.80p 4.12p
Diluted earnings per share 7 1.78p 4.11p
Adjusted basic earnings per share 7 4.71p 3.77p

Consolidated Balance Sheet

at 31 March 2000
2000 1999
Note £m £m
Fixed assets
Intangible assets 8 22,206 329
Tangible assets 9 6,307 2,150
Investments 10 122,338 372
Investments in joint ventures:

Share of gross assets 2,912 –
Share of gross liabilities (241) –
–––––––– ––––––––
2,671 –
Investments in associated undertakings 17,979 275
Other investments 101,688 97
–––––––– ––––––––
150,851 2,851
–––––––– ––––––––
Current assets
Stocks 11 190 45
Debtors 12 2,138 741
Liquid investments 30 –
Cash at bank and in hand 159 6
–––––––– ––––––––
2,517 792
Creditors: amounts falling due

within one year 13 4,441 1,530
–––––––– ––––––––
Net current liabilities (1,924) (738)
–––––––– ––––––––
Total assets less current liabilities 148,927 2,113

after more than one year 14 6,374 1,179
Provisions for liabilities and charges 17 193 10

–––––––– ––––––––
142,360 924
–––––––– ––––––––
Capital and reserves

Called up share capital 18 3,797 155
Share premium account 19 39,577 96
Merger reserve 19 96,914 –
Other reserve 19 1,120 –
Profit and loss account 19 (575) 564
–––––––– ––––––––
Total equity shareholders’ funds 140,833 815
Equity minority interests 523 105

Non-equity minority interests 20 1,004 4
–––––––– ––––––––
142,360 924
–––––––– ––––––––
The financial statements on pages 28 to 57 were approved by the Board of directors on 29 May 2000 and were signed on its behalf by:
C C GENT Chief Executive
K J HYDON Financial Director

Consolidated Cash Flow

2000 1999
Note £m £m
Net cash inflow from operating activities 25 2,510 1,045
Dividends received from joint ventures

and associated undertakings 236 3
Net cash outflow for returns on investments

and servicing of finance 25 (406) (90)
Taxation (325) (195)
Net cash outflow for capital expenditure

and financial investment 25 (756) (688)
Net cash outflow for acquisitions and disposals 25 (4,756) (317)
Equity dividends paid (221) (118)

–––––––– ––––––––
Cash outflow before management of liquid
resources and financing (3,718) (360)
Management of liquid resources
Short term deposits (33) –
Net cash inflow from financing
Issue of ordinary share capital 362 11
Issue of shares to minorities 37 –
Purchase of shares from minorities – (18)
Debt due within one year:
Increase/(decrease) in short term debt 598 (130)
Repayment of debt acquired (449) –
Debt due after one year:
(Decrease)/increase in bank loans (550) 490
Repayment of debt acquired (377) –
Issue of new bonds 4,246 –
–––––––– ––––––––
Net cash inflow from financing 3,867 353
–––––––– ––––––––
Increase/(decrease) in cash in the year 116 (7)

–––––––– ––––––––
Reconciliation of net cash flow to movement

in net debt
Increase/(decrease) in cash in the year 116 (7)
Cash inflow from increase in debt (3,468) (360)
Cash outflow from increase in liquid resources 33 –
–––––––– ––––––––
Increase in net debt resulting from cash flows (3,319) (367)
Debt acquired on acquisition of subsidiary undertakings (2,133) –

Translation difference 316 (19)
Other movements 1 (5)
–––––––– ––––––––
Increase in net debt in the year (5,135) (391)
Opening net debt (1,508) (1,117)
–––––––– ––––––––
Closing net debt 26 (6,643) (1,508)
–––––––– ––––––––
Consolidated Statement of Total Recognised Gains and Losses

2000 1999
£m £m

Currency translation (1,130) 6
–––––––– ––––––––
Total recognised gains and losses relating to the year (643) 643
–––––––– ––––––––
Movements in Equity Shareholders’ Funds

2000 1999
£m £m

Equity dividends (620) (197)
–––––––– ––––––––
(133) 440
Currency translation (1,130) 6

New share capital subscribed, net of issue costs 140,037 19
Unvested option consideration 1,165 –
Goodwill transferred to the profit and loss account
in respect of business disposals 18 11
Scrip dividends 81 64
Other (20) (8)
–––––––– ––––––––
Net movement in equity shareholders’ funds 140,018 532
Opening equity shareholders’ funds 815 283

–––––––– ––––––––
Closing equity shareholders’ funds 140,833 815
–––––––– ––––––––
Statement of Accounting Policies
Basis of accounting
The financial statements have been prepared in accordance with applicable accounting standards. During the financial year, the Group has adopted the
following Financial Reporting Standards issued by the Accounting Standards Board:
FRS 15 – “Tangible Fixed Assets”
FRS 16 – “Current Tax”
Adoption of these Financial Reporting Standards has not resulted in any restatement of prior year comparatives.
The merger with AirTouch Communications, Inc. has been accounted for as an acquisition in accordance with Financial Reporting Standard 6,
“Acquisitions and Mergers”.
The particular accounting policies adopted are stated below.
Accounting convention
The financial statements are prepared under the historical cost convention.
Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings and include the Group’s share of the
results of its joint ventures and associated undertakings for financial statements made up to 31 March 2000.
Foreign currencies
Transactions in foreign currencies are recorded at the exchange rates ruling on the dates of those transactions, adjusted for the effects of any hedging
arrangements. Foreign currency monetary assets and liabilities, including the Group’s interest in the underlying net assets of joint ventures and
associated undertakings, are translated into sterling at year end rates.
The results of international subsidiary undertakings, joint ventures and associated undertakings are translated into sterling at average rates of exchange.
The adjustment to year end rates is taken to reserves. Exchange differences which arise on the retranslation of international subsidiary undertakings’,
joint ventures’ and associated undertakings’ balance sheets at the beginning of the year and equity additions and withdrawals during the financial year,
are dealt with as a movement in reserves.
Other translation differences are dealt with in the profit and loss account.
Derivative financial instruments

Transactions in derivative financial instruments are undertaken for risk management purposes only.
The Group uses derivative financial instruments to hedge its exposure to interest rate and foreign currency risk. To the extent that such instruments are
matched against an underlying asset or liability, they are accounted for using hedge accounting.
Gains or losses on interest rate instruments are matched against the corresponding interest charge or interest receivable in the profit and loss account
over the life of the instrument. For foreign exchange instruments, gains or losses and premiums or discounts are matched to the underlying transactions
being hedged.
Turnover
Turnover represents the invoiced value, excluding sales taxes, of services and goods supplied by the Group.
Pensions
Costs relating to defined benefit plans, which are periodically calculated by professionally qualified actuaries, are charged against profits so that the
expected costs of providing pensions are recognised during the period in which benefit is derived from the employees’ services.
The costs of the various pension schemes may vary from the funding, dependent upon actuarial advice, with any difference between pension cost and
funding being treated as a provision or prepayment.
Defined contribution pension costs charged to the profit and loss account represent contributions payable in respect of the period.
Research and development

Expenditure on research and development is written off in the year in which it is incurred.
Scrip dividends
Dividends satisfied by the issue of ordinary shares are credited to reserves. The nominal value of the shares issued is offset against the share
premium account.
Statement of Accounting Policies continued
Goodwill
Goodwill is calculated as the surplus of cost over fair value attributed to the net assets (excluding goodwill) of subsidiary, joint venture or associated
undertakings acquired.
For acquisitions made after the financial year ended 31 March 1998, goodwill is capitalised and held as a foreign currency denominated asset, where
applicable. Goodwill is amortised on a straight line basis over its estimated useful economic life. For acquired network businesses, whose operations are
governed by fixed term licences, the amortisation period is determined primarily by reference to the unexpired licence period and the conditions for
licence renewal. For other acquisitions, including customer bases, the amortisation period for goodwill is typically between 5 and 10 years.
For acquisitions made before the adoption of FRS 10 on 1 April 1998, goodwill was written off directly to reserves. Goodwill written off directly to
reserves is reinstated in the profit and loss account when the related business is sold.
Other intangible fixed assets

Purchased intangible fixed assets, including licence fees, are capitalised at cost.
Network licence costs are amortised over the periods of the licences. Amortisation is charged from commencement of service of the network.
The annual charge is calculated in proportion to the expected usage of the network during the start up period and on a straight line basis thereafter.
Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation.
Depreciation is not provided on freehold land. The cost of other tangible fixed assets is written off, from the time they are brought into use, by equal
instalments over their expected useful lives as follows:
Freehold buildings 25 – 50 years
Leasehold premises the term of the lease
Plant and machinery 5 – 10 years
Motor vehicles 4 years
Computers and software 3 – 5 years
Furniture and fittings 5 – 10 years
Tangible fixed assets include overheads incurred in the acquisition, establishment and installation of base stations.
Investments
The consolidated financial statements include investments in associated undertakings using the equity method of accounting. An associated undertaking
is a company in which the Group owns a material share of the equity and, in the opinion of the directors, can exercise significant influence in its
management. The profit and loss account includes the Group’s share of the operating profit or loss, exceptional items, interest income or expense and
attributable taxation of those companies. The balance sheet shows the Group’s share of the net assets or liabilities of those companies, together with
loans advanced and attributed goodwill.
The consolidated financial statements include investments in joint ventures using the gross equity method of accounting. A joint venture is a company
in which the Group has a long term interest and exercises joint control. Under the gross equity method, a form of the equity method of accounting,
the Group’s share of the aggregate gross assets and liabilities underlying the investment in the joint venture is included in the balance sheet and
the Group’s share of the turnover of the joint venture is disclosed in the profit and loss account.
Other investments, held as fixed assets, comprise equity shareholdings, partnership interests and long term loans. They are stated at cost less provision
for any impairment. Dividend income is recognised upon receipt and interest when receivable.
Stocks
Stocks are valued at the lower of cost and estimated net realisable value.
Deferred taxation
Provision is made for deferred taxation only where there is a reasonable probability that a liability or asset will crystallise in the foreseeable future.
No provision is made for any tax liability which may arise if undistributed profits of certain international subsidiary undertakings, joint ventures and
associated undertakings are remitted to the UK, except in respect of planned remittances.
Leases
Rental costs under operating leases are charged to the profit and loss account in equal annual amounts over the periods of the leases.
Assets acquired under finance leases, which transfer substantially all the rights and obligations of ownership, are accounted for as though purchased
outright. The fair value of the asset at the inception of the lease is included in tangible fixed assets and the capital element of the leasing commitment
included in creditors. Finance charges are calculated on an actuarial basis and are allocated over each lease to produce a constant rate of charge on the
outstanding balance.
Lease obligations which are satisfied by cash and other assets deposited with third parties are set-off against those assets in the Group’s balance sheet.
Notes to the Consolidated Financial Statements
1 Segmental analysis
The Group operates substantially in one class of business, the supply of mobile telecommunications services and products. Analyses of
turnover, profit on ordinary activities before interest and net assets by geographical region are as follows:
Continuing
operations Acquisitions 2000 1999
£m £m £m £m
Turnover: Group and share of joint ventures
Europe, Middle East & Africa 1,107 715 1,822 945
United Kingdom 2,826 75 2,901 2,088
United States & Asia Pacific 565 2,947 3,512 327
–––––––– –––––––– –––––––– ––––––––
4,498 3,737 8,235 3,360
Less: Share of joint ventures
United States & Asia Pacific – (362) (362) –
–––––––– –––––––– –––––––– ––––––––
Group turnover 4,498 3,375 7,873 3,360
–––––––– –––––––– –––––––– ––––––––
Total Group operating profit before goodwill and exceptional items

Europe, Middle East & Africa 355 748 1,103 314
United Kingdom 708 (2) 706 644
United States & Asia Pacific 40 689 729 14
–––––––– –––––––– –––––––– ––––––––
1,103 1,435 2,538 972
Amortisation of goodwill (19) (1,693) (1,712) (9)

Exceptional reorganisation costs – (30) (30) –
Disposal of fixed asset investments 954 – 954 66
–––––––– –––––––– –––––––– ––––––––
Profit/(loss) on ordinary activities before interest 2,038 (288) 1,750 1,029
–––––––– –––––––– –––––––– ––––––––
Europe, Middle East & Africa 1,291 (155) 1,136 375

United Kingdom 719 (13) 706 643
United States & Asia Pacific 28 (120) (92) 11
–––––––– –––––––– –––––––– ––––––––
2,038 (288) 1,750 1,029
–––––––– –––––––– –––––––– ––––––––
Net assets and attributed goodwill

Europe, Middle East & Africa 119,511 900
United Kingdom 729 779
United States & Asia Pacific 28,763 753
Net borrowings (6,643) (1,508)
–––––––– ––––––––
142,360 924
–––––––– ––––––––
Amounts for acquisitions primarily comprise the results of AirTouch Communications, Inc. and its subsidiaries, joint ventures and associated
undertakings from 30 June 1999, and CommNet Cellular Inc., the acquisition of which was completed on 6 January 2000. Further details
regarding acquisitions are included in note 21.
Turnover is by origin, which is not materially different from turnover by destination.
Joint ventures and associated undertakings

The Group’s share of the (loss)/profit on ordinary activities before interest, and share of net assets, of joint ventures and associated
undertakings included in the above geographical analyses are as follows:
Joint ventures Associated undertakings
2000 1999 2000 1999
£m £m £m £m
Share of (loss)/profit on ordinary activities before interest
Europe, Middle East & Africa – – (135) 111
United Kingdom – – 3 4
United States & Asia Pacific (40) – (13) 3
–––––––– –––––––– –––––––– ––––––––
(40) – (145) 118
–––––––– –––––––– –––––––– ––––––––
Share of net assets and attributed goodwill
Europe, Middle East & Africa – – 13,798 262
United Kingdom – – – (6)
United States & Asia Pacific 2,671 – 4,181 13
–––––––– –––––––– –––––––– ––––––––
2,671 – 17,979 269
–––––––– –––––––– –––––––– ––––––––
Notes to the Consolidated Financial Statements continued
2 Operating profit
Continuing
£m £m £m £m
Group turnover 4,498 3,375 7,873 3,360

Cost of sales 2,591 1,768 4,359 1,809
–––––––– –––––––– –––––––– ––––––––
Gross profit 1,907 1,607 3,514 1,551
–––––––– –––––––– –––––––– ––––––––
Selling and distribution costs 305 564 869 243
Administrative expenses 622 1,042 1,664 461
Amortisation of goodwill 16 658 674 8

Other administration costs 606 384 990 453
–––––––– –––––––– –––––––– ––––––––
Total operating expenses 927 1,606 2,533 704
–––––––– –––––––– –––––––– ––––––––
Operating profit 980 1 981 847
–––––––– –––––––– –––––––– ––––––––
Operating profit has been arrived at after charging:

2000 1999
£m £m
Depreciation of tangible fixed assets
Owned assets 698 255
Leased assets 48 27
Amortisation of goodwill 674 8
Amortisation of other intangible fixed assets 12 7
Research and development 46 37
Payments under operating leases
Plant and machinery 76 10
Other assets 278 167
Auditors’ remuneration
Audit work 1 1
Other fees
United Kingdom 3 1
Overseas 4 –
Exceptional reorganisation costs 30 –
–––––––– ––––––––
Auditors’ other fees shown above exclude £6m (1999 – £1m) of fees payable for professional services incurred in the period in connection
with mergers and acquisitions. These fees have been accounted for as acquisition costs upon completion of the transaction, or are being
carried forward within investments pending completion. Auditors’ other fees incurred on specific capital projects during the year and totalling
£3m (1999 – £2m) have also been excluded, of which £2m was incurred by overseas operations (1999 – £1m).
The exceptional reorganisation costs relate to the reorganisation of the Group’s US operations following the merger with AirTouch.

Group turnover includes sales to joint ventures and associated undertakings of £303m (1999 – £255m) primarily comprising network airtime
and access charges. Total operating costs include charges from joint ventures and associated undertakings of £82m (1999 – £75m), primarily
comprising roaming charges and service provider incentive payments.
The Group’s share of the operating profit/(loss) of joint ventures and associated undertakings is further analysed as follows:
Continuing
£m £m £m £m
Share of operating profit/(loss):

Joint ventures – (40) (40) –
Associated undertakings 104 (249) (145) 116
–––––––– –––––––– –––––––– ––––––––
104 (289) (185) 116
–––––––– –––––––– –––––––– ––––––––
Included in the Group’s share of operating profit/(loss) above is a charge for the amortisation of goodwill of £52m for joint ventures
(1999 – £Nil) and £986m in respect of associated undertakings (1999 – £1m).
3 Disposal of fixed asset investments

The profit on disposal of fixed asset investments arose primarily from the disposal of the Group’s 17.24% shareholding in E-Plus Mobilfunk
GmbH, the disposal of the Group’s 20% shareholding in a UK service provider, Martin Dawes Telecommunications Limited, and the disposal of
the Group’s 50% shareholding in Comfone AG in Switzerland. The disposal of E-Plus was in accordance with an undertaking given to the
European Commission as a pre-condition to its approval of the merger with AirTouch Communications, Inc.
The profit on disposal of fixed asset investments in 1999 arose from the reduction in the Group’s interest in Globalstar from 5.2% to 3.0%,
the profit on disposal of the Group’s French service provider business and an adjustment to the profits realised in relation to business
disposals in 1998 following finalisation of the relevant completion accounts.
4 Net interest payable

2000 1999
£m £m
Parent and subsidiary undertakings
Interest receivable and similar income (55) (14)
–––––––– ––––––––
Interest payable and similar charges
Bank loans and overdrafts 214 4
Other loans 174 86
Exceptional finance costs 17 –
–––––––– ––––––––
405 90
–––––––– ––––––––
Group net interest payable 350 76
–––––––– ––––––––
Share of joint ventures

Interest payable and similar charges 3 –
–––––––– ––––––––
3 –
–––––––– ––––––––
Share of associated undertakings
Interest receivable and similar income (3) –
Interest payable and similar charges 51 18
–––––––– ––––––––
48 18
–––––––– ––––––––
Share of joint ventures and associated undertakings net interest payable 51 18
–––––––– ––––––––
The exceptional finance costs were incurred in restructuring the Group’s borrowing facilities in relation to the acquisition of Mannesmann AG.
5 Tax on profit on ordinary activities

2000 1999
£m £m
United Kingdom
Corporation tax charge at 30% (1999 – 31%) 117 164
Transfer to deferred taxation 11 5
–––––––– ––––––––
128 169
–––––––– ––––––––
International
Current tax 691 83
Transfer to deferred taxation (134) –
–––––––– ––––––––
557 83
–––––––– ––––––––
685 252
–––––––– ––––––––
Parent and subsidiary undertakings 494 241

Share of joint ventures (57) -
Share of associated undertakings 248 11
–––––––– ––––––––
685 252
–––––––– –––––––
There are no tax charges attributable to the profit on disposal of fixed asset investments in the year (1999 – £2m).
The increase in the effective tax rate for the year ended 31 March 2000 is primarily the result of the higher tax rates attributable to the former
AirTouch operations, whose results have been included for the nine month period following merger completion on 30 June 1999.
6 Equity dividends
2000 1999
£m £m
Interim dividend paid of 0.655p (1999 – 0.624p) per ordinary share 203 97
Second interim dividend declared of Nil p (1999 – 0.648p) per ordinary share – 100
Proposed final dividend of 0.680p (1999 – Nil p) per ordinary share 417 –
–––––––– ––––––––
620 197
–––––––– ––––––––
Dividends per share for the comparative period has been adjusted to give effect to the capitalisation (bonus) issue on 30 September 1999.
7 Earnings per share

Weighted average number of shares (millions) in issue during
the year and used to calculate:
2000 1999
Basic and adjusted basic earnings per share 27,100 15,445

Dilutive effect of share options 260 65
–––––––– ––––––––
Diluted earnings per share 27,360 15,510
–––––––– ––––––––
2000 Pence 1999 Pence
£m per share £m per share
Earnings for basic earnings per share 487 1.80 637 4.12
Goodwill amortisation 1,712 6.32 9 0.06
Exceptional reorganisation costs, net of attributable taxation 19 0.07 – –
Disposals of fixed asset investments, net of attributable taxation (954) (3.52) (64) (0.41)
Exceptional finance costs, net of attributable taxation 12 0.04 – –
–––––––– –––––––– –––––––– ––––––––
Adjusted basic earnings per share 1,276 4.71 582 3.77
–––––––– –––––––– –––––––– ––––––––
Earnings for basic earnings per share represents the net profit attributable to ordinary shareholders, being the profit on ordinary activities
after taxation and minority interests, and has also been used to calculate diluted earnings per share. Adjusted basic earnings per share has
been presented in order to highlight the underlying performance of the Group.
The Group’s consolidated financial statements for the year do not include the results of Mannesmann AG, as the acquisition received
clearance from the European Commission on 12 April 2000. Accordingly, the ordinary shares issued during the year as part of the purchase
consideration for Mannesmann AG have been excluded from the calculation of earnings per share.
The weighted average number of shares for the comparative period has been adjusted to give effect to the capitalisation (bonus) issue on
30 September 1999.
8 Intangible fixed assets

Licence and
Goodwill spectrum fees Total
£m £m £m
Cost
1 April 1999 181 173 354
Exchange movements (431) (26) (457)
Acquisitions (note 21) 22,447 – 22,447
Reclassifications from associated undertakings – 326 326
Additions – 251 251
–––––––– –––––––– ––––––––
31 March 2000 22,197 724 22,921
–––––––– –––––––– ––––––––
Amortisation
1 April 1999 8 17 25
Exchange movements 4 – 4
Charge for the year 674 12 686
–––––––– –––––––– ––––––––
31 March 2000 686 29 715
–––––––– –––––––– ––––––––
Net book value
31 March 2000 21,511 695 22,206
–––––––– –––––––– ––––––––
31 March 1999 173 156 329
–––––––– –––––––– ––––––––
For acquisitions prior to 1 April 1998, the cumulative goodwill written off to reserves, net of the goodwill attributed to business disposals,
was £1,194m at 31 March 2000 (1999 – £1,212m). The movement during the year relates to the disposal of the Group’s 20% shareholding
in a UK service provider, Martin Dawes Telecommunications Limited.
9 Tangible fixed assets Land Network

and Plant and Fixtures and infra-
buildings machinery fittings structure Total
£m £m £m £m £m
Cost
1 April 1999 94 455 132 2,516 3,197
Exchange movements (50) (24) (5) (123) (202)
Acquisitions (note 21) 222 33 53 2,624 2,932
Reclassifications from associated undertakings – – – 85 85
Additions 34 342 76 1,610 2,062
Disposals (7) (14) (4) (32) (57)
Reclassifications 2 (30) (8) 36 –
–––––––– –––––––– –––––––– –––––––– ––––––––
31 March 2000 295 762 244 6,716 8,017
–––––––– –––––––– –––––––– –––––––– ––––––––
Accumulated depreciation
1 April 1999 26 207 50 764 1,047
Exchange movements (5) (9) (1) (24) (39)
Charge for the year 17 116 22 591 746
Disposals (1) (12) (2) (29) (44)
Reclassifications (2) (11) (4) 17 –
–––––––– –––––––– –––––––– –––––––– ––––––––
31 March 2000 35 291 65 1,319 1,710
–––––––– –––––––– –––––––– –––––––– ––––––––
Net book value
31 March 2000 260 471 179 5,397 6,307
–––––––– –––––––– –––––––– –––––––– ––––––––
31 March 1999 68 248 82 1,752 2,150
–––––––– –––––––– –––––––– –––––––– ––––––––
The net book value of land and buildings comprises freeholds of £195m (1999 – £16m), long leaseholds of £10m (1999 – £5m) and short
leaseholds of £55m (1999 – £47m).
Network infrastructure at 31 March 2000 comprises: Short term
Freehold leasehold Plant and
premises premises machinery Total
£m £m £m £m
Cost 41 519 6,156 6,716

Accumulated depreciation 5 114 1,200 1,319
–––––––– –––––––– –––––––– ––––––––
Net book value 36 405 4,956 5,397
–––––––– –––––––– –––––––– ––––––––
31 March 1999
Net book value 10 167 1,575 1,752
–––––––– –––––––– –––––––– ––––––––
10 Fixed asset investments

Joint Associated Other
ventures undertakings investments Total
£m £m £m £m
1 April 1999 – 275 97 372

Exchange movements (35) (740) (13) (788)
Additions and loan advances 768 640 101,652 103,060
Goodwill 2,101 18,524 – 20,625
Disposals and loan repayments (67) (7) (48) (122)
Share of retained results, excluding goodwill amortisation (44) 358 – 314
Goodwill amortisation (52) (986) – (1,038)
Reclassifications to subsidiary undertakings – (85) – (85)
–––––––– –––––––– –––––––– ––––––––
31 March 2000 2,671 17,979 101,688 122,338
–––––––– –––––––– –––––––– ––––––––
The Group’s share of its joint ventures’ and associated undertakings’ post acquisition accumulated (losses)/profits at 31 March 2000 amounted
to £(44)m (1999 – £Nil) and £402m (1999 – £136m) respectively. There were no loans outstanding with joint ventures during the year. Loans to
associated undertakings at 31 March 2000 were £33m (1999 – £Nil). The maximum aggregate loans to associated undertakings and former
associated undertakings during the year which are not included within the period end balance were £13m (1999 – £3m).
Included in additions and loan advances within “Other investments” is an amount of £101,246m in respect of the acquisition of Mannesmann AG.
This represents the fair value of the consideration for the acquisition of approximately 98.62% of the issued share capital of Mannesmann AG and
99.72% of its convertible bond, together with related costs incurred. European Commission approval of the acquisition was received on 12 April
2000. Accordingly, the Group’s consolidated financial statements do not include Mannesmann AG as a consolidated subsidiary. The results and
net assets of Mannesmann AG will be consolidated in the Group’s financial statements for the year ending 31 March 2001.
The Group’s joint ventures, associated undertakings and fixed asset investments are detailed on page 57.
Fixed asset investments include 12,532,364 ordinary shares in Vodafone AirTouch Plc, held by a Qualifying Employee Share Ownership Trust
(‘QUEST’). These shares had a Nil cost to the Group. Further detail is provided within note 18 to the accounts.
Fixed asset investments also include 2,673,833 ordinary shares in Vodafone AirTouch Plc, held by the Vodafone Group Employee Trust to satisfy
the potential award of shares under the Group’s Long Term Incentive Plan and Short Term Incentive Plan. The cost to the Group of these shares
was £5m and their market value at 31 March 2000 was £9m.
10 Fixed asset investments continued

The Group’s share of its joint ventures and associated undertakings comprises:
Joint ventures Associated undertakings
2000 1999 2000 1999
£m £m £m £m
Share of turnover of joint ventures and associated
undertakings 362 – 3,286 698
–––––––– –––––––– –––––––– ––––––––
Share of assets
Fixed assets 790 – 2,472 669
Current assets 103 – 1,341 253
–––––––– –––––––– –––––––– ––––––––
893 – 3,813 922
–––––––– –––––––– –––––––– ––––––––
Share of liabilities
Liabilities due within one year 164 – 1,737 442
Liabilities due after more than one year 77 – 1,020 220
–––––––– –––––––– –––––––– ––––––––
241 – 2,757 662
–––––––– –––––––– –––––––– ––––––––
Share of net assets 652 – 1,056 260

Attributed goodwill net of amortisation charges 2,019 – 16,923 9
–––––––– –––––––– –––––––– ––––––––
Share of net assets and attributed goodwill 2,671 – 17,979 269
–––––––– –––––––– –––––––– ––––––––
The Group’s share of the net assets of its joint ventures and associated undertakings comprises:
2000 1999 2000 1999
£m £m £m £m
Fixed asset investments 2,671 – 17,979 275

Included in other creditors – – – (6)
–––––––– –––––––– –––––––– ––––––––
2,671 – 17,979 269
–––––––– –––––––– –––––––– ––––––––
The Group’s principal joint ventures, associated undertakings and fixed asset investments are detailed on page 57.
11 Stocks
2000 1999
£m £m
Goods held for resale 190 45

–––––––– ––––––––
12 Debtors
2000 1999
£m £m
Due within one year:
Trade debtors 943 385
Amounts owed by associated undertakings 23 47
Other debtors 221 66
Prepayments and accrued income 532 227
–––––––– ––––––––
1,719 725
–––––––– ––––––––
Due after more than one year:
Trade debtors 34 –
Other debtors 10 2
Prepayments and accrued income 46 14
Deferred tax (note 17) 329 –
–––––––– ––––––––
419 16
–––––––– ––––––––
2,138 741
–––––––– ––––––––
13 Creditors: amounts falling due within one year

2000 1999
£m £m
Bank loans, other loans and overdrafts 94 174

Commercial paper 700 203
Trade creditors 706 216
Amounts owed to associated undertakings 2 –
Taxation 535 252
Other taxes and social security costs 54 28
Other creditors 436 46
Dividends 417 100
Accruals and deferred income 1,497 511
–––––––– ––––––––
4,441 1,530
–––––––– ––––––––
14 Creditors: amounts falling due after more than one year

2000 1999
£m £m
Bank loans 184 606

Other loans 5,854 531
Other creditors 33 33
Accruals and deferred income 303 9
–––––––– ––––––––
6,374 1,179
–––––––– ––––––––
Bank loans of £184m are repayable in more than two years but not more than five years from the balance sheet date. Other loans are repayable
as follows:
Repayable in more than one year but not more than two years 481 –
Repayable in more than two years but not more than five years 1,497 531
Repayable in more than five years 3,876 –
–––––––– ––––––––
5,854 531
–––––––– ––––––––
Other loans primarily comprise bond issues by Vodafone AirTouch Plc, or its subsidiary AirTouch Communications, Inc. and guaranteed by
Vodafone AirTouch Plc, analysed as follows:
7.875% Sterling bond due 2001 249 248

7.125% US Dollar bond due 2001 156 –
7.5% Sterling bond due 2004 248 248
7.625% US Dollar bond due 2005 1,089 –
5.75% Euro bond due 2006 893 –
5.5% Deutschmark bond due 2008 123 –
7.75% US Dollar bond due 2010 1,702 –
Other 91 35
–––––––– ––––––––
5,854 531
–––––––– ––––––––
15 Financial liabilities 2000 1999

£m £m
Net debt
Liquid investments (30) –
Cash at bank and in hand (159) (6)
Debt due in one year or less, or on demand 794 377
Debt due after one year 6,038 1,137
–––––––– ––––––––
6,643 1,508
–––––––– ––––––––
Maturity of financial liabilities
The maturity profile of the Group’s borrowings at 31 March was as follows:
In one year or less, or on demand 794 377
In more than one year but not more than two years 481 –
In more than two years but not more than five years 1,681 1,137
In more than five years 3,876 –
–––––––– ––––––––
6,832 1,514
–––––––– ––––––––
The maturities of the Group’s other financial liabilities at 31 March was as follows:
In more than one year but not more than two years 33 5
In more than two years but not more than five years 3 37
–––––––– ––––––––
36 42
–––––––– ––––––––
Borrowing facilities
The Group had the following undrawn committed borrowing facilities available to it on 31 March:
Expiring in one year or less 5,689 50
Expiring in more than one year but not more than two years – 495
Expiring in more than two years 4,562 418
–––––––– ––––––––
10,251 963
–––––––– ––––––––
In addition to the above, a subsidiary undertaking has a £439m committed facility which may only be used to fund its operations. This facility
expires in more than five years.
Interest rate and currency of financial liabilities

After taking into account the various interest rate and currency swaps entered into by the Group, the currency and interest rate exposure of
the financial liabilities of the Group was: Fixed rate financial liabilities
Floating Fixed Non-interest Weighted Non-interest bearing
rate rate bearing Weighted average time financial liabilities –
financial financial financial average for which weighted average
Total liabilities liabilities liabilities interest rate rate is fixed period until maturity
Currency £m £m £m £m % Years Years
At 31 March 2000:
Sterling 2,298 871 1,422 5 6.7 1.6 0.7
Euro 1,895 322 1,511 62 3.8 1.6 1.3
US Dollar 2,057 578 1,479 – 7.3 13.1 –
Other 618 614 – 4 – – 3.2
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Gross financial liabilities 6,868 2,385 4,412 71 5.9 5.5 1.4
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 31 March 1999:
Sterling 733 235 496 2 6.8 3.3 1.5
Euro 440 230 176 34 3.4 1.3 2.3
Other 383 275 102 6 5.0 1.0 3.0
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Gross financial liabilities 1,556 740 774 42 5.8 2.6 2.5
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Interest on floating rate borrowings is based on national LIBOR equivalents or government bond rates in the relevant currencies.
Financial assets
Liquid investments of £30m comprises a Euro denominated short term deposit. Cash at bank and in hand of £159m was primarily Euro
denominated.
Fixed asset investments, excluding the investment in Mannesmann AG, are included at a net book value of £442m at 31 March 2000
(1999 – £97m). Fixed asset investments primarily comprise equity investments with a net book value of £392m (1999 – £60m), of which
£7m (1999 – £16m) was denominated in Sterling, £79m (1999 – £44m) was denominated in Euro, £66m was denominated in US Dollars
(1999 – £Nil) and £240m (1999 – £Nil) was denominated in other currencies. Fixed asset investments also include an interest bearing
US Dollar denominated deposit of £32m (1999 – £37m) which had a maximum period to maturity of 3.7 years.
16 Financial instruments
Fair values of financial assets and liabilities
The carrying amounts and estimated fair value of the Group’s outstanding financial instruments are set out below:
2000 2000 1999 1999
Net carrying Estimated Net carrying Estimated
amount fair value amount fair value
£m £m £m £m
Fixed asset investments (excluding investments
in joint ventures and associated undertakings) 442 442 97 97
Cash at bank and in hand and liquid investments 189 189 6 6
Borrowings:
Short term 794 794 377 377
Long term 6,038 6,017 1,137 1,175
Derivative financial instruments:
Interest rate – 57 – 12
Foreign exchange – (66) – (6)
–––––– –––––– –––––– ––––––
The Group’s exposure to market risk, which is the sensitivity of the value of financial instruments to changes in related currency and interest
rates, is minimised because gains and losses on the underlying assets and liabilities offset gains and losses on derivative financial instruments.
Fixed asset investments in the above table exclude £101,246m in relation to the fair value of the consideration for the acquisition of
Mannesmann AG as at 31 March 2000. The following methods and assumptions were used to estimate the fair values shown above.
Fixed asset investments (excluding investments in joint ventures and associated undertakings) – The net book value of fixed asset
investments at 31 March 2000 comprises investments recorded at an original cost of £442m (1999 – £97m), including assets with a fair
value to the Group of £384m arising as a result of the AirTouch merger. Investments include untraded equity investments in foreign companies
that are operating cellular and satellite communications services. Fixed asset investments of £442m do not include any valuation in respect of
existing customer bases or other intangible assets.
Cash at bank and in hand and liquid investments – The carrying values of cash and short term borrowings, and liquid investments,
approximate to their fair values because of the short term maturity of these instruments.
Borrowings (excluding foreign exchange contracts) – The fair value of quoted long term borrowings is based on year end mid-market
quoted prices. The fair value of other borrowings is estimated by discounting the future cash flows to net present values using appropriate
market interest and foreign currency rates prevailing at the year end.
Foreign exchange contracts and interest rate swaps and futures – The Group enters into foreign exchange contracts, interest rate swaps
and futures in order to manage its foreign currency and interest rate exposure. The fair value of these financial instruments was estimated by
discounting the future cash flows to net present values using appropriate market interest and foreign currency rates prevailing at the year end.
Hedges
The Group’s policy is to use derivative instruments to hedge against exposure to movements in interest rates and exchange rates. Changes in
the fair value of instruments used for hedging are not recognised in the financial statements until the hedged exposure is itself recognised.
Unrecognised gains and losses on instruments used for hedging are set out below:
Total net
Gains Losses gains/(losses)
£m £m £m
Unrecognised gains and losses on hedges at 1 April 1999 22 (16) 6

Less: gains and losses arising in previous years that
were recognised in the year (5) 16 11
–––––– –––––– ––––––
Gains and losses arising before 1 April 1999 that were
not recognised at 31 March 2000 17 – 17
Gains and losses arising in the year that were
not recognised at 31 March 2000 71 (97) (26)
–––––– –––––– ––––––
Unrecognised gains and losses on hedges at 31 March 2000 88 (97) (9)
–––––– –––––– ––––––
Of which:
Gains and losses expected to be recognised in 2000 86 (97) (11)
Gains and losses expected to be recognised in 2001 or later 2 – 2
Currency exposures
Taking into account the effect of forward contracts and other derivative instruments, the Group did not have a material financial exposure to
foreign exchange gains or losses on monetary assets and monetary liabilities denominated in foreign currencies at 31 March 2000.
Further details regarding the Group’s Treasury Management and Policies are included in the Financial Review on pages 10 to 14.
17 Provisions for liabilities and charges

Post
Deferred employment Other
taxation benefits provisions Total
£m £m £m £m
1 April 1999 10 – – 10
Exchange movements (5) – (1) (6)
Acquisitions (note 21) 157 23 60 240
Profit and loss account 13 4 2 19
Transfer to current tax (70) – – (70)
–––––––– –––––––– –––––––– ––––––––
31 March 2000 105 27 61 193
–––––––– –––––––– –––––––– ––––––––
Deferred taxation
The £123m credit to deferred taxation in the profit and loss account (note 5) is in relation to a deferred tax asset of £136m recognised on
the sub-letting of certain US communications towers, offset by a charge of £13m in relation to other short term timing differences.
The net deferred tax (asset)/liability is analysed as follows:
2000 1999
£m £m
Deferred tax on unvested options (193) –

Deferred tax on sub-letting of US communications towers (136) –
Accelerated capital allowances 11 –
Other timing differences 94 10
–––––––– ––––––––
(224) 10
–––––––– ––––––––
Analysed as:
Deferred tax asset (note 12) (329) –
Deferred tax provision 105 10
–––––––– ––––––––
(224) 10
–––––––– ––––––––
The amounts unprovided for deferred taxation are:
2000 1999
Amount Amount
unprovided unprovided
£m £m
Accelerated capital allowances 161 101

Gains subject to rollover relief 7 7
Other timing differences (92) (10)
–––––– ––––––
76 98
–––––– ––––––
The potential net tax benefit in respect of tax losses carried forward at 31 March 2000 was £16m in United Kingdom subsidiaries
(1999 – £18m) and £51m in international subsidiaries (1999 – £52m). These losses are only available for offset against future
profits arising from the same trade within these companies.
In addition, the Group’s share of losses of United Kingdom and international associated undertakings that are available for offset against
future trading profits in these entities is £Nil and £105m, respectively (1999 – £Nil and £55m, respectively).
Other provisions
Other provisions primarily comprise amounts provided for legal claims.
18 Called up share capital

2000 1999
Number £m Number £m
Authorised
Ordinary shares of US$0.10 each 78,000,000,000 4,875 – –
7% cumulative fixed rate shares of £1 each 50,000 – – –
Ordinary shares of 5p each – – 4,000,000,000 200
–––––––––––– ––––– –––––––––––– –––––
78,000,050,000 4,875 4,000,000,000 200
–––––––––––– ––––– –––––––––––– –––––
Ordinary shares allotted, issued and fully paid
1 April 3,099,406,734 155 3,085,587,323 154
Allotted and issued during the year 58,234,625,428 3,642 13,819,411 1
–––––––––––– ––––– –––––––––––– –––––
31 March 61,334,032,162 3,797 3,099,406,734 155
–––––––––––– ––––– –––––––––––– –––––
Allotted during the year Nominal
Number value Proceeds
£m £m
Savings related share option schemes 3,760,864 - 14

Executive share option schemes 9,019,353 1 10
US share option schemes 179,447,100 11 358
–––––––––––– –––––––– –––––
Total for share option schemes 192,227,317 12 382
Scrip dividends 20,973,986 1 –

Redenomination of share capital – 41 –
Shares issued as consideration for the merger with AirTouch
Communications, Inc. 3,046,345,743 193 –
Capitalisation issue 24,833,984,132 1,508 –
Shares issued as consideration for the acquisition of Mannesmann AG 30,141,094,250 1,887 –
–––––––––––– –––––––– –––––
58,234,625,428 3,642 382
–––––––––––– –––––––– –––––
Following approval at the Extraordinary General Meeting on 24 May 1999, the entire share capital at 30 June 1999, totalling 3,099,829,971
ordinary shares of 5p each, was redenominated to ordinary shares of $0.10 each. The equivalent sterling value of the redenominated shares
was calculated at that date and resulted in a transfer from the share premium account of a balance of £41m. On the same date, the Company
allotted 50,000 7% cumulative fixed rate shares of £1 each at par, fully paid.
Between 30 June 1999 and 30 September 1999, 3,046,345,743 ordinary shares were issued in connection with the Company’s merger with
AirTouch Communications, Inc., which completed on 30 June 1999.
On 30 September 1999 a capitalisation (bonus) issue of four shares for every one share held resulted in a transfer from the share premium
account to share capital of £1,508m.
At 31 March 2000, 30,141,094,250 ordinary shares of $0.10 each had been issued to shareholders of Mannesmann AG. This followed the
receipt of valid acceptances of the Company’s Offer to acquire Mannesmann AG in respect of a total of 499,970,377 Mannesmann shares,
representing approximately 98.62% of the issued share capital, and Euro 2,293,545,000 Mannesmann convertible bonds, representing
approximately 99.72% of the bonds in issue.
In February 1998, the Company established a Qualifying Employee Share Ownership Trust (‘QUEST’) to operate in connection with the
Company’s Savings Related Share Option Scheme. The trustee of the QUEST is Vodafone Group Share Trustee Limited, a wholly owned
subsidiary of the Company. At 31 March 2000 the trustee held 12,532,364 Vodafone AirTouch ordinary shares of which 3,695,995 shares
had been issued to the trustee during the year. The market value at 31 March 2000 for the total shareholding of the trustee was £44m.
The dividend rights in respect of these shares have been waived. During the year 5,580,186 shares (after adjustment for the capitalisation
issue) had been transferred to option holders exercising options under the Savings Related Share Option Scheme.
In July 1998, the Company established an Employee Benefit Trust (‘EBT’) to operate in connection with the Company’s Sharesave Scheme
and the executive share schemes. The trustee of the EBT is Vodafone Group Share Schemes Trustee Limited, a wholly owned subsidiary of the
Company. A total of 1,190,544 new ordinary shares (after adjustment for the capitalisation issue) have been allotted for use by the EBT during
the year, all of which have been transferred to employees exercising options under the relevant share option schemes.
The proceeds of share issues which have not been issued to parties outside the Group have been shown as deductions from the Group profit
and loss account reserves.
18 Called up share capital continued
Options
A summary of the options outstanding at 31 March 2000 to subscribe for shares in the Company is provided in the following table.
Weighted Exercisable Exercisable
Total shares/ average shares/ADS’s shares/ADS’s
ADS’s under period remaining Weighted at weighted
option to full vesting average 31 March 2000 average exercise
Range of exercise prices (millions) (months) exercise price (millions) price
Ordinary shares:
Vodafone Group Savings Related and
Sharesave Schemes
£0.01 – £1.00 14.6 15 £0.43 – –
£1.01 – £2.00 7.3 30 £1.27 – –
£2.01 – £3.00 6.4 41 £2.16 – –
––––––– –––––––
28.3 –
––––––– –––––––
Vodafone Group Executive Schemes
£0.01 – £1.00 41.7 – £0.54 15.7 £0.46
£1.01 – £2.00 69.6 16 £1.57 – –
£2.01 – £3.00 15.0 28 £2.59 – –
––––––– –––––––
126.3 15.7
––––––– –––––––
American Depositary Shares:
AirTouch Communications, Inc. 1993 Long Term
Stock Incentive Plan
$0.01 – $10.00 6.6 – $7.02 6.6 $7.02
$10.01 – $20.00 21.8 – $16.31 21.8 $16.31
$20.01 – $30.00 1.3 – $20.04 1.3 $20.04
$30.01 – $40.00 2.5 1 $34.05 – –
––––––– –––––––
32.2 29.7
––––––– –––––––
Vodafone AirTouch Plc 1999 Long Term
Stock Incentive Plan
$40.01 – $50.00 30.2 3 $41.53 1.5 $41.10
$50.01 – $60.00 0.9 11 $55.70 – –
––––––– –––––––
31.1 1.5
––––––– –––––––
American Depositary Shares, each representing ten Vodafone AirTouch Plc ordinary shares, are listed on the New York Stock Exchange.
Following the merger with AirTouch, some rights to acquire AirTouch Communications, Inc. 1993 Long Term Stock Incentive Plan options
were converted into rights to acquire Vodafone AirTouch Plc shares. No further awards will be granted under this scheme.
The Vodafone Group Savings Related and Sharesave Schemes, Vodafone Group Executive Schemes and Vodafone AirTouch Plc 1999
Long Term Stock Incentive Plan are described in the Report of the Remuneration Committee on pages 20 to 26.
19 Reserves
Share Profit
premium Merger Other and loss
account reserve reserve account
£m £m £m £m
1 April 1999 96 – – 564

Shares issued in respect of the merger with
AirTouch Communications, Inc. 38,274 – – –
Redenomination of share capital (41) – – –
Capitalisation issue (1,508) – – –
Shares issued in respect of the acquisition of
Mannesmann AG 2,431 96,914 – –
Other allotments of shares 306 – – –
Loss for the financial year – – – (133)
Goodwill transferred to the profit and loss
account in respect of business disposals – – – 18
Currency translation – – – (1,130)
Transfer in respect of issue of shares
to employee trusts (note 18) 20 – – (20)
Unvested option consideration – – 1,165 –
Transfer to profit and loss account – – (45) 45
Scrip dividends (1) – – 81
–––––––– –––––––– –––––––– ––––––––
31 March 2000 39,577 96,914 1,120 (575)
–––––––– –––––––– –––––––– ––––––––
The currency translation movement includes a gain of £316m (1999 – loss of £19m) in respect of foreign currency net borrowings.
20 Non-equity minority interests

Non-equity minority interests of £1,004m comprise £1,000m of Class D & E Preferred Shares issued by AirTouch Communications, Inc.
and £4m non-cumulative redeemable preference shares issued by Vodafone Pacific Pty Limited, formerly Vodafone Holdings Australia Pty
Limited (1999 – £4m non-cumulative redeemable preference shares issued by Vodafone Pacific Pty Limited).
The aggregate redemption value of the Class D & E Preferred Shares, on which annual dividends of $51.43 per share are payable quarterly
in arrears, is $1.65 billion. The holders of the Preferred Shares are not entitled to vote unless their dividends are in arrears and unpaid for six
quarterly dividend periods, in which case holders can vote for the election of two directors. The maturity date of the 825,000 AirTouch Class
D Preferred Shares is 6 April 2020, although they may be redeemed at the option of the company, in whole or in part, after 7 April 2018.
The 825,000 AirTouch Class E Preferred Shares have a maturity date of 7 April 2018 with no early redemption. The Preferred Shares have
a redemption price of $1,000 per share plus all accrued and unpaid dividends.
The holders of the shares issued by Vodafone Pacific Pty Limited have the right to vote and receive such dividend as the directors declare,
subject to a pre-defined limit on the amount of that dividend. These shares are redeemable by either the company or the holder of the share
under certain circumstances and are generally not entitled to any participation in the profits or assets of the company other than as prescribed.
These securities rank in priority to all other classes of share issued by the company as regards return of capital.
21 Acquisitions and disposals

Merger with AirTouch Communications, Inc.
(1
Balance Fair Accounting Fair value
(1 )
sheet at value policy balance
(1) (2)
acquisition Reclassification adjustments conformity sheet
(2) (1)
£m £m £m £m £m
Intangible fixed assets 5,284 – – (5,284)(3) –

Tangible fixed assets 2,637 – 188(4) – 2,825
Investments in joint ventures – 1,495 127(5) (963)(3) 659
Investments in associated undertakings – 809 – (203)(3)(6) 606
Other investments 2,477 (2,357) 245(7) – 365
Other net current assets 1 223 76(8) – 300
Net overdrafts (5) – – – (5)
Long term borrowings (1,483) – (30)(9) – (1,513)
Other creditors due after one year (100) 98 – – (2)
Provisions for liabilities and charges (1,150) (268) – 1,178(10) (240)
–––––– –––––– –––––– –––––– ––––––
Net assets 7,661 – 606 (5,272) 2,995
–––––– –––––– –––––– ––––––
Minority interests (1,267)

(11)
Goodwill 40,968
––––––
Consideration 42,696
––––––
Consideration satisfied by:

Vodafone AirTouch ordinary shares 38,467
Cash consideration 3,477
Unvested options 1,165
Tax on unvested options (449)
Other 36
––––––
42,696
––––––
Notes
The table above sets out the details of the merger with AirTouch Communications, Inc. which was completed on 30 June 1999 and has been accounted for as an acquisition.
1. Reclassification of certain investments to investments in joint ventures and investments in associated undertakings, and reclassification of certain liabilities to provisions.
2. The fair value adjustments are provisional and may be subject to adjustment in the year ending 31 March 2001.
3. Elimination of acquired intangibles, including goodwill.
4. Revaluation of certain tangible fixed assets to fair value.
5. Equity share of revaluations of certain tangible fixed assets to fair value.
6. Restatement of the Group’s share of associated undertakings’ net assets in line with Group accounting policies.
7. Revaluation of cost based investments to fair value.
8. Adjustments to other net current assets primarily comprise provisions for potential tax liabilities and an adjustment in relation to the discount to fair value of an option held by AirTouch
Communications, Inc. to increase its shareholding in Omnitel from 17.8% to 21.6%. This option was exercised during the year.
9. Revaluation of long term debt to fair value.
10. Restatement of deferred tax liabilities.
11. The total goodwill of £40,968m derived above has been allocated as £21,543m in respect of subsidiary undertakings, £2,031m for joint ventures and £17,394m for associated undertakings.
Impact on cash flows

AirTouch Communications, Inc. contributed £945m to the Group’s net operating cash flows, received £104m in respect of taxation and
utilised £487m for investing activities (including capital expenditure of £686m, and cash receipts of £279m in relation to the sub-lease of
certain US communications towers), excluding payments made to increase percentage holdings in associated undertakings on behalf of the
Group following the merger.
21 Acquisitions and disposals continued

Pre-merger results of AirTouch Communications, Inc.
The summarised profit and loss accounts and statements of total recognised gains and losses of AirTouch Communications, Inc. prepared
under US GAAP for the 6 months ended 30 June 1999 and the year ended 31 December 1998, and translated at the average exchange rate
for these periods of £1 = $1.61 and £1 = $1.66, respectively, are given below.
6 months ended 12 months ended
30 June 1999 31 December 1998
£m £m
Profit and loss account
Turnover 1,811 3,120
Operating costs (1,490) (2,550)
–––––––– ––––––––
Operating profit 321 570
Joint ventures and associated undertakings 227 236

Minority interests (57) (108)
Merger related costs (74) –
Miscellaneous income 57 2
Net interest payable (44) (73)
–––––––– ––––––––
Profit before taxation 430 627
Taxation (136) (190)
–––––––– ––––––––
Profit after taxation 294 437
–––––––– ––––––––
Statement of total recognised gains and losses
Profit after taxation 294 437
Foreign currency translation (loss)/gain (55) 5
Other gains and losses (18) –
–––––––– ––––––––
221 442
–––––––– ––––––––
CommNet Cellular Inc.
On 6 January 2000 the Group acquired CommNet Cellular Inc., a cellular network operator in the US, for a cash consideration of £459m.
The composition of net liabilities acquired is given below.
Balance sheet Fair value Accounting policy Fair value
(1) (2)
at acquisition adjustments conformity balance sheet
£m £m £m £m
Intangible fixed assets 110 – (110) –

Tangible fixed assets 115 (12) – 103
Trade debtors 18 – – 18
Other net current assets 18 (14) – 4
Short term debt (449) – – (449)
–––––––– –––––––– –––––––– ––––––––
Net liabilities (188) (26) (110) (324)
–––––––– –––––––– ––––––––
Goodwill 783
––––––––
Cash consideration 459
––––––––
Notes
1. The fair value adjustments, which primarily comprise the revaluation of certain tangible fixed assets and the write-off of deferred costs, are provisional and may be
subject to adjustment in the year ending 31 March 2001.
2. Elimination of acquired intangibles.
The loss after tax of CommNet Cellular Inc. for the 3 months ended 31 December 1999 was £1m (prepared under US GAAP and translated
at the average exchange rate for the period of £1=$1.62) and the profit after tax of CommNet Cellular Inc. for the year ended 30 September
1999 was £16m (prepared under US GAAP and translated at the average exchange rate for the year of £1 = $1.63).
Other acquisitions
The Group undertook a number of other acquisitions in the year for an aggregate consideration of £1,318m. The aggregate net liabilities
acquired as a result of these transactions was £3m, with goodwill of £1,321m resulting. Goodwill comprised £112m, £70m, £1,130m and
£9m in respect of acquired subsidiary undertakings, joint ventures, associated undertakings and customer bases, respectively. No significant
fair value adjustments were made to the acquired net assets or liabilities.
Disposal of interest in associated undertaking
In December 1999, the Group disposed of its interest in Martin Dawes Telecommunications Limited. The cash consideration received by the
Group in respect of the disposal was £27m. Goodwill amounting to £18m, which was previously written off to reserves, has been reinstated
and charged in the profit and loss account.
22 Leased assets
Operating leases
Commitments to non-cancellable operating lease payments within one year are as follows:
2000 1999
Land and Other Land and Other
buildings assets buildings assets
In respect of leases expiring: £m £m £m £m
Within one year 29 145 7 16

Between two and five years 71 60 19 121
After five years 118 35 40 39
–––––––– –––––––– –––––––– ––––––––
218 240 66 176
–––––––– –––––––– –––––––– ––––––––
Finance leases
Tangible fixed assets at 31 March 2000 include the following amounts in respect of finance leases:
Network
Plant and Fixtures infra-
machinery and fittings structure Total
£m £m £m £m
Cost 19 4 250 273

Accumulated depreciation (16) (4) (106) (126)
–––––––– –––––––– –––––––– ––––––––
Net book value 3 – 144 147
–––––––– –––––––– –––––––– ––––––––
31 March 1999
Net book value 2 3 171 176
–––––––– –––––––– –––––––– ––––––––
Liabilities under leases for network infrastructure assets have been unconditionally satisfied by call deposits and other assets, trust deed
and set-off arrangements. Accordingly, neither these lease liabilities nor the corresponding financial assets are included in the Group’s
balance sheet.
23 Capital commitments
2000 1999
£m £m
Contracted for but not provided 442 161

–––––––– ––––––––
24 Contingent liabilities
2000 1999
£m £m
Guarantees and indemnities of bank or other facilities including those in respect

of the Group’s joint ventures, associated undertakings and investments 1,155 175
–––––––– ––––––––
Guarantees and indemnities include £978m in respect of a letter of indemnity provided, in September 1999, to a co-investor in certain
operating companies in which Vodafone AirTouch has equity interests. The co-investor has provided the lending institutions to the operating
companies with certain credit support documents, which are not legally binding obligations on the co-investor. Prior to Vodafone AirTouch
indemnifying the co-investor from any loss it may suffer as a result of the credit support documents, the co-investor has agreed to request
other shareholders in the operating companies to make equity contributions in order that the operating companies may discharge their
liabilities and, in the event that the co-investor discharges, under the credit support documents, more than 40 per cent of the operating
companies’ indebtedness, the co-investor will use its efforts to cause the operating companies to refinance (if practicable) the remaining debt.
25 Analysis of cash flows

2000 1999
£m £m
Net cash inflow from operating activities
Operating profit 981 847
Depreciation and amortisation 1,432 297
Increase in stocks (65) (15)
Increase in debtors (271) (213)
Increase in creditors 433 129
–––––––– ––––––––
2,510 1,045
–––––––– ––––––––
Net cash outflow for returns on investments
and servicing of finance
Interest received 57 16
Interest paid (370) (85)
Dividends paid to minority shareholders (93) (21)
–––––––– ––––––––
(406) (90)
–––––––– ––––––––
Net cash outflow for capital expenditure
and financial investment
Purchase of intangible fixed assets (185) (18)
Purchase of tangible fixed assets (1,848) (737)
Purchase of trade investments (17) (4)
Disposal of interests in tangible fixed assets 294 14
Disposal of trade investments 991 54
Loans repaid by associated undertakings 9 3
–––––––– ––––––––
(756) (688)
–––––––– ––––––––
Net cash outflow for acquisitions and disposals
Purchase of subsidiary undertakings (4,062) (255)
Net cash acquired with subsidiary undertakings 4 –
Disposal of interest in subsidiary undertaking – 19
Purchase of interests in associated undertakings (717) (75)
Disposal of interests in associated undertakings 28 4
Purchase of customer bases (9) (10)
–––––––– ––––––––
(4,756) (317)
–––––––– ––––––––
Net cash inflow from operating activities is stated after cash payments of £30m for exceptional reorganisation costs (1999 – £9m).
The cash inflow from the disposal of interests in tangible fixed assets includes £279m of cash receipts in relation to the sub-letting of certain
US communications towers.
Material non-cash transactions in the year comprised issues of new ordinary shares in relation to the merger with AirTouch Communications,
Inc. and the acquisition of Mannesmann AG. Further details are included in note 18.
26 Analysis of net debt

Other non-cash
Acquisitions changes
1 April (excluding cash & exchange 31 March
1999 Cash flow & overdrafts) movements 2000
£m £m £m £m £m
Liquid investments – 33 – (3) 30

–––––––– –––––––– –––––––– –––––––– ––––––––
Cash at bank and in hand 6 153 – – 159
Bank overdrafts (6) (37) – – (43)
–––––––– –––––––– –––––––– –––––––– ––––––––
– 116 – – 116
–––––––– –––––––– –––––––– –––––––– ––––––––
Debt due within one year (other than bank overdrafts) (371) (149) (449) 218 (751)
Debt due after one year (1,137) (3,319) (1,684) 102 (6,038)
–––––––– –––––––– –––––––– –––––––– ––––––––
(1,508) (3,468) (2,133) 320 (6,789)
–––––––– –––––––– –––––––– –––––––– ––––––––
(1,508) (3,319) (2,133) 317 (6,643)
–––––––– –––––––– –––––––– –––––––– ––––––––
27 Directors
Aggregate emoluments of the directors of the Company were as follows:
2000 1999
£000 £000
Salaries and fees 3,422 2,444

Bonuses 695 –
Incentive schemes 2,468 514
Benefits 174 137
–––––––– ––––––––
6,759 3,095
–––––––– ––––––––
Aggregate gains on the exercise of share options were £93,910,000 (1999 – £6,963,000).
More detailed information concerning directors’ emoluments, shareholdings and options is shown in the Remuneration Report of the Board
on pages 20 to 26.
28 Employees
The average number of persons employed 2000 1999
by the Group during the year was: Number Number
Operations 9,058 3,675

Selling and distribution 5,484 2,871
Administration 14,923 6,096
–––––––– ––––––––
29,465 12,642
–––––––– ––––––––
The cost incurred in respect of these 2000 1999
employees (including directors) was: £m £m
Wages and salaries 774 314

Social security costs 65 20
Other pension costs 42 18
–––––––– ––––––––
881 352
–––––––– ––––––––
29 Pensions
The Group operates a number of pension plans for the benefit of its employees throughout the world. For UK employees the plans are
generally funded defined benefit schemes, the assets of which are held in separate trustee administered funds. For international employees
the schemes are generally defined contribution schemes.
UK defined benefit schemes

The schemes are subject to triennial valuations by independent actuaries. The last formal valuations of the three main UK schemes were
carried out as at 1 April 1998 using the projected unit funding method of valuation in which allowance is made for projected earnings
growth. The triennial formal valuations are supplemented by annual reviews by independent actuaries.
At 1 April 1998, the market value of the three principal schemes was £98m and their actuarial value was sufficient to cover 87.6% of the
benefits accrued to members calculated on an ongoing basis, and 99.4% of accrued benefits based on the Minimum Funding Requirement
basis. The deficiency is being dealt with by payment of contributions at the rate advised by the actuary.
The main assumptions used in the last valuations were that the average long term rate of return earned by the scheme assets would be
8.5% and that this will exceed the general rate of salary growth by between 0.5% and 1.5% p.a., and that equity dividend growth would be
4.5% p.a.
The pension cost for the year amounted to £17m (1999 – £13m).
A net prepayment of £17m (1999 – £13m) is included in debtors due after more than one year. This represents the excess of the amounts
funded over accumulated pension costs.
Defined contribution schemes

The pension cost for the year was £25m (1999 – £5m). The increase this year is primarily in respect of contributions charged in relation to
the AirTouch defined contribution plan.
30 Subsequent events
On 3 April 2000, a new US joint venture wireless business with a national footprint, Verizon Wireless, was created by the combination of
Vodafone AirTouch’s and Bell Atlantic’s US cellular, PCS and paging assets. Following the anticipated completion of the merger between
Bell Atlantic Corp. and GTE Corp., the Group will have a 45% shareholding in the new venture.
On 12 April 2000, the acquisition of Mannesmann AG received clearance from the European Commission. The acquisition has resulted in
increased shareholdings in certain mobile operations. In addition, Mannesmann’s interests also include fixed line businesses in Germany, Italy,
France and Austria as well as non-telecommunications businesses, primarily Atecs Mannesmann, its engineering and automotive business.
On 17 April 2000, the Company announced that Mannesmann AG had reached an agreement with Siemens AG and Robert Bosch AG on
the disposal of a 50% plus two shares stake in Atecs Mannesmann, with an option arrangement over Mannesmann AG’s remaining stake.
The transaction values Atecs Mannesmann at approximately 9.6 billion, consisting of a payment of 3.1 billion to be paid on completion
of the sale of the stake of 50% plus two shares, but in any event not later than 30 September 2000, 3.7 billion to 3.8 billion to be paid
upon the exercise of certain options between closing and 31 December 2003, and 2.8 billion of pension and non-trading financial liabilities
to be assumed by Siemens AG and Robert Bosch AG. The proceeds from the sale will be used to reduce Group net debt.
On 27 April 2000, the UK business was successful in acquiring the largest 3G licence available to an existing operator, at a cost of
£5.964 billion.
On 17 May 2000, the Company and VivendiNet (a joint venture between Vivendi and Canal+) announced that an agreement had been signed
for the creation of a new joint venture company, VIZZAVI, to establish a multi-access Internet portal for Europe. The Company and VivendiNet
will both have a 50% shareholding in the new company.
At the end of May, the Company and Mannesmann AG reached agreement for the sale of Orange plc to France Telecom for an enterprise
value of £31 billion, subject to approval by France Telecom’s shareholders and the regulatory authorities. Orange plc will retain its current
debt and commitment to fund its UK 3G licence, giving an equity value of approximately £25 billion. The consideration will comprise
£13.8 billion in cash, payable on completion, approximately £1.3 billion through a loan note redeemable by March 2001, and the balance
in France Telecom paper. France Telecom has underwritten the non-cash consideration to a value of £8.4 billion. Until the transaction is
completed, plans continue to effect a demerger of Orange plc in accordance with an undertaking given to the European Commission.
Company Balance Sheet

at 31 March 2000
2000 1999
Note £m £m
Fixed assets
Investments 31 55,416 3,222
–––––––– ––––––––
Current assets
Debtors 32 7,554 572

within one year 33 11,610 901
–––––––– ––––––––
Net current liabilities (4,056) (329)

–––––––– ––––––––
Total assets less current liabilities 51,360 2,893

after more than one year 34 4,694 1,121
–––––––– ––––––––
46,666 1,772
–––––––– ––––––––
Capital and reserves

Called up share capital 18 3,797 155
Share premium account 19 39,577 96
Capital reserve 88 88
Other reserve 19 1,120 –
Profit and loss account 36 2,084 1,433
–––––––– ––––––––
Total equity shareholders’ funds 46,666 1,772
–––––––– ––––––––
C C GENT Chief Executive
K J HYDON Financial Director
29 May 2000
Notes to the Company Balance Sheet
31 Fixed asset investments

Subsidiary Associated Other
undertakings undertakings Investments Total
£m £m £m £m
Cost
1 April 1999 3,199 23 – 3,222
Exchange movements – (1) – (1)
Additions 93,872 – 4,384 98,256
Disposals (43,519) (6) (2,536) (46,061)
–––––––– –––––––– –––––––– ––––––––
31 March 2000 53,552 16 1,848 55,416
–––––––– –––––––– –––––––– ––––––––
The Company’s 98.62% investment in the issued share capital of Mannesmann AG has been recorded based on the nominal value of the
shares issued by the Company, as permitted by section 131 of the Companies Act 1985. Details of the Company’s shares issued in respect
of this investment are set out in note 18. The Company holds 499,970,377 shares in Mannesmann AG, with an aggregate nominal value
of 1,278m.
Loans to associated undertakings included above amounted to £16m at 31 March 2000 (1999 – £17m). The Company’s subsidiary and
associated undertakings and other investments are detailed on pages 56 and 57.
32 Debtors
2000 1999
£m £m
Amounts owed by subsidiary undertakings 7,455 527

Group relief receivable 37 35
Other debtors 62 10
–––––––– ––––––––
7,554 572
–––––––– ––––––––
33 Creditors: amounts falling due within one year 2000 1999

£m £m
Bank loans, other loans and overdrafts 12 62

Commercial paper 703 208
Amounts owed to subsidiary undertakings 10,224 520
Taxation 1 –
Other creditors 7 4
Dividends 417 100
Accruals and deferred income 246 7
–––––––– ––––––––
11,610 901
–––––––– ––––––––
34 Creditors: amounts falling due after more than one year

2000 1999
£m £m
Bank loans – 606

–––––––– ––––––––
4,694 1,121
–––––––– ––––––––
Other loans are repayable as follows:

Between one and two years 305 –
Between two and five years 1,337 515
After five years 3,052 –
–––––––– ––––––––
–––––––– ––––––––
The other loans include £249m (1999 – £248m) and £248m (1999 – £248m) of sterling bonds with coupon rates of 7.875% and 7.5%,
respectively, £893m (1999 – £Nil) of eurobonds with a coupon rate of 5.75%, and £1,089m (1999 – £Nil), £1,702m (1999 – £Nil) and
£459m (1999 – £Nil) of US Dollar bonds with coupon rates of 7.625%, 7.75% and 7.875%, respectively. The bonds are repayable in 2001,
2004, 2006, 2005, 2010 and 2030, respectively.
Notes to the Company Balance Sheet continued
35 Deferred taxation
2000 1999
Amount Amount Amount Amount
provided unprovided provided unprovided
£m £m £m £m
Asset arising from other timing differences – 1 – 1

–––––––– –––––––– –––––––– ––––––––
36 Profit and loss account

£m
1 April 1999 1,433

Retained profit for the year 525
Transfer to the profit and loss account in relation to unvested option consideration 45
Scrip dividends 81
––––––––
31 March 2000 2,084
––––––––
In accordance with the exemption allowed by section 230 of the Companies Act 1985 no profit and loss account has been presented by the
Company. The profit for the financial year dealt with in the accounts of the Company is £1,145m (1999 – £384m).
37 Contingent liabilities
2000 1999
£m £m
Guarantees and indemnities of bank or other facilities of associated undertakings and investments 979 174
–––––––– ––––––––
Guarantees and indemnities include £978m in respect of a letter of indemnity provided, in September 1999, to a co-invester in certain
operating companies in which Vodafone Airtouch has equity interests. Further details are included in note 24.
Subsidiary Undertakings
Principal subsidiary undertakings
Vodafone AirTouch Plc had at 31 March 2000 the following subsidiary undertakings carrying on businesses which principally affect the profits and assets
of the Group.
Unless otherwise stated Vodafone AirTouch Plc’s principal subsidiary undertakings all have share capital consisting solely of ordinary shares and are
directly held; sub-subsidiary undertakings are shown inset. The country of incorporation or registration of all subsidiary undertakings is also their principal
place of operation, unless otherwise stated.
Country of
incorporation Percentage(2)
Name Activity or registration shareholdings
Vodafone UK Limited Holding company England 100.0

Vodafone Limited Cellular network operator England 100.0
Vodafone Distribution Limited Holding company England 100.0
Vodafone Corporate Limited Service provider England 100.0
Vodafone Connect Limited Service provider England 100.0
Vodafone Retail Limited (1) Holding company England 100.0
Vodafone Central Services Limited Provision of central services England 100.0
Vodafone Paging Limited (1) Radiopaging network operator England 100.0
Vodafone Value Added and Supply of value added services and
Data Services Limited packet radio network operator England 100.0
Vodafone AirTouch Global Commercial
Services Limited Global revenue opportunities England 100.0
Vodafone Finance Limited Financial trading company England 100.0
Vodafone AirTouch Group Services Limited Provision of central services England 100.0
Vodafone AirTouch International Holdings BV (1) Holding company Netherlands 100.0
Libertel NV Holding company Netherlands 70.0
Libertel Netwerk BV Cellular network operator Netherlands 70.0
Libertel Verkoop en Services BV Service provider Netherlands 70.0
Vodafone Malta Limited Cellular network operator Malta 80.0
Vodafone Gibraltar Limited (1) Investment company Gibraltar 100.0
Panafon SA Cellular network operator Greece 55.0
Misrfone Telecommunications Company SAE Cellular network operator Egypt 60.0
Vodafone Australasia Pty Limited (3) Holding company Australia 100.0
Vodafone Pacific Pty Limited (4) Licence holder and holding company Australia 91.0
Vodafone Network Pty Limited Cellular network operator Australia 91.0
Vodafone Pty Limited Service provider Australia 91.0
Vodafone New Zealand Limited Cellular network operator New Zealand 100.0
Vodafone Mobile NZ Limited Licence holder New Zealand 100.0
AirTouch Communications, Inc.(5) Holding company USA 100.0
AirTouch International Holding company USA 100.0
Vodafone AirTouch International BV Holding company Netherlands 100.0
Vodafone AirTouch (Europe) BV Holding company Netherlands 100.0
Europolitan Holdings AB Holding company for cellular network operator Sweden 71.1
VRAM Telecommunications Company Limited Cellular network operator Hungary 50.1
Telecel Comunicacoes Pessoais SA Cellular network operator Portugal 50.9
AirTouch Paging Holding company USA 100.0
AirTouch Support Services, Inc.(1) Provision of central services USA 100.0
Vodafone AirTouch Satellite Services, Inc. Holding company USA 100.0
(1) Indirectly held.

(2) To nearest tenth of one percent.
(3) Vodafone Australasia Pty Limited changed its name to Vee Australasia Pty Limited on 18 April 2000 and was subsequently placed in receivership on 2 May 2000.
(4) At 31 March 2000, share capital comprised 62,516,783 ordinary shares, 24,798 redeemable preference shares and 2,945,817 A Class shares of which 95.3% of the ordinary
shares and 91% of the redeemable preference shares were indirectly held by Vodafone AirTouch Plc. On 16 May 2000, all A Class shares were converted to ordinary shares and each
ordinary share (including A Class shares) was converted into 20 ordinary shares. Vodafone Airtouch Plc’s interest remained unchanged at 91.0%. The Company changed its name
from Vodafone Holdings Australia Pty Limited on 22 October 1999, and changed its name again in May 2000 to Vodafone Pacific Limited.
(5) Share capital consists of 597,379,729 ordinary shares and 1.65 million $1 Class D and E redeemable preference shares of which 100% of the ordinary shares were indirectly held
by Vodafone AirTouch Plc.
Joint Ventures, Associated Undertakings and Investments

Vodafone AirTouch Plc had at 31 March 2000 the following principal joint ventures, associated undertakings and investments:
Principal joint ventures

Vodafone AirTouch Plc’s joint ventures are partnerships. The country of incorporation or registration is also their principal place of operation.
Latest Country of
(1)
Percentage financial incorporation
Name Activity partnership interest accounts or registration
( 2)
CMT Partners Cellular network operator 46.9 31.12.99 USA
( 2)
Primeco Personal Communications, LP Cellular network operator 49.8 31.12.99 USA

(2) The registered or principal office of both joint ventures is c/o The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware, 19801 USA. The Group’s investment in these
ventures is subject to a partnership arrangement that confers joint control.
Principal associated undertakings

Vodafone AirTouch Plc’s principal associated undertakings all have share capital consisting solely of ordinary shares, unless otherwise stated, and are all
indirectly held. The country of incorporation or registration of all associated undertakings is also their principal place of operation.
Latest Country of
(1)
Percentage Par value of financial incorporation
Name Activity shareholding issued equity accounts or registration
Airtel Mobil SA Cellular network operator 21.7 PTS 78,016.7m 31.12.99 Spain
Belgacom Mobile SA Cellular network operator 25.0 BEF 2.82m 31.12.99 Belgium
Celtel Limited Cellular network operator 36.8 Shilling 608m 31.3.00 Uganda
J-Phone Chugoku Co., Limited Cellular network operator 21.7 Yen 50,000 31.3.00 Japan
J-Phone Hokkaido Co., Limited Cellular network operator 23.3 Yen 50,000 31.3.00 Japan
J-Phone Hokuriku Co., Limited Cellular network operator 23.9 Yen 50,000 31.3.00 Japan
J-Phone Kansai Co., Limited Cellular network operator 20.2 Yen 50,000 31.3.00 Japan
J-Phone Kyushu Co., Limited Cellular network operator 22.2 Yen 50,000 31.3.00 Japan
J-Phone Shikoku Co., Limited Cellular network operator 21.4 Yen 50,000 31.3.00 Japan
J-Phone Tohoku Co., Limited Cellular network operator 23.5 Yen 50,000 31.3.00 Japan
J-Phone Tokai Co., Limited Cellular network operator 20.2 Yen 50,000 31.3.00 Japan
J-Phone Tokyo Co., Limited Cellular network operator 28.8 Yen 50,000 31.3.00 Japan
Mannesmann Mobilfunk GmbH Cellular network operator 34.8 DEM 405m 31.12.99 Germany
Mobifon SA Cellular network operator 20.1 ROL 1,713,027.67m 31.12.99 Romania
Omnitel Pronto Italia SpA Cellular network operator 21.6 ITL 594,293.8m 31.12.99 Italy
Polkomtel SA Cellular network operator 19.6 PLN 1,500m 31.12.99 Poland
RPG Cellcom Limited Cellular network operator 49.0 Rupees 490.9m 31.3.00 India
RPG Cellular Services Limited Cellular network operator 20.6 Rupees 9.6m 31.3.00 India
Société Française du Radiotéléphone SA Cellular network operator 20.0 964.25m 31.12.99 France
Vodafone Fiji Limited Cellular network operator 49.0 F$ 6 million 31.12.99 Fiji
Vodacom Group (Pty) Limited Holding company 31.5 Rand 100 31.3.00 South Africa
Principal investments
The shareholdings in investments consist solely of ordinary shares and are indirectly held. The principal country of operation for the investments is the
same as the country of incorporation or registration.
Country of
(2)
Percentage incorporation
Name Activity shareholding or registration
(1)
Globalstar LP Development and operation of 8.2 USA
satellite telecommunications service
Mannesmann AG Cellular network and fixed line 98.6 Germany
telecommunications, engineering, automotive
and steel tubes and tubular products
Mannesmann Arcor AG & Co Fixed line operator 3.7 Germany
Shinsegi Telecom, Inc Cellular network operator 11.7 South Korea
(1) Partnership interest.
United States Accounting Principles

The following is a summary of the effects of the differences between US Generally Accepted Accounting Principles (“US GAAP”) and UK Generally
Accepted Accounting Principles (“UK GAAP”) that are significant to Vodafone AirTouch Plc. The principles are set out on page 59.
Net income and earnings per ordinary share

2000 1999
£m £m
Net income as reported in accordance with UK GAAP 487 637

Items (decreasing)/increasing net income:
Goodwill amortisation (425) (99)
Reorganisation costs 25 –
Profit on disposal of fixed asset investments 1 4
Income taxes 439 (28)
Minority interests 35 –
Other (9) (4)
–––––––– ––––––––
Net income in accordance with US GAAP 553 510
–––––––– ––––––––
Basic earnings per ordinary share in accordance with US GAAP 2.04p 3.30p
–––––––– ––––––––
Diluted earnings per ordinary share in accordance with US GAAP 2.02p 3.29p
–––––––– ––––––––
Shareholders’ equity
2000 1999
£m £m
Shareholders’ equity as reported in accordance with UK GAAP 140,833 815

Items increasing/(decreasing) shareholders’ equity:
Goodwill – net of amortisation 10,283 1,031
Fixed asset investments 9,054 –
Cumulative deferred income taxes (12,334) (71)
Proposed dividends 417 100
Minority interests (1,939) (3)
Other 20 (14)
–––––––– ––––––––
Shareholders’ equity in accordance with US GAAP 146,334 1,858
–––––––– ––––––––
Total assets
2000 1999
£m £m
Total assets as reported in accordance with UK GAAP 153,368 3,643

Items increasing total assets:
Goodwill – net of amortisation 10,283 1,031
Fixed asset investments 9,054 –
Deferred tax asset 616 44
Other 26 1
–––––––– ––––––––
Total assets in accordance with US GAAP 173,347 4,719
–––––––– ––––––––
United States Accounting Principles continued
Summary of differences between accounting principles generally accepted in the UK and the US
The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the UK (“UK GAAP”), which differ in
certain material respects from those generally accepted in the US (“US GAAP”). The differences that are material to the Group relate to the following
items and the necessary adjustments are shown on page 58.
Goodwill and other intangibles

Under UK GAAP, the policy followed prior to the introduction of FRS 10, “Goodwill and Intangible Assets” (which is effective for accounting periods ending
on or after December 23, 1998 and was adopted on a prospective basis) was to write off goodwill against shareholders’ equity in the year of acquisition.
FRS 10 requires goodwill to be capitalised and amortised over its estimated useful economic life.
Under US GAAP, intangibles arising on the acquisition of an equity stake would be capitalised and amortised over their useful lives.
Investments in associated undertakings, under US GAAP, can also include an element of goodwill in the amount of the excess investment over the
acquirer’s share in the fair value of the net assets at the date of the investment. Under UK GAAP, the treatment followed prior to the implementation of
FRS 10 was to write off the excess of the purchase consideration over the fair value of the stake in the associated undertaking acquired against
shareholders’ equity in the year of purchase.
Determination of the purchase price

Under UK GAAP and US GAAP the purchase price of a transaction accounted for as an acquisition is based on the fair value of the consideration. In the
case of share consideration, under UK GAAP the fair value of such consideration is based on the share price at completion of the acquisition or the date
when the transaction becomes unconditional. Under US GAAP the fair value of the share consideration is based on the average share price over a
reasonable period of time before and after the proposed acquisition is announced.
Deferred taxation
Under the UK GAAP partial provision method, deferred taxation is only provided for where timing differences are expected to reverse in the foreseeable
future. For US GAAP, under the liability method, deferred taxation is provided for temporary differences between the financial reporting basis and the tax
basis of assets and liabilities at enacted rates expected to be in effect when these amounts are realised or settled.
Tax benefit on option exercises

Under UK GAAP, the tax benefit received on the exercise of share options by employees, being the tax on the difference between the market value on the
date of exercise and the exercise price, is shown as a component of the tax charge for the period. Under US GAAP, the tax benefit is shown as a
component of paid-in capital on issue of shares.
Proposed dividends
Under UK GAAP, final dividends are included in the financial statements when recommended by the Board of directors to the shareholders in respect of
the results for a financial year. Under US GAAP, dividends are not included in the financial statements until declared by the Board of directors.
Earnings per ordinary share

Basic earnings per ordinary share has been calculated by dividing net income of £553m and £510m for the years ended 31 March 2000 and 1999,
respectively, by 27,100 million and 15,445 million, being the approximate weighted average number of ordinary shares outstanding for the years ended
31 March 2000 and 1999, respectively. For diluted earnings per share, the approximate weighted average number of ordinary shares outstanding for the
years ended 31 March 2000 and 1999 was 27,360 million and 15,510 million, respectively.
Unaudited Pro Forma Financial Information
Basis of pro forma financial information

The merger with AirTouch has been accounted for as an acquisition in accordance with Financial Reporting Standard 6, “Acquisitions and Mergers”.
The unaudited pro forma consolidated profit and loss accounts are also prepared on this basis.
The unaudited pro forma consolidated profit and loss account and accompanying notes for the year ended 31 March 2000 have been derived from
the audited consolidated financial results for that year, and the unaudited financial results of AirTouch for the three month period ended 30 June 1999.
The unaudited pro forma consolidated profit and loss account and accompanying notes for the year ended 31 March 1999 are derived from the audited
consolidated financial statements of Vodafone Group, and the unaudited consolidated financial statements of AirTouch, prepared for the corresponding
period. The financial statements of AirTouch, which were previously prepared under US GAAP, have been adjusted to conform materially to Vodafone
AirTouch’s accounting policies under UK GAAP following the merger.
The pro forma results for the year ended 31 March 2000 and the year ended 31 March 1999 have been determined as if the merger took place on
1 April 1999 and 1 April 1998, respectively, the first day of the financial accounting period presented in the unaudited pro forma consolidated profit and
loss accounts for those periods.
The pro forma merger adjustments reflected in the unaudited pro forma consolidated profit and loss accounts include assumptions that the Group’s
management believe to be reasonable. The unaudited pro forma consolidated profit and loss accounts do not take into account any synergies, including
cost savings, or any severance and restructuring costs, which may or are expected to occur as a result of the merger, except insofar as such costs and
savings have been included in the financial statements of Vodafone AirTouch for the year ended 31 March 2000.
Pro forma financial information does not include any adjustments arising from the creation, on 3 April 2000, of Verizon Wireless under a joint venture
arrangement with Bell Atlantic or the acquisition of Mannesmann AG, for which European Commission approval was received on 12 April 2000.
Unaudited pro forma profit and loss accounts for the years ended 31 March 2000 and 31 March 1999
2000 1999
£m £m
Group turnover 8,887 7,018

–––––––– ––––––––
Operating profit 1,013 762

Share of operating loss in joint ventures and associated undertakings (376) (760)
–––––––– ––––––––
Total Group operating profit 637 2
Total Group operating profit before goodwill and exceptional items:

– Subsidiary undertakings 1,886 1,624
– Joint ventures and associated undertakings 1,056 636
–––––––– ––––––––
2,942 2,260
Amortisation of goodwill (2,275) (2,258)
Exceptional reorganisation costs (30) –
–––––––– ––––––––
Total Group operating profit 637 2
–––––––– ––––––––
Disposal of fixed asset investments 975 116

–––––––– ––––––––
Profit on ordinary activities before interest 1,612 118
Net interest payable (485) (460)

–––––––– ––––––––
Profit/(loss) on ordinary activities before taxation 1,127 (342)
Tax on profit/(loss) on ordinary activities (810) (584)

–––––––– ––––––––
Profit/(loss) on ordinary activities after taxation 317 (926)
Equity minority interest (162) (129)

Non-equity minority interests (51) (51)
–––––––– ––––––––
Profit/(loss) for the financial year 104 (1,106)
–––––––– ––––––––
Basic earnings/(loss) per share 0.34p (3.64)p
Adjusted basic earnings per share 4.64p 3.47p

Unaudited Pro Forma Financial Information continued
Pro forma segmental analysis

Pro forma turnover and pro forma total Group operating profit by geographical region is set out below. Pro forma total Group operating profit is stated
after the inclusion of the Group’s share of operating profit, before goodwill and exceptional items, of joint ventures and associated undertakings.
2000 1999
£m £m
Group turnover
Europe, Middle East & Africa 2,030 1,617
United Kingdom 2,901 2,088
United States & Asia Pacific 3,956 3,313
–––––––– ––––––––
8,887 7,018
–––––––– ––––––––
Total Group operating profit (before goodwill and exceptional items)

Europe, Middle East & Africa 1,321 983
United States & Asia Pacific 915 633
–––––––– ––––––––
2,942 2,260
Amortisation of goodwill (2,275) (2,258)

Exceptional reorganisation costs (30) –
–––––––– ––––––––
637 2
–––––––– ––––––––
Profit on ordinary activities before taxation, goodwill and exceptional items:

Total Group operating profit (before goodwill and exceptional reorganisation costs) 2,942 2,260
Net interest payable (before exceptional finance costs) (468) (460)
–––––––– ––––––––
2,474 1,800
–––––––– ––––––––
Exceptional reorganisation costs are in respect of the merger with AirTouch and have been incurred in the United States. Exceptional finance costs of
£17m have been incurred in restructuring the Group’s borrowing facilities as a result of the acquisition of Mannesmann.
Pro forma earnings per share

2000 1999
£m £m
Earnings/(loss) for the financial year for basic earnings/(loss) per share 104 (1,106)
Amortisation of goodwill 2,275 2,258
Exceptional reorganisation costs, net of attributable taxation 19 –
Disposals of fixed asset investments, net of attributable taxation (975) (98)
Exceptional finance costs, net of attributable taxation 12 –
–––––––– ––––––––
Earnings for adjusted basic earnings per share 1,435 1,054
–––––––– ––––––––
Weighted average number of shares (millions):

Basic and adjusted 30,908 30,381
–––––––– ––––––––
Unaudited Pro forma Financial Information continued
Summary of differences between UK and US GAAP pro forma financial information

The pro forma financial information has been prepared in accordance with UK generally accepted accounting principles (“UK GAAP”). A description of the
relevant accounting principles which differ materially from US GAAP is provided on page 59. The effects of these differing accounting principles on the
pro forma profit and loss accounts presented for the years ended 31 March 2000 and 31 March 1999 are summarised below.
2000 1999
£m £m
UK GAAP pro forma net income/(loss) 104 (1,106)
Items (decreasing)/increasing net income/(loss):

Goodwill amortisation (534) (535)
Reorganisation costs 25 –
Profit on disposal of fixed asset investments 1 4
Income taxes 625 637
Minority interests 46 45
Other (9) 4
–––––––– ––––––––
Pro forma net income/(loss) in accordance with US GAAP 258 (951)
–––––––– ––––––––
US GAAP pro forma basic earnings/(loss) per ordinary share 0.83p (3.13)p
Pro forma proportionate information

The following tables of pro forma customer and financial information are presented on a proportionate basis. Proportionate presentation is not required by
UK GAAP and is not intended to replace the consolidated financial statements prepared in accordance with UK GAAP. However, since significant entities in
which the Group has an interest are not consolidated, proportionate information is provided as supplemental data to facilitate a more detailed
understanding and assessment of the consolidated financial statements prepared in accordance with UK GAAP.
UK GAAP requires consolidation of entities controlled by the Group and the equity method of accounting for entities in which the Group has significant
influence but not a controlling interest. Joint ventures are consolidated using the gross equity method. Proportionate presentation is a pro rata
consolidation, which reflects the Group’s share of turnover and expenses in both its consolidated and unconsolidated entities. Proportionate results are
calculated by multiplying the Group’s ownership interest in each entity by each entity’s results.
Proportionate information includes results from the Group’s equity accounted investments and investments held at cost. The Group does not have control
over the turnover, expenses or cash flow of these investments and is only entitled to cash from dividends received from these entities. The Group does
not own the underlying assets of these investments.
As a condition to the European Commission’s approval of the merger with AirTouch Communications, Inc. the Group entered into an undertaking to
dispose of its interest in E-Plus Mobilfunk GmbH following merger completion. As a result, pro forma proportionate customer and financial information
excludes E-Plus for the years presented.
2000 1999
Proportionate customer information (thousands) Number Number
Proportionate number of customers

–––––––– ––––––––
39,139 25,421
–––––––– ––––––––
2000 1999
Proportionate financial information £m £m
Proportionate turnover
–––––––– ––––––––
12,569 9,185
–––––––– ––––––––
Proportionate EBITDA*
–––––––– ––––––––
3,948 3,046
Less: Depreciation and amortisation, excluding goodwill (1,240) (991)
–––––––– ––––––––
Proportionate total Group operating profit before goodwill and exceptional costs 2,708 2,055
–––––––– ––––––––
* Proportionate EBITDA (earnings before interest, tax, depreciation and amortisation) is defined as operating profit before exceptional reorganisation costs plus depreciation and amortisation
of subsidiary undertakings, joint ventures, associated undertakings and investments, proportionate to equity stakes. Proportionate EBITDA represents the Group’s ownership interests in the
respective entities’ EBITDA. As such, proportionate EBITDA does not represent EBITDA available to the Group.
Notes
Notes
Vodafone AirTouch Plc Annual Report & Accounts for the year ended 31 March 2000
Designed and produced by Barrett Howe Plc.

Printed by Pillans & Wilson Greenaway.
Printed on elementary chlorine free paper manufactured

using woodpulp from sustainable resources.

Annual Report & Accounts for the year ended 31 March 2000

Registered Office: The Courtyard, 2-4 London Road, Newbury, Berkshire RG14 1JX, England
Tel: +44 (0)1635 33251 Fax: +44 (0)1635 45713
Registered in England No.1833679
www.vodafone.com
PRINTED IN UNITED KINGDOM

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VOD510 Cover Section 20/6/00 9:58 am Page 1

Vodafone AirTouch Plc

Vodafone AirTouch Plc

Our vision is to be the world’s leading

Remuneration Report of the Board 20

Statement of Directors’ Responsibilities 27

Report of the Auditors 27

Consolidated Profit and Loss Account 28

Consolidated Balance Sheet 29

Consolidated Cash Flow 30

Consolidated Statement of Total Recognised Gains and Losses 31

Movement in Equity Shareholders’ Funds 31

Statement of Accounting Policies 32

Notes to the Consolidated Financial Statements 34

Company Balance Sheet 53

Notes to the Company Balance Sheet 54

Joint Ventures, Associated Undertakings and Investments 57

United States Accounting Principles 58

Unaudited Pro Forma Financial Information 60

Proportionate customers at year end 39,139,000 25,421,000 54

Proportionate turnover £12,569m £9,185m 37

Proportionate total Group operating profit

Total Group operating profit

Profit on ordinary activities before taxation

Europe, Middle East & Africa

• Group interest in E-Plus disposed of at a profit of £939m.

Business Review continued

Business Review continued

US Cellular and PCS operations

Business Review continued

Business Review continued

Employment and labour standards New Group headquarters building

Business Review continued

Environmental policy and management systems • Health

Profit and loss account

Financial Review continued

Financial Review continued

Cash flows and net borrowings Future investment

Net cash outflow – investments £m

Financial Review continued

Foreign exchange management 4.0

Financial Review continued

Dividends Introduction of the single

Review of the Group’s business

Purchase by the Company of its own shares

Results and dividends

Charitable and political contributions

Creditor payment terms

Directors’ Report continued

Research and development

Directors’ interests in the shares of Vodafone AirTouch Plc

Directors’ interests in contracts

Employee education, training and development

Directors’ Report continued

Health, safety and welfare

Directors and Organisation

Committees of the Board

Corporate Governance continued

Remuneration Report of the Board