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** **

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**Form 20-F**

 

 
| **o** | **REGISTRATION STATEMENT PURSUANT TO   SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-------|---------------------------------------------------------------------------------------------------------------------|

 

**OR**

 
| **þ** | **ANNUAL REPORT PURSUANT TO SECTION 13 OR   15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|------------|------------------------------------------------------------------------------------------------------|

 

**For the fiscal year ended: March 31, 2016**

 

**OR**

 
| **o** | **TRANSITION REPORT PURSUANT TO SECTION 13 or   15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-------|----------------------------------------------------------------------------------------------------------|

 

**OR**

 
| **o** | **SHELL COMPANY REPORT PURSUANT TO SECTION 13 or   15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-------|-------------------------------------------------------------------------------------------------------------|

 

**Date of event requiring this shell company report:                  **

 

**For the transition period from:                      to                    **

 

**Commission file number: 001-10086**

 

**VODAFONE GROUP PUBLIC LIMITED COMPANY**

*(Exact name of Registrant as specified in its charter)*

 

**England**

*(Jurisdiction of incorporation or organization)*

 

**Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England**

*(Address of principal executive offices)*

 

**Rosemary Martin (Group General Counsel and Company Secretary)**

**tel +44 (0) 1635 33251, fax +44 (0) 1635 580 857**

 

**Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England**

*(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)*

 

Securities registered or to be registered pursuant to Section 12(b) of the Act:

 

 
| **Title of each class** |    | **Name of each exchange**

**on which registered** |
|-------------------------|--------------|----------------------------------------------------|
| See   Schedule A        |    | See   Schedule A                                   |

 

Securities registered or to be registered pursuant to Section 12(g) of the Act:

 

**None**

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

 

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**None**

 

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

 
|                                            |           |         |
|-------------------------------------------------|----------------|--------------|
| Ordinary Shares of 20 20/21 US cents each       | 26,558,570,312 |    |
| 7% Cumulative Fixed Rate Shares of £1 each | 50,000         |    |

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act

 

Yes  þ    No  o

 

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

 

Yes  o    No  þ

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

 

Yes  þ    No  o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

    Yes  o    No  o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

 

 
| Large   accelerated filer  þ |   | Accelerated   filer  o |   | Non-accelerated   filer  o |
|---------------------------------------------|--------|----------------------------------|--------|--------------------------------------|

 

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

 

 
| US GAAP  o |   | International   Financial   Reporting  þ |   | Other  o |
|---------------------------|--------|---------------------------------------------------------|--------|--------------------|
|                      |   | Standards   as issued by the                            |   |               |
|                      |   | International   Accounting                              |   |               |
|                      |   | Standards   Board                                       |   |               |

 

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow

 

Item 17  o    Item 18  o

 

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes  o    No   þ

 

 

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SCHEDULE A

 

 
| **Title of each class**                                                                                        |    | **Name of each exchange   on which registered** |
|----------------------------------------------------------------------------------------------------------------|--------------|-------------------------------------------------|
| Ordinary shares of 20 20/21 US cents each                                                                      |    | NASDAQ   Global Select Market*                  |
| American Depositary Shares (evidenced by American Depositary Receipts)   each representing ten ordinary shares |    | NASDAQ   Global Select Market                   |
| 5.625% Notes due February 2017                                                                            |    | New   York Stock Exchange                       |
| 1.625% Notes due March 2017                                                                               |    | New   York Stock Exchange                       |
| 1.25% Notes due September 2017                                                                            |    | New   York Stock Exchange                       |
| 1.5% Notes due February 2018                                                                              |    | New   York Stock Exchange                       |
| 4.625% Notes due July 2018                                                                                |    | New   York Stock Exchange                       |
| 5.450% Notes due June 2019                                                                                |    | New   York Stock Exchange                       |
| 4.375% Notes due March 2021                                                                               |    | New   York Stock Exchange                       |
| 2.5% Notes due September 2022                                                                             |    | New   York Stock Exchange                       |
| 2.95% Notes due February 2023                                                                             |    | New   York Stock Exchange                       |
| 6.25% Notes due November 2032                                                                             |    | New   York Stock Exchange                       |
| 6.15% Notes due February 2037                                                                             |    | New   York Stock Exchange                       |
| 4.375% Notes due February 2043                                                                            |    | New   York Stock Exchange                       |

 
| * | Listed, not for   trading, but only in connection with the registration of American Depositary   Shares, pursuant to the requirements of the Securities and Exchange   Commission. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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 Confidence in the future Vodafone Group Plc   Annual Report on Form 20-F 2016 

 

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At Vodafone, we   create connections. We’re helping people confidently connect to their   families, friends, customers and content through any service, anywhere, at any   time. And with our focus on being a high-quality provider we’re well -placed   to continue this success. Find out how we’re... Overview Strategy Strategy   Responding to a changing world... Managing our people and impact... Building a   great platform for growth... Pages 02–09 Pages 10–17 Pages 18–29 Performance   Governance Financials Performing Creating and Delivering across all our   markets... maintaining the right culture... results for shareholders... Pages 30–37   Pages 38–74 Pages 75–162 This constitutes the annual report on Form 20-F of   Vodafone Group Plc (the ‘Company’) in accordance with the requirements of the   US Securities and Exchange Commission (the ‘SEC’) for the year ended 31 March   2016 and is dated 10 June 2016. This document contains certain information   set out within the Company’s annual report in accordance with International   Financial Reporting Standards (‘IFRS’) as issued by the International   Accounting Standards Board (‘IASB’) and with those parts of the UK Companies   Act 2006 applicable to companies reporting under IFRS, dated 17 May 2016, as   updated or supplemented if necessary. The content of the Group’s website   (www.vodafone.com) should not be considered to form part of this annual   report on Form 20-F. The production of this year’s report reflects our “Fit   for Growth” programme – our commitment to driving cost efficiencies through   the business without compromising our ability to deliver excellence. Whilst   remaining focused on publishing high-quality communications and disclosures   in our reporting, we have minimised the production costs of this document.   More on Cost efficiency and “Fit for Growth”: Pages 14 and 15 Vodafone today   We confidently connect more and more people each year. Today we have 462   million mobile customers, 13 million fixed broadband customers and 9.5   million TV customers. Why do they choose us? Because we are a leader in   network quality, offer excellent customer experience and provide integrated,   worry-free solutions. www.vodafone.com 

 

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**Contents**

 
| **Welcome to our**

**2016 Annual Report**

** **

 

 

 

** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                         |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|
| The Overview, Strategy Review and Performance   sections constitute the Strategic Report.

These are based on an assessment of our   performance using the key strategic areas as set out on page 10.

** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **Overview**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                    |   | **Strategy** |   |   | **Performance** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                    |   |   |   |   |   |
| An   introduction to the report covering who we are, the Chairman’s reflections on   the year, notable events, and a snapshot of where and how we do business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                    |   | A summary of the changing landscape we   operate in, and how that has shaped our strategy and financial position. Plus   a review of performance against our goals and our approach to running a   sustainable business. |   |   | Commentary on the Group’s operating   performance. |
| **30**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Operating results                                       |
| **36**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Financial position and resources                        |
| **02**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Performance highlights                                  | ** ** |   |
| **03**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Chairman’s statement                               |   |   | **10** | Chief Executive’s strategic review |   |   | ** ** |   |
| **04**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | At a glance                                             |   |   | **14** | Chief Financial Officer’s review |   |   | ** ** |   |
| **06**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Our business model                                      |   |   | **16** | Key performance indicators |   |   | ** ** |   |
| **08**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Market overview                                         |   |   | **18** | Our people |   |   | ** ** |   |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                    |   |   | **20** | Sustainable business |   |   |   |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                    |   |   | **22** | Principal risk factors and uncertainties |   |   |   |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                    |   |   | ** ** |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                    |   | ** ** |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                    |   |   |   |   |   |
| **Governance**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                    |   | **Financials** |   |   | **Additional Information** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                    |   |   |   |   |   |
| An explanation of how we are organised, what   the Board has focused on and how it has performed, our diversity practices,   how we communicate with our shareholders and how our Directors are rewarded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                    |   | The statutory financial statements of the   Group and the Company and associated audit reports. |   |   | Find out about our shares, information on our   history and development, regulatory matters impacting our business and other   statutory financial information. |
| **75**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Contents                                                |
| **76**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Directors’ statement of responsibility             | **175** | Shareholder information |
| **38**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Chairman’s introduction                            |   |   | **78** | Risk mitigation |   |   | **182** | History and development |
| **39**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Our governance framework                                |   |   | **82** | Report   of independent registered public accounting firm |   |   | **183** | Regulation |
| **40**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Board of Directors                                      |   |   |   |   | **190** | Non-GAAP information |
| **42**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Executive Committee                                     |   |   | **87** | Consolidated   financial statements and financial commentary |   |   | **195** | Form 20-F cross reference guide |
| **44**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Board activities                                        |   |   |   |   | **198** | Forward-looking statements |
| **45**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Board evaluation, induction and training                |   |   | **168** | This page is intentionally left blank |   |   | **200** | Definition of terms |
| **46**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Shareholder engagement                                  |   |   | ** ** |   |   |   | **202** | Selected financial data |
| **47**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Board committees                                        |   |   | ** ** |   |   |   | Exhibit 2.3 |   | Exhibit 4.8 |   |   |
| **54**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Compliance   with the 2014 UK Corporate Governance Code |   |   | ** ** |   |   |   | Exhibit 2.4 |   | Exhibit 4.9 |   | Exhibit 12 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                    | ** ** |   |   |   | Exhibit 2.5 |   | Exhibit 4.10 |   | Exhibit 13 |
| **56**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Our US listing requirements                             |   |   | ** ** |   |   |   | Exhibit 4.2 |   | Exhibit 4.32 |   | Exhibit 15.1 |
| **57**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Directors’ remuneration                            |   |   | ** ** |   |   |   | Exhibit 4.6 |   | Exhibit 4.35 |   | Exhibit 15.2 |
| **74**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Directors’ report                                  |   |   | ** ** |   |   |   | Exhibit 4.7 |   | Exhibit 7 |   | Exhibit 15.3 |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                    |   | ** ** |   |   |   |   |   |   |   |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                    |   | ** ** |   |   |   |   |   |   |   |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                    |   | ** ** |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Unless   otherwise stated references to “year” or “2016” mean the financial year ended   31 March 2016, to “2015” or “previous year” mean the financial year ended 31   March 2015, and to the “fourth quarter” or “Q4” are to the quarter ended 31   March 2016. For other references please refer to page 35.

 

All   amounts marked with an “*” represent “organic growth”, which presents   performance on a comparable basis, both in terms of merger and acquisition   activity as well as in terms of movements in foreign exchange rates. See   definition on page 191 for more information. Definitions of terms used   throughout the report can be found on pages 200 and 201.

 

The   terms “Vodafone”, the “Group”, “we”, “our” and “us” refer to the Company and,   as applicable, its subsidiaries and/or interests in joint ventures and   associates.

 

Website   references are for informational purposes only and are not incorporated by   reference into our Annual Report on Form 20-F. |
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Performance highlights Further   improvement in our performance We have returned to organic growth in both   revenue and adjusted EBITDA Revenue Reported revenue decreased by 3.0% over   the year. On an organic basis, which adjusts for certain items*, revenue grew   by 2.3% reflecting underlying improvement. Our improved operational   performance is encouraging steady customer growth Mobile customers 16 million   customers joined our networks last year, mainly driven by growth in emerging   markets. Internet of Things 02 Vodafone Group Plc Annual Report on Form 20-F   2016 47m 4G customers 26 million more customers used our superfast 4G during   the year. 13.4m Fixed broadband customers rose by over one million, supported   by the expansion of our broadband reach. 38m connections are up by 37% over   the year, driven by our global scale and reach. £11.6bn Adjusted EBITDA on a   reported basis fell by 2.5%. On an organic basis it grew 2.7%. £1.4bn   Operating profit declined due to reduction in adjusted EBITDA (2015: £2.0bn).   £8.6bn Capital expenditure remained high due to our Project Spring investment   (2015: £9.2bn). 11.45p Dividends per share up 2.0% over last year (2015:   11.22p). 

 

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Chairman’s statement A year of solid   progress This has been a year of continued strategy implementation and   improved operational execution, with a return to growth enabling consistent   attractive returns to shareholders. Our Project Spring investment programme   is bearing fruit have started to address some of these issues, impacts of   mobile communications are continued pressures from regulatory and represents   an excellent long-term investment are hampering economic development. with   the piecemeal release of new spectrum, in networks, and this is exacerbated   by other 2017 and beyond, dividends will be declared US dollars. This is   consistent with the change Vodafone Foundation, the Group platform single   Foundation, but a unique network programmes in Vodafone markets. We have   since its formation in helping charities and goals, more recently providing   connectivity women in Tanzania, and emergency support many other causes. The   Foundation remains around the world to save lives and improve Gerard Kleisterlee   With the advent of new technologies designed outdated copper infrastructures,   the risk of investment in 21st century fibre networks. trying to use   exclusive content ownership 03 Vodafone Group Plc Annual Report on Form 20-F   2016 Overview Strategy review Performance Governance Financials Additional   information Good progress. Financial improvement is following The financial   year 2016 has been a year of solid progress, both with respect to the further   implementation of our strategy as well as regarding our focus on customer   experience excellence and operational execution. Vodafone has been undergoing   a substantial transformation over the last five years. While historically we   developed as a business that was almost exclusively focused on mobile voice   and text services, we now cover most of our markets with advanced mobile data   networks, we reach 72 million homes in Europe with Vodafone-branded high   speed broadband services, of which 41% are on our own fibre or cable   networks, and we offer a broad portfolio of market-leading, integrated fixed   and mobile communications services across a footprint of 26 countries.   Vittorio covers this progress in more detail in his review on pages 10 to 13.   Our progress has come about through significant organic investment and acquisitions.   Our total spend in the last three years – across capital expenditure,   spectrum licences and acquisitions – has exceeded £47 billion. We have funded   this through the sale of valuable but non-controlled assets such as Verizon   Wireless, while still maintaining a strong balance sheet and paying an   attractive and growing dividend. This is one of the key roles of the Board:   finding the right balance between long-term investment to secure the   sustainability of the business; a strong credit position to weather uncertain   economic times; and a regular and reliable return for shareholders. The   crucial next step for Vodafone is to translate these investments into   improving financial performance, and I am extremely pleased to report that   Vodafone returned to organic growth this year in both revenue and adjusted   EBITDA, aided by our Project Spring investment programme which completed in   March 2016. Our performance will be further enhanced by our Customer   eXperience eXcellence programme (CXX), which we launched last year and which,   with Vittorio’s personal leadership, will continue to have the highest   attention from the Board. These improvements are necessary to maintain our   strong financial framework and underpin our dividend policy. Nick sets out in   more detail our plans for continued growth, supported by increasing   efficiency, on pages 14 and 15. The Board continues to view the dividend as   the key element of shareholder returns and consistent with this policy we   have raised the dividend per share by 2% to 11.45 pence for the year. For the   financial year ending 31 March in euros and paid in euros, pounds sterling   and in the Group’s reporting currency to euros from pounds sterling. The   regulatory agenda is still unresolved in key areas At Vodafone we are aiming   for a regulatory environment that enables investment, innovation and returns   for business, while always maintaining adequate levels of competition to   provide customers choice and value for money. So far in several geographies   we are still some way from such a position and this will remain a point of   concern for the Board when making its investment decisions. In Europe,   inconsistent industry regulations and spectrum policies, exacerbated by   overly fragmented market structures, have led to a steep deterioration in   return on capital employed over recent years. to squeeze higher broadband   speeds from of “re-monopolisation” is rising, at the expense Additionally, a   number of incumbents are as a further lever to limit competition. Recent   initiatives by the European Commission but we believe more needs to be done.   In emerging markets, the positive economic well documented, but there too we   face fiscal intervention. For example, while India opportunity, the present   regulatory challenges Spectrum auction structures, combined leave less   capital available for investment ongoing regulatory and fiscal burdens.   Vodafone Foundation This year we are celebrating 25 years of the for   charitable giving. In reality it is not one of 27 local foundations and   social investment raised and invested over £560 million philanthropic   organisations to achieve their in refugee camps, access to healthcare for for   victims of domestic violence, among committed to connecting communities the   livelihood and education of children. /s/ Gerard Kleisterlee Chairman 

 

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At a glance What we offer In recent   years we have taken advantage of growth opportunities to move from being a   pure mobile operator to delivering a broad mix of communication services   including mobile, fixed broadband, video content, cloud & hosting and   Internet of Things offerings. We believe the future is in converging these   services to be a unified communications provider and we are well positioned   to deliver on this trend. Fixed Enterprise 5% wholesale incl 6% (wholesale   incl. partner markets) 13 million are TV customers. voice, broadband and TV   services to our enterprise customers, including Private Networks). 04   Vodafone Group Plc Annual Report on Form 20-F 2016 Our services Mobile 462   million customers of which 43% are active data users. We provide a range of   mobile services, enabling customers to call, text and access the internet,   stream music and watch videos whether at home or travelling abroad. Fixed   fixed broadband customers and 9.5 million We provide a range of services   including to consumers and a wider range of services cloud & hosting and   IP-VPN (Virtual Pages 10 to 13 Other services Includes Partner Markets and   Common Functions (see page 5); Mobile Virtual Network Operators (‘MVNOs’) who   are mobile providers that rent capacity from mobile operators to sell onto   their customers; Internet of Things (‘IoT’) which is communication between   devices via mobile technologies; international voice transit and roaming.   Converged services In many of our markets, there is a growing trend towards   the convergence of fixed and mobile services (also known as unified   communications). For customers and operators this provides many benefits   including lower bills for users and higher customer loyalty towards   operators. We believe this trend will continue to advance in Europe and start   gaining traction in our AMAP region and that we are well positioned to take   advantage and win market share. Today, we have nearly three million converged   customers taking combined fixed and mobile services. More on our strategy:   Fixed services increasingly important in line with trend to convergence...   Enterprise continues to be a key growth driver of our business... 1% Split of   service revenue 74%MVNOs, IoT and Mobile partner markets) 28% Split of   service revenue Consumer Other MVNOs and 2 Fi it of 

 

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Where we   operate Our business is organised into two geographic regions: Europe, and   Africa, Middle East and Asia Pacific (‘AMAP’), which includes our emerging   markets. Our reach and scale Vodacom 9% Germany 19% 32% India 12% AMAP Split   of service Other AMAP 11% UK 16% revenue 66% Italy 10% Other Europe 12% 2%   Europe Spain 9% Other (partner markets and common functions1) We provide mobile   networks in 26 countries (including joint ventures and associates) and fixed   services in 17 of these. There are 57 markets where we hold no equity   interest but have partnership agreements with local mobile operators for them   to use our products and services and in some cases our brand. revenue comes   Notes: 1 Common functions include revenue from services provided centrally or   offered outside our operating company footprint, including some markets where   we have a licensed network operation, for example offering IP-VPN services in   Singapore. 2 3 4 5 Vodafone revenue share estimates at end December 2015.   Customer share for Spain. Democratic Republic of Congo (‘DRC’), Lesotho,   Mozambique, South Africa and Tanzania. South Africa. Fixed broadband markets.   05 Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy   review Performance Governance Financials Additional information of our   service revenue comes from Europe MobileMobileFixed Core markets customers   market share2 market share2 Germany5 30.3m 33% 20% UK5 18.2m 24% 5% Italy5   24.1m 32% 6% Spain5 14.3m 28% 22% Also operating in: Albania Hungary   Netherlands5 Czech Republic5 Ireland5 Portugal5 Greece5 Malta5 Romania5 of   our service from AMAP MobileMobile Core markets customers market share2   India5198.0m 22% Vodacom3,5 70.4m 50%4 Also operating in: Australia Egypt5   Kenya (associate) Qatar5 (joint venture) Ghana5 New Zealand5 Turkey5 

 

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Our business model Investing in a great   platform for the future Our global scale and reach, leading network quality,   and the breadth of services we offer helps differentiate us from our peers.   Our business model is simple – maintain a virtuous circle of high investment,   to maintain a superior network and customer experience, leading to strong   cash generation so that we can reinvest and reward our shareholders. Superior   network infrastructure y (‘IT’) My Vodafone app users (account self-service)   countries have cloud & hosting capability range of services we provide.   Note: 1 Europe. returned to shareholders in the last 3 years 06 Vodafone   Group Plc Annual Report on Form 20-F 2016 Investment and returns to   shareholders £47bn re-investing in our business We’ve invested £47 billion in   capital expenditure, new acquisitions and spectrum and licences in the last   three years. This has enhanced our networks, and competitive position and   enabled us to generate substantial returns for shareholders. £19bn Project   Spring Project Spring was our two year £19 billion programme of accelerated   investment in mobile and fixed networks, IT systems, products and services,   and our retail platform. It aims to secure a premium position in most of our   markets, and sustain strong cash flows and growing shareholder returns. £11bn   We recognise that our shareholders regard the dividend as an important form   of return on their investment. That is why we have consistently increased the   dividend per share every year for the last 16 years and returned over £11   billion in normal cash dividends in the last three years. Spectrum and Mobile   Network Fixed network Information Technolog £7.7bn spent on spectrum in the   last 3 years 300,000 base station sites We acquire spectrum and licences to   use radio frequencies that deliver mobile services. We have steadily   increased our spectrum holdings to boost network quality and our capacity to   carry more data. We also have one of the world’s largest footprints of mobile   base station sites, across 26 countries. More on spectrum holdings: Pages 187   which means... we can provide customers with wide coverage, both indoors and   outdoors, a reliable connection, high-speed data transmission, and ample data   capacity. 72m1 homes reached with high speed broadband £15bn spent acquiring   fixed businesses in recent years Our fixed capabilities comprise cable, fibre   and copper networks to enable TV, broadband and voice services. These depend   on either building our own fixed line infrastructure, renting from incumbent   operators or acquiring cable companies. which means... we can already reach   around half of European households with high speed broadband over 30 Mbps.   25m 12 Our IT estate provides our data centres, customer relationship   capability, customer billing services and online resources. Over the last   three years we have invested £4.2 billion to upgrade our IT systems and to   standardise and simplify our processes. This has enhanced customer services   at all touchpoints – in-store, on the phone and online – and expanded the   which means... we can provide new offerings, such as single bills for converged   fixed and mobile price plans, and cloud & hosting for business users for   more flexible working. 

 

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Breadth of   services s call centres in all European markets retail customer service staff   Page 18 Note: 1 Includes employees, contractors and third parties. customer   service, so we have launched a customer service excellence programme. The   goal “Network satisfaction with no surprises” better service” ask only once”   07 Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy   review Performance Governance Financials Additional information Customer   eXperience eXcellence We want to show customers we CARE Page 10 While Project   Spring has built better networks, we know that our customers also want great   is simple: to substantially enhance the quality of service we provide and to   be the Net Promoter Score leader in every single market in which we operate.   Our programme has four simple pillars: Connectivity – that Always in   controlRewarding loyalty Easy access is reliable and secure“Control your   costs“Extra rewards and“Always available, guaranteed” We’re continually   trying to improve our customer service, and we are pleased to be the leader   or co-leader in mobile network quality tests and Net Promoter Scores in the   majority of our markets. More on focusing on our customers: A wide range of   services to meet customers’ need Simple customer service Convenient sales   channels 38m Internet of Things connections Although our roots are in mobile   we now enable a much wider range of communication including TV, fixed   broadband and landline calls. But we haven’t stopped there. We also provide   enhanced services such as mobile money services, cloud & hosting and   connected machines via our IoT services. More on our mobile money service,   M-Pesa: Page 11 which means... we unify communications, bringing together fixed   and mobile services. 16,000 exclusive branded shops globally 4,900 stores   upgraded to new format in last 3 years 92% of our customers are individuals   or families. We reach them through a variety of channels including branded   stores, distribution partners, third-party retailers, and increasingly,   online services. 8% of our customers are enterprises – from small shop owners   to multinationals. We reach these customers via our direct sales teams,   indirect partners, and telesales channels. which means... it is easy for our   customers to get in touch wherever and however is convenient for them. 24/7   41,0001 We have a broad customer base comprising individuals, domestic   businesses of all sizes, multinationals and public sector departments, with a   wide range of communications needs. Our highly-trained and diverse workforce   of employees from over 130 countries help provide these different services.   More on People and Diversity: which means... our customer satisfaction ranking,   which we measure through our Net Promoter Score, makes us the leader in 13   out of 21 markets. 25m mobile money users 9.5m TV customers 

 

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Market overview Understanding our   marketplace Our customers are demanding higher network speeds, reliable and secure   data connections, and a better customer experience. Against this background,   we can see great opportunities to create value, while managing risks. A   fast-moving industry generating many new opportunities As more communities   connect there has been money transfer, video and entertainment, Operators are   upgrading their mobile 450 Mbps. This is allowing customers to do more –   moving from simply mobile-momentum is coming from growth in to now   increasingly connecting cars, homes, commercially available around 2020, with   latency and allow faster connections and devices connected to the Internet of   Things expected to grow significantly, which will allow customers to use   these new services Regulators and policy makers continue Page 183 08 Vodafone   Group Plc Annual Report on Form 20-F 2016 fixed connections by 2020 What’s   the scale and structure of our market? The communications market is growing   as more communities around the globe gain access to new technology. The   growth in the number of mobile users continues its momentum, now at 7.6   billion, up half a billion since last year, generating US$1 trillion in   annual service revenue. Much of the emerging markets such as Africa and Asia   due to the combination of large and relatively young populations, fast GDP   growth, increased data usage and limited fixed line infrastructure. Global   fixed market The global fixed market has two billion connections, generating   US$678 billion in 2015, up 0.4% from 2014. This year revenue from fixed voice   continued its decline as users switched to using fixed broadband and mobile.   We are also seeing an increased take-up of pay TV, aligned to fixed broadband   growth. These trends provide opportunities for differentiation, as not all   operators are well-positioned to sustain the levels of investment needed for   higher-speed networks, providing higher quality services for customers.   Competition The industry is highly competitive with a large number of   providers in both fixed line and mobile segments. There are 12 major telecom   providers that are able to gain advantages by leveraging size and scale. In   addition to competition between networks, over-the-top applications have   enabled companies to offer data services via apps, increasing the number of   competitors further. In this environment, Vodafone has differentiated its   service through high-quality network performance, and also through converged   offerings (mobile, fixed line, broadband, TV), allowing us to compete more   effectively. Innovation more investment in innovations such as mobile and the   Internet of Things (formerly M2M). networks, providing 4G speeds of up to   working with smartphones and tablets and cities. We anticipate 5G will become   speeds of up to 1 Gbps. This will reduce response times. As we look to the   future the number of (via mobile and other technologies) is massively expand   the demand for data and to increase their productivity. In the fixed   broadband sector, operators are investing in more high-speed fibre broadband,   which provides data speeds typically up to 1 Gbps, compared with up to 24   Mbps on copper-based ADSL broadband. Regulation to have a significant impact   on the structure and performance of the industry. Regulators continue to   lower mobile termination rate (‘MTR’) fees, which are the fees mobile   companies charge for calls received from other companies’ networks, and to   limit the amount that operators can charge for mobile roaming services. These   two areas represent 10% of Vodafone’s service revenue, down 11% from last   year. More on Regulation: Notes: 1 Compound annual growth rate.The industry   data on these pages, unless stated, is from the 2 Vodafone’s benchmark   tests.following sources: GSMA, Analysys Mason, Ampere Analysis, 3 Vodafone,   “The Connected Future for SMEs”.Ovum and Strategy Analytics. Global market   potential 8.5bn m obile users expected by 2020 US$1.1tn predicted mobile   market in 2020 Growth in mobile data usage petabytes (calendar year) 2015   2016 2017 2.2bn US$690bn fixed service revenue by 2020 Growth in pay TV   customers million (calendar year) 2015 2016 2017 Actual 875 Estimate 910   =Estimate939 Actual 36,000 Estimate 52,000 Estimate 72,000 

 

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Adapting and   evolving our response We live in a fast-paced world where our customers’   needs are constantly evolving. In order to compete we are responding to key   market trends, and building a stronger product offering for our customers.   More on our strategy to respond to these trends: Pages 10 to 13 Focusing on   services that will make a difference to our customers What’s the trend? How   we are responding? to evolve rapidly as demand for improvements in   performance, experience. As we move towards continue around mobile and fixed   faster, more flexible and highly driven by faster fixed and mobile networks   with greater more advanced handsets with larger screens, increased use media,   messaging, video choosing simplicity – either line to their mobile service.   one customer service, and one intense for basic mobile of Europe’s SMEs say   and provide flexibility for 09 Vodafone Group Plc Annual Report on Form 20-F   2016 Overview Strategy review Performance Governance Financials Additional   information Improving business environment 80%3 communication technologies   are fundamental to how they operate today. Market competition remains and   fixed communications. Regardless of size, enterprise customers are   progressively adopting digital ways of working to improve their competitiveness   their workforce. Enterprise Customers are increasingly looking for   pre-integrated fixed, mobile and cloud services with simple, predictable and   transparent pricing. We have invested in building these service offerings at   scale helping us achieve a commercial advantage across our footprint. More on   Enterprise: Page 13 Growth in demand for converged services 56% of households   in Spain use converged services Customers are increasingly adding mobile to   their fixed line services, or adding fixed They want one provider, with   simple interaction. Convergence We’re evolving to meet customer needs across   all converged services, first adding fixed-line and then television service   offerings for homes and businesses. Customers can access Vodafone services   and content across multiple platforms, at their convenience. With the rapid   growth of the Internet of Things (‘IoT’), we expect to see more demand for   converged services across wearable devices, and in the transport, retail and   healthcare sectors, amongst others. Growing importance of data, emerging   markets and other new revenue areas 40% CAGR1 mobile data usage growth by   2021 Demand for data is being geographic reach and capacity, faster   processing power and of applications such as social streaming and general browsing.   Data 50% of our European mobile data traffic is carried on 4G networks   Vodafone was rated best or co-best for data services in 15 of 20 markets2.   Our AMAP region now accounts for almost half of all data traffic carried in   the 2016 financial year, compared to 30% three years ago. Demand for   continued network innovation 450 Mbps today’s peak performance for downloads,   up from less than 1 Mbps in 2004 Network innovation continues data increases,   offering significant efficiency and customer a “gigabit society”, innovation   will access solutions that enable even secure exchanges of data. Network With   the completion of Project Spring we are ready to take on the significant data   growth demanded by customers. We now have 73 million 3G customers in emerging   markets and 47 million 4G customers in total using speeds of up to 450 Mbps.   Our high-speed fibre broadband has speeds up to 1 Gbps. We are working with   industry and universities on the next set of 5G standards, so we can continue   to improve speed and user experience. 

 

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Chief Executive’s strategic review   Responding to a changing world It has been a year of continued progress, with   signs of recovery in Europe and continued growth in emerging markets. Our   Project Spring investment programme is now complete. Executing our strategy   to capture growth opportunities speed broadband to 72 million homes own   infrastructure a Further expansion in enterprise products to 70 countries,   IoT connectivity platform to 12 countries up our focus on improving our   customers’ service, in order to bring to life the clear As measured by Net   Promoter Score, of 21 markets and improved in 15 of these to do to build   clear differentiation. Data Convergence Enterprise 10 Vodafone Group Plc   Annual Report on Form 20-F 2016 Our strategy We aim to be a converged   communications leader, investing to provide our customers with differentiated   network access and excellent customer service. Together with capturing the   scale and efficiency benefits of our global presence, we aim to generate   attractive returns, enabling us to sustain our investment levels, further   increase our network differentiation and meet our customers’ high expectations.   Review of the year We have made good progress on a number of fronts in the   last year. We have significantly expanded our mobile and fixed data network   coverage and quality, leading to strong growth in data usage; we have   maintained encouraging commercial momentum, with consistent customer growth;   and we have returned to organic growth in both revenue and adjusted EBITDA,   thanks in part to strong cost efficiency. In emerging markets, we are   achieving sustained growth supported by the strength of our brand, our   networks and our distribution. In Europe, the majority of our markets have   returned to growth, reflecting a more stable regulatory and macroeconomic   environment and better competitive performance than in recent years. Our key   strategic drivers – data, convergence and enterprise – are at the heart of   this continued improvement. Project Spring, our two year £19 billion   investment programme, which was designed to place Vodafone at the forefront   of the growth in mobile data and the increasing trend towards the convergence   of fixed and mobile services, came to its close in March 2016. Highlights   include: a 4G population coverage of 87% in our European markets, up from   just 32% in September 2013 a Extensive modernisation and capacity   improvements, with 93% of our European network now ‘single RAN’ and 90% with   high capacity backhaul a 3G population coverage of 95% in targeted urban   areas in India, and 4G launched in the last few months a 91% of all customer   data sessions in Europe now at speeds of 3 Mbps or better – the rate needed   for high definition video streaming a Dropped call rates down by 40% since   September 2013 – so customers on average now only lose one call in 217 a   Fibre networks that provide high in Europe; including 30 million on our and   services, with IP-VPN extended to 30 countries and cloud & hosting During   the year we also significantly stepped experience of our network and customer   customer benefits of our investments. we ended the year as the leader in 13   out markets: good progress, but still much /s/ Vittorio Colao Vittorio Colao   Chief Executive 

 

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positive   results in our major markets, with best overall in Italy and Spain, best network   overall in Germany. to 99% and 4G coverage to 58% – significantly pricing   plans that make data affordable This has been further boosted by the success   tablets. With these products, we are able at a much reduced price point,   opening customers for the first time. to 47 million, with average usage   typically in data over the last few years since the launch extended our 3G   network by 40,000 base We now have 27 million 3G customers out progress, only   27% of our European customers for further growth. M-Pesa, our money transfer   service, now has more than 25 million active customers, an increase of 27% in   the year, Ghana and supported by a network of more 11 Vodafone Group Plc   Annual Report on Form 20-F 2016 Overview Strategy review Performance   Governance Financials Additional information We are witnessing various   drivers of data growth across our markets: the increasing penetration of   smartphones, both in Europe and emerging markets; high speed 3G and 4G   networks, delivering consistent high-definition video to customers on the   move; bigger screen sizes for a richer experience; the proliferation of   “over-the-top” video services; and the rapid migration of social media from   the desktop to mobile. Customers increasingly expect high speed data coverage   as much as they expect reliable voice services. Our data strategy is simple:   to build high quality mobile data networks, to encourage worry-free usage at   fair prices, and to offer products and services tailored to specific needs   and accessible to a wide range of users. Total data traffic across our   network grew 71% in the year, mainly reflecting the increased take-up of 4G.   Driven by Project Spring, we now offer 4G services in 21 of our markets, with   India, Turkey and Albania added during the year. Our 4G customer base grew by   126% doubling when customers migrate from 3G to 4G. From a commercial   perspective, we are focusing on offering customers worry-free data usage,   with bigger data bundles and more inclusive roaming. We now have the most   extensive 4G roaming network in the world, reaching over 90 countries.   Despite this strong are using 4G, giving us significant opportunity Our   network investments are yielding very a number of independent tests   demonstrating improvements in data coverage and performance, and placing us   very clearly in the top tier of network operators. We ranked in London, and a   strong number two network In AMAP, progress has been equally strong. In South   Africa, we have built 3G coverage ahead of our competitors. We have developed   for customers across every demographic. of Vodafone-branded mobile phones and   to bring the same quality and functionality as well-known phone brands to the   market up mobile data services for low income In India, we have experienced   strong growth of 3G in 2011. Through Project Spring, we have station sites to   55,000 since September 2013. of a total base of 198 million mobile users.   Enhancing customer services boosted by market launches in Albania and than   261,000 agents in 11 countries. Data High speed, worry-free Context a As smartphone   penetration increases, customers want faster and more reliable data services   a Customers have multiple mobile devices and want a single, worry free bill a   Customers who are on the move demand high-definition video capabilities and   low latency speeds (fast reaction time) for a more enjoyable experience What   we’re aiming for a We’re encouraging customers to use 4G to give them a   better user experience. The number of 4G customers more than doubled to 47   million in the year a We are driving data usage by bundling content with 4G.   Data usage grew 71% in the year, and video usage accounts for around   one-third of data traffic a Increasing smartphone penetration also helps   drive data usage. 58% of our customers have a smartphone in Europe, compared   to 52% last year a We want our customers to use our services wherever they   are. Our 4G roaming network reaches 93 countries Average smartphone usage in   Europe MB/month 2014 2015 2016 197m of our customers use data, representing   43% of all customers, up from 40% last year 473 755 1,120 

 

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Chief   Executive’s strategic review (continued) of 3.5% in fixed line during the   year, and 26% customers taking high speed services on fibre In February 2016   we made another important business with Ziggo, the cable operator owned with   99% 4G coverage and over 90% cable compete head-to-head with the incumbent   present value of €3.5 billion. increasingly important parts of our offering,   of a bundle with broadband. In the year increasingly important content where   our customers value it. costs. We will also encourage regulators content – in   addition to their dominance 12 Vodafone Group Plc Annual Report on Form 20-F   2016 Convergence Connectivity and content, wherever you are Context a   Customers are increasingly converging or unifying communications by sharing   content between their fixed and mobile devices – phone, tablet, laptop or TV   a Television and content, when bundled with broadband, are becoming   increasingly important drivers of customer demand a The growing demand for   converged services drives data usage, which in turn requires the combination   of mobile and fibre infrastructure What we’re aiming for a We expect fixed   revenue to continue to gain in importance to us, driven by convergence a We   are aiming to increase our market share in fixed from a low level today a We   seek to roll out more high-speed fibre or cable. We already reach 72 million   households in Europe, up from 41 million last year a We’re aiming to expand   our TV services, to support the take up of broadband. We already have TV   services in seven markets Fixed broadband customers million 2014 2015 2016   21% of our service revenue comes from fixed services In many of our markets,   there is a growing trend towards the convergence of fixed and mobile services   (also known as unified communications). This trend provides many benefits to   both customers and operators. For customers, there is the convenience of a   single bill, the likelihood of lower overall prices compared to buying   services individually, and the potential of enhancements to the service:   using your TV subscription on multiple mobile devices as well as your big   screen at home, for example. For the provider, there is an important network   benefit from the combination of mobile and fibre infrastructure, which is   increasingly necessary as the volume of data continues to grow strongly. The   bundling of services also increases customer loyalty and provides   opportunities to sell additional services or sign-up more members of a   household. We have transformed our presence in converged or unified   communications in the last four years, particularly in Europe. With several   significant acquisitions, capital investment in fibre networks and strong   growth in customers, we are now a major player in high speed fixed broadband.   With the ability to market fibre and cable broadband services to 72 million   homes in Europe, 41% of these on our own next-generation networks, our reach   is very broad. We achieved organic service revenue growth of all our European   service revenue now comes from the provision of fixed line and TV. Our   broadband customer base grew 11% year-on-year to 13 million – with 48% of   these or cable. The launch of broadband in the UK during 2015 means we now   provide fixed services in most of our European countries, as well as   significant growth markets such as Turkey and Egypt. strategic move with the   announcement of our intention to form a 50:50 joint venture in the   Netherlands, combining our strong mobile by Liberty Global. This will create   a business footprint in one of our key European markets. This combination   enables us to provide excellent converged services to customers, operator,   and realise synergies with a net Television and content are becoming with   customers often looking to buy as part we launched TV services in Ireland and   now offer TV in seven markets. We have 9.5 million TV customers, with 0.4   million added this year. Television and content are becoming Our goal is to   ensure access to premium In several markets, incumbents have sought to gain   exclusive access to key content rights. In this scenario we will compete to   secure access, which may increase our to prevent incumbents from using in   fixed access markets – as a lever to reduce competition. 9.2 12.0 13.4 

 

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to reach £10   billion in the year, or 28% of total look to procure fixed and mobile from a   single international presence over the last two years: data networks) in 70   countries, with 268 points capabilities in 12 countries. Both of these &   Wireless Worldwide in 2012. serves our biggest multi-national customers, by   emerging markets. Our IoT unit achieved rise in connections to 38 million. We   are the for IoT, in both scale and expertise, with and we are evolving our   model from simple and vehicle tracking) to capture more of the which now   operates as Vodafone Automotive, converged communications offer One It has   also enabled us to increase our points 13 Vodafone Group Plc Annual Report on   Form 20-F 2016 Overview Strategy review Performance Governance Financials   Additional information Enterprise communications is a substantial and growing   market. In a digital world, it is vital for companies big and small to be   always connected with each other, their customers and their suppliers. They   want to do so in a seamless, cost-effective way, without managing multiple   suppliers across many borders. They need to have a mobile and digital   strategy: it is no longer simply about equipping a workforce with mobile   phones. Our customers are assessing how new services such as the Internet of   Things can enhance their customer proposition and simplify their businesses.   Plain connectivity, whether mobile or fixed, is becoming more commoditised:   enterprise communications providers increasingly need to be experts in a   wider range of services to address these changing needs. Vodafone has   positioned itself well in this changing marketplace. Enterprise has always   been at the centre of our strategy, and we continue to enjoy strong market   share in mobile enterprise across all our major markets. Enterprise customers   value our trusted brand, network quality and wide geographic reach, and this   has been a strong foundation on which to build our expansion into fixed-line   and value-added data and managed services. With an estimated Enterprise   market share in Europe of 33% in mobile and only 6% in non-mobile, the   long-term growth opportunity is significant. Our Enterprise service revenue   grew 2.1%* Group service revenue. All of our strategic growth areas performed   well, supported by Project Spring investments. Enterprise fixed revenue grew   4.4%*, as customers increasingly provider. We have substantially expanded our   we now offer IP-VPN services (secure private of presence. In Cloud &   Hosting, we now have specialisms build on our acquisition of Cable Vodafone   Global Enterprise (‘VGE’), which saw revenue growth of 5.9%* in the year   driven service revenue growth of 29%*, with a 37% acknowledged world leading   mobile provider a global SIM available in over 200 countries, connectivity   (for example, smart meters value chain. The acquisition of Cobra in 2014, has   significantly extended the breadth and value of our services in the   automotive sector, and we see similar opportunities in other industry   sectors. Project Spring has strengthened our Enterprise business Project   Spring has helped scale our Net, which is now available in 30 countries. of   presence by 57% to 268 and double our IP-VPN geographic coverage to 70   countries. Enterprise Context a Businesses are increasingly searching for one   communications provider to supply both fixed and mobile to their workforce a   It is important for communication service providers to offer businesses   reliable connectivity to employees, customers and suppliers What we’re aiming   for a We want to maintain our strong mobile market share in enterprise, which   has been earned from our trusted brand, global footprint and service quality   a We aim to increase our market share in fixed enterprise services, by   building on Project Spring investments a We intend to continue to invest in   the growth areas of converged communications, cloud & hosting services,   and the Internet of Things Internet of Things connections million 2014 2015   2016 28% of our service revenue is from enterprise customers 20.2 27.8 38.0 

 

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Chief Financial Officer’s review   Meeting our objectives This has been a strong year of execution for the   Group, meeting our strategic goals and delivering returns to shareholders. of   accelerated investment was Spring customer experience targets have in the   quality of our services compared data sessions above three megabits per on   page 10, the mobile build phase was quality video) and dropped call rates   were network, delivering a much improved respectively. In AMAP, our dropped   call than 0.9%. In terms of progress against our operational A key strategic   focus for the Group is to gain competitive fixed networks Combined annual   cost and capex converged services. Part of the execution €6.3bn cable   companies, were acquired we expected to generate combined annual cost and   capex acquisition by the 2018 financial year, mainly from Vodafone DSL   customers migrated 2.9m (mostly KDG and Ono) onto our own infrastructure and   and procurement. I am pleased to say that 14 Vodafone Group Plc Annual Report   on Form 20-F 2016 My priorities When I became CFO I highlighted three clear   priorities which I believe will have a significant impact on our future   financial performance: the execution of Project Spring according to the   financial plan; the integration of acquisitions, most notably Kabel   Deutschland (‘KDG’) and Ono; and a continued focus on cost efficiency. I   believe that we have made good progress in all three areas and in the coming   financial year it will be important to build on the improving execution seen   during the 2016 financial year as we continue to monetise our Project Spring   investments. Additionally, we intend to continue to pursue incremental   operating efficiencies across all of our operating companies. During the year   we initiated an ambitious cost efficiency project called “Fit for Growth”   which we anticipate will deliver significant long-term benefits in terms of   both cost savings and enhanced strategic flexibility. Executing these   programmes with minimal disruption to customers is a priority. Our results   are reviewed in more detail later in this report, but overall I am satisfied   that we have made important progress in improving the financial performance   of the business. More on our performance: Pages 30 to 37 Cost efficiency   Project Spring execution Acquisition integration Project Spring execution Our   £19 billion, two-year programmeI am pleased to say that all of our Project   designed to deliver tangible differencesbeen met. In Europe, targets for both   to competitors. As Vittorio highlighted second (the threshold for   high-definition completed and we now have a modernised achieved: above 90%   and less than 0.5% customer experience. rate target has also been achieved at   less plan we are ahead overall, achieving 108% On the financial front,   capital investment of the build targets. In our AMAP region was broadly, as   planned, £19 billion taking we delivered our mobile build targets three into   account foreign exchange movements months ahead of plan. In Europe we areand   timing differences. Consequently this slightly behind. In particular our 4G   build has, as expected, depressed our cash flows was impacted by rollout   delays in the over the last two years. Looking forward, UK and Germany.we   continue to expect that the level of capital spending will return to a more   normalised level of capital intensity and we will generate the expected £1   billion of incremental cash flow by the 2019 financial year. KDG and Ono acquisition   integration €600m to meet the growing demand for synergies by 2018   (previously €540m)of this strategy is to acquire companies where we can see a   clear return on that investment. KDG and Ono, two leading Net Present Value   of synergies (was €5.0bn)in 2013 and 2014 respectively. In total 242,000   synergies of approximately €540 million migrating fixed and mobile customers   combining backhaul and core networks converged services customers and   rationalisation of back office functions progress on integration has been   better than expected and we now aim to deliver annual synergies totalling   €600 million. 

 

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financial year   guidance Based on guidance foreign exchange rates, of the mobile build target   met was £11.9 billion, in line with the £11.5 billion same basis our free   cash flow was £1.0 billion, flow guidance. The key goals for the year ahead   are to build last year, further enhance customer service, continue our focus   on cost efficiency and grow to better align with the geographic split of the   is now targeted to be in the mid-teens we previously anticipated, as we   believe that available to further accelerate our growth and The Board intends   to grow dividends per and beyond, dividends will be declared in euros and   paid in euros, pounds sterling and returns with the primary currency in which   /s/ Nick Read Chief Financial Officer opportunities for savings in   procurement and 1 Before the impact of M&A, spectrum purchases and 15   Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information 108% 87% Europe 4G   coverage, slightly behind >90% target £1bn incremental cash flow from Spring   by 2019 In Spain the integration of Ono has proceeded successfully. We have   so far connected over 800 mobile base station sites to Ono’s fibre to save on   backhaul costs. In addition, the launch last May of Vodafone One, our fully   converged cable, mobile and TV service, has attracted 1.5 million customers.   Overall we have already secured 100% of the original €240 million of cost and   capex synergies targeted. We now expect to deliver €300 million of annualised   savings. We have also made solid progress in Germany, and we have already   managed to secure 80% of the original €300 million synergy target. We have   migrated 242,000 customers off our DSL platform (on which we pay high monthly   fees) onto KDG’s cable infrastructure. In November, we launched Vodafone Red One,   our converged offer, which now has 54,000 customers. Finally, we have   identified further opportunities for savings in procurement and other   efficiency measures and as a result we are now targeting synergies with a NPV   of €3.5 billion, up from €3.0 billion previously. Fit for Growth net savings   from zero based Performance against 2016 adjusted EBITDA for the 2016   financial year to £12.0 billion range set in May 2015. On the consistent with   our positive free cash Looking ahead on the improving commercial execution   evident monetise the Project Spring investments, the dividend to   shareholders. With effect from 1 April 2016, our presentation currency will   change from sterling to the euro Group’s operations. We expect adjusted   EBITDA to grow organically by 3–6%; this implies a range of €15.7 billion to   €16.2 billion at guidance exchange rates. We expect free cash flow of at   least €4 billion1. Total capital expenditure as a percentage of annual   revenue; this is higher than the 13%–14% range that there are attractive   investment opportunities improve our long-term strategic positioning. share   annually. For the 2017 financial year US dollars, aligning the Group’s   shareholder we generate free cash-flow. Nick Read Note: restructuring costs.   Cost efficiency We continued to make good progress on costs this year within   the scope of our Fit for Growth programme. As a result we were able to reduce   overall customer costs through commercial efficiencies and drive down the   support cost base in Europe. This helped offset increased network costs   driven by the Project Spring roll-out, and inflationary pressures in our high   growth markets in AMAP. Our Group-wide initiatives are driving a meaningful   improvement in our cost base. These include a focus on direct cost   optimisation; commercial efficiencies; network & IT transformation   opportunities; centralised procurement and shared services; zero-based   budgeting; and cost & capex synergy savings at acquired companies,   combined with comprehensive local market initiatives. We introduced a   zero-based budgeting methodology for the first time this year of which there   were three key components. The first was an absolute cost reduction across   Group functions, which was fully implemented in March 2016, delivering an   annual net saving of £100m. Secondly, for Group operational units such as   data centres and Shared Services we established productivity targets to drive   efficiencies further across the organisation. And thirdly, we set multi-year   targets for each of our local markets to drive margin expansion. The revenue   growth combined with our strict cost control and efficiency measures is   enabling us to achieve greater operational leverage and begin to expand   margins. £100m budgeting in Group functions 80% Procurement spend centralised   by 2019 

 

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Key performance indicators Measuring   our performance to keep us on track We track our performance against   strategic, financial and operational metrics which allows the business and   key stakeholders to assess our short term performance and enables us to see where   we can do better. Strategic performance Changes to KPIs this year We have   updated our Key Performance Indicators (‘KPI’s) this year to align better to   our strategy and areas of investment. Enterprise is an engine of growth for   the Group and contributes 28% of the Group’s revenues. We have included   Enterprise in our KPIs as a reflection of its growing importance. With 4G and   fixed broadband becoming more important in our emerging markets, we have   adopted a Group metric for 4G customers and fixed broadband customers. Paying   for performance The incentive plans used to reward the performance of our   Directors and our senior managers, with some local variances, include   measures linked to our KPIs. More on rewards for performance in the   Remuneration Report: Pages 57 to 73 Convergence million homes passed   Enterprise % Notes: 1 2 Based on Android and iPhone devices. Next Generation   Network providing high-speed broadband over 30 Mbps. Before the impact of   M&A, spectrum purchases and restructuring costs. 3 16 Vodafone Group Plc   Annual Report on Form 20-F 2016 Fixed as a percentage of enterprise service   revenue Fixed services have become more important as businesses increasingly   look to procure fixed and mobile from a single provider. Enterprise fixed   revenue grew 4.4% in the year and we expect that this will increase as we   continue to invest in our global fixed line footprint. Achieved 2014 2015   2016 23 25 27 Fixed broadband customers million Convergence As we expand our   fixed broadband coverage we have successfully been able to increase our   broadband base. We have added 1 million broadband customers across Europe and   266,000 customers across AMAP during the year, and expect to continue to grow   our base this year and beyond. Achieved 2014 2015 2016 9.2 12.0 13.4 Europe   NGN coverage (owned assets)2 As customers move towards converged services we   have been investing in either building fibre or acquiring cable networks so   we can offer high-speed broadband to our consumer and enterprise customers.   We can now reach 30 million homes across Europe with high-speed broadband (72   million when including our wholesale access deals). Achieved 2014 2015 2016   16 26 30 Europe average monthly smartphone data usage1 MB Data A key goal in   Europe is to ensure customers are using more data which will support revenue   growth in the years ahead. Average smartphone usage has almost tripled over   the last two years, helped by the uptake of 4G and content packages. Achieved   2014 2015 2016 473 755 1,120 4G customers Data million To ensure we get a return   on our Project Spring 4G investment it is important that we migrate and   attract new customers onto our 4G network. We more than doubled the number of   our 4G customers in the year to 47 million and we expect this to continue to   grow significantly. Achieved 2014 2015 2016 4.9 20.7 46.8 Europe 4G coverage   Data % One of our main objectives of Project Spring was to roll out rapidly   4G across our European markets with a target to reach over 90% coverage by   March 2016. We have now reached 87% coverage across our European markets,   slightly behind our target of over 90%, which we expect to reach shortly.   More work to do 2014 2015 2016 46 72 87 

 

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performance in   both revenue and adjusted EBITDA for the first time since 2008. With the   recovery of our by 2.0% to 11.45 pence. Page 30 17 Vodafone Group Plc Annual   Report on Form 20-F 2016 Overview Strategy review Performance Governance   Financials Additional information Financial performance Operational Financial   indicators This has been a strong year of execution for the Group, delivering   a return to organic growth European performance and the continued strong   growth in AMAP, we met our financial guidance for both adjusted EBITDA and   free cash flow and increased our dividend per share More on Financial   performance: a combination of the pride, loyalty and motivation We increased   our employee engagement score quartile position. the proportion each year. Percentage   of women in senior management % Diversity increases the range of skills and   styles in our business, and increased female representation across our senior   management (top c.1,500 managers) is one measure of diversity. Our goal is to   increase We have made progress on this metric this year, with the proportion   increasing slightly. More work to do 2014 2015 2016 24 23 24 Dividend per   share pence The ordinary dividend remains the primary method of shareholder   return. We intend to increase the dividend per share annually. We increased   our dividend per share to 11.45 pence in the year. Our intention remains to   grow the dividend per share annually. Achieved 2014 2015 2016 11.00 11.22   11.45 Free cash flow3 £ billion Cash generation is key to delivering strong shareholder   returns. Our guidance was for positive free cash flow after all capital   expenditure. Free cash flow fell slightly during the year due to elevated   capital expenditures for Project Spring. On a guidance basis, free cash flow   was £1.0 billion, consistent with the guidance range. Achieved 2014 2015 2016   4.4 1.1 1.0 Employee engagement index The employee engagement score measures   of our workforce. Our goal here is to retain our top quartile position. by   two points this year, and we retained a top Achieved 2014 2015 2016 77 77 79   Adjusted EBITDA £ billion Growth in adjusted EBITDA supports our free cash   flow which helps fund investment and shareholder returns. Our guidance was   for adjusted EBITDA of £11.5 billion to £12 billion in the year. Adjusted EBITDA   fell 2.5% to £11.6 billion (up 2.7% on an organic basis). On a guidance   basis, adjusted EBITDA was £11.9 billion, in line with the guidance range.   Achieved 2014 2015 2016 11.1 11.9 11.6 Organic service revenue growth %   Growth in revenue demonstrates our ability to increase our customer base and   stabilise or raise ARPU. Our aim was to return to service revenue growth. We   returned to service revenue growth supported by our Project Spring investment   programme and achieved stabilisation in our European businesses. Achieved   2014 2015–1.6 2016 –2.6 +1.5 Consumer mobile net promoter score out of 21   markets We use Net Promoter Scores (‘NPS’) to measure the extent to which our   customers would recommend us to friends and family. This year we increased   the number of markets where we are ranked number one, but have more work to   do in the UK and Germany. Achieved 2014 2015 2016 9 11 13 

 

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Our people The people behind our   business Our people are behind every aspect of our strategy and execution, so   it is important that we attract, develop and retain exceptional people who   are empowered to use their best judgement in every situation. Building a   high-performing culture This year we employed an average of 108,000 people   from 138 countries as well as over 26,000 contractors. Our senior leadership   team includes 21 nationalities, bringing together a diverse set of   experiences and opinions to help us achieve our goals by better understanding   the needs of our customers. Increasing employee engagement We engage our   employees on issues related to our strategy, our people agenda, our products   and services and changes happening in the Company in a variety of ways, including   executive video updates, events and forums, our intranet, emails, texts, as   well as through individual team leaders. Every year all our employees are   invited to participate in a global survey which allows us to measure   engagement levels, identify ways to improve how we do things, and compare   ourselves with 30 other large companies. This year our engagement index,   which measures how committed our employees are, their desire to continue   working for us and their willingness to recommend Vodafone as an employer,   increased by two points to 79, which is three points higher than other   comparable companies. Our employee net promoter score, which indicates   employees’ commitment to promoting our products and services, rose eight   points to 59 (17 points higher than other large companies). The increase   showed the growing levels of employee confidence that Project Spring and our   Customer eXperience eXcellence programme are delivering. Training and   developing future leaders We empower our people to contribute to our business   success by tailoring their training and development to their individual   capabilities and ambitions. We provide a combination of formal training, on   the job experiences, and regular feedback from managers. This year we trained   around 50,000 people through our global academies which enable our employees   to develop world class capabilities within their core discipline and support   their career development. These academies have won several industry awards   for innovation and quality. Our global employee survey showed that 80% of   employees feel they can learn the skills and knowledge to do their jobs well.   We conduct regular talent reviews to identify high-potential future leaders.   Each year we provide 60 of those with the opportunity for an accelerated development   through our “Inspire” programme. The programme offers development and   executive coaching and may include an assignment to another Vodafone market   or function. Focusing on our customers Over the last year more than 14,000   retail store managers and sales advisers received training in the Vodafone   Way of Retail programme. To date, more than 31,000 retail customer service   employees and third-party staff have received training to enhance the   services provided to our customers. We have standardised the recruitment   process across all of our local markets to improve the quality of new   recruits to our stores and have developed a new assessment approach for all   customer facing employees. Our Group and local market senior leadership teams   took part in the Customer Experience Leadership programme – a two-day   workshop focused on listening to customers, external best practices, driving   simplicity, and action planning. Making progress on Diversity and Inclusion   We are committed to treating all employees fairly and offering equal   opportunities in all aspects of employment and advancement. This year’s   global employee survey showed that 89% of employees believe that Vodafone   treats people fairly. Last year we launched a new global maternity policy,   providing mandatory minimum maternity benefits, including 16 weeks of full   pay followed by full pay for a 30-hour week for the first six months after   employees return to work. This year, our CEO, Vittorio Colao, signed up to be   a UN HeforShe Impact Champion, making significant commitments to gender   equality for Vodafone. 37,000 colleagues, suppliers, and customers have   already joined the campaign, which promotes gender equality – socially,   economically and politically. In 2015 we developed a new unconscious bias   training for all leadership teams to highlight the key decisions and everyday   situations that may be affected by bias. In addition, employee networks in   the areas of Lesbian, Gay, Bisexual and Transgender (‘LGBT’), disability and   gender have expanded globally and these serve a critical purpose in   supporting these communities. 18 Vodafone Group Plc Annual Report on Form   20-F 2016 

 

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Our “Discover”   programme for graduates accelerates the careers of high performing graduates,   with over 700 people recruited onto this programme during the year. After the   programme, a number of “Discovers” join an international programme,   “Columbus” with the purpose of building leadership skills through a   challenging two-year assignment outside of their home market. This year we   launched a mobile app and website so employees can access topics such as   anti-bribery, conflict of interest, speak up, privacy, security and   competition law via their phone when they are out of the office. 33% Creating   a safe place to work We want everyone working with Vodafone – employees and   contractors – to return home safely every day. We start with the wellbeing of   our employees: we launched our third annual Global Wellbeing Challenge on   World Heart Day in October 2015. Around 5,000 employees took part in a wide   range of exercise activities including cycling, dancing, running, swimming,   and Zumba. Together, they covered a total of over 245,507 miles – equivalent   to going around the world 10 times. For our safety campaign we focus on our   top five risks: occupational road risk, working with electricity, working at   height, control of contractors, and laying cables in the ground. Our efforts   start at the top and our senior executives are personally involved, we train   our people and suppliers, and we participate in best practice sharing with   industry partners. Despite all our efforts, we deeply regret that 12 people2   lost their lives during the year. Traffic accidents involving contractors in   India and Africa continue to be our main area of exposure. We have robust   policies and processes to manage risks, and if incidents occur we work hard   to identify and address the root causes. For more on Health & Safety read   our sustainability report at www.vodafone.com/sustainability Recognising   performance We reward people based on their performance, potential and   contribution to our success. This year, we simplified the process by directly   empowering our line managers to make performance decisions without a higher   level approval. We continue to benchmark roles regularly to ensure   competitive, fair remuneration in every country in which we operate. We also   offer competitive retirement and other benefit provisions which vary depending   on conditions and practices in local markets. Global short-term incentive   plans are offered to a large percentage of employees and global long-term   incentive plans are offered to our senior managers. Our incentive   arrangements are subject to company performance measures, comprising both   financial and strategic metrics, and individual performance measures. During   the year we introduced a Customer Appreciation metric into our Global   short-term incentive plan. See page 57 for more on remuneration. Doing what’s   right We recognise that ethical conduct is just as important as high   performance, and failure to operate ethically will impact our business   success. Our “Code of Conduct” sets out our business principles and what we   expect from employees to ensure they protect themselves as well as the   Company’s reputation and assets. 1,700 women went on maternity leave this   year and were eligible for our new global maternity policy Notes: 1 Employee   numbers are shown on a full time employee basis. A statutory view is provided   on page 140. 2 There were 12 fatalities, one was an employee, three were   members of the public and eight were contractors. 19 Vodafone Group Plc   Annual Report on Form 20-F 2016 Overview Strategy review Performance   Governance Financials Additional information Employees by location % Spain 5%   Italy 6% Vodacom Other 7% Germany 14% India 20%UK 15% Monthly average   employees1 number 2014 2015 2016 Employee engagement index 2014 2015 2016   Employee turnover rate% 2014 2015 2016 Nationalities in top senior leadership   roles 2014 2015 2016 Gender of employees % Female Male 36%64% 24 24 21 15 18   19 77 77 79 92,812 101,443 107,667 

 

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Sustainable business Sustainable   business Mobile and digital technologies are a powerful social good,   enhancing citizens’ understanding of, and ability to participate in, the   world around them, and transforming the workplace, boosting productivity for   businesses of all sizes in every industry. A new strategic approach Our   businesses play an integral role in the daily lives of our more than 462   million mobile customers and are a vital part of the national infrastructure   upon which the economies of our countries of operation depend. During 2016,   we developed a new sustainable business strategy to ensure an even closer   alignment between our core commercial goals and the maximum possible social   and economic benefits achievable at scale as a consequence of those goals. Under   that strategy, we have identified three areas where we believe our business   activities can have the greatest positive societal impact: In parallel, we   will focus our ongoing corporate transparency programme on those aspects of   our business that are the source of greatest Energy innovation and greenhouse   gas emissions There is clear evidence that global temperatures are rising   quickly and a very strong consensus among scientists and policymakers that   carbon dioxide emissions from hydrocarbon fuels such as coal, oil and gas –   together with other greenhouse gases – are having a direct impact on the   climate. The information, communications and technology (‘ICT’) industry   requires significant amounts of electricity to connect billions of people,   devices and machines and transmit vast amounts of data every second. Most   power is supplied “on-grid” by national power generation companies whose   predominant energy source is hydrocarbons, especially coal.   Telecommunications operators also rely on hydrocarbons – in the form of   diesel used in on-site generators – to power infrastructure “off-grid” in   remote locations or areas of unreliable on-grid power. Vodafone is a   signatory to the Paris Pledge for Action which recognises that climate change   threatens future generations and calls for strong action to reduce emissions   and achieve a safe and stable climate in which temperature rises are limited   to well below 2oC. Our networks account for most of the energy consumption in   our businesses and are therefore the main source of our greenhouse gas   emissions. As customer demand for data increases every year, our power   requirements also grow; energy efficiency programmes (and, consequently,   emissions reduction) are therefore an important priority. We collaborate   closely with our major equipment suppliers to ensure that energy efficiency   is integral to the design specification for new infrastructure. We have   deployed highly efficient Single Radio Access Network (‘SRAN’) technologies   (which allow 2G, 3G and 4G services to be run from a single piece of   equipment) at more than 211,800 sites. We are also exploring a number of   on-grid and off-grid renewable energy options. public debate and concern,   specifically: a Taxation and total economic contribution, building on our   existing commitment to transparency in corporate taxation including   country-by-country reporting a Supply chain integrity and safety, providing   insights into our efforts to ensure responsible and ethical behaviour among   our suppliers and sub-suppliers and to ensure safety in our operations a   Women’s empowerment, extending the benefits of mobile to more women in   emerging markets while striving to become the world’s best employer for women   by 2025 a Mobile, masts and health, addressing public concern regarding   electromagnetic frequency (‘EMF’) emissions from mobile phones and base   stations a Digital rights and freedoms, building on our commitment to   transparency in law enforcement assistance, censorship, privacy and data   protection matters a Energy innovation, optimising energy efficiency in, and   reducing greenhouse gas emissions from, our activities while helping our   customers reduce their own emissions We are also committed to explaining how   we put our principles into practice to ensure that our businesses operate   responsibly. Further details of our approach are set out in the Group’s   annual Sustainable Business Report, published on the same day as this Report.   a Youth skills and jobs, using our technologies and expertise to help young   adults enhance their skills and secure job opportunities in countries with   high levels of youth unemployment Connecting women to healthcare In 2016,   164,000 women subscribed to Vodafone Turkey’s health and wellbeing SMS   service which sends twice-weekly texts offering information and advice about   prenatal, antenatal and infant care and women’s health. An interactive app   with information about child development has also been downloaded 160,000   times. 20 Vodafone Group Plc Annual Report on Form 20-F 2016 

 

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Our total   greenhouse gas emissions in 2016 were 4% higher than in 2015 at 2.57 million   tonnes of CO2e (carbon dioxide equivalent), as a consequence of a 71%   increase in the volume of data carried across our mobile networks. However,   our measure of greenhouse gas efficiency improved greatly: annual greenhouse   gas emissions per petabyte of data carried by our mobile networks were 40%   lower than in 2015, dropping to an average of 1,900 tonnes CO2e/ petabyte.   Our technologies and services also provide our customers with the means to   make a meaningful reduction in their own emissions, most notably through the   deployment of Internet of Things (‘IoT’) applications – a field in which we   are the world’s leading mobile provider. Using network intelligence to   optimise energy use in a wide variety of machines, devices and processes   could account for a 20% reduction in projected global CO2e emissions by 2030   – enabling emissions to remain at 2015 levels1. In 2015, we announced a new   goal under which we would seek to help our customers reduce their CO2e   emissions by two tonnes for every one tonne of emissions from our own   operations. We aim to achieve that goal by the end of March 2018. As of the   end of March 2016, we were well on track to do so, helping our customers to   save 1.74 tonnes of CO2e for every tonne of CO2e generated through our   activities. We estimate that more than 30% of the 38 million IoT connections   operated by Vodafone directly enable our customers to reduce their emissions.   The total emissions avoided as a consequence of our IoT technologies and   services in 2016 increased by 29%, over the same period in 2015, to reach 4.5   million tonnes CO2e. We provide further details of our approach to energy   innovation in our annual Sustainable Business Report. Human Rights   Communications technologies play an important role in underpinning human   rights, enabling citizens to share information and exercise freedom of   expression. However, many governments are concerned that these technologies   are also empowering people intent on harm, such as criminals and terrorists;   conversely, civil society groups are concerned that state actions to address   the malign use of communications technologies have the effect of eroding the   individual’s right to privacy. Human rights that extend in to the digital   realm are important priorities for Vodafone – as can be seen in our Law   Enforcement Disclosure Report. However, we are also fully mindful of other   human rights risks in our operations – as our Code of Conduct makes clear –   which are the focus of senior management scrutiny across all of our   businesses. These include labour rights (particularly with regard to our   supply chain) and economic, social and cultural rights. Details of our   principles, rules and compliance programmes in response to those risks are   set out in our annual Sustainable Business Report including a statement – as   stipulated under the UK Modern Slavery Act (2015) – summarising our actions   to address the risk of modern slavery within our own operations and those of   our suppliers and sub-suppliers. The Report also provides details of our   ongoing work with our suppliers and other industry stakeholders to improve   ethical, labour and environmental standards across our supply chain. Note: 1   Smarter Report 2030, Global e-Sustainability Initiative (GeSI) June 2015. 21   Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information Greenhouse gas   (‘GHG’) emissions million tonnes of CO2e 2014 2015 2016 Scope 1 emissions   (over which we have direct control) Scope 2 emissions (from purchased   electricity) Total of Scope 1 and Scope 2 Note: Calculated using local market   actual or estimated data sourced from invoices, purchasing requisitions,   direct data measurement and estimations. Carbon emissions calculated in line   with GHG Protocol standards. The 2014 and 2015 values have been re-based in   accordance with revised Scope 2 guidance. Scope 2 emissions are reported   using the market-based methodology. For full methodology see our Sustainable   Business Report 2016. Greenhouse gas emissions per petabyte of data carried   by our mobile networks tonnes of CO2e 2014 2015 2016 Note: Figures include   all data carried by our mobile networks with an adjustment to include only   part of the data carried in India, where only base stations under Vodafone’s   operational control are included in our greenhouse gas emissions totals.   Ratio of GHG emission savings for customers to our own GHG footprint 2014   2015 2016 2018 Note: 2014 figures have been extrapolated from actuals for   2013 and 2015. Emissions savings for customers have been calculated based on   GeSI’s ICT Enablement Methodology. Our Sustainable Business Report 2016:   www.vodafone.com/sustainability/ report 2016 1.19 1.41 1.74 Target 2.00 8,200   3,100 1,900 0.34 2.04 2.38 0.37 2.10 2.47 0.41 2.16 2.57 

 

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Principal risk   factors and uncertainties Identifying our risks We have a clear framework for   identifying and managing risk, both at an operational and strategic level.   Our risk identification processes have been designed to be responsive to the   ever-changing environments in which we operate. 22 Vodafone Group Plc Annual   Report on Form 20-F 2016 Our risk management framework Vodafone needs to take   risks and assume exposures to achieve its Vodafone has recently introduced an   enhanced global framework strategy. Risk, within agreed and defined   parameters, is essential to the designed to identify risks; set risk   appetite: put in place appropriate success of Vodafone. Equally, failure to   suitably manage risk may have measures to ensure risks are properly managed and   monitored; an adverse impact upon Vodafone’s strategic goals and objectives.   and facilitate informed decision making. The framework, as set out in the   diagram, ensures we have one, company-wide approach to risk management, with   local oversight and approvals. versus appetite views shared with Report a   Inform the Board and Executive Committee on how effectively risks are being   managed a Group-wide, consolidated risk managers Monitor a Integrated   assurance mapping identifies all levels of control and oversight in place a   Effectiveness of control and oversight is tested across the “three lines of   defence”1 Manage a Controls and mitigating actions identified and measured a   Risk action plans created to control risks outside of appetite Measure a Risk   appetites set by the Board for all principal risks and cascaded down a   Standardised scoring and categorisation allows consolidation and escalation   across Group Identify a Risks identified in each Vodafone local market and   entity a Strategic risk reviews with Senior Leadership a Group principal   risks reviewed and agreed with the Board 

 

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Oversight of   risks The Board has overall responsibility for the Group’s risk management   and internal controls system. The Audit and Risk Committee, under delegation   from the Board, monitors the nature and extent of risk exposure against risk   appetite for our principal risks. Details of the activities of the Audit and   Risk Committee are set out on pages 47 to 52 of this report. At an   operational level, risks are reviewed and managed by the Executive Committee   and through its delegated sub-committee, the Risk and Compliance Committee.   Details of the activities of the Risk and Compliance Committee are set out on   page 39 of this report. Our principal risks The risk management framework   covers all risks to our business but includes a process to identify the   principal risks to our strategic objectives through the integration of bottom-up   and top-down exercises. The bottom-up exercise identifies and consolidates   all of the priority risks raised by local markets and entities. The top-down   exercise involves interviews with around 30 senior executives. The aggregated   results from these exercises are used to form the principal risks which are   approved by the Executive Committee, prior to submission to the Audit and   Risk Committee and the Board. Each principal risk is assigned to a senior   executive who is responsible for managing the risk and reporting on progress   to the Executive Committee. Vodafone’s principal risks are similar to those   reported last year, although with some changes to the driving force behind   the risks, and one new risk regarding legal and regulatory requirements. What   is the risk? A successful cyber-attack or internal event could result in us   not being able to deliver service to our customers and/or failing to protect   their data. This could include a terrorist attack, state sponsored hacking,   hacktivists or threats from individuals. 23 Vodafone Group Plc Annual Report   on Form 20-F 2016 Overview Strategy review Performance Governance Financials   Additional information Cyber threat 

 

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Principal risk   factors and uncertainties (continued) What is the risk? Vodafone operates   under licence in most markets. Increased financial pressures on governments   may lead them to target foreign investors for further licence fees or to   charge unreasonably high prices to obtain or renew spectrum. Similarly we   could be exposed to additional liabilities if we faced a new challenge from   tax or competition authorities or if local or international tax laws were to   change, for example as a result of the OECD’s recommendations on base erosion   and profit shifting or the proposed EU tax and financial reporting   Directives. 24 Vodafone Group Plc Annual Report on Form 20-F 2016 Adverse   political measures Failure to deliver on convergence What is the risk? We   face competition from providers who have the ability to sell converged   services (combinations of fixed line, broadband, TV content and mobile) on   their existing infrastructure. If we fail to deliver converged services in   key markets, due to inability to access infrastructure or content at a   reasonable price, this could potentially lead to higher customer churn and/or   significant downward pressure on our prices. 

 

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What is the   risk? Concerns have been expressed that electromagnetic signals emitted by   mobile telephone handsets and base stations may pose health risks.   Authorities, including the World Health Organization (‘WHO’) agree there is   no evidence that convinces experts that exposure to radio frequency fields   from mobile devices and base stations operated within guideline limits has   any adverse health effects. A change to this view could result in a range of   impacts from a change to national legislation, to a major reduction in mobile   phone usage or to major litigation. What is the risk? We have a number of   high-value, ongoing contracts with corporate customers, including some   government agencies and departments. Successful and profitable delivery of   our major enterprise contracts is dependent on complex technologies deployed   across multiple geographies, as well as relative stability in the requirements,   strategies and businesses of our customers. 25 Vodafone Group Plc Annual   Report on Form 20-F 2016 Overview Strategy review Performance Governance   Financials Additional information Major enterprise contracts EMF related   health risks 

 

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Principal risk   factors and uncertainties (continued) What is the risk? We face increased   competition from a variety of new technology providers, new market entrants   and competitor consolidation. 26 Vodafone Group Plc Annual Report on Form   20-F 2016 Market disruption Unstable economic conditions What is the risk? As   a multinational business, we operate in many countries and currencies, so   changes to global economic conditions can impact us. This could be because   another global crisis would result in reduced spending power for customers or   because a relative strengthening or weakening of the major currencies in   which we transact could impact our profitability. As a UK business, the UK   leaving the European Union may impact us, and it could lead to wider concerns   about the stability of the Eurozone. 

 

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What is the   risk? If our network or IT systems fail, voice, video or data transmissions   may be significantly interrupted. We need to ensure that our critical assets   are protected and our systems are resilient, so that impact on our customers   is minimised, particularly during our major IT transformation projects. What   is the risk? Vodafone must comply with a multitude of local and international   laws as well as regulations. These encompass but are not limited to, licence   requirements, customer registration, data privacy, anti-money laundering,   competition law, anti-bribery and economic sanctions. Non-compliance with   these requirements exposes Vodafone to financial and reputational risk. 27   Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information Non-compliance with   laws and regulation Network/IT infrastructure failure 

 

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Principal risk   factors and uncertainties (continued) What is the risk? If we fail to deliver   a differentiated and superior experience to our customers in store, online   and on the phone, this could diminish our brand and reputation, weakening our   relationship with customers and reducing their loyalty to Vodafone. 28   Vodafone Group Plc Annual Report on Form 20-F 2016 Customer Experience 

 

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Operating   results Our financial performance This section presents our operating   performance, providing commentary on how the revenue and the adjusted EBITDA   performance of the Group and its operating segments have developed over the   last year. Group1 % change Europe £m AMAP £m Other2 Eliminations 2016 £m 2015   £m £m £m £ Organic Notes: 1 2016 results reflect average foreign exchange   rates of £1:€1.37, £1:INR 98.61 and £1:ZAR 20.72. 2 The “Other” segment   primarily represent the results of the partner markets and the net result of   unallocated central Group costs. Revenue Group revenue decreased 3.0% to   £41.0 billion and service revenue decreased by 3.5% to £37.2 billion.   Reported growth includes the full year impact from the acquisitions of Hellas   Online (‘HOL’) and Cobra Automotive (‘Cobra’) in the prior year. In Europe,   organic service revenue declined 0.6%* reflecting continued competitive   pressures in a number of markets, with improving trends throughout the year.   In AMAP, organic service revenue increased by 6.9%* continuing its sustained   track record of strong organic growth. Amortisation of intangible assets in   relation to customer bases and brands are recognised under accounting rules   after we acquire businesses and decreased to £979 million (2015: £1,269   million) due to the acquisition of Ono. Including the above items, operating   profit decreased by £0.6 billion to £1.4 billion as the £0.45 billion   impairment charge, £0.3 billion reduction in adjusted EBITDA and £0.1 billion   increase in restructuring costs were partly offset by £0.1 billion of lower   depreciation and amortisation charges and £0.1 billion higher contribution   from associates and joint ventures. Adjusted EBITDA Group adjusted EBITDA   declined 2.5% to £11.6 billion, with organic growth in Europe and AMAP and   the acquisitions of HOL and Cobra being more than offset by foreign exchange   movements. On an organic basis, adjusted EBITDA rose 2.7%* and the Group’s   adjusted EBITDA margin stabilised at 28.3%. Net financing costs 2016 £m 2015   £m Operating profit Adjusted operating profit excludes certain income and   expenses that we have identified separately to allow their effect on the   results of the Group to be assessed (see page 190). The items that are   included in operating profit but are excluded from adjusted operating profit   are discussed below. An impairment loss of £450 million was recognised in the   current financial year (2015: £nil). Further detail is provided in note 4 to   the Group’s consolidated financial statements. Restructuring costs of £236 million   (2015: £157 million) have been incurred to improve future business   performance and reduce costs. 30 Note: 1 Comprises foreign exchange rate   differences in relation to certain intercompany balances. Vodafone Group Plc   Annual Report on Form 20-F 2016 Investment income 300 883 Financing costs   (2,124) (1.736) Net financing costs (1,824) (853) Analysed as: Net financing   costs before interest on settlement of tax issues (1,107) (1,160) Interest   (expense)/credit arising on settlement of outstanding tax issues (15) 4   (1,122) (1,156) Mark-to-market losses (247) (134) Foreign exchange1 (455) 437   (1,824) (853) Revenue 26,71813,2081,160(113)40,973 42,227(3.0)2.3 Service   revenue 24,46111,843968(113)37,159 38,497(3.5)1.5 Other revenue   2,2571,365192–3,814 3,730 Adjusted EBITDA 7,6864,042(116)–11,612   11,915(2.5)2.7 Adjusted operating profit 1,4091,813(105)– 3,117   3,507(11.1)(3.9) Adjustments for: Impairment loss (450) – Restructuring costs   (236) (157) Amortisation of acquired customer bases and brand intangible assets   (979) (1,269) Other income and expense (75) (114) Operating profit 1,377   1,967 Non-operating income and expense (2) (19) Net financing costs (1,824)   (853) Income tax (expense)/credit (3,369) 4,765 (Loss)/profit for the   financial year from continuing operations (3,818) 5,860 Profit for the   financial year from discontinued operations – 57 (Loss)/profit for the   financial year (3,818) 5,917 

 

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Earnings per   share Adjusted earnings per share, which excludes the reduction in the tax   losses in Luxembourg following the revaluation of investments in the local   statutory accounts in the current period and the recognition of deferred tax   assets in respect of tax losses in Luxembourg in the prior year, was 5.04   pence, a decrease of 9.2% year-on-year, reflecting the Group’s lower adjusted   operating profit for the year. Basic earnings per share was a loss of 15.08   pence primarily due to the reduction in deferred tax on losses, as described   above, which has been excluded from adjusted earnings per share. Net   financing costs, excluding mark-to-market losses and foreign exchange   differences in relation to certain intercompany balances, decreased by 3%   primarily due to the impact of foreign exchange losses on financing costs.   Taxation 2016 £m 2015 £m 2016 £m 2015 £m The deferred tax on revaluation of   investments in Luxembourg for the year ended 31 March 2016 includes the use   of Luxembourg losses in the year of £423 million (2015: £439 million) and a   reduction in the deferred tax asset in the period of £3,207 million (2015:   recognition of an additional asset of £2,127 million) arising from the tax treatment   of the revaluation of investments based upon the local GAAP financial   statements at 31 March 2016. These items reduce the amount of losses we have   available for future use against our profits in Luxembourg and do not affect   the amount of tax we pay in other countries. In addition, the tax rate in the   year ended 31 March 2015 includes the impact of the recognition of an   additional £3,341 million deferred tax asset in respect of the Group’s   historic tax losses in Luxembourg. The losses were recognised as a   consequence of the acquisition of Ono. 2016 £m 2015 £m The statutory   effective tax rate for the year ended 31 March 2016 was (750.3)% compared to   (440.4)% in the prior year. The difference is primarily due to the effect of   the reduction in deferred tax assets in Luxembourg based upon the local   statutory accounts at 31 March 2016 this year compared to the recognition of   deferred tax assets in Luxembourg the prior year and the lower loss before   tax. 31 Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy   review Performance Governance Financials Additional information Total tax   (expense)/credit (3,369) 4,822 Loss before tax: Continuing operations (449)   1,095 Discontinued operations – – Total profit before tax (449) 1,095   Effective tax rate -750.3% -440.4% (Loss)/profit attributable to owners of   the parent (4,024) 5,761 Adjustments: Impairment loss 450 – Amortisation of   acquired customer base and brand intangible assets 979 1,269 Restructuring   costs 236 157 Other income and expense 75 114 Non-operating income and   expense 2 19 Investment income and financing costs 449 (437) 2,191 1,122   Taxation 3,194 (5,334) Discontinued operations – (57) Non-controlling   interests (17) (21) Adjusted profit attributable to owners of the parent   1,344 1,471 Income tax expense: Continuing operations before deferred tax on   revaluation of investments in Luxembourg (162) (703) Discontinued operations   – 57 Total income tax expense (162) (646) Deferred tax on revaluation of   investments in Luxembourg – continuing operations (3,207) 5,468 Total tax   (expense)/credit (3,369) 4,822 

 

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Operating   results (continued) Europe1 Restated 2015 £m % change Germany £m Italy £m UK   £m Spain Other Europe Eliminations £m Europe £m £m £m £ Organic Note: 1 The   Group has amended its reporting to reflect changes in the internal management   of its Enterprise business. The primary change has been that on 1 April 2015   the Group redefined its segments to report international voice transit   service revenue within Common Functions rather than within the service   revenue amount disclosed for each country and region. The service revenue   amounts presented for the year ended 31 March 2015 have been restated onto a   comparable basis together with all disclosed organic service revenue growth   rates. There is no impact on total Group service revenue or costs. Revenue   decreased 3.5% for the year. M&A activity, including HOL and Cobra,   contributed a 1.3 percentage point positive impact, while foreign exchange   movements contributed a 5.2 percentage point negative impact. On an organic   basis, service revenue decreased by 0.6%*, reflecting continued competitive   pressures in a number of markets. Adjusted EBITDA decreased 2.6%, including a   1.2 percentage point positive impact from M&A activity and a 5.5   percentage point negative impact from foreign exchange movements. On an   organic basis adjusted EBITDA increased 1.7%* driven by good cost control in   a number of our Germany Service revenue declined 0.4%* for the year, but   returned to growth in Q4 (Q3: -0.4%*; Q4: 1.6%*) led by improvements in   consumer mobile and fixed trends and aided by an accounting reclassification   in fixed line. Mobile service revenue declined 1.6%*. Consumer contract   revenue stabilised in the year, supported by consistent growth in contract   net adds (+594,000 for the year). This performance has been driven by an   increased focus on direct channels and our ‘Otelo’ second brand; during Q4,   higher competition in indirect channels weighed on our contract net   additions. The Enterprise market became increasingly competitive during the   year, leading to a deteriorating revenue trend as falling ARPU more than   offset good contract wins. We have made further strong progress on network   investment, with 87% 4G coverage and dropped call rates declining 25%   year-on-year to an all-time low of 0.44%. In November, the independent   “Connect” test confirmed the premium quality of our voice network in Germany   and a strong second and most improved data position. Fixed service revenue   growth was 1.5%*, with continued strong growth in cable and a slowing decline   in DSL-related revenue. Cable net adds growth continued to be strong   throughout the year, supplemented by ongoing migrations from the DSL base; in   the second half of the year DSL net adds also turned positive, with growing   customer demand for VDSL. Broadband ARPU was down year-on-year in a   promotional market, with improvements in cable offset by DSL declines,   although the pace of decline began to moderate during H2. The integration of   KDG has been completed; we expect cost synergies to meet the initial targets   set out at the time of acquisition, and now expect further upside potential   longer-term. In November, we launched Vodafone Red One, our fully integrated   fixed, mobile and TV service combining high speed mobile and fixed; as of 31   March 2016 we had 54,000 customers. Adjusted EBITDA grew 2.1%*, with adjusted   EBITDA margin improving by 0.8* percentage points. The impact of lower   revenues and increased Project Spring network opex was more than offset by   opex efficiencies (including KDG synergies), savings in commercial costs   (aided by our increased focus on direct channels) and a change in commission   processes. markets, as well as the benefits of acquisition integrations.   Organic change % Other activity1 pps Foreign exchange pps Reported change %   Revenue – Europe 0.4 1.3 (5.2) (3.5) Service revenue Germany (0.4) – (6.7)   (7.1) Italy (0.8) – (6.7) (7.5) UK (0.3) (0.4) (0.1) (0.8) Spain (3.5) 8.7   (6.6) (1.4) Other Europe 1.5 1.9 (6.8) (3.4) Europe (0.6) 1.3 (5.1) (4.4)   Adjusted EBITDA Germany 2.1 – (6.7) (4.6) Italy 3.1 – (6.8) (3.7) UK 1.2   (5.4) – (4.2) Spain 4.2 19.6 (6.8) 17.0 Other Europe (1.5) 1.3 (6.5) (6.7)   Europe 1.7 1.2 (5.5) (2.6) Europe adjusted =operating profit   (12.9)(0.2)(5.6)(18.7) Note: 1 “Other activity” includes the impact of   M&A activity. Refer to “Organic growth” on page 191 for further detail.   32 Vodafone Group Plc Annual Report on Form 20-F 2016 Year ended 31 March   2016 Revenue 7,7874,405 6,1733,633 4,835(115)26,718 27,687(3.5)0.4 Service   revenue 7,1973,758 5,8493,274 4,494(111) 24,461 25,588(4.4)(0.6) Other   revenue 590647 324359 341(4) 2,257 2,099 Adjusted EBITDA 2,5371,478 1,289915   1,467–7,686 7,894(2.6)1.7 Adjusted operating profit 378590 (69)53 457–1,409   1,733(18.7)(12.9) Adjusted EBITDA margin 32.6%33.6% 20.9% 25.2% 30.3%28.8%   28.5% 

 

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Italy Service   revenue declined 0.8%* for the year, but returned to growth in Q4 (Q3:   -0.3%*; Q4: 1.3%*), aided by the leap-year benefit. The mobile business is on   a steady recovery path, while fixed line performance continues to be positive   despite increased competition in recent months. Mobile service revenue   declined 1.1%*, as a recovery in ARPU supported by prepaid price increases   only partially offset the year-on-year decline in the customer base. Mobile   number portability in the market has reduced in recent quarters and the   customer base decline stabilised during the year, aided by market-leading NPS   scores in mobile following our Project Spring investments. Consumer trends   improved faster than Enterprise, where competitive intensity has increased in   H2. As of 31 March 2016 we have 95% population coverage on our 4G network and   6.5 million 4G customers (September 2015: 4.0 million). Fixed service revenue   was up 1.2%*, driven by sustained commercial momentum. We added 168,000   broadband customers during the year, a strong performance, and in Q4 50% of   our gross adds have taken a fibre-based service. Of our base of 2.0 million   broadband customers, 297,000 are fibre customers. We have now built out our   own fibre network to over 16,000 cabinets, enabling us to reach 3.6 million   households. Our high speed broadband rollout in Italy will be enhanced by our   commercial agreement with Enel, which plans to roll out Fibre-To-The-Home   (FTTH) to 224 cities nationwide, providing access on competitive commercial   terms. In these areas Enel will be our exclusive fibre partner going forward.   Adjusted EBITDA was up 3.1%*, as we successfully offset the decline in   service revenue with savings in commercial costs and operating expenses. The   adjusted EBITDA margin was stable year-on-year due principally to higher   handset revenues. Fixed service revenue grew 1.1%*. Excluding carrier   services, fixed service revenue grew 2.4%* in the second half of the year   including an improving performance in Enterprise. After regional trials   during the summer, we began to offer our consumer broadband service to 24   million premises across the UK (98% of BT’s fibre footprint) in October,   securing 38,000 customers by 31 March 2016. Our new TV service is in field   trials with plans to launch later in the current calendar year. Adjusted   EBITDA grew 1.2%*, with a 0.2* percentage point increase in the adjusted   EBITDA margin driven by continued operational efficiencies. Reported adjusted   EBITDA benefited from one-off settlements with other network operators in the   first half of the year. Spain Service revenue declined 3.5%* (Q3: -3.1%*; Q4:   -3.2%*), with mobile revenue recovering steadily despite the negative effect   of handset financing, and continued positive momentum in fixed. Excluding   handset financing effects, service revenues declined by 0.3%* in the year.   Mobile service revenue fell 8.0%*. The contract customer base continued to   grow in a more stable market, despite increased promotional activity around   the start of the new football season. We are seeing signs that ARPU is   beginning to stabilise, aided by our market-leading NPS scores in mobile and   our ‘more-for-more’ pricing strategy, in which customers receive higher data   allowances and additional features (e.g. free European roaming) together with   an increase in the monthly tariff. Our 4G population coverage reached 91% at   31 March 2016 and we have 5.4 million 4G customers. Fixed service revenue   rose 7.8%*, supported by consistent growth in broadband net additions. The   integration of Ono has proceeded successfully and we have already achieved   100% of the original €240 million of cost and capex synergies targeted. We   now expect to be able to deliver €300 million of annualised run-rate savings   over the original timeframe. In part this reflects the very successful launch   in May of Vodafone One, our fully integrated cable, mobile and TV service,   which has already reached 1.5 million customers. Including our joint fibre   network build with Orange, we now reach 8.5 million premises with cable or   fibre. Our recent agreement with Mediapro together with the wholesale   obligations imposed on the incumbent provide us with access to a full range   of premium TV channels for the coming years, albeit at an increased cost.   Adjusted EBITDA increased 4.2%* year-on-year with a 1.3* percentage point   increase in the adjusted EBITDA margin, as strong cost control, the benefit   to margin from handset financing and the cost synergies from the Ono   acquisition more than offset rising TV costs. UK Service revenue declined   0.3%* for the year (Q3: -0.7%*; Q4: -0.1%*), with improving trends in fixed   line offset by a slowdown in mobile, reflecting operational challenges   following a billing system migration. Q4 growth benefited from strong carrier   services activity; excluding this, underlying trends were stable. The organic   growth rate for the year excludes one-off settlements with other network   operators in Q2. Mobile service revenue declined 0.7%*. Contract customer   growth slowed in Q4, impacted partly by higher churn in relation to the   billing system migration. Revenue trends were also impacted by the pricing   and usage of 08XX numbers following the introduction of Non-Geographic Call   Services regulation, and a focus on giving customers more control of their   out-of-bundle data spend. As a result, in-bundle revenue and demand for data   add-ons continued to grow. Enterprise mobile trends remained relatively   stable despite increased competition. National 4G coverage reached 91% (based   on the OFCOM definition), and 99.5% in London; based on our estimations, 4G   coverage was 84%, and despite some delays the pace of 4G coverage expansion   in conjunction with our network sharing partner is now accelerating. We   achieved significant growth in 4G customers, with 7.0 million at the period   end (September 2015: 5.3 million). Other Europe Service revenue rose 1.5%*   (Q3: 1.6%*; Q4: 2.1%*), with all markets except Greece achieving growth   during the year. In Q4, Romania (7.7%*), Portugal (3.5%*) and the Czech   Republic enjoyed an improvement in top-line growth. 33 Vodafone Group Plc   Annual Report on Form 20-F 2016 Overview Strategy review Performance   Governance Financials Additional information 

 

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Operating   results (continued) In the Netherlands, service revenue increased 0.3%*, with   growth moving into decline during H2 (Q3: 0.2%*; Q4: -1.3%*) as continued   gains in fixed line (partly aided by a Q4 accounting reclassification) were   offset by a decline in mobile contract ARPU. In Portugal, fixed service   revenue continues to grow strongly and mobile is recovering as ARPU and churn   pressure from the shift towards convergent pricing begins to moderate. Our   FTTH network now reaches 2.4 million homes. Ireland returned to service   revenue growth in Q2, with strong momentum in fixed line Africa, Middle East   and Asia Pacific1 and an improving trend in mobile. The initial 4G roll-out   is complete with 95% population coverage. In Greece macroeconomic conditions   remained a drag, however good cost control led to improved margins. The   integration of HOL is progressing according to plan. Adjusted EBITDA declined   1.5%*, with a 1.0* percentage point decline in adjusted EBITDA margin, mainly   driven by lower margins in Portugal and Romania. Restated 2015 £m % change   India £m Vodacom £m Other AMAP £m Eliminations £m AMAP £m £ Organic Note: 1   The Group has amended its reporting to reflect changes in the internal   management of its Enterprise business. The primary change has been that on 1   April 2015 the Group redefined its segments to report international voice   transit service revenue within Common Functions rather than within the   service revenue amount disclosed for each country and region. The service   revenue amounts presented for the year ended 31 March 2015 have been restated   onto a comparable basis together with all disclosed organic service revenue   growth rates. There is no impact on total Group service revenues or costs.   India Service revenue increased 5.0%* (Q3: 2.3%*; Q4: 5.3%*) as customer base   growth and strong demand for 3G data was partially offset by a number of   regulatory changes, including MTR cuts, roaming price caps and an increase in   service tax. Excluding these impacts, service revenue growth was 10.0%*. Q4   growth recovered versus Q3 as voice price competition moderated during the   quarter and regulatory impacts began to reduce in March. We added 14.1   million customers during the year, taking the total to 197.9 million. Growth   in total minutes of use continued, but this was offset by a decline in   average revenue per minute as a result of ongoing competition on voice   business. Data growth continues to be very strong, with data usage over the   network up 64% year-on-year, and the active data customer base increasing by   3.8 million to 67.5 million. The 3G customer base grew to 27.4 million, up   41.4% year-on-year, and smartphone penetration in our four biggest urban   areas is now 52.8%. In Q4, browsing revenue represented 19.2% of local   service revenue, up from 14.9% in the equivalent quarter last year. Since the   launch of Project Spring we have added over 37,700 new 3G sites, taking the   total to 55,500 and our population coverage to 95% of target urban areas. We   have launched 4G in five key circles and plan to expand to cover over 60% of   our data revenues in the coming year, ahead of the upcoming spectrum auction.   Our M-Pesa business continues to expand, with 1.3 million active customers at   March 2016, and approximately 120,000 agents. In August, the Reserve Bank of   India granted us ‘in principle’ approval to set up a payments bank. Adjusted   EBITDA grew 4.1%*, with a 0.2* percentage point deterioration in adjusted   EBITDA margin as the benefits of service revenue growth were offset by the   ongoing increase in operating costs related to Project Spring, higher   acquisition costs and the translation effects of non-rupee operating costs.   Market conditions remain competitive and may be further impacted by the   forthcoming spectrum auctions and a new entrant. Preparations continue for a   potential IPO of Vodafone India. Revenue decreased 1.3%, with strong organic   growth offset by a 7.7 percentage point adverse impact from foreign exchange   movements, particularly with regards to the South African rand, Turkish lira   and Egyptian pound. On an organic basis, service revenue was up 6.9%* driven   by growth in the customer base, increased voice and data usage, and continued   good commercial execution. Overall growth was negatively impacted by MTR cuts   and other regulatory charges, mainly in India. Adjusted EBITDA decreased   1.1%, including a 7.9 percentage point adverse impact from foreign exchange   movements. On an organic basis, adjusted EBITDA grew 7.2%*, driven by growth   in all major markets. Organic change % Other activity1 pps Foreign exchange   pps Reported change % Revenue – AMAP 7.0 (0.6) (7.7) (1.3) Service revenue   India 5.0 – (0.2) 4.8 Vodacom 5.4 – (12.7) (7.3) Other AMAP 10.1 (1.9) (9.3)   (1.1) AMAP 6.9 (0.7) (7.0) (0.8) Adjusted EBITDA India 4.1 – (0.3) 3.8   =Vodacom 12.7 –(15.5)(2.8) Other AMAP 4.5 (1.3) (7.1) (3.9) AMAP 7.2 (0.4)   (7.9) (1.1) AMAP adjusted operating profit 11.7 (1.1) (10.0) 0.6 Note: 1   “Other activity” includes the impact of M&A activity. Refer to “Organic   growth” on page 191 for further detail. 34 Vodafone Group Plc Annual Report   on Form 20-F 2016 Year ended 31 March 2016 Revenue 4,516 3,8874,814(9) 13,208   13,382(1.3)7.0 Service revenue 4,497 3,2334,122(9) 11,843 11,935(0.8)6.9   Other revenue 19 654692– 1,365 1,447 Adjusted EBITDA 1,331 1,4841,227– 4,042   4,086(1.1) 7.2 Adjusted operating profit 469 992352– 1,813 1,8020.611.7   Adjusted EBITDA margin 29.5% 38.2%25.5%30.6% 30.5% 

 

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Vodacom Vodacom   Group service revenue increased 5.4%* (Q3: 7.2%*; Q4: 6.3%*), supported by strong   momentum in both South Africa and the International operations. In South   Africa, organic service revenue grew 4.7%* (Q3: 7.2%*; Q4: 6.5%*), with the   consumer and enterprise businesses both performing well. We continued to   focus on building brand and network differentiation, with our performance   driven by strong demand for data. We further enhanced our leading network   position, more than doubling our LTE/4G sites to over 6,000, taking coverage   to 58.2% on LTE/4G and 98.9% on 3G. Data revenue growth remained strong at   18.8*% in Q4 and data is now 36.3% of local service revenue. Our pricing   transformation strategy is making good progress, with 85% of contract   customers now on integrated price plans and churn falling to our lowest   levels at 6.9% in Q4. Total bundle sales reached 1.1 billion, supported by   our ‘Just 4 U’ personalised offers. Service revenue growth in Vodacom’s   International operations outside South Africa was 10.0%*, driven by increased   voice revenue as a result of pricing strategies and bundle offerings, data   take-up and M-Pesa. Active data customers reached 10.1 million, 37% of total   customers, and active M-Pesa customers totalled 6.8 million in Q4, all   benefiting from sustained network investment. Vodacom Group adjusted EBITDA   increased 12.7%*, significantly faster than revenues, with a 3.6* percentage   point improvement in adjusted EBITDA margin. This strong performance partly   reflected a change in accounting for certain transactions in the indirect   channel, which depressed equipment sales and total revenues with no impact on   adjusted EBITDA. Excluding this effect, adjusted EBITDA margins rose driven   by operating leverage, tight cost control and a tailwind from foreign   exchange gains. Section 219 SEC filings of interest Vodafone Group Plc (‘Vodafone’)   does not have any subsidiaries, other equity investments, assets, facilities   or employees located in Iran, and Vodafone has made no capital investment in   Iran. To the best of its knowledge, no U.S. persons, including any U.S.   affiliates of Vodafone, are involved in the activities described below.   Except as specified below, to the best of Vodafone’s knowledge, neither it,   its subsidiaries, nor its affiliates have engaged in any conduct needing to   be disclosed under Section 13(r) of the Securities Exchange Act of 1934.   Roaming and interconnect Vodafone has wholesale roaming and interconnect   arrangements with mobile and fixed line operators in Iran. Vodafone has, or   has had, relationships with telecommunications operators in Iran in   connection with such roaming and interconnect arrangements, some of which it   believes are or may be government controlled entities. The approximate total   gross revenues attributable to the arrangements mentioned above for the   financial year ended 31 March 2016 were £676,000. EPEG Project Vodafone   Global Network Limited (‘VGN’) is a member of a consortium made up of   Telecommunication Infrastructure Company of Iran (‘TIC’) (an entity   controlled by the government of Iran), Rostelecom and Omantel, that has built   a high speed cable network from a landing point in Oman to Germany. Each   member of the consortium is responsible for funding, building and maintaining   its section of the cable, with VGN owning and being responsible for the   segment from the Ukrainian border with Russia to Frankfurt, Germany. No   capacity sales have been made on this high speed cable network yet;   consequently there are no EPEG revenues or profits associated with the EPEG   project. Vodafone intends to continue its involvement in the EPEG Project.   Intellectual Property Vodafone, through one of its subsidiaries, also makes   some insignificant payments to Iran in order to register certain domain   names, register and renew certain trademarks, and protect its brand globally.   Vodafone paid annual registration fees of £48 to IRNIC for the registration   of three domain names. Vodafone paid £60 (2.6 million Iranian Rial) to the   Iranian trademarks office in order to renew one of its trade marks during the   fiscal year ended 31 March 2016. During the fiscal year ended 31 March 2016,   Vodafone, through one of its subsidiaries, also made payments of: Other AMAP   Service revenue increased 10.1%* (Q3: 10.8%*; Q4: 12.1%*), with strong growth   in Turkey, Egypt and Ghana partially offset by a decline in Qatar. Service   revenue in Turkey was up 19.7%*, reflecting continued strong growth in   consumer contract and Enterprise revenue, and we launched 4G services in   April 2016. Fixed line momentum was strong, almost quadrupling the fixed   broadband customer base to 363,000 at the end of the period. In Egypt,   service revenue was up 8.9%* driven by continued strong growth in data. New   Zealand returned to modest growth, with solid mobile contract customer trends   and improving fixed line ARPU. Adjusted EBITDA grew 4.5%*, with a 2.1*   percentage point contraction in adjusted EBITDA margin. A strong revenue   performance and improved margins in Turkey were partly offset by higher costs   for imported goods post foreign exchange rate devaluations across the region.   Associates and joint ventures Indus Towers, the Indian towers company in   which Vodafone has a 42% interest, achieved local currency revenue growth of   5.8%. Indus Towers owned 119,881 towers as at 31 March 2016, with a tenancy   ratio of 2.25. Our share of Indus Towers adjusted EBITDA was £305 million and   its contribution to the Group’s adjusted operating profit was £74 million.   Safaricom, Vodafone’s 40% associate which is the leading mobile operator in   Kenya, saw local currency service revenue growth of 13.8% for the year, with   local currency adjusted EBITDA up 16.8%, driven by an increase in the   customer base leading to growth across all revenue streams, predominantly   mobile data and M-Pesa. 4G coverage is now in 20 out of 47 counties. Vodafone   Hutchison Australia (‘VHA’), in which Vodafone owns a 50% stake, is   performing solidly in an intensely competitive environment, with service   revenues (excluding MTR impact) returning to growth after five years in   decline. adjusted EBITDA growth was driven by an increase in revenue and   improved cost management. a £2,934 to UAE law firm Cedar White Bradley’s UAE   bank account, for legal advice provided by UAE lawyers relating to trade mark   infringement matters in Iran. a £843 to Iranian law firm Raysan Patent and   Trademark Agents’ UK bank account for legal services (trade mark searching   and investigation) provided by Iranian lawyers relating to trade mark   infringement matters in Iran. These funds were not used to pay the Iranian   trademarks office or any party outside of Raysan Patent and Trademark Agents.   Notes: References to “Q4” are to the quarter ended 31 March 2016 unless   otherwise stated. References to “Q3” are to the quarter ended 31 December   2015 unless otherwise stated. References to the “second half of the year” or   “H2” are to the six months ended 31 March 2016 unless otherwise stated.   References to the “year” or “financial year” are to the financial year ended   31 March 2016 and references to the “prior financial year” are to the   financial year ended 31 March 2015 unless otherwise stated. All amounts   marked with an “*” represent “organic growth”, which presents performance on   a comparable basis, both in terms of merger and acquisition activity as well   as in terms of movements in foreign exchange rates. See page 191 “Non-GAAP   information” for further details. 35 Vodafone Group Plc Annual Report on Form   20-F 2016 Overview Strategy review Performance Governance Financials   Additional information 

 

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Financial   position and resources Consolidated statement of financial position The   consolidated statement of financial position is set out on page 88. Details   on the major movements of both our assets and liabilities in the year are set   out below: Assets Goodwill and other intangible assets Goodwill and other   intangible assets increased by £3.3 billion to £46.8 billion. The increase   primarily arose as a result of £7.3 billion of additions, including £5.4   billion for spectrum purchased in India, Germany, Turkey, Spain, Italy and   the UK, plus £2.3 billion of favourable movements in foreign exchange rates   which were partly offset by £4.3 billion of amortisation, £1.7 billion   transferred to assets held for resale and £0.5 billion of goodwill   impairment. Property, plant and equipment Property, plant and equipment   increased by £1.5 billion to £28.1 billion, principally due to £6.7 billion   of additions driven by investment in the Group’s networks as a result of   Project Spring plus £1.0 billion of favourable foreign exchange movements,   partly offset by £5.2 billion of depreciation charges and £0.9 billion   transferred to assets held for resale. Other non-current assets Other   non-current assets decreased by £2.0 billion to £30.7 billion, mainly due to   decrease in deferred tax assets primarily due to the reduction of tax losses   in Luxembourg (see note 6 for further details). Current assets Current assets   increased by £8.3 billion to £28.1 billion, mainly due to a £3.3 billion   increase in cash and cash equivalents, £2.9 billion of assets held for resale   and a £1.1 billion increase in trade receivables. Total equity and   liabilities Total equity Total equity decreased by £0.4 billion to £67.3   billion as the £2.8 billion of proceeds from the convertible bonds was offset   by £3.2 billion of dividends paid to equity shareholders and non-controlling   interests and the total comprehensive loss for the year of £0.1 billion.   Non-current liabilities Non-current liabilities increased by £7.1 billion to   £33.0 billion, primarily due to a £6.9 billion increase in long-term   borrowings. Current liabilities Current liabilities decreased by £4.5 billion   to £33.4 billion, mainly due to £3.4 billion of additional short-term   borrowings and a £0.8 billion increase in trade and other payables. Trade   payables at 31 March 2016 were equivalent to 45 days (2015: 43 days)   outstanding, calculated by reference to the amount owed to suppliers as a   proportion of the amounts invoiced by suppliers during the year. It is our   policy to agree terms of transactions, including payment terms, with   suppliers and it is our normal practice that payment is made accordingly.   Contractual obligations and commitments A summary of our principal   contractual financial obligations and commitments is shown below. Payments   due by period £m Contractual obligations and commitments1 Total < 1 year   1–3 years 3–5 years >5 years Borrowings2 53,816 16,188 9,999 7,215 20,414   Operating lease commitments3 7,862 1,527 2,084 1,429 2,822 Capital   commitments3,4 2,051 1,839 178 32 2 Purchase commitments5 6,952 3,857 2,697   274 124 Total 70,681 23,411 14,958 8,950 23,362 Notes: 1 This table includes   commitments in respect of options over interests in Group businesses held by   non-controlling shareholders (see “Potential cash outflows from option   agreements and similar arrangements” on page 133) and obligations to pay   dividends to non-controlling shareholders (see “Dividends from associates and   to non-controlling shareholders” on page 133). The table excludes current and   deferred tax liabilities and obligations under post employment benefit   schemes, details of which are provided in notes 6 “Taxation” and 26 “Post   employment benefits” respectively. The table also excludes the contractual   obligations of associates and joint ventures. See note 21 “Borrowings”. See   note 29 “Commitments”. Primarily related to spectrum and network   infrastructure. Primarily related to device purchase obligations. 2 3 4 5   Dividends We provide returns to shareholders through equity dividends and   historically have generally paid dividends in February and August in each   year. The Directors expect that we will continue to pay dividends   semi-annually. The £3.0 billion equity dividend in the current year comprises   £2.0 billion in relation to the final dividend for the year ended 31 March   2015 and £1.0 billion for the interim dividend for the year ended 31 March   2016. The interim dividend of 3.68 pence per share announced by the Directors   in November 2015 represented a 2.2% increase over last year’s interim   dividend. The Directors are proposing a final dividend of 7.77 pence per   share. Total dividends for the year increased by 2.0% to 11.45 pence per   share. Liquidity and capital resources Our liquidity and working capital may   be affected by a material decrease in cash flow due to a number of factors as   outlined in “Principal risk factors and uncertainties” on pages 22 to 28. We   do not use non-consolidated special purpose entities as a source of liquidity   or for other financing purposes. 36 Vodafone Group Plc Annual Report on Form   20-F 2016 

 

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In addition to   the commentary on the Group’s consolidated statement of cash flows below, further   disclosure in relation to the Group’s objectives, policies and processes for   managing its capital; its financial risk management objectives; details of   its financial instruments and hedging activities; and its exposures to credit   risk and liquidity risk can be found in “Borrowings”, “Liquidity and capital   resources” and “Capital and financial risk management” in notes 21, 22 and 23   respectively to the consolidated financial statements. Cash flows A   reconciliation of cash generated by operations to free cash flow, a non-GAAP   measure used by management is shown on Cash generated by operations Excluding   restructuring and other costs, cash generated by operations increased 2.6% to   £11.4 billion as lower adjusted EBITDA was offset by working capital movements.   Capital expenditure Capital expenditure decreased £0.6 billion to £8.6   billion primarily driven by the completion of the Project Spring investment   programme. Free cash flow Free cash flow was £1.0 billion, a decrease of £0.1   billion from the prior year, as higher cash generated by operations excluding   restructuring and other costs and working capital movements in respect of   capital expenditure were offset by lower capital expenditure and lower   dividends received from Indus Towers. Licence and spectrum payments Payments   for licences and spectrum include amounts relating to the purchase of   spectrum in Germany of £1.4 billion, £0.6 billion in India, £0.6 billion in   Turkey, £0.2 billion in Italy and £0.1 billion in the UK. Acquisitions and   disposals Payments for acquisitions and disposals for the year ended 31 March   2015 primarily included £2,945 million in relation to the acquisition of the   entire share capital of Ono plus £2,858 million of associated net debt   acquired and £563 million in relation to the acquisition of the remaining   10.97% equity interest in Vodafone India. Convertible issue and foreign   exchange A foreign exchange loss of £2.0 billion was recognised on net debt   as losses on the euro and rupee offset favourable foreign exchange movements   on the South African rand. This was offset by £2.8 billion of proceeds from   the issue of £2.9 billion of mandatory convertible bonds in February 2016,   £2.8 billion of which have been classified as equity after taking into   account the cost of future coupon payments. The Group also holds $5.0 billion   (2015: $5.25 billion) of Verizon loan notes, and has the potential to utilise   the proceeds from these notes to repurchase the shares issued to satisfy the   mandatory convertible bonds. pages 190 and 191. The reconciliation to net   debt is shown below. 2016 £m 2015 £m Notes: 1 Operating free cash flow for   the year ended 31 March 2016 excludes £186 million (2015: £336 million) of   restructuring costs, £nil (2015: £365 million) UK pensions contribution   payment and £nil (2015; £116 million) of KDG incentive scheme payments that   vested upon acquisition. 2 Other cash flows for the year ended 31 March 2016   include £2,020 million (2015: £nil) of debt recognised in respect of spectrum   in India and Germany, £186 million (2015: £336 million) of restructuring   costs, £nil (2015: £365 million) UK pensions contribution payment, £nil   (2015: £359 million) of Verizon Wireless tax dividends received after the   completion of the disposal, £nil (2015: £328 million) of interest paid on the   settlement of the Piramal option, £nil (2015: £116 million) of KDG incentive   scheme payments that vested upon acquisition, £nil (2015: £176 million) tax   refund relating to the rationalisation and reorganisation of our non-US   assets prior to the disposal of our stake in Verizon Wireless and a £50   million (2015: £100 million) payment in respect of the Group’s historic UK   tax settlement. 3 Includes cash and cash equivalents of £14 million (2015:   £nil) in respect of assets held for sale. 37 Vodafone Group Plc Annual Report   on Form 20-F 2016 Overview Strategy review Performance Governance Financials   Additional information This year’s report contains the strategic report on   pages 1 to 37, which includes an analysis of our performance and position, a   review of the business during the year, and outlines the principal risks and   uncertainties we face. The strategic report was approved by the Board and   signed on its behalf by the Chief Executive and Chief Financial Officer. /s/   Vittorio Colao /s/ Nick Read Vittorio Colao Nick Read Chief Executive Chief   Financial Officer 17 May 2016 Adjusted EBITDA 11,612 11,915 Working capital   (386) (121) Capital expenditure (8,599) (9,197) Disposal of property, plant   and equipment 140 178 Other 117 88 Operating free cash flow1 2,884 2,863 Taxation   (689) (758) Dividends received from associates and investments 67 224   Dividends paid to non-controlling shareholders in subsidiaries (223) (247)   Interest received and paid (1,026) (994) Free cash flow1 1,013 1,088 Licence   and spectrum payments (2,944) (443) Acquisitions and disposals (96) (7,040)   Equity dividends paid (2,998) (2,927) Foreign exchange (1,968) 895   Convertible issue 2,754 – Other2 (2,665) (144) Net debt increase (6,904)   (8,571) Opening net debt (22,271) (13,700) Closing net debt3 (29,175)   (22,271) 

 

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Our approach to   governance Creating long-term value A commitment to act with integrity at all   times is integral to the creation of shareholder value. We fully complied   with the 2014 UK Corporate Governance Code during the year. to the Board?   David is a highly experienced business leader with extensive financial levels   in Vodafone is also a priority. This includes diversity of skills background   and belief. coming year? We intend to sustain that positive trend although,   it should be noted, the Group. Chairman 38 Vodafone Group Plc Annual Report   on Form 20-F 2016 What were the Board’s main priorities during the year? The   Board’s role is to define the long-term strategic objectives for the Group   and then evaluate progress against those objectives while ensuring there is a   strong and effective system of corporate governance in place at all levels.   2016 was another important transitional year for Vodafone: as I explain in my   introduction on page 3, our expansion across 4G, cable and fibre networks and   TV and content services is transforming our businesses. A key priority during   the year was to ensure that the significant investments involved were   allocated in a manner most likely to maximise returns to shareholders over   time as well as enhance our customers’ experience. We also continued to focus   on measures to mitigate the wide range of operating and commercial risks that   are inherent to our industry and which are summarised on pages 22 to 28. How   would you describe the decision making culture of the Board? Highly   collaborative and collegiate with a strong emphasis on open and honest debate   involving all of the Directors. As Chairman, I strive to ensure that Vodafone   has a Board that works effectively and where all can contribute freely. We   are fortunate to be able to draw on a diverse range of professional skills   and backgrounds around the boardroom table and I encourage each Director to   share their intuitions to enrich the Board’s collective understanding. We   seek to ensure that every Director has the facts and background context   necessary to reach informed conclusions on the matters before the Board. We   provide an insight into our induction process for new Directors on page 45.   All Directors have access to training and specialist briefing opportunities   to ensure they remain fully aware of major developments in this highly   complex and dynamic industry. Contents 38 Chairman’s introduction 47 Board   committees 39 Our governance framework 54 Compliance with the 2014 40 Board   of Directors UK Corporate Governance Code 42 Executive Committee 56 Our US   listing requirements 44 Board activities 57 Directors’ remuneration 45 Board   evaluation, induction 74 Directors’ report and training 46 Shareholder   engagement We comply with the corporate governance statement requirements   pursuant to the FCA’s Disclosure and Transparency Rules by virtue of the   information included in this “Governance” section of the Annual Report   together with information contained in the “Shareholder information” section   on pages 175 to 181. What do the Non-Executive Directors bring It is   essential to ensure that the composition of the Board reflects the strategic   priorities of the Group and provides a variety of informed insights to   determine the appropriate approach to the management of risk. Each of the   Directors brings a particular perspective to every discussion, shaped by   their backgrounds in a number of industries and roles over many years, which   underpins the Board’s commitment as a whole to rigorous scrutiny and analysis   of the Group’s key issues and opportunities. We provide a summary of each   Director’s experience on pages 40 and 41. During the year, we were pleased to   welcome David Nish to the Board. expertise and capital markets skills.   Enhancing diversity in the boardroom, the executive team and at all and   experience, age, gender, disability, sexual orientation, cultural I am   pleased to report that 25% of our Board roles are held by women. Our ambition   over the coming years is to increase that proportion further. Details of our   commitment to increase the number of women in executive roles (and to empower   our female customers) are set out in our 2016 Sustainable Business Report.   What are the Board’s key objectives for the In March 2016 we concluded the   largest organic investment programme in Vodafone’s history. Project Spring   was designed to bring about a material enhancement to the quality of the   networks and services relied on by 462 million mobile customers and 13   million fixed broadband customers and as we explain on pages 10 and 14, that   goal has largely been achieved. The priority for the year ahead will be to   ensure that the Group’s momentum post-Project Spring translates into stronger   financial performance as well as a much better experience for our customers.   Our return to growth after more than six years of significant macroeconomic   pressure in Europe is very welcome. we continue to face a number of   challenges in some markets. We will also maintain our focus on the effective   management of risk and on compliance with the high standards of corporate   governance across /s/ Gerard Kleisterlee Gerard Kleisterlee 17 May 2016 

 

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Our governance   framework How we are governed We have a strong and effective governance   system throughout the Group. Responsibility for good governance lies with   your Board. Responsible for the overall conduct of the Group’s business and:   of the business. Page 44 Committee the implementation of that policy 39   Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information Chairman Gerard   Kleisterlee a Is responsible for leadership of the Board a Sets the Board’s   agenda a Meets regularly with the Chief Executive and other key executives to   stay informed Board a is responsible for the long-term success of the   Company; a sets the Group strategy; a is responsible for ensuring the   effectiveness of and reporting on our system of corporate governance; and a   is accountable to shareholders for the proper conduct More on: website   vodafone.com/governance Audit and Risk Committee a Provides effective   governance over the Group’s financial results a Reviews the activity and   performance of the internal audit function and external auditor a Reviews the   integrity, adequacy and effectiveness of the Group’s system of internal   control including the risk management framework and related compliance   activities More on: Pages 47 to 52 Nominations and Governance Committee a   Evaluates and makes recommendations regarding Board and committee   composition, succession planning and diversity a Oversees matters relating to   corporate governance More on: Page 53 Remuneration a Sets, reviews and   recommends the Group’s overall remuneration policy and strategy and reviews   and strategy More on: Page 57 The Matters Reserved for the Board can be found   on our Chief Executive Vittorio Colao a Leads the business and implements   strategy and policy a Chairs the Executive Committee Executive Committee a   Focuses on strategy implementation, financial and competitive performance,   commercial and technological developments, succession planning and   organisational development Disclosure Committee a Oversees the accuracy and   timeliness of Group disclosures and approves controls and procedures in   relation to the public disclosure of financial information Risk and   Compliance Committee a Assists the Executive Committee to fulfil its   accountabilities with regard to risk management and policy compliance 

 

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Board of   Directors Experienced, effective and diverse leadership Our business is led   by our Board of Directors (the ‘Board’). Biographical details of the   Directors and senior management as at 17 May 2016 are as follows (with   further information available at vodafone.com/board). Key to Committee   membership: A Audit and Risk N Nominations and Governance R Remuneration R   Red background denotes Committee Chairman Independent services to publishing   and information. to Board discussions. a Oxford University, trustee and   member Dr Mathias Döpfner Independent Non-Executive Director Dame Clara Furse   Independent Non-Executive Director Valerie Gooding cbe Independent   Non-Executive Director Renee James Independent Non-Executive Director R A R N   R Tenure: 1 year Nationality: German Tenure: 1 year Nationality: British and   Canadian Tenure: 2 years Nationality: British Tenure: 5 years Nationality:   American Skills and experience: Mathias brings wide-ranging experience within   the global digital media industry to his role. Having led his business, Axel   Springer SE, through a highly successful transition into digital and   international markets, he provides a digital perspective to the Board’s   strategy. Other current appointments: a Axel Springer SE, chairman and chief   executive officer a Time Warner and Warner Music Group, member of the board   of directors a Business Insider Inc., chairman of the board of directors a   American Academy, American Jewish Committee and the European Publishers   Council, holds honorary offices a St John’s College, University of Cambridge,   member Skills and experience: Valerie brings a wealth of international   business experience obtained at companies with high levels of customer   service including British Airways and as chief executive of BUPA which,   together with her focus on leadership and talent, is greatly valuable to   Board discussions. Other current appointments: a Premier Farnell plc,   non-executive chairman a TUI Group, non-executive director a English National   Ballet, trustee a Historic Royal Palaces, trustee a Royal Botanic Gardens,   Kew, trustee Skills and experience: Renee brings comprehensive knowledge of   the high technology sector developed from her long career at Intel   Corporation where she was appointed president. Her extensive experience of   international management and the development and implementation of corporate   strategy is an asset to the Board and Remuneration Committee. Other current   appointments: a US President’s National Security Telecommunications Advisory   Committee, vice chair a C200, member a Carlyle Group, operating executive a   Oracle Corporation, non-executive director a Citigroup Inc., non-executive   director a Sabre Corporation, non-executive director a University of Oregon,   College of Arts, advisory board member Skills and experience: Dame Clara   brings to the Board a deep understanding of international capital markets,   regulation, services industries and business transformation developed from   her previous roles as chief executive of the London Stock Exchange Group plc   and Credit Lyonnais Rouse Ltd. Her financial proficiency is highly valued as   a member of the Audit and Risk Committee. In 2008 she was appointed Dame   Commander of the Order of the British Empire. Other current appointments: a   Bank of England, Financial Policy Committee member a Nomura Holdings Inc,   non-executive director a Amadeus IT Holdings SA, non-executive director 40   Vodafone Group Plc Annual Report on Form 20-F 2016 Gerard Kleisterlee N   Chairman Tenure: 5 years Nationality: Dutch Skills and experience: Gerard has   extensive experience of senior leadership of global businesses in both the   developed and emerging markets. He brings to the Group a deep understanding   of the consumer electronics, technology and lifestyle industries gained from   his career with Philips Electronics spanning over 30 years and continues to   use this experience to oversee the development of Vodafone’s strategy and the   effectiveness of its operations as a total communications company. Other   current appointments: a Royal Dutch Shell, non-executive director and member   of the audit committee a IBEX Global Solutions plc, non-executive director a   ASML, Chairman of supervisory board Vittorio Colao Chief Executive –   Executive Director Tenure: 9 years Nationality: Italian Skills and   experience: With over 20 years’ experience working in the telecoms industry,   Vittorio has extensive leadership skills developed within both Vodafone and   the wider industry and is widely recognised as an outstanding leader in the   telecoms sector. Other current appointments: a European Round Table of Industrialists,   vice chairman a Unilever Plc, non-executive director Nick Read Chief   Financial Officer – Executive Director Tenure: 2 years Nationality: British   Skills and experience: Nick combines strong operational leadership with a   detailed understanding of the industry and its challenges and opportunities.   Nick has wide-ranging experience in senior finance roles at both Vodafone and   other multinational companies including United Business Media plc and Federal   Express Worldwide. Other current appointments: None Sir Crispin Davis A   Non-Executive Director Tenure: 1 year Nationality: British Skills and   experience: Sir Crispin has broad-ranging experience as a business leader in   international content and technology markets from his roles as chief   executive of Reed Elsevier and the digital agency Aegis Group plc and group   managing director of Guinness PLC (now Diageo plc). He was knighted in 2004   for He brings a strong commercial perspective Other current appointments: of   the university board a CVC Capital Partners, adviser 

 

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Senior   Independent Director N Other current appointments: Investment Trust PLC, a   The Francis Crick Institute, director of the a Computacenter Plc,   non-executive director Accountants of Scotland, member 33% Tenure 56% Philip   Yea 5/5 Stephen Pusey1 2/2 Nick Read 7/7 Directors) Nominations and Mathias   Döpfner 5/7 Director Attendance 4–6 years Valerie Gooding 7/7 Valerie   Gooding4 3/3 Samuel Jonah 7/7 Luc Vandevelde1 2/2 Remuneration Committee3   David Nish2 2/2 Media Valerie Gooding 5/5 Philip Yea 6/7 41 Vodafone Group   Plc Annual Report on Form 20-F 2016 Overview Strategy review Performance   Governance Financials Additional information Attendance at scheduled meetings   Audit and Risk Committee Board analysis of the Board in the 2016 financial   year Director Attendance Director Attendance Nick Land 5/5 Gerard Kleisterlee   7/7 Sir Crispin Davis 5/5 Vittorio Colao 7/7 Dame Clara Furse 4/5 7+ years 0–3   years (Non-Executive Sir Crispin Davis 7/7 Governance Committee Dame Clara   Furse 6/7 Gerard Kleisterlee 5/5 11% Renee James 7/7 Philip Yea 5/5 Sector   experience5 Nick Land 7/7 Consumer Goods Luc Vandevelde1 2/2 Director   Attendance Technology Luc Vandevelde 12/2 Telecoms Renee James 5/5 Finance   Samuel Jonah 5/5 Emerging markets Notes: 1 Stephen Pusey and Luc Vandevelde   stepped down from the Board at the annual general meeting on 28 July 2015. 2   David Nish joined the Board on 1 January 2016. 3 Dr Mathias Döpfner joined   the Remuneration Committee on 1 April 2016. 4 Valerie Gooding joined the   Nominations and Governance Committee on 2 November 2015. 5 Some Directors   have expertise in more than one sector. 3 2 3 3 5 1 Samuel Jonah kbe R   Independent Non-Executive Director Tenure: 7 years Nationality: Ghanaian   Skills and experience: Samuel brings experience and understanding of business   operations in emerging markets, particularly Africa. Previously executive   president of AngloGold Ashanei Ltd and member of the Advisory Council of the   President of the African Development Bank, he provides an international,   commercial perspective to Board discussions. Other current appointments: a   Iron Mineral Benefication Services, non-executive chairman a Jonah Capital   (Pty) Limited, executive chairman a Metropolitan Insurance Company Limited,   chairman a Presidents of Togo and Nigeria, adviser a The Investment Climate   Facility, member of trustee board Nick Land A Independent Non-Executive   Director Tenure: 9 years Nationality: British Skills and experience: After a   career spanning 36 years at Ernst & Young UK where Nick was executive   chairman, he brings strong financial expertise and experience of dealing with   major corporations in many parts of the world to the Board and to his role as   Chairman of the Audit and Risk Committee. Other current appointments: a   Ashmore Group plc, non-executive director a Financial Reporting Council,   non-executive director a The Vodafone Foundation, Chairman of the Board of   Trustees a Dentons UKMEA LLP, adviser a Silicon Valley Bank, London, adviser   David Nish Independent Non-Executive Director Tenure: <1 year Nationality:   British Skills and experience: David has wide-ranging operational and   strategic experience as a senior leader and has a strong understanding of   financial and capital markets through his previous directorships which   include chief executive officer and chief financial officer of Standard Life   plc and chief financial officer of Scottish Power plc. Other current   appointments: a HSBC Holdings Plc, non-executive director a London Stock   Exchange Group Plc, non-executive director a Zurich Insurance Group, board   member a UK Green Investment Bank Plc, non-executive director a Council of   the Institute of Chartered Philip Yea A Tenure: 10 years Nationality: British   Skills and experience: Philip’s experience as chief financial officer of   Diageo plc and in the private equity industry at Investcorp and 3i Group plc,   together with his knowledge of the Vodafone Group, makes him a valued member   of the Board. Philip’s financial expertise is an asset to his role as member   of the Audit and Risk Committee. a Aberdeen Asian Smaller Companies   non-executive director trustee board a Greene King Plc, chairman 

 

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Executive   Committee Delivering our strategy, driving performance Chaired by Vittorio   Colao, the Executive Committee focuses on managing Vodafone’s business   affairs as a whole, which includes the delivery of a competitive strategy,   developing our financial structure and planning, driving financial   performance and ensuring good succession planning. Group Business Warren has   responsibility for managing and business development strategy. in 1988 as   well as leading the recent sale He will retire from the Executive Committee   Previous roles include: and head of European Technology (1985–1995) Nick   Jeffery Group Enterprise Chief Executive Officer Matthew Kirk Group External   Affairs Director Rosemary Martin Group General Counsel and Company Secretary   Ronald Schellekens Group Human Resources Director Tenure: 3 years   Nationality: British Tenure: 7 years Nationality: British Tenure: 6 years   Nationality: British Tenure: 7 years Nationality: Dutch Responsibilities:   Nick is responsible for Vodafone’s strategy and execution in the Enterprise   market worldwide, and has responsibility for a portfolio which includes:   Vodafone Global Enterprise, Vodafone Carrier Services, The Internet of   Things, Cloud & Hosting Services, Enterprise Marketing and Sales   Operations as well as Enterprise Products and Operations and Enterprise   Security Services. Previous roles include: a Cable & Wireless Worldwide,   chief executive (2012–2013) a Vodafone Global Enterprise, Chief Executive   (2006–2012) Responsibilities: Matthew leads Vodafone’s engagement with   external stakeholders (including governments, regulators, international   institutions, the media and industry commentators) in order to project   Vodafone’s position on the contribution of our industry to broader policy   objectives and on issues of importance to our customers and to the   communities in which Vodafone operates. Matthew is also responsible for   security, and for the Vodafone Foundation, of which he is a Trustee. Previous   roles include: a British Ambassador to Finland (2002–2006) a Member of the   British Diplomatic Service (20+ years) Responsibilities: Rosemary has   responsibility for managing Vodafone’s legal risk and for providing legal and   company secretariat services to the Group. Previous roles include: a   Practical Law Company, chief executive (2008) a Reuters Group Plc, various   governance roles including group general counsel and company secretary   (1997–2008) a Rowe & Maw, partner (1990–1997) Responsibilities: Ronald   has responsibility for leading Vodafone’s people and organisation strategy which   includes developing strong talent and leadership, effective organisations,   strategic capabilities and an engaging culture and work environment, thereby   building strong capabilities in Vodafone to deliver growth. Previous roles   include: a Royal Dutch Shell, HR executive vice president (2003–2008) a   PepsiCo, senior vice president (1994–2003) a AT&T Network Systems,   various human resources roles (1986–1994) 42 Vodafone Group Plc Annual Report   on Form 20-F 2016 Membership The Committee includes the Executive Directors   and the senior managers as detailed below. Committee Meetings The Committee   meets 11 times a year and typical agenda items include: a strategy; a   substantial business developments and projects; a Chief Executive’s update on   the business and the business environment; a updates on business performance;   a Group function heads’ updates; a talent; a presentations on various topics,   for example, from the Group Financial Controller, the Group Audit Director   and the Group Risk and Compliance Director; and a competitor performance   analysis. Each year the Committee conducts a strategy review to identify key   strategic issues facing Vodafone to be presented to the Board. The agreed   strategy is then used as a basis for developing the upcoming budget and three-year   operating plans. Vittorio Colao Chief Executive (See page 40) Nick Read Chief   Financial Officer (See page 40) Paolo Bertoluzzo Group Chief Commercial   Operations & Strategy Officer Tenure: 3 years Nationality: Italian   Responsibilities: Paolo has responsibility for Vodafone’s global commercial   operations and strategy, as well as innovation and transformation projects,   including the Customer eXperience eXcellence programme. Previous roles   include: a Vodafone Group, Regional Chief Executive Officer, Southern Europe   (2012–2013) a Vodafone Italy, Chief Executive Officer (2008–2013) a Vodacom   Group, Board Director (2010–2012) Warren Finegold Development Director   Tenure: 10 years Nationality: British Responsibilities: Vodafone’s mergers   and acquisitions Warren worked on Vodafone’s initial IPO of Vodafone’s   interest in Verizon Wireless. on 30 June 2016. a UBS Investment Bank,   managing director a Goldman Sachs, executive director 

 

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Ametsreiter   Officers are responsible for: Chief Executive Officer – brand   differentiation; 43 Vodafone Group Plc Annual Report on Form 20-F 2016   Overview Strategy review Performance Governance Financials Additional   information Executive Officers who also joined the Executive Committee Dr   Hannes Aldo Bisio local markets in accordance with Group a executing the   strategic vision into Tenure: <1 year Nationality: Austrian Previous roles   include: a ensuring delivery against key Previous roles   include:officer/managing director (2008–2013) In carrying out their role,   they: executive officer (2009–2015)(2007–2008) a own the end-to-end   accountabilitya Mobilkom Austria/Telkom Austria, chiefa RCS Quotidiani,   managing director balance sheet performance and local stakeholders,   protecting compliance, and ensuring Vodafone organisation through the   direction and Chief Executive Officer –Chief Executive Officer –Chief Executive   Officer – a Vodafone Portugal, Chief Executive a Vodafone UK, Enterprise   Business Unit Responsibilities: member (1995–2009)(2010–2012)Vodafone’s   operations in the Netherlands, President (2005–2007)management positions   (1998–2010)Republic, Hungary, Albania and Malta. (2004)a Vodafone   Netherlands, Chief Executive Serpil Timuray Regional Chief Executive Officer   – Africa, Middle East and Asia Pacific Region (AMAP) Tenure: 2 years   Nationality: Turkish Responsibilities: As Regional Chief Executive Officer of   AMAP, Serpil oversees Vodafone’s operations in the Vodacom Group, India,   Australia, Egypt, Ghana, Kenya, Qatar, New Zealand and Turkey. Previous roles   include: a Vodafone Turkey, Chief Executive Officer (2009–2013) a Danone   Turkey, chief executive officer (2002–2008) a Danone Turkey, marketing   director with additional sales director role (1999–2002) a Procter &   Gamble Turkey, various marketing roles including executive committee member   (1991–1999) Johan Wibergh Group Technology Officer Tenure: 1 year Nationality:   Swedish Responsibilities: Johan has responsibility for defining and leading   Vodafone’s global technology organisation which includes the organic   investment programme and Project Spring. He is integral to developing   Vodafone’s convergence strategy on a global scale. Previous roles include: a   Ericsson, various roles including executive VP (1996–2015) European Chief In   October 2015, the Chief Executive Officers of our four large European markets   became Executive Committee members. The remaining European markets are   represented by Rob Shuter in October 2015. The Chief Executive a defining   Vodafone strategy in their Chief Executive Officer –Vodafone Italy strategy   and operating models; Vodafone Germany Tenure: 2 years Nationality: Italian   commercial plans; and a Ariston Thermo Group, chief executive performance   indicators.a Telkom Austria Group, group chief a McKinsey & Company,   senior partner a A1 Telekom, chief executive officer (2009) for in-country   profit and loss, marketing officer (2001–2009)(2004–2006) a manage   relationships with Vodafone’s reputation, legal is contributing to the   development of its local community; and a define the culture and values of   the communication of business objectives, vision and mission, and by   developing people’s talents and competences. Tenure refers to the length of   service in role. António Coimbra Jeroen Hoencamp Rob Shuter Vodafone Spain Vodafone   UK Netherlands and Europe Cluster Tenure: 3 years Nationality: Portuguese Tenure:   2 years Nationality: Dutch Tenure: <1 year Nationality: British and   Previous roles include: Previous roles include: South African Officer   (2009–2012)Director (2013)As Chief Executive Officer for Netherlands a   Vodafone Portugal, Executive Committee a Vodafone Ireland, Chief Executive   Officer and Europe cluster, Rob oversees a Apritel (on behalf of Vodafone   Portugal),a Vodafone Netherlands, various senior Portugal, Ireland, Greece,   Romania, Czech a Vodafone Japan, Chief Marketing Officer Previous roles   include: Officer (2012–2015) a Vodacom Group, Finance Director (2009–2012) a   Nedbank Retail, managing director (2000–2009) 

 

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Board   activities Key areas of focus for your Board Board activities are structured   to assist the Board in achieving its goal to support and advise executive   management on the delivery of the Group’s strategy within a transparent   governance framework. More on strategic More on strategic 57 to 73 on   performance of operations in Europe, of the Group; 30 to 37 a assessment of   risks and internal controls; 23, 51 and 52 a reports on compliance and   litigation; and quarterly market share metrics; and 16 and 17 149 to 152 of   the external evaluation of the The Board continued to focus on overseeing the   execution a reviewing and approving the revisions to the a received regular   business and the Matters Reserved for the Board. 54 and 55 People a discussed   progress of the Customer combination of Vodafone and Liberty The Board   received presentations on the following topics: a held a strategy day,   focusing on the evolution UK and India; 32 to 35 industry trends, competitor   strategies and 44 Vodafone Group Plc Annual Report on Form 20-F 2016 Board’s   visit to Munich Offsite Board meetings give the Board further insights into   the business. In September 2015 the Board held its annual strategy meeting in   Munich. As part of this visit, the Board received a presentation from local   management of Vodafone Germany and KDG, visited a Vodafone Germany retail   store and received a presentation on 5G communication. A Board meeting and an   Audit and Risk Committee meeting were also held whilst in Munich. Governance   in action: What the Board did in 2016 Data Convergence Enterprise Link to   Link to pages objectives pages objectives Performance (financial and   operational)Governance Throughout the year the Board received and discussed: The   Board dealt with corporate governance matters, including: a reports from the   Chief Executive a reports from the Board Committees; 47 to 53, AMAP and   Enterprise; 10 to 13 a the appointment of new Board members; 53 a information   on the financial performance 10 to 15, a the Annual Report; 76 and 77 a   network and customer satisfaction updates54 and 55, a the annual budget and   operating plan. 14 and 15 a the conclusions and recommendations Strategy Board’s   performance; and 45 of our strategy. The Board: terms of reference of the   Board Committees development reports; 10 to 13 eXperience eXcellence   programme and The Group HR Director updated the Board twice during the year   on: commercial priority reports; 7, 10 to 13 a talent capability and   diversity; 18 and 19 a received updates on content strategy;11 and 12 a   health and safety; and19 a discussed and approved the strategic a other HR   matters. 18 and 19 Global’s Dutch operations; and12, 149 Deep dives and   sustainability of Vodafone’s strategy,a local market focus on Spain, Vodacom,   our organisation and governance. 10 to 13 a Germany and Turkey spectrum   auctions; 37, 183, 186 a potential initial public offering of Vodafone India;   and 35 a Vodafone UK’s TV offering. 33 

 

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Board   evaluation, induction and training Evaluating our performance and keeping up   to date The Board recognises that it continually needs to monitor and improve   its performance. This is achieved through annual performance evaluation, full   induction of new Board members and ongoing Board development activities. The   Chairman is responsible for ensuring that all Non-Executive Executive   Directors are conscious of the need to keep themselves in 2016 were the   Enterprise business, technology, share dealing rules market visit with   Vittorio Colao to Vodafone Italy. They attended fibre presentation. Committee   during the year covering key themes surrounding financial Company Secretary on   current legal and governance issues. 45 Vodafone Group Plc Annual Report on   Form 20-F 2016 Overview Strategy review Performance Governance Financials   Additional information business opportunities and risks marketing, external   affairs, finance, investor relations and risk; Board Development Directors   receive ongoing training and development. Our Non-properly briefed and   informed about current issues. Specific areas covered at sessions attended by   Vodafone Directors and corporate governance. In June 2015, Val Gooding went   on a local customer focus groups, a Customer eXperience eXcellence session   run by local management, visited three retail stores, and received a 4G and   Specific and tailored updates, delivered by PricewaterhouseCoopers LLP, were   also provided to the members of our Audit and Risk and narrative reporting,   and accounting and auditing standards. The Board also received reports from   the Group General Counsel and David Nish’s induction Expertise a Financial   expertise and capital markets skills Focus areas a Learn about Vodafone and   our business lines a Learn about Vodafone’s markets, competitions, customers,   a Meet senior management across the Group Overview of induction programme   David’s induction includes the following: a meetings with the members of the   Executive Committee to discuss our business, strategy and operations; a   presentations from the management teams of the Europe cluster, AMAP and   Enterprise; a visits to the headquarters of Vodafone UK, a Vodafone UK store   and Vodafone’s call centre in Stoke-on-Trent (UK); a meetings with various   Group senior managers to discuss Group strategy, people strategy and   remuneration, technology and a training on his duties as a director and on   Vodafone’s governance structure; a meeting with the Chairs of the Board   Committees and the Chairman; and a meeting key Group advisers. Governance in   action: Board Evaluation Progress against recommendations set in 2015   Recommendation: The Board should continue to develop its understanding of the   future challenges and trends in Vodafone’s sector, especially convergence,   technology trends and the regulatory environment. Action taken in 2016: The   Board received relevant training and carried out deep dives into these areas   which were considered at Board meetings throughout the year. Recommendation:   The Board should increase its focus on customers’ experience and it should   continue to monitor management’s success in delivering operational strategic   objectives. Action taken in 2016: The Board regularly reviewed the progress   of the Customer eXperience eXcellence programme and continued to focus on the   execution of our strategy. This year’s process In accordance with our   three-year cycle, our 2016 Board evaluation was externally facilitated by   Ffion Hague of Independent Board Evaluation which has no other connection   with Vodafone. The evaluation included a series of one-on-one interviews with   all Directors and key senior managers, and observations of Board, Audit and   Risk, Remuneration, and Nominations and Governance Committee meetings. Ffion   Hague discussed her initial findings with the Chairman and presented the   final results to the Board in March 2016. Conclusions from this year’s review   The conclusions of this year’s review have been positive and have confirmed   that the Board and its Committees operate effectively and that each Director   contributes to the overall effectiveness and success of the Group. The   recommendations in this year’s review included: a reviewing the Board   induction and development programme to focus on strategically significant   areas; a increasing transparency around Board and executive succession plans;   a clarifying expectations on an overall strategic framework; and a creating   more opportunities for Board members to spend informal time together. The   Board will address these recommendations during the 2017 financial year and   will report on progress in our 2017 Annual Report. 

 

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Shareholder   engagement Communicating with our shareholders We are committed to   communicating our strategy and activities clearly to all our shareholders.   shareholder groups and financial analysts to discuss the business mix of   Directors and senior management, including our Chairman, the Investor   Relations team. Institutional investors also meet with the us this year debt   and dividend cover; emerging markets; We launched a quick, simple dealing   service for Vodafone than 1,000 shares in February 46 Vodafone Group Plc   Annual Report on Form 20-F 2016 Launch of our low-cost share dealing   programme and economical share shareholders with no more 2016. This service   ran until 23 May 2016 and allowed shareholders to sell all their Vodafone   shares or buy more shares either free of dealing costs or at a competitive   rate. Over 27% of such shareholders chose to use this service. Governance in   action: Our investor calendar Set out below is a calendar of our investor   events throughout the year. Boston, Toronto, Paris and in London and New York   January 2016 October 2015 and Italy and Frankfurt road shows November 2015   May 2015 September 2015 December 2015 a Preliminary results published a   Investor meeting about regulation a Investor conference in New York a London,   New York, a Several investor conferences Edinburgh road shows a Investor   meetings in Spain June 2015 a 5G webinar a Annual Report published a Investor   conference in Germany February 2016 a Switzerland, Netherlands, Spain a Q3   Trading Statement published a Investor conference in London a Half-year   results published March 2016 a Investor meetings in Spain, Turkey a London,   New York, Boston, a Investor conference in Miami and Italy Edinburgh, Paris,   Toronto, a Investor conference in London a Chairman’s London road show Switzerland   and a Investor meeting with Enterprise Netherlands roadshows July 2015 a   Investor conference in Barcelona a Q1 Trading Statement published a Annual   general meeting in London a Investor meetings in India How we communicate   with our shareholders We maintained an active dialogue with our shareholders   throughout the year through a planned programme of investor relations   activities. We also respond to daily queries from shareholders and analysts through   our Investor Relations team and have a section of our website which is   dedicated to shareholders and analysts: vodafone.com/ investor. Our   registrars, Computershare, and BNY Mellon (as custodians of our American   Depositary Receipts (‘ADR’) programme) also have a team of people to answer   shareholder and ADR holder queries in relation to technical aspects of their   holdings such as dividend payments and shareholding balances. All of our   financial results presentations are available on our website at vodafone.com/investor.   Our annual general meeting and our roadshows Our annual general meeting is   attended by our Board and Executive Committee members and is open to all our   shareholders to attend. A summary presentation of financial results is given   before the Chairman deals with the formal business of the meeting. All   shareholders present can question the Board during the meeting. We hold   meetings with major institutional investors, individual performance and   strategy. These are attended by the appropriate Chief Executive, Executive   Committee members, senior leaders and Chairman to discuss matters of   governance. What our shareholders have asked Common topics raised by our   institutional and individual shareholders include: a 4G and data; a   shareholder returns; a cash flow, capital expenditure, a regulation in Europe   and a fixed broadband and TV strategy; a spectrum renewal costs; a   performance outlook; a integration of KDG and Ono; and a Project Spring   strategy; a administration of shareholding. 

 

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Board   committees Membership The membership of the Committee has been selected with   the aim of providing the range of financial and commercial expertise   necessary to meet its responsibilities. Given my experience, I continue to be   designated as the financial expert on the Committee for the purposes of the   US Sarbanes-Oxley Act and the UK Corporate Governance Code. There were no   changes to the membership of the Committee during the year, all of whom are   Non-Executive Directors of the Company. How the Committee operates The   Committee met five times during the year under its standard schedule of   meetings, an increase from the four meetings in the last financial year, a   change reflecting its increased responsibilities particularly in relation to   risk management. Meetings of the Committee generally take place the day   before a Board meeting to maximise the efficiency of interaction with the   Board and I report to the Board, as a separate agenda item, on the activity   of the Committee and matters of particular relevance to the Board in the   conduct of its work. The external auditor, PricewaterhouseCoopers LLP, is   invited to each meeting together with the Chief Executive, the Chief   Financial Officer, the Deputy Chief Financial Officer, the Group Financial   Reporting Director, the Group Audit Director, the Group Risk and Compliance   Director, and the Group General Counsel and Company Secretary. The Committee   also regularly meets separately with each of PricewaterhouseCoopers LLP, the   Chief Financial Officer and the Group Audit Director without others being   present. In the year, the Board appointed an external company to perform an   independent review of the Committee which concluded that the Board members   considered the Committee to be fully effective in meeting its objectives.   Financial reporting The Committee’s primary responsibility in relation to the   Group’s financial reporting is to review with both management and the   external auditor the appropriateness of the half-year and annual financial   statements concentrating on, amongst other matters: a the quality and   acceptability of accounting policies and practices; a material areas in which   significant judgements have been applied or where significant issues have   been discussed with the external auditor; a the clarity of the disclosures   and compliance with financial reporting standards and relevant financial and   governance reporting requirements, including the 2014 UK Corporate Governance   Code; a any correspondence from regulators in relation to our financial   reporting; and a an assessment of whether the Annual Report, taken as a   whole, is fair, balanced and understandable and provides the information   necessary for shareholders to assess the Company’s position and performance,   business model and strategy. This assessment forms the basis of the advice   given to the Board to assist them in making the statement required by the   2014 UK Corporate Governance Code. 47 Vodafone Group Plc Annual Report on   Form 20-F 2016 Overview Strategy review Performance Governance Financials   Additional information Audit and Risk Committee The Committee continued to   focus its work on the Group’s financial reporting, financial control and risk   management and compliance processes. The Committee’s role was expanded this   year to provide assistance to the Board with assessing compliance with   elements of the 2014 UK Corporate Governance Code. Chairman and financial   expert Nick Land Independent Non-Executive Director Responsibilities: The   Board has approved terms of reference for the Committee which are available at   vodafone.com/governance. These provided the framework for the Committee’s   work in the year and can be summarised into four primary sets of activities.   These are o=versight of the: a appropriateness of the Group’s external   financial reporting; a relationship with, and performance of, the external   auditor; a Group’s system of internal control, including risk management   framework and the work of the internal audit function; and a Group’s system   of compliance activities. The 2016 financial year has seen the Committee’s   activities and terms of reference reviewed and expanded to reflect the   Group’s adoption of the 2014 UK Corporate Governance Code, to cover: a   providing advice to the Board on the assessment, management and mitigation of   the principal risks facing the Group; a monitoring the Group’s risk   management system and its effectiveness; and a providing advice on how the   Group’s prospects have been assessed in order to make the new longer-term   viability statement. Key objectives: The provision of effective governance   over the appropriateness of the Group’s financial reporting, including the   adequacy of related disclosures, the performance of both the internal audit   function and the external auditor and oversight over the Group’s system of   internal control including risk management and compliance activities. 

 

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Board   committees (continued) Accounting policies and practices The Committee   received reports from management in relation to the identification of   critical accounting judgements and key sources of estimation uncertainty,   significant accounting policies and proposed disclosure of these in the 2016   Annual Report. This disclosure also includes qualitative details in relation   to IFRS 15 “Revenue from contracts with customers” and IFRS 16 “Leases”, both   of which are likely to have a substantial effect on the Group’s accounting when   adopted. Following discussions with management and the external auditor, the   Committee approved these critical accounting judgements, significant   accounting policies and disclosures which are set out in note 1 “Basis of   preparation” to the consolidated financial statements. Regulators and our   financial reporting There has been no correspondence from regulators in   relation to our financial reporting during the 2016 financial year. The   Committee is committed to improving the effectiveness and clarity of the   Group’s corporate reporting and has continued to encourage management to   consider, and adopt where appropriate, initiatives by regulatory bodies which   would enhance our reporting, such as the FRC Lab projects on the use of   digital media in corporate reporting, the disclosure of dividends and   business model reporting. Significant judgements and issues The significant   areas of focus considered by the Committee in relation to the 2016 accounts,   and how these were addressed, are outlined below. We have discussed these   with the external auditor during the year. revenue in their detailed audit   plan, which identified the primary Committee received reporting from it on   these matters. 48 Vodafone Group Plc Annual Report on Form 20-F 2016   Significant judgements and issues Matter considered Action Revenue   recognition The timing of revenue recognition, the recognition of revenue on   a gross or net basis, the treatment of discounts, incentives and commissions   and the accounting for arrangements with multiple deliverables are complex   areas of accounting. See note 1 “Basis of preparation” for further detail. In   addition there is heightened risk in relation to the accounting for revenue   as a result of the inherent complexity of systems and changing pricing   models. An in-depth review of revenue accounting was undertaken by the   Committee during the previous financial year. PricewaterhouseCoopers LLP   shared its approach to the audit of risks attaching to the audit of revenue   to be (a) the controls over the underlying accuracy of billing systems and   (b) presumed fraud risk, and reported on the results of its audit work in   this area to the Committee at both the half-year and year end. The Committee   received reporting from PricewaterhouseCoopers LLP in relation to revenue   recognition and discussed a number of judgements in relation to the   presentation of revenue and commissions. The Committee was satisfied with the   appropriateness of the revenue recognised in the financial statements.   Taxation The Group is subject to a range of tax claims and related legal   actions across a number of jurisdictions where it operates. The most material   claim continues to be from the Indian tax authorities in relation to our   acquisition of Vodafone India Limited in 2007, further details of which are   included in note 30 “Contingent liabilities and legal proceedings”. Further,   the Group has extensive accumulated tax losses as detailed in note 6   “Taxation”, and a key management judgement is whether a deferred tax asset   should be recognised in respect of these losses. As at 31 March 2016, the   Group had recognised a £22,382 million deferred tax asset primarily in   respect of these tax losses. The Group Tax Director presented on both   provisioning and disclosure of tax contingencies and deferred tax asset   recognition at the November 2015 and May 2016 Committee meetings. He also   provided an update on upcoming changes in the wider tax landscape that were   potentially relevant to the Group. PricewaterhouseCoopers LLP also identified   this as an area of higher audit effort and the The Committee challenged both   management and PricewaterhouseCoopers LLP on the legal judgements   underpinning both the provisioning and disclosure stance adopted in relation   to material elements of tax contingent liabilities and the IFRS basis of, and   operating assumptions underlying, the deferred tax assets recognised at the   period end. The Committee was satisfied with the approach adopted in the   financial statements by management for each matter. 

 

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primarily to   the assumptions underlying the calculation of the value in reviews these   claims and relevant legal advice received by the Group, and disclosure in the   financial statements for both matters. of these key business and IT controls   and they reported to the 49 Vodafone Group Plc Annual Report on Form 20-F   2016 Overview Strategy review Performance Governance Financials Additional   information Significant judgements and issues Matter considered Action   Goodwill impairment testing This is an area of focus for the Committee given   the materiality of the Group’s goodwill balances (£22.8 billion at 31 March   2016) and the inherent subjectivity in impairment testing. The judgements in   relation to goodwill impairment continue to relate use of the business, being   the achievability of the long-term business plan and the macroeconomic and   related modelling assumptions underlying the valuation process. See note 4   “Impairment losses” for further detail. The Committee received detailed   reporting from management and challenged the appropriateness of the   assumptions made, including: a the consistent application of management’s   methodology; a the achievability of the business plans; a assumptions in   relation to terminal growth in the businesses at the end of the plan period;   and a discount rates. This remains an area of audit focus and   PricewaterhouseCoopers LLP provided detailed reporting on these matters to   the Committee, including sensitivity testing. The Committee was satisfied   with both the appropriateness of the analysis performed by management that   indicated a goodwill impairment charge of £450 million in relation to   Vodafone Romania, and the impairment related disclosures set out in note 4 to   the financial statements. Liability provisioning The Group is subject to a   range of claims and legal actions from a number of sources, including   competitors, regulators, customers, suppliers and on occasion fellow   shareholders in Group subsidiaries. The level of provisioning for contingent   and other liabilities is an issue where management and legal judgements are   important and accordingly an area of Committee focus. See note 30 “Contingent   liabilities and legal proceedings” for further detail. The Committee received   a presentation from the Group’s General Counsel and Company Secretary and the   Director of Litigation in both November 2015 and May 2016 on management’s assessment   of the most significant claims. As this is an area of audit focus,   PricewaterhouseCoopers LLP also to form a view on the appropriateness of the   level of provisioning that is shared with the Committee. The Committee   challenged both management and PricewaterhouseCoopers LLP on the level of   provisioning for legal claims and was satisfied that the amounts recorded   appropriately reflected the risk of loss. Significant one-off transactions   The Committee reviewed the accounting and reporting of a number of material   one-off transactions. These included: a The recognition of spectrum assets   and a corresponding liability of £2.7 billion during the 2016 financial year   in relation to Vodafone India. See note 22 “Liquidity and capital resources”   for further detail. a The issue by the Group in February 2016 of £2.9 billion   of mandatory convertible bonds. See note 22 “Liquidity and capital resources”   for further detail. Management outlined the key accounting and disclosure   impacts in relation to these transactions. The Committee received detailed   reporting from PricewaterhouseCoopers LLP on their assessment of the   accounting and disclosures made by management in both the half-year and   annual financial statements and were satisfied with the accounting Key   business controls The Group has continued to devote considerable resources to   the development of key business and related IT controls to ensure a robust   system of internal control. During the year, this focused on ongoing work   programmes over general ledger account controls and user access to the   Group’s core Enterprise Resource Planning (‘ERP’) system as well as new   activity, including a multi-year project to implement a suite of standard   controls over the Group’s core financial processes and managing the business   and IT control implications of changes to the scope of the Group’s section   404 of the US Sarbanes-Oxley compliance activities. The Committee reviewed   the work performed by management in relation to the implementation and   maintenance of these controls, including the degree to which they operated   effectively throughout the year and at the year end. This was supplemented by   the results of related reviews performed by Internal Audit. The audit scope   of PricewaterhouseCoopers LLP included certain Committee the results of their   audit testing in these areas. The Committee was satisfied with the basis of   management’s report on internal control over financial reporting as required   by section 404 of the US Sarbanes-Oxley Act and with management’s ongoing   focus on enhancements to the internal control environment. 

 

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Board   committees (continued) External audit The Committee has primary   responsibility for overseeing the relationship with, and performance of, the   external auditor. This includes making the recommendation on the appointment,   reappointment and removal of the external auditor, assessing their   independence on an ongoing basis and for negotiating the audit fee. Auditor   appointment PricewaterhouseCoopers LLP were appointed as the Group’s external   auditor in July 2014 following an audit tender and, in accordance with the   2014 UK Corporate Governance Code, the Group will be required to put the   external audit contract out to tender by 2024. In addition,   PricewaterhouseCoopers LLP will be required to rotate the audit partner   responsible for the Group audit every five years and, as a result, the current   lead audit partner will be required to change in 2019. The Committee   continues to review the auditor appointment and the need to tender the audit,   ensuring the Group’s compliance with the 2014 UK Corporate Governance Code   and the reforms of the audit market by the UK Competition and Markets   Authority. Accordingly, the Company confirms that it complied with the   provisions of the Competition and Markets Authority’s Order for the financial   year under review. For the financial year ending 31 March 2017, the Committee   has recommended to the Board that PricewaterhouseCoopers LLP be reappointed   under the current external audit contract and the Directors will be proposing   the reappointment of PricewaterhouseCoopers LLP at the annual general meeting   in July 2016. Audit risk At the start of the audit cycle for the new   financial year we received from PricewaterhouseCoopers LLP a detailed audit   plan identifying their audit scope, planning materiality and their assessment   of key risks. The audit risk identification process is considered a key   factor in the overall effectiveness of the external audit process, and the   key risks for the 2016 financial year, which were unchanged from the previous   year, were as follows: Other matters The Committee also undertook a range of   further activities in relation to the Group’s accounting and external   reporting in the year: Adoption of recent accounting developments The   Committee received regular reporting from management on the Group’s   implementation of IFRS 15 “Revenue from contracts with customers”, which will   be adopted in the financial year ending 31 March 2019, focusing on the key   decision points relating to the choice of IT system for generating the   necessary accounting entries, systems integration, the methodology in which the   standard would be adopted and programme resourcing. The Committee will also   review the Group’s implementation of IFRS 16 “Leases”, which will be adopted   in either the financial years ending 31 March 2019 or 2020, once management   has more fully assessed the impact of the changes. Fair, balanced and   understandable As part of the Committee’s assessment of whether the Annual   Report, taken as a whole, is fair, balanced and understandable and provides   the information necessary for shareholders to assess the Company’s position   and performance, business model and strategy, it draws on the work of the   Group’s Disclosure Committee and has discussions with senior management. The   processes and controls that nderpin our consideration include ensuring that:   u= a all contributors are fully briefed on the fair, balanced and   understandable requirement; a a dedicated and experienced core team is   responsible for the coordination of content submissions, verification,   detailed review and challenge; a senior management confirms that the content   in respect of their areas of responsibility is considered to be fair,   balanced and understandable; a the Disclosure Committee reviews and assesses   the Annual Report as a whole; and a the Committee receives an early draft of   the Annual Report to enable timely review and comment. a Taxation matters,   including a provisioning claim for withholding tax in India and the   recognition and recoverability of deferred tax assets in Luxembourg and   Germany. These processes allowed us to provide positive assurance to the   Board to assist them in making the statement required by the 2014 UK   Corporate Governance Code. Long-term viability statement Following the   adoption of the 2014 UK Corporate Governance Code during the current   financial year, the Committee’s terms of reference were extended to include   providing advice to the Board on the form and basis underlying the longer   term viability statement. The Committee reviewed the process and assessment   of the Group’s prospects made by management, including: a Carrying value of   goodwill. a Provisions and contingent liabilities. a Revenue recognition. a   Accounting for significant one-off transactions. a Capitalisation and asset   lives. a Management override of internal controls. These risks are regularly   reviewed by the Committee to ensure the external auditor’s areas of audit   focus remain appropriate. Working with the auditor We hold private meetings   with the external auditor at each Committee meeting to provide additional   opportunity for open dialogue and feedback from the Committee and the auditor   without management being present. Matters typically discussed include the   external auditor’s assessment of business risks, the transparency and   openness of interactions with management, confirmation that there has been no   restriction in scope placed on them by management, the independence of their   audit and how they have exercised professional scepticism. I also meet with   the external lead audit partner outside the formal Committee process   throughout the year. a the review period and alignment with the Group’s   internal long-term forecasts; a the assessment of the capacity of the Group   to remain viable after consideration of future cash flows, expected debt   service requirements, undrawn facilities and access to capital markets; and a   the modelling of the financial impact of certain of the Group’s principal   risks materialising using severe but plausible scenarios. Management also   sought independent external advice on best practice to ensure appropriate   compliance with the requirements of the 2014 UK Corporate Governance Code. 50   Vodafone Group Plc Annual Report on Form 20-F 2016 

 

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Effectiveness   of the external audit process The Committee reviewed the quality of the   external audit throughout the year and considered the performance of   PricewaterhouseCoopers LLP, taking into account the Committee’s own   assessment, the results of a detailed survey of senior finance personnel   across the Group focusing on a range of factors we considered relevant to   audit quality, feedback from PricewaterhouseCoopers LLP on their performance   against their own performance objectives and the firm-wide audit quality   inspection report issued by the FRC in May 2015. Based on this review, the   Committee concluded that there had been appropriate focus and challenge on   the primary areas of audit focus and PricewaterhouseCoopers LLP had applied   robust challenge and scepticism throughout the audit. Independence and   objectivity In its assessment of the independence of the auditor and in   accordance with the US Public Company Accounting Oversight Board’s standard   on independence, the Committee receives details of any relationships between   the Company and PricewaterhouseCoopers LLP that may have a bearing on their   independence and receives confirmation that they are independent of the   Company within the meaning of the securities laws administered by the US   Securities and Exchange Commission (‘SEC’). As one of the ways in which it   seeks to protect the independence and objectivity of the external auditor,   the Committee has a policy governing the engagement of the external auditor   to provide non-audit services. This precludes PricewaterhouseCoopers LLP from   providing certain services such as valuation work or the provision of   accounting services and also sets a presumption that PricewaterhouseCoopers   LLP should only be engaged for non-audit services where there is no legal or practical   alternative supplier. For certain specific permitted services, the Committee   has pre-approved that PricewaterhouseCoopers LLP can be engaged by   management, subject to the policies set out above, and subject to a £50,000   fee limit for individual engagements, a £500,000 total fee limit for services   where there is no legal alternative and a £500,000 total fee limit for   services where there is no practical alternative supplier. For all other   services or those permitted services that exceed these specified fee limits,   I, as Chairman, or in my absence another Committee member, can pre-approve   permitted services. Following the publication by the Competition and Markets   Authority of its final order in relation to the responsibilities of the audit   committee, the Board approved amendments to the Committee’s terms of   reference during the 2016 financial year such that only the Committee can   negotiate and approve the statutory audit fee, the scope of the statutory   audit and approval of the appointment of the lead audit engagement partner.   In addition, the Committee assessed the impact of further expected UK   regulation restricting non-audit services that auditors can provide,   including a cap on the amount of non-audit fees that can be billed and a list   of prohibited services. Consequently, the Group’s policy on non-audit fees   will be amended to reflect these additional restrictions during the financial   year ending 31 March 2017 for implementation in the financial year ending 31   March 2018. For the 2016 financial year, the Committee considered the ongoing   fee proposal included as part of the audit tender, negotiated audit scope   changes for the 2016 financial year and, following the receipt of formal   assurance that their fees were appropriate for the scope of the work required,   agreed a charge from PricewaterhouseCoopers LLP and related member firms of   £12 million for statutory audit services. In addition to the statutory audit   fee, PricewaterhouseCoopers LLP and related member firms charged the Group £1   million for audit-related and other assurance services primarily in   connection with local regulatory filings where we were legally required to   appoint them by virtue of their position as statutory auditor. Further   details of the fees paid, for audit and non-audit services to both   PricewaterhouseCoopers LLP for the 2016 and 2015 financial years and to   Deloitte LLP for the 2014 financial year, can be found in note 3 to the   consolidated financial statements. Internal control and risk management The   Committee has the primary responsibility for the oversight of the Group’s   system of internal control, including the risk management framework and the   work of the internal audit function. Assessment of Group’s system of internal   control, including risk management framework The Group’s risk assessment   process and the way in which significant business risks are managed is a key   area of focus for the Committee. Our activity here was driven primarily by   the Group’s assessment of its principal risks and uncertainties, as set out   on pages 22 to 28. A range of mitigations for risks faced by the Group are   included on pages 78 to 81. This year, the Committee performed a detailed   review of the Company’s new risk management framework document which is   designed to: clarify roles and responsibilities for risk management and   oversight, set out a consistent end-to-end process for managing risk across   the business, provide the Board with a clear line of sight over the principal   risks, and provide an overview of how the principal risks are being managed.   Our review included reports from the Group Risk and Compliance Director on   the Group’s risk evaluation process as well as a review of changes to   significant risks identified at both operating entity and Group levels. The   Committee also maintains a programme of in-depth reviews into specific   financial, operational and regulatory areas of the business. These reviews   are critical to the role of the Committee, as they allow us to meet key   business leaders responsible for these areas and provide independent challenge   to their activities. During the 2016 financial year, the areas reviewed   included: a the integration of KDG into Vodafone Germany and the transition   to Vodafone compliance standards; a changes to the Group’s Enterprise   operations to improve service and delivery to customers; a the risk and   control framework associated with implementation of a new billing system in   the Netherlands; a the Group’s cyber security strategy, covering network, IT   and retail systems; and a the Group’s network resilience policy and the   ability to recover from a significant fault or challenge to normal   operations. The Group has in place an internal control environment to protect   the business from the material risks which have been identified. Management   is responsible for establishing and maintaining adequate internal controls   over financial reporting and we have responsibility for ensuring the   effectiveness of these controls. 51 Vodafone Group Plc Annual Report on Form   20-F 2016 Overview Strategy review Performance Governance Financials   Additional information 

 

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Board   committees (continued) Compliance activities The Committee is responsible for   the oversight of the Group’s compliance programme and held a number of deep   dive This year, the Group implemented an integrated assurance mapping process   to improve the coordination of assurance activities across the Group and to   provide a framework that allowed a comprehensive assessment of the assurance   and compliance activities for the Group’s significant risks. The mapping   process was piloted in the UK and Irish operating companies before being   rolled out to all business units during the second half of the 2016 financial   year. We reviewed the process by which the Group evaluated its control   environment. Our work here was driven primarily by the Group Audit Director’s   reports on the effectiveness of internal controls, significant identified   frauds and any identified fraud that involved management or employees with a   significant role in internal controls. Oversight of the Group’s compliance   activities in relation to section 404 of the US Sarbanes-Oxley Act also falls   within the Committee’s remit. The Committee has completed its review of the   effectiveness of the Group’s system of internal control, including risk   management, during the year and up to the date of this Annual Report, in   accordance with the requirements of the Guidance on Risk Management, Internal   Control and related Financial and Business Reporting published by the FRC. It   confirms that no significant failings or weaknesses were identified in the   review for the 2016 financial year and allowed us to provide positive   assurance to the Board to assist them in making the statements required by   the 2014 UK Corporate Governance Code. Where areas for improvement were   identified, processes are in place to ensure that the necessary action is   taken and that progress is monitored. Internal audit Monitoring and review of   the scope, extent and effectiveness of the activity of the Group Internal   Audit department is an agenda item at each Committee meeting. We approve the   annual audit plan prior to the start of each financial year and receive   updates from the Group Audit Director on audit activities, progress against   the approved Group audit plan, the results of any unsatisfactory audits and   the action plans to address these areas. I play a major role in setting the   Group Audit Director’s annual objectives and we meet regularly to discuss the   team’s activities and any significant issues arising from their work.   Compliance with section 404 of the US Sarbanes-Oxley Act The Committee takes   an active role in monitoring the Group’s compliance activities in respect of   section 404 of the US Sarbanes-Oxley Act, receiving reports from management   in the year covering: sessions on compliance-related matters in the year.   These focused on: a changes to the control environment, including the   creation of two new management controls governance committees and a redefined   finance operating model providing greater clarity of roles and   responsibilities; a updates to the Group’s Code of Conduct, which is reviewed   every three years; a the results from the annual Policy Compliance Review   which tests the extent to which local markets and Group entities are   compliant with our high risk policies; a the results from our “Doing What’s   Right” employee awareness and e-learning programmes and other measures   designed to assess the culture of the organisation; a the results of the use   of “Speak Up” channels in place to enable employees to raise concerns about   possible irregularities in financial reporting or other issues and the   outputs of any resulting investigations; and a the methodology for fraud   reporting and investigations into known or suspected fraudulent activities by   both third parties and employees. /s/ Nick Land Nick Land On behalf of the   Audit and Risk Committee 17 May 2016 a financial control governance; a   changes to the section 404 programme, including scoping, the development of a   standard controls framework and the development of a quality assurance   programme; and a the enhancement of the wider control environment in response   to ongoing business developments. The external auditor reported the status of   their work in relation to this matter in each of their reports to the   Committee. 52 Vodafone Group Plc Annual Report on Form 20-F 2016 

 

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Assessment of   the independence of the Non-Executive Directors The Committee reviewed the independence   of all the Non-Executive Directors and in particular Philip Yea and Nick   Land, who have both served on the Board for over nine years. The Committee   considered their length of tenure on the Board, independence and other   external commitments. As a result of its assessment, the Committee is   confident that Philip and Nick continue to demonstrate qualities of   independence and judgement in carrying out their roles. In addition, the   Committee believes that Philip’s and Nick’s external commitments have not   negatively impacted their commitment to Vodafone and therefore recommended to   the Board that Philip and Nick stand for reappointment at the 2016 annual   general meeting. All of the Non-Executive Directors are considered   independent. Board evaluation The Committee oversaw the external evaluation   of the Board and Committees. A description of the process and conclusions of   the evaluation is set out on page 45. Succession planning The Committee   received several presentations throughout the year from the Chief Executive   and Group Human Resources Director. The presentations provided details of the   changes to the Vodafone organisational structure in order to deliver our   strategy as well as succession planning for senior management. Potential   successors have been identified for the top senior management positions and   the Committee reviewed the profiles for all of these positions during the   year. The Committee also monitors a schedule on the length of tenure of the   Chairman and Non-Executive Directors and the mix and skills of the Directors.   The Committee is satisfied that adequate succession planning is currently in   place for the Executive Directors and senior executives, but will keep   succession planning under review and monitor the progress and success of the   development plans which have been established for relevant employees.   Diversity Vodafone acknowledges the importance of diversity and inclusion to   the effective functioning of the Board. This includes diversity of skills and   experience, age, gender, disability, sexual orientation, cultural background   or belief. 25% of our Board roles are held by women and our ambition over the   coming years is to increase that proportion further. Diversity extends beyond   the boardroom. The Board supports management in its efforts to build a   diverse organisation and endorses the Group’s “Recruiting and Managing   People” policy, one of the objectives of which is to “attract and develop a   highly qualified and diverse workforce and ensure that all selection   decisions are based on merit”. Governance The Committee reviewed Vodafone’s   compliance with the 2014 UK Corporate Governance Code and was satisfied that   Vodafone complied with the Code during the year. It also received updates on   corporate governance developments during the year and considered the impact   of these developments on Vodafone. /s/ Gerard Kleisterlee Gerard Kleisterlee   On behalf of the Nominations and Governance Committee 17 May 2016 Committee   meetings The Committee met five times during the year. I invite other individuals   and external advisers to attend all or part of any meeting, as and when   appropriate. I report to the Board, as a separate agenda item, on the   activities of the Committee at the following Board meeting. David Nish’s   appointment The Committee reviewed the mix and skills of the Board and   identified that it would be valuable for a Non-Executive Director to be   appointed who had financial expertise and capital markets skills as well as   experience as a chief executive. A description of the role and capabilities   required for this appointment was prepared. Sciteb, an external search   consultancy, was appointed, which has no other connection to Vodafone and has   signed up to the voluntary Code of Conduct for Executive search firms. David   was identified as a suitable candidate. He was invited to meet with the   members of the Committee and following those meetings, the Committee   recommended to the Board that he be invited to become a Non-Executive   Director. The Board accepted the recommendation and David accepted the Board’s   invitation and became a Non-Executive Director with effect from 1 January   2016. Changes to the Board and Committees The changes made to the composition   of the Board and Committees during the year are set out on page 54. 53   Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information Nominations and   Governance Committee The Committee continues its work of ensuring the Board   composition is right and that our governance is effective. Chairman Gerard   Kleisterlee Chairman of the Board – Independent on appointment   Responsibilities: a assessing the composition of the Board and making   recommendations on appointments to the Board and senior executive succession   planning; a overseeing the performance evaluation of the Board, its   committees and individual Directors; and a overseeing all matters relating to   corporate governance, bringing any issues to the attention of the Board. The   terms of reference of the Committee are available on vodafone.com/governance.   Key objective: To make sure the Board comprises individuals with the   necessary skills, knowledge and experience to ensure that it is effective in   discharging its responsibilities and to have oversight of all matters   relating to corporate governance. 

 

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Compliance with   the 2014 UK Corporate Governance Code Throughout the financial year and to   the date of this document, we complied with the provisions and applied the   main principles of the 2014 version of the UK Corporate Governance Code (the   ‘Code’). The Code can be found on the Financial Reporting Council website   (frc.org.uk). This table sets out how we have applied the main principles of   the Code, cross referring to other parts of this Annual Report. This table is   intended to assist with the evaluation of our compliance during the year and   should be read alongside the Governance section as a whole. Headings   correspond to the headings in the Code. The auditor’s report on the corporate   governance statement is on page 86. A. Leadership A.1 – The role of the Board   The Board’s responsibilities are set out on page 39 along with a statement of   how it operates. The Board held seven scheduled meetings during the year and   holds additional meetings, as required. All Directors are expected, wherever   possible, to attend all Board and relevant Committee meetings. Details of   such attendance are on page 41. A.2 and A.3 – Division of responsibilities   and the role of the Chairman The roles of the Chairman and Chief Executive   are separate: their key responsibilities are set out on page 39. Board   meetings are arranged to ensure sufficient time is available for the   discussion of all items. The Chairman was independent on appointment. A.4 –   Non-Executive Directors Philip Yea has been Senior Independent Director since   July 2015 when he took over from Luc Vandevelde who stepped down from the   Board. Philip: B. Effectiveness B.1 – The composition of the Board The Board   consists of 12 Directors, (nine Non-Executive Directors, the Chairman and two   Executive Directors). 11 Directors served throughout the year. Changes made   to the composition of the Board and Committees during the year were as   follows: a Philip Yea became Senior Independent Director on 28 July 2015   after Luc Vandevelde stepped down from the Board. Stephen Pusey also stepped   down from the Board in July 2015; a Valerie Gooding became Chairman of the   Remuneration Committee on 28 July 2015; and a Valerie Gooding joined the   Nominations and Governance Committee on 2 November 2015. Dr Mathias Döpfner   joined the Remuneration Committee on 1 April 2016. It is expected that David   Nish will join the Audit and Risk Committee on 29 July 2016. The balance and   independence of the Board is kept under review by the Nominations and   Governance Committee. Its terms of reference are available at vodafone.com/governance.   Philip Yea, Nick Land and Samuel Jonah have served on the Board for ten, nine   and seven years respectively. The Board has determined that they, along with   all of the Non-Executive Directors, continue to demonstrate qualities of independence   and judgement in carrying out their roles, supporting the Executive Directors   and senior management in an objective manner. Their length of service and   resulting experience are of great benefit to the Board. B.2 – Appointments to   the Board David Nish was appointed as a Non-Executive Director from 1 January   2016. Further details on the appointment process are set out on page 53,   which also includes the Board’s policy on diversity. B.3 – Commitment The   Board is satisfied that the external commitments of its Chairman and other   Non-Executive Directors (set out on pages 40 and 41) do not conflict with   their duties and commitments as Directors of the Company. Directors must: a   acts as a sounding board for the Chairman and as an intermediary for the other   Directors; a report any changes to their commitments to the Board; a complete   an annual conflicts questionnaire. Any conflicts identified are considered   and, as appropriate, authorised by the Board. If authorised, it is recorded   in a register and reviewed periodically; and a is available to shareholders   if they have concerns which they have not been able to otherwise resolve; a   reviews the performance of the Chairman annually; and a notify the Company of   actual or potential conflicts or a change in circumstances relating to an   existing authorisation. a if necessary, convenes meetings of the   Non-Executive Directors. The Executive Directors’ service contracts and   Non-Executive Directors’ appointment letters are available for inspection at   our registered office and at our annual general meeting. B.4 – Development   Details of Board induction and training and development are set out on page   45. The Non-Executive Directors are responsible for using their skills,   experience and independent judgement to: a constructively challenge the   strategy proposed by the Executive Directors; a scrutinise and challenge   performance and risk management across the Group’s business; and a assess the   risk and integrity of the financial information and controls. The Chairman   met with just the Non-Executive Directors at every Board meeting this year.   54 Vodafone Group Plc Annual Report on Form 20-F 2016 

 

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B.5 –   Information and support There is a procedure to enable Directors to take   independent legal and/ or financial advice at the Company’s expense, managed   by the Group General Counsel and Company Secretary. No such independent   advice was sought in the 2016 financial year. The Group General Counsel and   Company Secretary also: Further information can be found in the Directors’   statement of responsibility on pages 76 and 77 and in the Audit and Risk   Committee report on pages 47 to 52 (which also covers the oversight and   monitoring of the system, and its effectiveness). C.3 – Audit Committee and   auditor The Audit and Risk Committee is responsible for governance around   both the internal audit function and external auditor and for oversight of   the Group’s systems of internal controls. Further details on the Audit and   Risk Committee and its activities are set out on pages 47 to 52. Its terms of   reference are available at vodafone.com/governance. a assists the Chairman by   organising induction and training programmes and ensuring that all Directors   have full and timely access to all relevant information; a ensures that the   correct Board procedures are followed; and a advises the Board on corporate   governance matters. D. Remuneration D.1 and D.2 – The level and components of   remuneration and procedure The removal of the Group General Counsel and   Company Secretary is a matter for the Board as a whole. B.6 – Evaluation   Information on Board evaluation is set out on page 45. B.7 –   Election/Re-election All Directors have submitted themselves for   re-election at the 2016 annual general meeting with the exception of   David Nish who will be elected for the first time in accordance with our   Articles of Association. The Nominations and Governance Committee confirmed   to the Board that the contributions made by the Directors continue to be   effective and that the Company should support their re-election. The   biographies for our Directors can be found on pages 40 and 41. a The Remuneration   Committee is responsible for determining the policy on remuneration of the   Chairman, executives and senior management team. More information is set out   on pages 57 to 73. a The Chairman of the Board and the Remuneration   Committee’s Chairman are also responsible for maintaining contact with the   Company’s principal shareholders about remuneration. Full details are set out   in its terms of reference, available at vodafone.com/governance. E. Relations   with shareholders E.1 – Dialogue with shareholders The Chairman ensures that   there is effective communication with investors and that the Board   understands the views of major shareholders on matters such as governance and   strategy. He is available to meet shareholders for this purpose. The other   members of the Board are also available to meet major investors on request.   Further information is set out on page 46. E.2 – Constructive use of the   annual general meeting Our annual general meeting will be held on 29 July   2016 and is an opportunity for shareholders to vote on certain aspects of   Group business and present questions to the Board. C. Accountability C.1 –   Financial and business reporting The following statements can be found in   this Annual Report Statement Pages The Directors’ statement of responsibility   regarding the financial statements, including the going concern assessment.   76 and 77 A statement confirming that the Board considers that the Annual   Report and accounts, taken as a whole, is fair, balanced and understandable   and provides the information necessary for shareholders to assess the   Company’s position and performance, business model and strategy. 76 a A   summary presentation of the full year results is given before the Chairman   deals with the formal business of the meeting. An explanation of the Company’s   business model and the strategy for delivering the objectives of the Company.   6 to 13 a All shareholders can question any member of the Board both during   the meeting and informally afterwards. The Board encourages participation of   investors at the meeting. C.2 – System of risk management and internal   control An overview of the Group’s framework for identifying risk is on pages   22 to 28. The Board has overall responsibility for the system of risk   management and internal control (and for reviewing its effectiveness) and has   conducted a robust assessment of the principal risks facing the Company,   including those that would threaten its business model, future performance,   solvency or liquidity. Such a system is designed to manage rather than   eliminate business risks and can only provide reasonable and not absolute   assurance against material mistreatment or loss. The Board has implemented in   full the FRC “Guidance on Risk Management Internal Control and related   Financial and Business Reporting” for the year and to the date of this Annual   Report. The resulting procedures, which are subject to regular monitoring and   review, provide an ongoing process for identifying, evaluating and managing   the Company’s principal risks. a The meeting is also broadcast live and on   demand on our website at vodafone.com/agm. a Voting on all resolutions is on   a poll. The proxy votes cast, including details of the votes withheld, are   disclosed to those in attendance at the meeting and the results are published   on our website and announced via the Regulatory News Service. a A copy of our   notice of meeting can be found at vodafone.com/agm. 55 Vodafone Group Plc   Annual Report on Form 20-F 2016 Overview Strategy review Performance   Governance Financials Additional information 

 

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Our US listing   requirements As Vodafone’s American depositary shares are listed on NASDAQ   Stock Market LLC (‘NASDAQ’), we are required to disclose a summary of any   material differences between the corporate governance practices we follow and   those of US companies listed on NASDAQ. Vodafone’s corporate governance   practices are primarily based on UK requirements but substantially conform to   those required of US companies listed on NASDAQ. The material differences are   set out in the following table: 56 Vodafone Group Plc Annual Report on Form   20-F 2016 Board member independence Different tests of independence for Board   members are applied under the Code and the NASDAQ listing rules. The Board is   not required to take into consideration NASDAQ’s detailed definitions of   independence as set out in the NASDAQ listing rules. The Board has carried   out an assessment based on the independence requirements of the Code and has   determined that, in its judgement, each of Vodafone’s Non-Executive Directors   is independent within the meaning of those requirements. Committees The   NASDAQ listing rules require US companies to have a nominations committee, an   audit committee and a compensation committee, each composed entirely of   independent directors, with the nominations committee and the audit committee   each required to have a written charter which addresses the committee’s   purpose and responsibilities, and the compensation committee having sole   authority and adequate funding to engage compensation consultants,   independent legal counsel and other compensation advisers. a Our Nominations   and Governance Committee is chaired by the Chairman of the Board and its   other members are independent Non-Executive Directors. a Our Remuneration   Committee is composed entirely of independent Non-Executive Directors. a Our   Audit and Risk Committee is composed entirely of Non-Executive Directors,   each of whom (i) the Board has determined to be independent based on the   independence requirements of the Code and (ii) meets the independence   requirements of the Securities Exchange Act 1934. a We have terms of   reference for our Nominations and Governance Committee, Audit and Risk   Committee and Remuneration Committee, each of which complies with the   requirements of the Code and is available for inspection on our website at   vodafone.com/governance. a These terms of reference are generally responsive   to the relevant NASDAQ listing rules, but may not address all aspects of   these rules. Code of Ethics and Code of Conduct Under the NASDAQ listing   rules, US companies must adopt a Code of Conduct applicable to all directors,   officers and employees that complies with the definition of a “code of   ethics” set out in section 406 of the Sarbanes-Oxley Act. a We have adopted a   Code of Ethics that complies with section 406 of the Sarbanes-Oxley Act which   is applicable only to the senior financial and principal executive officers,   and which is available on our website at vodafone.com/governance. a We have   also adopted a separate Code of Conduct which applies to all employees.   Quorum The quorum required for shareholder meetings, in accordance with our   articles of association, is two shareholders, regardless of the level of   their aggregate share ownership, while US companies listed on NASDAQ are   required by the NASDAQ listing rules to have a minimum quorum of 33.33% of   the shareholders of ordinary shares for shareholder meetings. Related party   transactions In lieu of obtaining an independent review of related party   transactions for conflicts of interests in accordance with the NASDAQ listing   rules, we seek shareholder approval for related party transactions that (i)   meet certain financial thresholds or (ii) have unusual features in accordance   with the Listing Rules issued by the FCA in the United Kingdom (the ‘Listing   Rules’), the Companies Act 2006 and our articles of association. Further, we   use the definition of a transaction with a related party as set out in the   Listing Rules, which differs in certain respects from the definition of   related party transaction in the NASDAQ listing rules. Shareholder approval   When determining whether shareholder approval is required for a proposed   transaction, we comply with both the NASDAQ listing rules and the Listing   Rules. Under the NASDAQ listing rules, whether shareholder approval is required   for a transaction depends on, among other things, the percentage of shares to   be issued or sold in connection with the transaction. Under the Listing   Rules, whether shareholder approval is required for a transaction depends on,   among other things, whether the size of a transaction exceeds a certain   percentage of the size of the listed company undertaking the transaction. 

 

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Directors’   remuneration Committee Letter from the Remuneration Committee Chairman Dear shareholder   On behalf of the Board, I present our 2016 Directors’ Remuneration Report –   my first as Chairman of the Remuneration Committee. This report sets out both   our policy, as approved by shareholders at the 2014 annual general meeting,   and how this policy was implemented during 2016. Last year’s report received   a vote in favour from shareholders of over 97% – indicating support for the   Committee’s focus on implementing the key principles of our executive   remuneration approach. The Committee remains committed to ensuring that all   of our decisions are guided by the principles of: a offering competitive and   fair rates of pay and benefits; a ensuring our remuneration policy, and the   manner in which it is implemented, drives the behaviours that support our strategy   and business objectives; a maintaining a “pay for performance” approach to   remuneration which ensures our incentive plans only deliver significant   rewards if and when they are justified by business performance; and a   aligning the interests of our senior management team with those of   shareholders by developing an approach to share ownership that helps to   maintain commitment over the long term. Project Spring during 2016 The year   under review saw operational progress made under Project Spring. In AMAP this   was reflected through continued customer and data growth whilst in Europe our   progress was evident in the fact that c.70% of our markets returned to   service revenue growth. Our improved financial performance was complemented   by significant steps being made in the “Customer eXperience eXcellence” phase   of Project Spring. This saw us increase the number of markets where we are   Consumer NPS leader by 2, to 13 out of 21. In addition to the above, the   combined impact of these results has led to a number of notable achievements   this year, including: a doubling the number of our 4G customers to 47m; a   increasing our fixed broadband base to 13.4m (an increase of 1.3m); a   returning to full year growth in both adjusted EBITDA and service revenue; a   strong enterprise performance; and a meeting targets in Europe for dropped   call rates of less than 0.5% and for data sessions above three megabits per   second of above 90%. 57 Vodafone Group Plc Annual Report on Form 20-F 2016   Overview Strategy review Performance Governance Financials Additional   information Remuneration During the year the Committee has continued to   ensure its work supports our long-term strategic goals and that remuneration   levels fairly reflect ongoing performance in the context of wider market conditions   and shareholder views. Chairman Valerie Gooding Independent Non-Executive   Director Responsibilities: a determining, on behalf of the Board, the policy   on the remuneration of the Chairman of the Board, the Executive Directors and   the senior management team; a determining the total remuneration packages for   these individuals including any compensation on termination of office; a   operating within recognised principles of good governance; and a preparing an   Annual Report on Directors’ remuneration. Contents of the Remuneration Report   Remuneration policy Page 59 The remuneration policy table Page 60 Chairman   and Non-Executive Directors’ remuneration Page 64 Annual Report on   remuneration Page 65 Remuneration Committee Page 65 2016 remuneration Page 66   2017 remuneration Page 72 Further remuneration information Page 73 Key   objective: To assess and make recommendations to the Board on the policies   for executive remuneration and reward packages for the individual Executive   Directors. 

 

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Directors’   remuneration (continued) Remuneration outcomes during 2016 Annual bonus   performance during the year was assessed against both financial and strategic   measures. The former constituted 60% of maximum opportunity and was comprised   of service revenue, adjusted EBITDA and adjusted cash flow (all equally   weighted). Our strategic measure was comprised of Customer Appreciation KPIs,   reflecting our focus on customer experience excellence and included Net   Promoter Score and Brand Consideration, as well as consideration of other   factors such as customer churn. During the year, performance under all of the   financial measures exceeded target performance, with cash flow in particular   recording strong results. These results reflected both a stabilisation of   performance in our European markets, with outcomes for this region ranging   from slightly below to slightly above financial targets, and continued strong   performance in our AMAP markets where financial performance across all three   measures was significantly above targets. Performance under the Customer   Appreciation KPIs element of the bonus was slightly above on target   performance highlighting that whilst there has been a positive start to our   customer experience excellence focus, there still remain further gains to be   made. We will be looking closely at underlying local market performance to   ensure that all of our customers, regardless of where they are in the world,   feel the benefit of our significant investment in this area. Further details   about how this measure was assessed is provided on page 66. As part of our   commitment to full and open disclosure we have, for several years, published   details of the performance required to achieve a target payout under the   GSTIP for the year under review. This year we have sought to further reflect   best practice by disclosing full target ranges of which further details can   also be found on page 66. Performance against these targets during the year   resulted in an overall payout of 58.4% of maximum. In terms of long-term   incentives, the 2014 GLTI award was measured over the three financial years   ending 31 March 2016 and was assessed against both Free Cash Flow and TSR   performance. Over the course of the performance period, the Free Cash Flow   measure exceeded threshold performance, which was complemented by a slight   outperformance of the median of the TSR comparator group. This resulted in a   combined payout of 23.2% of maximum. Application of policy for the year ahead   Following the Committee’s annual review of the current policy it was agreed   that no changes would be made in respect of the year ahead. Similarly, it was   determined that the current balance of performance measures, following last   year’s introduction of the Customer Appreciation KPIs measure under the   GSTIP, remains appropriate. As part of this annual review, the Committee also   contacted our top 20 shareholders to consult on the proposed application of   the policy for the year ahead. This included the decision to increase the   base salary of the Chief Financial Officer by 2.0% in light of business   performance, salary increases for other UK employees and external market   information. The Chief Executive Officer requested not to be considered for a   salary increase during the year, and the Committee respected this request.   The Committee appreciates the importance of consulting with shareholders on   matters of executive remuneration and was therefore pleased with the high   level of engagement and support shown by investors. During the year the   Committee also completed a risk assessment of the current incentive plans.   Although such an assessment is conducted annually, the Committee saw the   review as particularly important this year given the current external   environment. Following the assessment, the Committee remains satisfied that   the current incentive plans do not promote undue risk. This will therefore   constitute the third financial year in which the current policy has been in   place – a reflection of its success in providing an effective framework which   has demonstrated the flexibility to meet our changing strategic priorities   over the last three years. In line with the reporting requirements our Policy   Report will be put forward to a binding shareholder vote at the 2017 annual   general meeting. The Committee is therefore in the process of conducting a   full review of our existing arrangements to ensure that the Policy Report put   forward for shareholder approval is appropriately positioned to support our   executive remuneration programme over the next three years. Conclusion The   success of Project Spring was always going to require more than financial   investment. Indeed, our latest results show how our significant investment in   infrastructure has been matched by a contribution from all our colleagues to   improving our customers’ experience. Continuous improvement for customers   will be crucial in maximising the benefits from Project Spring for years to   come. Finally, I would like to take this opportunity to welcome Dr Mathias   Döpfner to the Remuneration Committee and thank my predecessor, Luc   Vandevelde, who stepped down from both the Committee and the Board following   the 2015 annual general meeting, for his hard work and support during his   tenure. I look forward to ensuring that the Committee continues to maintain   and develop an executive remuneration framework that supports the   opportunities ahead. /s/ Valerie Gooding Valerie Gooding Chairman of the   Remuneration Committee 17 May 2016 58 Vodafone Group Plc Annual Report on   Form 20-F 2016 

 

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Remuneration   policy No changes have been made to our policy since its approval at the 2014   annual general meeting which was held on 29 July 2014. Our approved Policy   Report is available on our website at vodafone.com, and has been reproduced   below exactly as it was set out in the 2014 Annual Report. As such, a few   phrases (e.g. references to the 2014 annual general meeting) are now out of   date. 59 Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy   review Performance Governance Financials Additional information REMUNERATION   POLICY (FIRST PUBLISHED IN THE 2014 ANNUAL REPORT) In this forward-looking   section we describe our remuneration policy for the Board. This includes our   considerations when determining policy, a description of the elements of the   reward package and an indication of the potential future value of this   package for each of the executive directors. In addition we describe our   policy applied to the Chairman and non-executive directors. We will be   seeking shareholder approval for our remuneration policy at the 2014 AGM and   we intend to implement at that point. We do not envisage making any changes   to our policy over the next three years, however, we will review it each year   to ensure that it continues to support our Company strategy. If we feel it is   necessary to make a change to our policy within the next three years, we will   seek shareholder approval. Considerations when determining remuneration   policy Our remuneration principles which are outlined on page 57 are the   context for our policy. Our principal consideration when determining   remuneration policy is to ensure that it supports our Company strategy and   business objectives. The views of our shareholders are also taken into   account when determining executive pay. In advance of asking for approval for   the remuneration policy we have consulted with our major shareholders. We   invited our top 20 shareholders to comment on remuneration at Vodafone and   several meetings between shareholders and the Remuneration Committee Chairman   took place. The main topics of consultation were as follows: a new share plan   rules for which we will seek shareholder approval at the 2014 annual general   meeting; a changes to executive remuneration arrangements (reduction of   maximum long-term incentive vesting levels and pension provision); and a   impact of Project Spring on Free Cash Flow performance under the global   long-term incentive plan (‘GLTI’). We have not consulted with employees on   the executive remuneration policy nor is any fixed remuneration comparison   measurement used. However, when determining the policy for Executive   Directors, we have been mindful of the pay and employment conditions of   employees in Vodafone Group as a whole, with particular reference to the   market in which the executive is based. Further information on our   remuneration policy for other employees is given on page 62. Performance   measures and targets Our Company strategy and business objectives are the   primary consideration when we are selecting performance measures for our   incentive plans. The targets within our incentive plans that are related to   internal financial measures (such as revenue, profit and cash flow) are   typically determined based on our budgets. Targets for strategic and external   measures (such as competitive performance and Total Shareholder Return   (‘TSR’)) are set based on Company objectives and in light of the competitive   marketplace. The threshold and maximum levels of performance are set to   reflect minimum acceptable levels at threshold and very stretching but   achievable levels at maximum. As in previous remuneration reports we will   disclose the details of our performance targets for our short and long-term   incentive plans. However, our annual bonus targets are commercially sensitive   and therefore we will only disclose our targets in the remuneration report   following the completion of the financial year. We will disclose the targets   for each long-term award in the remuneration report for the financial year   preceding the start of the performance period. At the end of each performance   period we review performance against the targets, using judgement to account   for items such as (but not limited to) mergers, acquisitions, disposals,   foreign exchange rate movements, changes in accounting treatment, material   one-off tax settlements etc. The application of judgement is important to   ensure that the final assessments of performance are fair and appropriate. In   addition, the Remuneration Committee reviews the incentive plan results   before any payments are made to executives or any shares vest and has full   discretion to adjust the final payment or vesting downwards if they believe   circumstances warrant it. In particular, the Committee may use discretion to   clawback any unvested share award (or vested but unexercised options) as it   sees appropriate, in which case the award may lapse wholly or in part, may   vest to a lesser extent than it would otherwise have vested or vesting may be   delayed. R y 

 

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Directors’   remuneration (continued) Remuneration policy (continued) The remuneration   policy table The table below summarises the main components of the reward   package for Executive Directors. Purpose and link to strategy Operation a   Performance over the financial year is measured against targets set at the   start of the financial year. a Long-term incentive base awards consist of   performance based on Group operational and external performance. 60 Vodafone   Group Plc Annual Report on Form 20-F 2016 Base salary a To attract and retain   the best talent. a Salaries are usually reviewed annually and fixed for 12   months commencing 1 July. Decision is influenced by: a level of skill, experience   and scope of responsibilities of individual; a business performance, scarcity   of talent, economic climate and market conditions; a increases elsewhere   within the Group; and a external comparator groups (which are used for   reference purposes only) made up of companies of similar size and complexity   to Vodafone. Pension a To remain competitive within the marketplace. a   Executive Directors may choose to participate in the defined contribution   pension scheme or to receive a cash allowance in lieu of pension. Benefits a   To aid retention and remain competitive within the marketplace. a Travel   related benefits. This may include (but is not limited to) company car or   cash allowance, fuel and access to a driver where appropriate. a Private   medical, death and disability insurance and annual health checks. a In the   event that we ask an individual to relocate we would offer them support in   line with Vodafone’s relocation or international assignment policies. This   may cover (but is not limited to) relocation, cost of living allowance,   housing, home leave, education support, tax equalisation and advice. a Legal   fees if appropriate. a Other benefits are also offered in line with the   benefits offered to other employees for example, all-employee share plans,   mobile phone discounts, maternity/paternity benefits, sick leave, paid   holiday, etc. Annual Bonus – Global Short-Term Incentive Plan (‘GSTIP’) a To   drive behaviour and communicate the key priorities for the year. a To   motivate employees and incentivise delivery of performance over the one year   operating cycle. a The financial metrics are designed to both drive our   growth strategies whilst also focusing on improving operating efficiencies.   Measuring competitive performance with its heavy reliance on net promoter score   (‘NPS’) means providing a great customer experience remains at the heart of   what we do. a Bonus levels and the appropriateness of measures and weightings   are reviewed annually to ensure they continue to support our strategy.   stretching financial and non-financial performance a The annual bonus is   usually paid in cash in June each year for performance over the previous   year. Long-Term Incentive – Global Long-Term Incentive Plan (‘GLTI’) base   awards and co-investment awards (further details can be found in the notes   that follow this table) a To motivate and incentivise delivery of sustained   performance over the long term. a To support and encourage greater   shareholder alignment through a high level of personal financial commitment.   a The use of free cash flow as the principal performance measure ensures we   apply prudent cash management and rigorous capital discipline to our   investment decisions, whilst the use of TSR along with a performance period   of not less than three years means that we are focused on the long-term   interests of our shareholders. a Award levels and the framework for   determining vesting are reviewed annually to ensure they continue to support   our strategy. shares which are granted each year. a Individuals must   co-invest in Vodafone shares and hold them in trust for at least three years   in order to receive the full target award. a All awards vest not less than   three years after the award a Dividend equivalents are paid in cash after the   vesting date. 

 

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Opportunity   Performance metrics 61 Vodafone Group Plc Annual Report on Form 20-F 2016   Overview Strategy review Performance Governance Financials Additional   information a Average salary increases for existing Executive Committee   members (including Executive Directors) will not normally exceed average   increases for employees in other appropriate parts of the Group. Increases   above this level may be made in specific situations. These situations could   include (but are not limited to) internal promotions, changes to role,   material changes to the business and exceptional company performance. None. a   The pension contribution or cash payment is equal to 30% of annual gross   salary. In light of pension levels elsewhere in the Group we have decided to   reduce the pension benefits level from 30% to no more than 24% from November   2015. None. a Benefits will be provided in line with appropriate levels   indicated by local market practice in the country of employment. a We expect   to maintain benefits at the current level but the value of benefit may   fluctuate depending on, amongst other things, personal situation, insurance   premiums and other external factors. None. a Bonuses can range from 0–200% of   base salary, with 100% paid for on-target performance. Maximum is only paid   out for exceptional performance. a Performance over each financial year is   measured against stretching targets set at the beginning of the year. a The   performance measures normally comprise of a mix of financial and strategic   measures. Financial measures may include (but are not limited to) profit,   revenue and cash flow with a weighting of no less than 50%. Strategic measures   may include (but are not limited to) competitive performance metrics such as   net promoter score and market share. a The basic target award level is 137.5%   of base salary for the Chief Executive (110% for other Executive Directors).   a The target award level may increase up to 237.5% of base salary for the   Chief Executive (or 210% for others) if the individual commits to a   co-investment in shares equal in value to their base salary. a Minimum   vesting is 0% of target award level, threshold vesting is 50% and maximum   vesting is 250% of the target award level. a Maximum long-term incentive face   value at award of 594% of base salary for the Chief Executive (237.5% x 250%)   and 525% for others. a The awards that vest accrue cash dividend equivalents   over the three year vesting period. a Awards vest to the extent performance   conditions are satisfied. There is a mandatory holding period where 50% of   the post-tax shares are released after vesting, a further 25% after the first   anniversary of vesting, and the remaining 25% will be released after the   second anniversary. a Performance is measured against stretching targets set   at the beginning of the performance period. a Vesting is determined based on   a matrix of two measures: a adjusted free cash flow as our operational   performance measure; and a relative TSR against a peer group of companies as   our external performance measure. 

 

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Directors’   remuneration (continued) 62 Vodafone Group Plc Annual Report on Form 20-F   2016 Remuneration policy (continued) Notes to the remuneration policy table   Existing arrangements We will honour existing awards to Executive Directors,   and incentives, benefits and contractual arrangements made to individuals   prior to their promotion to the Board. This will last until the existing   incentives vest (or lapse) or the benefits or contractual arrangements no   longer apply. Long-Term Incentive (‘GLTI’) When referring to our long-term   incentive awards we use the financial year end in which the award was made.   For example, the ‘2013 award’ was made in the financial year ending 31 March   2013. The awards are usually made in the first half of the financial year   (the 2013 award was made in July 2012). The extent to which awards vest   depends on two performance conditions: a underlying operational performance   as measured by adjusted free cash flow; and a relative Total Shareholder   Return (‘TSR’) against a peer group median. Adjusted free cash flow The free   cash flow performance is based on the cumulative adjusted free cash flow   figure over the performance period. The detailed targets and the definition   of adjusted free cash flow are determined each year as appropriate. The target   adjusted free cash flow level is set by reference to our long-range plan and   market expectations. We consider the targets to be critical to the Company’s   long-term success and its ability to maximise shareholder value, and to be in   line with the strategic goals of the Company. The Remuneration Committee sets   these targets to be sufficiently demanding with significant stretch where   only outstanding performance will be rewarded with a maximum payout. The   cumulative adjusted free cash flow vesting levels as a percentage of target   are shown in the table below (with linear interpolation between points):   Performance Vesting percentage Below threshold 0% Threshold 50% Target 100%   Maximum 125% TSR outperformance of a peer group median We have a limited number   of appropriate peers and this makes the measurement of a relative ranking   system volatile. As such, the outperformance of the median of a peer group is   felt to be the most appropriate TSR measure. The peer group for the   performance condition is reviewed each year and amended as appropriate. The   relative TSR position determines the performance multiplier. This will be   applied to the adjusted free cash flow vesting percentage. There will be no   multiplier until TSR performance exceeds median. Above median, the following   table will apply (with linear interpolation between points): Multiplier   Median No increase Percentage outperformance of the peer group median   equivalent to 65th percentile 1.5 times Percentage outperformance of the peer   group median equivalent to 80th percentile 2.0 times In order to determine   the percentages for the equivalent outperformance levels above median, the   Remuneration Committee seeks independent external advice. Combined vesting   matrix The combination of the two performance measures gives a combined   vesting matrix as follows (with linear interpolation between points): TSR   outperformance Up to 65th percentile 80th percentile Adjusted free cash flow   measure Median equivalent equivalent Below threshold 0% 0% 0% Threshold 50%   75% 100% Target 100% 150% 200% Maximum 125% 187.5% 250% The combined vesting   percentages are applied to the target number of shares granted. Outstanding   awards For the awards made in the 2013 and 2014 financial years (vesting in   July 2015 and June 2016 respectively) the award structure is as set out   above, except that the maximum vesting percentage for cumulative adjusted   free cash flow was 150% leading to an overall maximum of 300% of target   award. Remuneration policy for other employees While our remuneration policy follows   the same fundamental principles across the Group, packages offered to   employees reflect differences in market practice in the different countries,   role and seniority. For example, the remuneration package elements for our   Executive Directors are essentially the same as for the other Executive   Committee members, with some small differences, for example higher levels of   share awards. The remuneration for the next level of management, our senior   leadership team, again follows the same principles but with differences such   as local and individual performance aspects in the annual bonus targets and   performance share awards. They also receive lower levels of share awards   which are partly delivered in restricted shares. 

 

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63 Vodafone   Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information Estimates of total   future potential remuneration from 2015 pay packages The tables below provide   estimates of the potential future remuneration for each of the Executive   Directors based on the remuneration opportunity granted in the 2015 financial   year and therefore do not reflect the latest remuneration information.   Potential outcomes based on different performance scenarios are provided for   each Executive Director. The assumptions underlying each scenario are   described below. Fixed Consists of base salary, benefits and pension. Base   salary is at 1 July 2014. Benefits are valued using the figures in the total   remuneration for the 2014 financial year table on page 78 (of the 2014   report) and on a similar basis for Nick Read (promoted to the Board on 1   April 2014). Pensions are valued by applying cash allowance rate of 30% of   base salary at 1 July 2014. Base Benefits Pension Total fixed   (£’000)(£’000)(£’000)(£’000) Chief Executive1, 150383451, 533 Chief Financial   Officer 67523203901 Chief Technology Officer 60021180801 On target Based on   what a Director would receive if performance was in line with plan. The   target award opportunity for the annual bonus (‘GSTIP’) is 100% of base   salary. The target award opportunity for the long-term incentive (‘GLTI’) is   237.5% of base salary for the Chief Executive and 210% for others. We assumed   that TSR performance was at median. Maximum Two times the target award   opportunity is payable under the annual bonus (‘GSTIP’). The maximum levels   of performance for the long-term incentive (‘GLTI’) are 250% of target award   opportunity. We assumed that TSR performance was at or above the 80th   percentile equivalent. All scenarios Each executive is assumed to co-invest   the maximum allowed under the long-term incentive (‘GLTI’), 100% of salary,   and the long-term incentive (‘GLTI’) award reflects this. Long-term   incentives consist of share awards only which are measured at face value i.e.   no assumption for increase in share price or cash dividend equivalents payable.   Vittorio Colao, Chief Executive£’000 Nick Read, Chief Financial Officer   (appointed 1 April 2014) £’000 0 Fixed On target Maximum 0 Fixed On target Maximum   ¢ Salary and benefits ¢ Annual bonus ¢ Long-term incentive¢ Salary and benefits   ¢ Annual bonus ¢ Long-term incentive Stephen Pusey, Chief Technology Officer £’000   23% 0 Fixed On target Maximum ¢ Salary and benefits ¢ Annual bonus ¢   Long-term incentive Recruitment remuneration Our approach to recruitment   remuneration is to pay no more than is necessary and appropriate to attract   the right talent to the role. The remuneration policy table (pages 60 and 61)   sets out the various components which would be considered for inclusion in   the remuneration package for the appointment of an Executive Director. Any new   Director’s remuneration package would include the same elements, and be   subject to the same constraints, as those of the existing Directors   performing similar roles. This means a potential maximum bonus opportunity of   200% of base salary and long-term incentive maximum face value of opportunity   at award of 594% of base salary. When considering the remuneration   arrangements of individuals recruited from external roles to the Board, we   will take into account the remuneration package of that individual in their   prior role. We only provide additional compensation to individuals for awards   foregone. If necessary we will seek to replicate, as far as practicable, the   level and timing of such remuneration, taking into account also any remaining   performance requirements applying to it. This will be achieved by granting   awards of cash or shares that vest over a timeframe similar to those   forfeited and if appropriate based on performance conditions. A commensurate   reduction in quantum will be applied where it is determined that the new   awards are either not subject to performance conditions or subject to   performance conditions that are not as stretching as those of the awards   forfeited. 12,000 10,000 8,000 6,000 61% £5,151 4,000 47% £2,661 2,000 £801   23% 30% 16% 12,000 10,000 8,000 £5,795 6,000 61% 4,000 47% £2,994 23% 2,000   £901 23% 30% 16% 12,000 64% £10,661 10,000 8,000 £5,414 6,000 51% 4,000   £1,533 21% 22% 2,000 28% 14% 

 

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Directors’   remuneration (continued) loss of office in (if the executive continues to   work during the notice period or is on gardening leave) or they will be made   under plan rules to determine that awards should not vest in the case of a   ‘bad leaver’ which may include, at their absolute 64 Vodafone Group Plc   Annual Report on Form 20-F 2016 Remuneration policy (continued) Service   contracts of Executive Directors After an initial term of up to two years   Executive Directors’ contracts have rolling terms and are terminable on no   more than 12 months’ notice. The key elements of the service contract for executives   relate to remuneration, payments on loss of office (see below), and   restrictions during active employment (and for 12 months thereafter). These   restrictions include non-competition, non-solicitation of customers and   employees etc. Additionally, all of the Company’s share plans contain   provisions relating to a change of control. Outstanding awards and options   would normally vest and become exercisable on a change of control to the   extent that any performance condition has been satisfied and pro-rated to   reflect the acceleration of vesting. Payments for departing executives In the   table below we summarise the key elements of our policy on payment for loss   of office. We will of course, always comply both with the relevant plan rules   and local employment legislation. Provision Policy Notice period and a 12   months’ notice from the Company to the Executive Director. compensation fora   Up to 12 months’ base salary (in line with the notice period). Notice period   payments will either be made as normal service contracts as monthly payments   in lieu of notice (subject to mitigation if alternative employment is   obtained). Treatment of annual bonus a The annual bonus will be pro-rated for   the period of service during the financial year and will reflect the extent (‘GSTIP’)   on termination to which Company performance has been achieved. under plan   rules a The Remuneration Committee has discretion to reduce the entitlement   to an annual bonus to reflect the individual’s performance and the   circumstances of the termination. Treatment of unvested a An Executive   Director’s award will vest in accordance with the terms of the plan and   satisfaction of performance long-term incentive awards conditions measured at   the normal completion of the performance period, with the award pro-rated for   the (‘GLTI’) and co-investment proportion of the vesting period that had   elapsed at the date of cessation of employment. awards on termination a The   Remuneration Committee has discretion to vary the level of vesting as deemed   appropriate, and in particular discretion, departure in case of poor   performance, departure without the agreement of the Board, or detrimental   competitive activity. Pension and benefits a Generally pension and benefit   provisions will continue to apply until the termination date. a Where   appropriate other benefits may be receivable, such as (but not limited to)   payments in lieu of accrued holiday and legal fees or tax advice costs in   relation to the termination. a Benefits of relative small value may continue   after termination where appropriate, such as (but not limited to) mobile   phone provision. In exceptional circumstances, an arrangement may be   established specifically to facilitate the exit of a particular individual   albeit that any such arrangement would be made within the context of   minimising the cost to the Group. We will only take such a course of action   in exceptional circumstances and where it is considered to be in the best   interests of shareholders. Chairman and Non-Executive Directors’ remuneration   Our policy is for the Chairman to review the remuneration of Non-Executive   Directors annually following consultation with the Remuneration Committee   Chairman. Fees for the Chairman are set by the Remuneration Committee.   Element Policy Fees a We aim to pay competitively for the role including   consideration of the time commitment required. We benchmark the fees against   an appropriate external comparator group. We pay fees to our Chairman and   Senior Independent Director that include fees for chairmanship of any   committees. We pay a fee to each of our other Non-Executive Directors and   they receive an additional fee if they chair a committee. Non-executive fee   levels are set within the maximum level as approved by shareholders as part   of our articles of association. Allowancesa An allowance is payable each time   a non-Europe-based Non-Executive Director is required to travel to attend   Board and committee meetings to reflect the additional time commitment   involved. Incentives a Non-Executive Directors do not participate in any incentive   plans. Benefits a Non-Executive Directors do not participate in any benefit   plans. The Company does not provide any contribution to their pension   arrangements. The Chairman is entitled to the use of a car and a driver   whenever and wherever he is providing his services to or representing the   Company. We have been advised that for Non-Executive Directors, certain   travel and accommodation expenses in relation to attending Board meetings   should be treated as a taxable benefit therefore we also cover the tax   liability for these expenses. Non-Executive Director service contracts   Non-Executive Directors are engaged on letters of appointment that set out   their duties and responsibilities. The appointment of Non-Executive Directors   may be terminated without compensation. Non-Executive Directors are generally   not expected to serve for a period exceeding nine years. For further   information refer to the “Nomination and Governance Committee” section of the   Annual Report (pages 69 and 70). 

 

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Annual Report   on remuneration Remuneration Committee In this section we give details of the   composition of the Remuneration Committee and activities undertaken during   the 2016 financial year. The Committee is comprised to exercise independent   judgement and consists only of the following independent Non-Executive   Directors: Chairman: Valerie Gooding (from 28 July 2015) Committee members:   Renee James and Samuel Jonah The Committee regularly consults with Vittorio   Colao, the Chief Executive, and Ronald Schellekens, the Group HR Director, on   various matters relating to the appropriateness of awards for Executive   Directors and senior executives, though they are not present when their own   compensation is discussed. In addition, Adrian Jackson, the Group Reward and   Policy Director, provides a perspective on information provided to the   Committee, and requests information and analysis from external advisers as   required. Rosemary Martin, the Group General Counsel and Company Secretary,   advises the Committee on corporate governance guidelines and acts as   secretary to the Committee. External advisers The Remuneration Committee   seeks and considers advice from independent remuneration advisers where   appropriate. The appointed advisers, Willis Towers Watson, were selected   through a thorough process led by the Chairman of the Remuneration Committee   and were appointed by the Committee in 2007. The Chairman of the Remuneration   Committee has direct access to the advisers as and when required, and the   Committee determines the protocols by which the advisers interact with   management in support of the Committee. The advice and recommendations of the   external advisers are used as a guide, but do not serve as a substitute for   thorough consideration of the issues by each Committee member. Advisers   attend Committee meetings occasionally, as and when required by the   Committee. Willis Towers Watson is a member of the Remuneration Consultants’   Group and, as such, voluntarily operates under the Remuneration Consultants’   Group Code of Conduct in relation to executive remuneration consulting in the   UK. This is based upon principles of transparency, integrity, objectivity,   competence, due care and confidentiality by executive remuneration   consultants. Willis Towers Watson has confirmed that it adheres to that Code   of Conduct throughout the year for all remuneration services provided to Vodafone   and therefore the Committee is satisfied that it is independent and   objective. The Remuneration Consultants’ Group Code of Conduct is available   at remunerationconsultantsgroup.com. Fees for services provided to the   Committee £’0001 Adviser Appointed by Services provided to the Committee   Other services provided to the Company Willis Towers Watson Remuneration   Committee in 2007 Advice on market practice; governance; provision of market   data on executive reward; reward consultancy; and performance analysis. £102   Reward and benefits consultancy; provision of benchmark data; pension   administration; and insurance consultancy services. Note: 1 Fees are   determined on a time spent basis. 2015 annual general meeting – Remuneration   Report voting results At the 2015 annual general meeting there was an   advisory vote on our Remuneration Report. Details of the voting outcomes are   provided in the table below. Votes for % Votes against % Total votes Withheld   Remuneration Report 17,072,436,151 97.19 493,289,470 2.81 17,565,725,621   553,520,692 2014 annual general meeting – Remuneration Policy voting results   At the 2014 annual general meeting there was a binding vote on our   Remuneration Policy. Details of the voting outcomes are provided in the table   below. Votes for % Votes against % Total votes Withheld Remuneration Policy   16,620,036,145 95.97 698,459,069 4.03 17,318,495,214 227,447,313 Meetings The   Remuneration Committee had seven formal meetings during the year. In   addition, informal conference calls can also take place. The principal agenda   items at the formal meetings were as follows: Meeting Agenda items May 2015 a   2015 annual bonus achievement and 2016 targets and ranges a 2012 long-term   incentive award vesting and 2016 targets and ranges a 2015 Directors’ Remuneration   Report June 2015 a Re-organisation of Europe region July 2015 a 2016   long-term incentive awards a Large local market CEO remuneration a 2015 grant   of co-investment awards September 2015 a 2016 reward strategy a Annual review   of remuneration policy a Corporate governance matters November 2015 a 2016   annual bonus framework January 2016 March 2016 a 2016 reward packages for the   Executive Committee a Non-Executive Director fee levels a Chairman’s fees a   2016 Directors’ Remuneration Report a Committee’s Terms of Reference a Risk   assessment 65 Vodafone Group Plc Annual Report on Form 20-F 2016 Overview   Strategy review Performance Governance Financials Additional information 

 

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Directors’   remuneration (continued) Annual Report on remuneration (continued) 2016   remuneration In this section we summarise the pay packages awarded to our Executive   Directors for performance in the 2016 financial year versus 2015.   Specifically we have provided a table that shows all remuneration that was   earned by each individual during the year and computed a single total   remuneration figure for the year. The value of the annual bonus (‘GSTIP’)   reflects what was earned in respect of the year but will be paid out in cash   in the following year. Similarly the value of the long-term incentive   (‘GLTI’) reflects the share awards which will vest in June 2016 as a result   of the performance through the three year period ended at the completion of   our financial year on 31 March 2016. The Remuneration Committee reviews all   incentive awards prior to payment and uses judgement to ensure that the final   assessments of performance are fair and appropriate. If circumstances warrant   it, the Committee may adjust the final payment or vesting downwards. On this   occasion, based on the fact that final annual bonus payout and final vesting   level long-term incentives awards GLTI were deemed to be an accurate   reflection of performance and were considered fair and appropriate, the   Committee did not use its discretion to adjust final outcomes. 2016 annual   bonus (‘GSTIP’) payout In the table below we disclose our achievement against   each of the performance measures and targets in our annual bonus (‘GSTIP’)   and the resulting total annual bonus payout level for the year ended 31 March   2016 of 116.7%. This is applied to the target bonus level of 100% of base   salary for each executive. Commentary on our performance against each measure   is provided below the table. Payout at target performance 100% Payout at   maximum performance 200% Threshold performance level £bn Target performance   level £bn Maximum performance level £bn Actual performance level1 £bn Actual   payout % Performance measure Service revenue 20% 40% 20.7% 37.2 39.2 41.1   39.2 Adjusted EBITDA 20% 40% 23.7% 11.4 12.2 13.1 12.4 Adjusted free cash   flow 20% 40% 30.7% 0.1 0.7 1.3 1.0 Customer Appreciation KPIs 40% 80% 41.6%   See below for further details Total annual bonus payout level 100% 200%   116.7% Note: 1 These figures are adjusted to include the removal of the   impact of M&A, foreign exchange movements and any changes in accounting   treatment. During the year under review, service revenue performance was   slightly above budget, with both Europe and AMAP regions recording above   target performances. Adjusted EBITDA results also demonstrated above target   performance, with both Europe and AMAP again recording equally strong   performances. With regards to Adjusted Free Cash Flow, overall performance   reflected particularly strong AMAP performance, with our Europe region   recording below target results. An assessment of performance under the   Customer Appreciation KPIs measure was conducted on a market by market basis,   with these scores then being subject to a revenue-weighted average to give an   overall performance achievement. Performance was primarily judged against an   assessment of net promoter score and brand consideration for both consumer   and enterprise operations, where applicable, within each market. Additional   consideration was then given to other relevant factors including customer   churn rates and revenue market share. Group performance for the year was   slightly above target reflecting our position as Consumer NPS leader in 13   out of 21 markets – an increase from our previous position as leader in 11   markets. 66 Vodafone Group Plc Annual Report on Form 20-F 2016 Total   remuneration for the 2016 financial year Vittorio Colao Stephen Pusey1 Nick   Read 2016 £’000 2015 £’000 2016 £’000 2015 £’000 2016 £’000 2015 £’000   Salary/fees 1,150 1,140 200594 694675 Taxable benefits2 32 40 721 2628 Annual   bonus: GSTIP (see below for further detail) 1,342 1,287 233671 817755 Total   long-term incentive: 2,429 – 754– 1,412– GLTI vesting during the year3 2,102   – 653– 861– Cash in lieu of GLTI dividends4 327 – 101– 134– GLTR vesting   during the year5 – – –– 380– GLTR dividend equivalent shares6 – – –– 37– Cash   in lieu of pension 316 342 60178 191203 Other7 1 1 –– 11 Total 5,270 2,810   1,2541,464 3,1411,662 Notes: 1 Stephen Pusey stepped down from the Board   following the AGM held on 28 July 2015 and retired on 31 July 2015. 2 Taxable   benefits include amounts in respect of: – Private healthcare (2016: £1,946;   2015: £1,854); – Cash car allowance £19,200 p.a.; and – Travel (2016:   Vittorio Colao £10,764, Nick Read £4,546; 2015: Vittorio Colao £18,022; Nick   Read £7,164). 3 The value shown in the 2016 column is the award which vests   on 26 June 2016 and is valued using an average of closing share price over   the last quarter of the 2016 financial year of 216.59 pence. 4 Participants   also receive a cash award, equivalent in value to the dividends that would   have been paid during the vesting period on any shares that vest. The cash in   lieu of dividend value shown in 2016 relates to the award which vests on 26   June 2016. 5 On 26 June 2013, prior to his appointment to the Board, Nick   Read was granted a GLTR share award which was subject to a continued   employment condition. This award subsequently vested on June 2015 following   the fulfilment of the continued employment condition. The value shown in the   2016 column in respect of Nick Read is based on the execution share price on   26 June 2015 of 238.09 pence. 6 Nick Read received an award of 15,620   dividend equivalent shares in respect of the GLTR share award which vested on   26 June 2015. 7 Reflects the value of the SAYE benefit which is calculated as   £250 x 12 months x 20% to reflect the discount applied based on savings made   during the year. 

 

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Base salary   £’000 Target bonus % of base salary 2016 payout % of target Actual payment   £’000 2016 annual bonus (‘GSTIP’) amounts Vittorio Colao 1,150 100% 116.7%   1,342 Stephen Pusey1 600 100% 116.7% 233 Nick Read 700 100% 116.7% 817 Note:   1 The actual payment figure for Stephen Pusey reflects the pro-rated amount   paid in respect of time served. Long-term incentive (‘GLTI’) award vesting in   June 2016 The 2014 long-term incentive (‘GLTI’) awards which were made in   June 2013 will partially vest in June 2016. The performance conditions for   the three year period ending in the 2016 financial year are as follows: TSR   outperformance TSR peer group AT&T Orange 0.0% (Up to median) 4.5% (65th   percentile equivalent) 9.0% (80th percentile equivalent) Adjusted free cash flow   measure £bn BT Group Telecom Italia Below threshold <12.4 0% 0% 0%   Deutsche Telekom Telefónica Threshold 12.4 50% 75% 100% Emerging markets   composite Target 14.4 100% 150% 200% Maximum 16.4 150% 225% 300% The adjusted   free cash flow for the three year period ended on 31 March 2016, having   removed the impact of the investment made under Project Spring as set out in   our 2014 Annual Remuneration Report, was £13.1 billion. This compares with a   threshold of £12.4 billion and a target of £14.4 billion. The chart to the   right shows that our TSR performance against our peer group for the same   period resulted in an outperformance of the median by 0.4% a year. Using the   combined payout matrix above, this performance resulted in a payout of 69.6%   of target. The combined vesting percentages are applied to the target number   of shares granted as shown below. 170 154 137 145 Adjusted free cash flow   performance payout % of target Maximum number of shares Target number of   shares Value of shares vesting (’000) Overall vesting % of target Number of   shares vesting 2014 GLTI performance share awards vesting in June 2016 TSR   multiplier Vittorio Colao 4,185,370 1,395,123 66.6% 1.05 times 69.6% 970,586   £2,102 Stephen Pusey1 1,904,846 634,948 66.6% 1.05 times 69.6% 301,272 £653 Nick   Read 1,713,392 571,130 66.6% 1.05 times 69.6% 397,335 £861 Note: 1 The number   and value of shares vesting for Stephen Pusey reflect the pro-rated amount   paid in respect of time served. These share awards will vest on 26 June 2016.   Specified procedures are performed by PricewaterhouseCoopers LLP over the   adjusted free cash flow to assist with the Committee’s assessment of   performance. The performance assessment in respect of the TSR outperformance   of the peer group median is undertaken by Willis Towers Watson. Details of   how the plan works can be found on pages 60 to 62. Long-term incentive   (‘GLTI’) awarded during the year The performance conditions for the 2016   long-term incentive awards made in June 2015 and September 2015 are a   combination of adjusted free cash flow and TSR performance as follows: TSR   outperformance TSR peer group Bharti Orange 0.0% (Up to median) 4.5% (65th   percentile equivalent) 9.0% (80th percentile equivalent) Adjusted free cash   flow measure £bn BT Group Telecom Italia Below threshold <7.3 0% 0% 0%   Deutsche Telekom Telefónica Threshold 7.3 50% 75% 100% MTN Target 9.0 100%   150% 200% Maximum 10.7 125% 187.5% 250% The combined vesting percentages are   applied to the target number of conditional shares granted. 67 Vodafone Group   Plc Annual Report on Form 20-F 2016 Overview Strategy review Performance   Governance Financials Additional information 2013 GLTI award: TSR performance   (growth in the value of a hypothetical US$100 holding over the performance   period, six-month averaging) 180175171 160149150150 150138139 140130137135   130117129 120107121 110 100100103 9003/1309/1303/1409/1403/1509/1503/16   Vodafone Group Median of peer groupOutperformance of median of 9% p.a. 

 

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Directors’   remuneration (continued) Annual Report on remuneration (continued) In order   to participate fully in this award, executives had to co-invest personal   shares worth 100% of salary. The resulting awards to Executive Directors were   as follows: Number of shares awarded Face value of shares awarded 1   Proportion of maximum award vesting at minimum performance Target vesting   level (40% of max) Maximum vesting level Target vesting level Maximum vesting   level Performance period end 2016 GLTI performance share awards made in June   2015 and September 2015 Vittorio Colao 1,215,662 3,039,156 £2,731,579   £6,828,949 1/5th 31 Mar 2018 Nick Read 635,986 1,589,967 £1,417,652   £3,544,135 1/5th 31 Mar 2018 Note: 1 Face value calculated based on target   awards of 137.5 % of salary for Vittorio Colao and 110% of salary for Nick   Read made in June 2015 using a share price for the awards of 239.4 pence and,   following co-investment at the end of the close period, target awards of 100%   of salary in September 2015 for both Executive Directors, using a share price   for the awards of 207.2 pence (i.e. closing share price for the day prior to   each grant). Dividend equivalents on the shares that vest are paid in cash   after the vesting date. All-employee share plans The Executive Directors are   also eligible to participate in the UK all-employee plans. Summary of plans   Sharesave The Vodafone Group 2008 Sharesave Plan is an HM Revenue &   Customs (‘HMRC’) approved scheme open to all staff permanently employed by a   Vodafone Company in the UK as of the eligibility date. Options under the plan   are granted at up to a 20% discount to market value. Executive Directors’   participation is included in the option table on page 69. Share Incentive   Plan The Vodafone Share Incentive Plan (‘SIP’) is an HMRC approved plan open   to all staff permanently employed by a Vodafone Company in the UK.   Participants may contribute up to a maximum of £125 per month (or 5% of   salary if less) which the trustee of the plan uses to buy shares on their   behalf. An equivalent number of shares are purchased with contributions from   the employing company. UK-based Executive Directors are eligible to   participate. Pensions (audited) The Executive Directors received a cash   allowance of 30% of base salary in lieu of pension contributions until 31   October 2015. From 1 November 2015, cash allowance in lieu of pension   contributions for Vittorio Colao and Nick Read were reduced to 24% of base   salary. No Executive Directors accrued benefits under any defined   contribution pension plans during the year or have participated in a defined   benefits scheme while an Executive Director. The Executive Directors are   provided benefits in the event of death in service. They also have an   entitlement under a long-term disability plan from which two-thirds of base   salary, up to a maximum benefit determined by the insurer, would be provided   until normal retirement date (aged 60). In respect of the Executive Committee   members, the Group has made aggregate contributions of £130,806 (2015:   £43,000) into defined contribution pension schemes. Alignment to shareholder   interests All of our Executive Directors have shareholdings in excess of   their goals. Current levels of ownership by the Executive Directors, and the   date by which the goal should be or should have been achieved, are shown   below. The values are calculated using an average share price over the six   months to 31 March 2016 of 216.09 pence. Goal as a % of salary Current % of   salary held % of goal achieved Number of shares Value of shareholding Date   for goal to be achieved At 31 March 2016 Vittorio Colao 400% 2,049% 512%   10,906,223 £23.6m July 2012 Stephen Pusey (position at retirement) 300% 569%   190% 1,579,543 £3.4m June 2014 Nick Read 300% 644% 215% 2,086,257 £4.5m April   2019 Collectively the Executive Committee including the Executive Directors   own more than 24 million Vodafone shares, with a value of over £52.3 million.   None of the Executive Committee members’ shareholdings amounts to more than   1% of the issued shares in that class of share, excluding treasury shares.   Directors’ interests in the shares of the Company A summary of interests in   shares and scheme interests of the Directors who served during the year is   given below. More details of the performance shares and options follows.   Share plans Share options SAYE (unvested without performance conditions)   Unvested GLTI shares (with performance conditions) Total number of interests   in shares GIP (vested) At 31 March 2016 Executive Directors Vittorio Colao   21,490,367 10,574,537 9,607 – Stephen Pusey (position at retirement)   4,317,502 2,737,959 – – Nick Read 8,120,116 5,096,027 10,389 927,443 Total   33,927,985 18,408,523 19,996 927,443 The total number of interests in shares   includes interests of connected persons, unvested share awards and share   options. 68 Vodafone Group Plc Annual Report on Form 20-F 2016 

 

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Total number of   interests in shares At 31 March 2016 Non-Executive Directors Sir Crispin   Davis 34,500 Dr Mathias Döpfner 11,500 Dame Clara Furse 25,000 Valerie   Gooding1 4,038 Renee James 27,272 Samuel Jonah 30,190 Gerard Kleisterlee   107,078 Nick Land 42,090 David Nish 21,227 Luc Vandevelde (position at   retirement on 28 July 2015) 75,474 Philip Yea 33,408 Note: 1 On 17 May 2016,   Valerie Gooding acquired an interest in a further 7,962 shares resulting in a   total interest in 12,000 shares as at 17 May 2016. At 17 May 2016 and during   the period from 1 April 2016 to 17 May 2016, no Director had any interest in   the shares of any subsidiary company. Other than those individuals included   in the tables above who were Board members at 31 March 2016, members of the Group’s   Executive Committee at 31 March 2016 had an aggregate beneficial interest in   11,188,246 ordinary shares of the Company. At 17 May 2016 the Directors had   an aggregate beneficial interest in 13,336,745 ordinary shares of the Company   and the Executive Committee members had an aggregate beneficial interest in   11,197,712 ordinary shares of the Company, which includes awards made under   the Vodafone Share Incentive Plan after 31 March 2016 and share purchases   made after the year-end outside of the close period. None of the Directors or   the Executive Committee members had an individual beneficial interest   amounting to greater than 1% of the Company’s ordinary shares. With the   exception of the acquisition of an interest in 7,962 ordinary shares by   Valerie Gooding as outlined above, the Directors’ total number of interests   in shares did not change during the period from 1 April 2016 to 17 May 2016.   Performance shares The maximum number of outstanding shares that have been   awarded to Directors under the long-term incentive (‘GLTI’) plan are   currently as follows: 2014 award Awarded: June 2013 and September 20131   Performance period ending: March 2016 Vesting date: June 2016 Share price at   grant: 180.2 pence and 202.5 pence 2015 award Awarded: June 2014 Performance   period ending: March 2017 Vesting date: June 2017 2016 award Awarded: June   2015 and September 20151 Performance period ending: March 2018 Vesting date:   June 2018 GLTI performance share awards Share price at grant: 189.9 pence   Share price at grant: 239.4 pence and 207.2 pence Vittorio Colao 4,185,370   3,350,011 3,039,156 Stephen Pusey 1,904,846 833,113 – Nick Read 1,713,392   1,792,668 1,589,967 Note: 1 Due to a close period, Executive Directors were   not able to make co-investment commitments at the time of the main award in   June 2013 and 2015 and therefore part of the award was made in September 2013   and 2015 respectively. For details of the performance conditions please see   page 62. Share options The following information summarises the Executive   Directors’ options under the Vodafone Group 2008 Sharesave Plan (‘SAYE’), the   Vodafone Group Incentive Plan (‘GIP’) and the Vodafone Group Plc 1999   Long-Term Stock Incentive Plan (‘LTSIP’). HMRC approved awards may be made   under all of the schemes mentioned. No other Directors have options under any   schemes and, other than under the SAYE, no options have been granted since   2007. Options under the Vodafone Group 2008 Sharesave Plan were granted at a   discount of 20% to the market value of the shares at the time of the grant.   No other options may be granted at a discount. Options granted during the   2016 financial year Options exercised during the 2016 financial year Options   lapsed during the 2015 financial year At 1 April 2015 or date of appointment   Options held at 31 March 2016 Market price on exercise Option price Date from   which exercisable Number of shares Number of shares Number of shares Number   of shares Number of shares Gain on exercise Grant date Pence1 Expiry date   Pence Notes: 1 The closing trade share price on 31 March 2016 was 221.20   pence. The highest trade share price during the year was 255.35 pence and the   lowest price was 200.20 pence. 2 The options granted in July 2005 were   subject to a three year cumulative growth in adjusted earnings per share   performance condition. The options vested 100% in July 2008. 3 The options   granted in July 2007 were subject to a three year cumulative growth in   adjusted earnings per share performance condition. The options vested 100% in   July 2010. 69 Vodafone Group Plc Annual Report on Form 20-F 2016 Overview   Strategy review Performance Governance Financials Additional information   Vittorio Colao SAYE Jul 20149,607––– 9,607 156.13 Sep 2019 Feb 2020––   Total9,607 9,607 Nick Read LTSIP2Jul 2005257,838–257,838– – 136.00Jul 2008   Jul 2015 206.89 £182,786 GIP3 Jul 2007927,443––– 927,443 167.80Jul 2010 Jul   2017–– SAYE Jul 201210,389––– 10,389 144.37 Sep 2017 Feb 2018––   Total1,195,670 937,832 

 

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Directors’   remuneration (continued) Annual Report on remuneration (continued) At 17 May   2016 there had been no change to the Directors’ interests in share options   from 31 March 2016. Other than those individuals included in the table above,   at 17 May 2016 members of the Group’s Executive Committee held options for   26,501 ordinary shares at prices ranging from 156.1 pence to 189.2 pence per   ordinary share, with a weighted average exercise price of 174.3 pence per   ordinary share exercisable at dates ranging from 1 September 2017 to 1   September 2020. Hannes Ametsreiter, Paolo Bertoluzzo, Aldo Bisio, António   Coimbra, Warren Finegold, Ronald Schellekens, Robert Shuter and Serpil   Timuray held no options at 17 May 2016. Loss of office payments Stephen Pusey   retired on 31 July 2015 having worked 9 months of his 12 month notice period.   Stephen was entitled to receive payments in lieu of notice each month for the   remainder of his notice period subject to mitigation. In total, Stephen   received the equivalent of 3 months salary (£150,000) and an amount   equivalent to the pro-rated annual leave that had not been taken during his   employment in the year (£16,846). Since Stephen was employed for part of the   2016 financial year his annual bonus payment (as disclosed on page 67) was   pro-rated for time served (i.e. to 31 July 2015). Stephen’s 2014 GLTI award,   the final vesting of which is described on page 67, will also be pro-rated   for time worked and will vest at the normal vesting date. Stephen’s   outstanding 2015 GLTI award will be pro-rated on a time worked basis and will   vest, subject to performance, at the normal vesting date, in accordance with   our share plan rules. Stephen will receive no further benefits aside from the   provision of a SIM card for his personal use at the Company’s expense for a   period of three years commencing on 1 August 2015. Payments to past Directors   During the 2016 financial year Lord MacLaurin received benefit payments in   respect of security costs as per his contractual arrangements. These costs   exceeded our de minimis threshold of £5,000 p.a. and, including the tax paid,   were £9,411. Fees retained for external non-executive directorships Executive   Directors may hold positions in other companies as non-executive directors   and retain the fees. With effect from 1 July 2015, Vittorio Colao was   appointed to the boards of Unilever N.V. and Unilever PLC as a non-executive   director. During the year ended 31 March 2016 Vittorio retained fees of   £63,783 in respect of this role. With effect from 1 April 2015, Stephen Pusey   was appointed to the board of Centrica plc as a non-executive director.   During the period up to his retirement on 31 July 2015, Stephen retained fees   of £24,000 in respect of this role. Assessing pay and performance In the   table below we summarise the Chief Executive’s single figure remuneration   over the past seven years, as well as how our variable pay plans have paid   out in relation to the maximum opportunity. This can be compared with the   historic TSR performance over the same period. The chart below shows the   performance of the Company relative to the STOXX Europe 600 Index over a six   year period. The STOXX Europe 600 Index was selected as this is a broad-based   index that includes many of our closest competitors. It should be noted that   the payout from the long-term incentive plan is based on the TSR performance   shown in the chart on page 67 and not this chart. 322 310 170 193 Financial   year remuneration for Chief Executive (Vittorio Colao) 20101 2011 2012 2013   2014 2015 2016 Single figure of total remuneration £’000 3,350 7,022 15,767   11,099 8,014 2,810 5,270 Annual variable element (actual award versus maximum   opportunity) 64% 62% 47% 33% 44% 56% 58% Long-term incentive (vesting versus   maximum opportunity) 25% 31% 100% 57% 37% 0% 23% Note: 1 The single figure   reflects share awards which were granted in 2006 and 2007, prior to his   appointment to Chief Executive in 2008. 70 Vodafone Group Plc Annual Report   on Form 20-F 2016 Seven-year historical TSR performance (growth in the value of   a hypothetical €100 holding over seven years) 325 267 275279 215245 225190227   175155168167 125100137 7503/0903/1003/1103/1203/1303/1403/1503/16 Vodafone   Group STOXX Europe 600 Index 

 

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Change in the   Chief Executive’s remuneration In the table below we show the percentage   change in the Chief Executive’s remuneration (salary, taxable benefits and   annual bonus payment) between the 2015 and 2016 financial years compared to   the average for other Vodafone Group employees who are measured on comparable   business objectives and who have been employed in the UK since 2015 (per   capita). Vodafone has employees based all around the world and some of these   individuals work in countries with very high inflation therefore a comparison   to Vodafone’s UK-based Group employees is more appropriate than to all   employees. Percentage change from 2015 to 2016 Other Vodafone Group employees   employed in the UK Item Chief Executive: Vittorio Colao Base salary 0.9% 5.1%   Taxable benefits -20.0% 0.4% Annual bonus 4.3% 15.4% Relative spend on pay   The chart below shows both the dividends distributed in the year and the   total cost of remuneration in the Group. For more details on dividends and   expenditure on remuneration for all employees, please see pages 111 and 140   respectively. 2016 remuneration for the Chairman and Non-Executive Directors   Salary/fees Benefits1 Total 2016 £’000 2015 £’000 2016 £’000 2015 £’000 2016   £’000 2015 £’000 Notes: 1 We have been advised that for Non-Executive   Directors, certain travel and accommodation expenses in relation to attending   Board meetings should be treated as a taxable benefit. The table above   includes these travel expenses and the corresponding tax contribution. 2   Salary/fees include an additional allowance of £6,000 per meeting for   Directors based outside Europe. 71 Vodafone Group Plc Annual Report on Form   20-F 2016 Overview Strategy review Performance Governance Financials   Additional information Chairman Gerard Kleisterlee 625625 7766 702 691 Senior   Independent Director Philip Yea 128115 1– 129 115 Non-Executive Directors Sir   Crispin Davis (appointed 28 July 2014) 11578 –26 115 104 Dr Mathias Döpfner   (appointed 1 April 2015) 115– 1– 116 – Dame Clara Furse (appointed 1   September 2014) 11567 –– 115 67 Valerie Gooding 132115 65 138 120 Renee   James2 133145 1011 143 156 Samuel Jonah2 151151 175 168 156 Nick Land 140140   11 141 141 David Nish (appointed 1 January 2016) 29– 7– 36 – Former Non-Executive   Directors Alan Jebson2 (retired 31 July 2014) –56 –32 – 88 Omid Kordestani2   (retired 31 December 2014) –116 –14 – 130 Anne Lauvergeon (retired 31 July   2014) –38 –1 – 39 Luc Vandevelde (retired 28 July 2015) 53160 196 72 166   Anthony Watson (retired 31 July 2014) –38 –4 – 42 Total 1,7361,844 139171   1,875 2,015 Relative importance of spend on pay£m 5,000 4,194 4,411 4,000   2,930 2,998 3,000 2,000 1,000 02015201620152016 Distributed by way of   dividendsOverall expenditure on remuneration for all employees 

 

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Directors’   remuneration (continued) Annual Report on remuneration (continued) 2017   remuneration Details of how the remuneration policy will be implemented for   the 2017 financial year are set out below. 2017 base salaries The   Remuneration Committee considered business performance, salary increases for   other UK employees and external market information and decided to increase   the salary of the Chief Financial Officer by 2.0% which is in line with the   average salary increase budget for all employees across the UK. The Chief   Executive requested not to be considered for a salary increase during the   review. The average salary increase for Executive Committee members will be   2.5%; this compares to a budget of 2.4% which is based on an average of the   relevant local market budget for each Executive Committee member. The annual   salaries for 2017 (effective 1 July 2016) are as follows: a Chief Executive:   Vittorio Colao £1,150,000; and a Chief Financial Officer: Nick Read £714,000.   2017 annual bonus (‘GSTIP’) The performance measures and weightings for 2017,   which remain unchanged from 2016, are as follows: a service revenue (20%); a   Adjusted EBITDA (20%); a adjusted free cash flow (20%); and a customer   appreciation KPIs (40%). This includes an assessment of net promoter score   (‘NPS’) and brand consideration measures. In respect of the measures included   under the customer appreciation KPIs, net promoter score is used as a measure   of the extent to which our customers would recommend us, whilst brand   consideration acts as a measure of the percentage of people who would   consider using a certain brand as their telecoms provider. Both measures   utilise data collected in our local markets which is validated for quality   and consistency by independent third party agencies. The data is sourced from   studies involving both our own customers and customers of our competitors for   the NPS measure, and both Vodafone users and non-users for the brand   consideration measure. In formulating a final assessment of performance under   the customer appreciation KPIs, the Committee will also consider other   relevant customer factors such as churn, customer growth and service levels.   Due to the potential impact on our commercial interests, annual bonus targets   are considered commercially sensitive and therefore will be disclosed in the   2017 remuneration report following the completion of the financial year.   Long-term incentive (‘GLTI’) awards for 2017 As described in our policy on   pages 60 to 62 the performance conditions are a combination of adjusted free   cash flow and TSR performance. The details for the 2017 award are provided in   the table below (with linear interpolation between points). Following the annual   review of the performance measure, the Committee decided that for the 2017   award the TSR outperformance range should remain unchanged. The Committee   will keep the calibration of the range under review and continue to only make   changes where there is sufficient evidence to suggest this is appropriate.   TSR outperformance TSR peer group Bharti Orange 0.0% (Up to median) 4.5%   (65th percentile equivalent) 9.0% (80th percentile equivalent) Adjusted free   cash flow measure £bn1 BT Group Telecom Italia Below threshold <9.95 0% 0%   0% Deutsche Telekom Telefónica Threshold 9.95 50% 75% 100% MTN Target 11.80   100% 150% 200% Maximum 13.65 125% 187.5% 250% Note: 1 In line with the   decision to change the Group’s reporting currency to euros from pounds   sterling, as outlined in the Chairman’s statement on page 3, the equivalent   targets in euros, based on internal foreign exchange rate assumptions,   including €1.38 : £1, will be a threshold of €13.75bn, a target of €16.30bn   and a maximum of €18.85bn. The combined vesting percentages are applied to   the target number of shares granted. 2016 remuneration for the Chairman and   Non-Executive Directors For the 2016 review, the fees for our Chairman and   non-executives have been benchmarked against a comparator group of the FTSE   30 companies (excluding Financial Services). Following the review it was   agreed that the additional fee for the Senior Independent Director should be   increased by £5,000 which brings it in line with other fees for additional   responsibilities. Fee payable £’000 From 1 April 2016 Position/role Chairman 1   625 Non-Executive Director 115 Additional fee for Senior Independent Director   25 Additional fee for Chairmanship of Audit, Remuneration and Risk Committees   25 Note: 1 The Chairman’s fee also includes the fee for the Chairmanship of   the Nominations and Governance Committee. 72 Vodafone Group Plc Annual Report   on Form 20-F 2016 

 

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For 2017, the   allowance payable each time a non-Europe-based Non-Executive Director is   required to travel to attend Board and Committee meetings to reflect the   additional time commitment involved is £6,000. Further remuneration   information Dilution All awards are made under plans that incorporate   dilution limits as set out in the guidelines for share incentive schemes   published by the Investment Association. The current estimated dilution from   subsisting executive awards is approximately 2.8% of the Company’s share   capital at 31 March 2016 (3.0% at 31 March 2015), whilst from all-employee   share awards it is approximately 0.5% (0.5% at 31 March 2015). This gives a   total dilution of 3.3% (3.5% at 31 March 2015). Service contracts The terms   and conditions of appointment of our Directors are available for inspection   at the Company’s registered office during normal business hours and at the   annual general meeting (for 15 minutes prior to the meeting and during the   meeting). The Executive Directors have notice periods in their service contracts   of 12 months. The Non-Executive Directors’ letters of appointment do not   contain provision for notice periods or for compensation if their   appointments are terminated. This report on remuneration has been approved by   the Board of Directors and signed on its behalf by: /s/ Valerie Gooding   Valerie Gooding Chairman of the Remuneration Committee 17 May 2016 73   Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information 

 

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Directors’   report The Directors of the Company present their report together with the   audited consolidated financial statements for the year ended 31 March 2016.   This report has been prepared in accordance with requirements outlined within   The Large and Medium-sized Companies and Groups (Accounts and Reports)   Regulations 2008 and forms part of the management report as required under   Disclosure & Transparency Rule (‘DTR’) 4. Certain information that   fulfils the requirements of the Directors’ report can be found elsewhere in   this document and is referred to below. This information is incorporated into   this Directors’ report by reference. Responsibility statement As required   under the DTR a statement made by the Board regarding the preparation of the   financial statements is set out on pages 76 and 77 which also provides   details regarding the disclosure of information to the Company’s auditor and   management’s report on internal control over financial information. Going   concern The going concern statement required by the Listing Rules and the   Code is set out in the “Directors’ statement of responsibility” on pages 76   and 77. Corporate governance statement The corporate governance statement   setting out how the Company complies with the Code and which includes a description   of the main features of its internal control and risk management arrangements   in relation to the financial reporting process is set out on pages 54 and 55.   The information required by DTR 7.2.6R can be found in the “shareholder   information” section on pages 175 to 181. A description of the composition   and operation of the Board and its Committees is set out on pages 38 to 73.   Strategic Report The Strategic Report is set out on pages 2 to 37 and is   incorporated into this Directors’ report by reference. Directors and their   interests The Directors of the Company who served during the financial year   ended 31 March 2016 and up to the date of signing the financial statements   are as follows: Gerard Kleisterlee, Vittorio Colao, Nick Read, Sir Crispin   Davis, Dr Mathias Döpfner, Dame Clara Furse, Valerie Gooding, Renee James,   Samuel Jonah, Nick Land, Philip Yea and David Nish. Luc Vandevelde and   Stephen Pusey stepped down during the financial year ended 31 March 2016.   Details of Directors’ interests in the Company’s ordinary shares, options   held over ordinary shares, interests in share options and long-term incentive   plans are set out on pages 66 to 72. Directors’ conflicts of interest   Established within the Company is a procedure for managing and monitoring conflicts   of interest for Directors. Details of this procedure are set out on page 54.   Directors’ indemnities In accordance with our Articles of Association and to   the extent permitted by law, Directors are granted an indemnity from the   Company in respect of liability incurred as a result of their office. In   addition, we maintained a Directors’ and officers’ liability insurance policy   throughout the year. Neither our indemnity nor the insurance provides cover   in the event that a Director is proven to have acted dishonestly or   fraudulently. Disclosures required under Listing Rule 9.8.4 The information   on the amount of interest capitalised and the treatment of tax relief can be   found in notes 5 and 6 to the consolidated financial statements respectively.   The remaining disclosures required by Listing Rule 9.8.4 are not applicable   to Vodafone. Capital structure and rights attaching to shares All information   relating to the Company’s capital structure, rights attaching to shares,   dividends, the policy to repurchase the Company’s own shares and other   shareholder information is contained on pages 175 to 181. Change of control   Details of change of control provisions in the Company’s revolving credit   facilities is set out on page 130. Information on agreements between the   Company and its Directors providing for compensation for loss of office of   employment (including details of change of control provisions in share   schemes) is set out on page 64. Subject to that, there are no agreements   between the Company and its employees providing for compensation for loss of   office of employment that occurs because of a takeover bid. Dividends Full   details of the Company’s dividend policy and proposed final dividend payment   for the year ended 31 March 2016 are set out on pages 17 and 36 and note 9 to   the consolidated financial statements. Sustainability Information about the   Company’s approach to sustainability risks and opportunities is set out on   pages 20 and 21. Also included on these pages are details of our greenhouse   gas emissions. Political donations No political donations or contributions to   political parties under the Companies Act 2006 have been made during the   financial year. The Group policy is that no political donations be made or   political expenditure incurred. Financial risk management objectives and   policies Disclosures relating to financial risk management objectives and   policies, including our policy for hedging are set out in note 23 to the   consolidated financial statements and disclosures relating to exposure to   price risk, credit risk, liquidity risk and cash flow risk are outlined in   note 23. Important events since the end of the financial year Details of   those important events affecting the Group which have occurred since the end   of the financial year are set out in the Strategic Report and note 32 to the   consolidated financial statements. Future developments within the Group The   Strategic Report contains details of likely future developments within the   Group. Group policy compliance Each Group policy is owned by a member of the   Executive Committee so that there is clear accountability and authority for   ensuring the associated business risk is adequately managed. Regional chief   executives and the senior leadership team member responsible for each Group   function have primary accountability for ensuring compliance with all Group   policies by all our markets and entities. Our Group compliance team and   policy champions support the policy owners and local markets in implementing   policies and monitoring compliance. Code of Conduct All of the key Group   policies have been consolidated into the Vodafone Code of Conduct. This is a   policy document applicable to all employees and those who work for or on   behalf of Vodafone. It sets out the standards of behaviour expected in   relation to areas such as insider dealing, bribery and raising concerns   through the whistle-blowing process (known internally as “Speak Up”).   Branches The Group, through various subsidiaries, has branches in a number of   different jurisdictions in which the business operates. Employee disclosures   Our disclosures relating to the employment of disabled persons, women in   senior management roles, employee engagement and policies are included in   “Our people” on pages 18 and 19. By Order of the Board /s/ Rosemary Martin Rosemary   Martin Group General Counsel and Company Secretary 17 May 2016 74 Vodafone   Group Plc Annual Report on Form 20-F 2016 

 

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Contents financial   statements: financial information: 96 2. Segmental analysis 170 This page is   intentionally left blank 100 4. Impairment losses financing costs 172 This   page is intentionally left blank 173 This page is intentionally left blank   109 7. Discontinued operations and assets 76 Directors’ statement 111 8.   Earnings per share B-1 Separate financial statements 114 11. Property, plant   and equipment public accounting firm public accounting firm 84 This page is   intentionally left blank joint arrangements 122 16. Trade and other payables   87 Consolidated statement 124 18. Called up share capital 88 Consolidated   statement 125 19. Reconciliation of net cash flow from 89 Consolidated   statement of changes 125 20. Cash and cash equivalents 90 Consolidated   statement of cash flows 130 22. Liquidity and capital resources 75 Vodafone   Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information Financials 91 Notes   to the consolidated 163 Other unaudited 911. Basis of preparation163 Prior   year operating results Income statement 168 This page is intentionally left   blank 993. Operating profit/(loss)169 This page is intentionally left blank   1045. Investment income and 171 This page is intentionally left blank 1056.   Taxation held for sale 174 This page is intentionally left blank of   responsibility 1119. Equity dividendsrequired by Rule 3-09 of 78 Risk   mitigation Financial position Regulation S-X 82 Report of independent   registered 112 10. Intangible assets B-3 Report of independent registered 116   12. Investments in associates and 85 This page is intentionally left blank   119 13. Other investments 86 This page is intentionally left blank 120 14.   Inventory 87 Consolidated financial statements:121 15. Trade and other   receivables 87 Consolidated income statement 123 17. Provisions of   comprehensive income Cash flows of financial position operating activities in   equity126 21. Borrowings 134 23. Capital and financial risk management   Employee remuneration 139 24. Directors and key management compensation 140   25. Employees 141 26. Post employment benefits 145 27. Share-based payments   Additional disclosures 147 28. Acquisitions and disposals 148 29. Commitments   149 30. Contingent liabilities and legal proceedings 153 31. Related party   transactions 153 32. Subsequent events 154 33. Related undertakings 162 34.   Subsidiaries exempt from audit Reporting our financial performance We   continue to review the format of our consolidated financial statements with   the aim of making them clear and easier to follow. This year, we have changed   the order of certain notes to the financial statements so as to incorporate a   full listing of all the Group’s related undertakings, including subsidiaries,   joint arrangements and associates, in note 33, as now required by Company   Law. We hope these changes help you to navigate to the information that is   important to you. 

 

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Directors’   statement of responsibility The Directors are responsible for preparing the   financial statements in accordance with applicable law and regulations and   keeping proper accounting records. Detailed below are statements made by the   Directors in relation to their responsibilities, disclosure of information to   the Company’s auditor, going concern and management’s report on internal   control over financial reporting. Financial statements and accounting records   Company law of England and Wales 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 of the Group at the end of the financial   year and of the profit or loss of the Group for that period. In preparing   those financial statements the Directors are required to: The Directors are   responsible for preparing the Annual Report in accordance with applicable law   and regulations. Having taken advice from the Audit and Risk Committee, the   Board considers the report and accounts, taken as a whole, is fair, balanced   and understandable and that it provides the information necessary for   shareholders to assess the Company’s position and performance, business model   and strategy. Neither the Company nor the Directors accept any liability to   any person in relation to the Annual Report except to the extent that such   liability could arise under English law. Accordingly, any liability to a   person who has demonstrated reliance on any untrue or misleading statement or   omission shall be determined in accordance with section 90A and schedule 10A   of the Financial Services and Markets Act 2000. a select suitable accounting   policies and apply them consistently; a make judgements and estimates that   are reasonable and prudent; a present information, including accounting   policies, in a manner that provides relevant, reliable, comparable and   understandable information; a state whether the consolidated financial   statements have been prepared in accordance with International Financial Reporting   Standards (‘IFRS’) as adopted for use in the EU and Article 4 of the EU IAS   Regulations. The Directors also ensure that the consolidated financial   statements have been prepared in accordance with IFRS as issued by the   International Accounting Standards Board (‘IASB’); Disclosure of information   to the auditor Having made the requisite enquiries, so far as the Directors   are aware, there is no relevant audit information (as defined by section   418(3) of the Companies Act 2006) of which the Company’s auditor is unaware   and the Directors have taken all the steps they ought to have taken to make   themselves aware of any relevant audit information and to establish that the   Company’s auditor is aware of that information. a state for the Company   financial statements whether applicable UK accounting standards have been   followed; and Going concern The Group’s business activities, performance,   position and principal risks and uncertainties and how these are managed are   set out in the strategic report on pages 1 to 37. A range of mitigations for   risks faced by the Group are included on pages 78 and 81. In addition, the   financial position of the Group is included in “Borrowings”, “Liquidity and   capital resources” and “Capital and financial risk management” in notes 21, 22   and 23 respectively to the consolidated financial statements, which include   disclosure in relation to the Group’s objectives, policies and processes for   managing its capital; its financial risk management objectives; details of   its financial instruments and hedging activities; and its exposures to credit   risk and liquidity risk. The Group believes it adequately manages or   mitigates its solvency and liquidity risks through two primary processes,   described below. Business planning process and performance management The   Group’s forecasting and planning cycle consists of three in-year forecasts, a   budget and a long-range plan. These generate income statement, cash flow and   net debt projections for assessment by Group management and the Board. Each   forecast is compared with prior forecasts and actual results so as to   identify variances and understand the drivers of the changes and their future   impact so as to allow management to take action where appropriate. Additional   analysis is undertaken to review and sense check the key assumptions   underpinning the forecasts. a 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 of the Group and to enable them to   ensure that the financial statements comply with the Companies Act 2006 and   for the consolidated financial statements, Article 4 of the EU IAS   Regulation. They are also responsible for the system of internal control, 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. The Directors are responsible for the maintenance and   integrity of the Company’s website. Legislation in the United Kingdom   governing the preparation and dissemination of financial statements may   differ from legislation in other jurisdictions. Directors’ responsibility   statement Each of the Directors, whose names and functions are listed on   pages 40 and 41 confirm that, to the best of their knowledge: a the   consolidated financial statements, prepared in accordance with IFRS as issued   by the IASB and IFRS as adopted by the EU, give a true and fair view of the   assets, liabilities, financial position and profit of the Group; a the parent   company financial statements, prepared in accordance with United Kingdom   generally accepted accounting practice, give a true and fair view of the   assets, liabilities, financial position and profit of the Company; and a the   strategic report includes a fair review of the development and performance of   the business and the position of the Group together with a description of the   principal risks and uncertainties that it faces. 76 Vodafone Group Plc Annual   Report on Form 20-F 2016 

 

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Cash flow and   liquidity reviews The business planning process provides outputs for detailed   cash flow and liquidity reviews, to ensure that the Group maintains adequate   liquidity throughout the forecast periods. The prime output is a one year   liquidity forecast which is prepared and updated on a daily basis which   highlights the extent of the Group’s liquidity based on controlled cash flows   and the headroom under the Group’s undrawn revolving credit facility (‘RCF’).   The key inputs into this forecast are: Any internal control framework, no   matter how well designed, has inherent limitations including the possibility   of human error and the circumvention or overriding of the controls and   procedures, and may not prevent or detect misstatements. Also, projections of   any evaluation of effectiveness to future periods are subject to the risk   that controls may become inadequate because of changes in conditions or because   the degree of compliance with the policies or procedures may deteriorate.   Management has assessed the effectiveness of the internal control over   financial reporting at 31 March 2016 based on the updated Internal Control –   Integrated Framework, issued by the Committee of Sponsoring Organizations of   the Treadway Commission (‘COSO’) in 2013. Based on management’s assessment,   management has concluded that internal control over financial reporting was   effective at 31 March 2016. During the period covered by this document, there   were no changes in the Group’s internal control over financial reporting that   have materially affected or are reasonably likely to materially affect the   effectiveness of the internal controls over financial reporting. The Group’s internal   control over financial reporting at 31 March 2016 has been audited by   PricewaterhouseCoopers LLP, an independent registered public accounting firm   who also audit the Group’s consolidated financial statements. Their audit   report on internal control over financial reporting is on page 82. By Order   of the Board /s/ Rosemary Martin Rosemary Martin Group General Counsel and   Company Secretary 17 May 2016 a free cash flow forecasts, with the first   three month’s inputs being sourced directly from the operating companies   (analysed on a daily basis), with information beyond this taken from the   latest forecast/budget cycle; a bond and other debt maturities; and a   expectations for shareholder returns, spectrum auctions and M&A activity.   The liquidity forecast shows two scenarios assuming either maturing   commercial paper is refinanced or no new commercial paper issuance. The   liquidity forecast is reviewed by the Group Chief Financial Officer and   included in each of his reports to the Board. In addition, the Group continues   to manage its foreign exchange and interest rate risks within the framework   of policies and guidelines authorised and reviewed by the Board, with   oversight provided by the Treasury Risk Committee. Conclusion The Group has   considerable financial resources, and the Directors believe that the Group is   well placed to manage its business risks successfully. Accordingly, the   Directors continue to adopt the going concern basis in preparing the Annual   Report and accounts. Disclosure controls and procedures The Directors, the   Chief Executive and the Chief Financial Officer have evaluated the   effectiveness of the disclosure controls and procedures, including those   defined in the United States Securities Exchange Act of 1934, Rule 13a–15(e),   and, based on that evaluation, have concluded that the disclosure controls   and procedures were effective at the end of the period covered by this   report. Management’s report on internal control over financial reporting As   required by section 404 of the US Sarbanes-Oxley Act, management is   responsible for establishing and maintaining adequate internal control over   financial reporting for the Group. The Group’s internal control over   financial reporting includes policies and procedures that: a pertain to the   maintenance of records that, in reasonable detail, accurately and fairly   reflect transactions and dispositions of assets; a are designed to provide   reasonable assurance that transactions are recorded as necessary to permit   the preparation of financial statements in accordance with IFRS, as adopted   by the EU and IFRS as issued by the IASB, and that receipts and expenditures   are being made only in accordance with authorisation of management and the   Directors of the Company; and a provide reasonable assurance regarding   prevention or timely detection of unauthorised acquisition, use or   disposition of the Group’s assets that could have a material effect on the   financial statements. 77 Vodafone Group Plc Annual Report on Form 20-F 2016   Overview Strategy review Performance Governance Financials Additional   information 

 

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Risk mitigation   Mitigations for risks faced by the Group include: How could it impact us?   This risk could have major customer, financial, reputational and regulatory   impact in all markets in which we operate. As some systems operate at Group   level and support more than one market, we could be affected in multiple   markets at one time and for both consumer and enterprise customers,   magnifying the impact. Changes from 2015 This risk combines two risks from   our previous annual report; malicious attack causing service disruption; and   customer data breach. We have merged these to reflect that a single   cyber-attack could result in both outcomes. How do we manage it? a We have a   global security strategy that is risk-based and approved by the Executive   Committee a We have a global security function that sets policies and   processes. Security controls are implemented centrally and in local markets,   and we have a continuous improvement programme to mitigate the changing   threats we face a We manage the risk of malicious attacks on our   infrastructure using our global security operations centre that provides 24/7   proactive monitoring of our global infrastructure, responds to incidents and   manages recovery from those incidents a Applications or infrastructure that   store or transmit confidential personal and business voice and data traffic   have layers of security control applied a We have an assurance programme that   incorporates both internal reviews and reviews of third parties that hold   data on our behalf. Vodafone holds internationally recognised certifications   for its information security processes a We regularly provide mandatory   security and privacy awareness training to Vodafone employees How could it   impact us? Our own convergence strategy may be compromised if we are unable   to obtain regulated or equivalent access to infrastructure and content, or   acquire, rent or build the right assets, or if we are unable to effectively   integrate those businesses we do acquire into our existing operations.   Changes from 2015 This risk has slightly increased as regulation is failing   to deliver a level playing field across fixed and content markets leading to   potential re-monopolisation by incumbent operators. How do we manage it? a We   actively look for opportunities, in all markets, to provide services beyond   mobile through organic investment, acquisition, partnerships, or joint   ventures. In key European and some non-European markets we are already   providing converged services a Timely and coordinated intervention with   regulatory and competition authorities to ensure that dominant infrastructure   access and content providers cannot discriminate or restrict competition a   Integration plans ensure that cost synergies and revenue benefits are   delivered and acquired businesses are successfully integrated through the   alignment of policies, processes and systems How could it impact us? If we   are not licensed to operate, we cannot serve our customers. If the cost of   operations were to significantly increase, directly or indirectly, this would   impact Vodafone’s profitability and returns to shareholders. Additionally,   disputes in regards to the level of tax payable and any related penalties   could be significant, as reflected in our ongoing dispute in India. Changes   from 2015 There have been no significant changes over the last 12 months. How   do we manage it? a We work with governments and regulators, nationally and   internationally, to help shape any proposals that impact our business a We   maintain constructive but robust engagement with the tax authorities,   relevant government representatives and non-governmental organisations as   well as active engagement with a wide range of international companies and   business organisations with similar issues a Where appropriate, we engage   advisers and legal counsel to obtain opinions on tax legislation and   principles 78 Vodafone Group Plc Annual Report on Form 20-F 2016 Adverse   political measures Failure to deliver on convergence Cyber threat Unaudited   information 

 

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How could it   impact us? This is an unlikely risk; however, it would have a major impact on   services used by our customers in all our markets – particularly in countries   that have a very low tolerance for environmental and health-related risks.   Changes from 2015 There have been no significant changes to this risk over   the last 12 months. How do we manage it? a We have a global health and safety   policy that includes standards for electromagnetic fields (‘EMF’) that are   mandated in all our local markets. Compliance to this policy is monitored and   overseen by the Risk and Compliance Committee a We have a Group EMF Board   that manages potential risks through cross sector initiatives and which   oversees a coordinated global programme to respond to public concern, and   develop appropriate advocacy related to possible precautionary legislation a   We monitor scientific developments and engage with relevant bodies to support   the delivery and transparent communication of the scientific research agenda   set by the WHO How could it impact us? Failure to deliver these enterprise   services may lead to a reduction in our expected revenue and could impact our   credibility to deliver on large, complex deals. Delivery challenges for any   nationally critical service would have a particularly adverse impact on our   reputation. Changes from 2015 We are facing new competitors for our   Enterprise customers, specifically from major technology companies. Despite   this, and the new business brought in over the last 12 months, the risk   remains stable. How do we manage it? a Our Group Enterprise customer   operations are now consolidated within one function, aligned to industry best   practice which will deliver a standard service model to our customers a We   have implemented a single process across Group Enterprise that ensures   alignment, visibility and control across the entire customer experience, from   sales governance and commercial risk through to service delivery, billing and   in-life operations. This is supported by globally standardised “ways of   working” frameworks a We have an investment plan in implementation to   digitise service operations, with investment having started in the 2016   financial year and set to conclude in the 2018 financial year. This plan is   aimed at lifting our Enterprise customer experience into a market leadership position   How could it impact us? The potential for another global financial crisis may   lead to further economic instability and subsequent reductions in corporate   and consumer confidence and spending. It could also have a prolonged impact   on capital markets that may restrict our financing. Changes from 2015   Eurozone stability has improved but low commodity prices, in part a   consequence of reduced forecast growth in China, means the threat of another   global financial crisis remains a significant risk factor, given the   inability of central banks to reduce interest rates much further. How do we   manage it? a We monitor closely economic and currency situations in both our   AMAP and European markets a We include contingencies in our business plans to   cater for negative operational impacts that could arise from a variety of   causes including the impact of lower economic growth than is generally   expected a We have credit facilities with 30 relationship banks that are   committed for a minimum of five years and which total £5.8 billion. Such   facilities could be used in the event of a prolonged disruption to the   capital markets a Our exposure to any depreciation of sterling, for example   from the UK leaving the EU, is limited by the fact that the vast majority of   our income is denominated in other currencies 79 Vodafone Group Plc Annual   Report on Form 20-F 2016 Overview Strategy review Performance Governance   Financials Additional information Unstable economic conditions Major   enterprise contracts EMF related health risks 

 

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How could it   impact us? There are two ways in which this risk could occur. First, advances   in offerings of over the top (‘OTT’) services could reduce demand for our   traditional voice and text services and impact revenue. Secondly, new   entrants investing heavily or the consolidation of competitors could result   in price wars in key markets. The threat from OTT competition is relevant for   all markets where alternative services are commonly available and has the   potential for major impact on service revenues. The risk of competitor   disruption is higher in new and emerging markets. Changes from 2015 This risk   previously included supplier concentration. Improvements in how we manage key   supplier groups and ensuring competitive tendering have reduced this risk.   How do we manage it? a We have developed strategies which strengthen our   relationships with customers through integrated voice, messaging and data   price plans to avoid customers reducing their out of bundle usage through   internet/Wi-Fi based substitution. The loss of voice and messaging revenue is   partially offset by the increase in data revenue a We monitor the competitor   landscape in all markets, and react appropriately, working to make sure each   market has a fair and competitive environment How could it impact us? For the   majority of network and IT infrastructure failures, the associated impacts   would be confined to a single market. There are, however, some exceptions   where data centres and critical network sites serve multiple markets. There   are a number of causes for failure such as major incidents caused by   suppliers, natural disasters, deliberate attacks or a failure as a result of   an internal project or transformation. Failure to successfully implement key   IT transformation projects would also increase the risk of IT systems being   unable to support our strategic objectives. Changes from 2015 During 2016 a   number of major projects to improve key IT systems are taking place in some   of our markets, which increases this risk, during the project implementation   phase. How do we manage it? a Specific back-up and resilience policy   requirements are built into our network and IT infrastructure a We monitor   our ability to replace strategic equipment promptly in the event of   end-of-life failure, and for high risk components we maintain dedicated   back-up equipment ready for use a A blueprinted approach to geographic   resilience, where the secondary IT location is expected to be in a different   country, has been developed with external market specialists. This will be   used for business applications which require this degree of location   resilience a Network and IT contingency plans are in place to cover residual   risks that cannot be mitigated a A crisis management team and escalation   processes are in place both nationally and internationally. Crisis   simulations are conducted annually 80 Vodafone Group Plc Annual Report on   Form 20-F 2016 Network/IT infrastructure failure Market disruption 

 

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How could it   impact us? Non-compliance with legislation or regulatory requirements could   lead to reputational damage, financial penalties and/or suspension of our   licence to operate. Changes from 2015 Now included in our principal risks due   to changes in laws and their enforcement. How do we manage it? a We have   subject matter experts in legal and regulatory teams at a local and global   level who manage risk across the Group a Our Compliance team monitors all   high risk policies and tracks remedial actions for non-compliance or partial   compliance a We train our employees in “Doing what’s right”, our training and   awareness programme which defines and reinforces our ethical culture across   the organisation How could it impact us? This risk is relevant to all our   markets in both our consumer and enterprise businesses. Differentiation based   on a superior customer experience involves a number of areas, including those   that directly deal with customers and others that look after our network and   IT systems. Changes from 2015 We have now completed one year of our Customer   eXperience eXcellence programme. In the 2016 financial year we achieved   improvements in our consumer Net Promoter Score (‘NPS’) position in 15 out of   20 of our Local Markets. Vodafone is now ranked number one in 13 out of 21   markets. In nine out of 13 of these markets we increased our gap over our   closest competitor, supporting our ambition to become a clear customer   experience leader. In most of the remaining markets we significantly   decreased the gap between Vodafone and the leader. This marks Vodafone’s best   annual improvement in overall NPS to date. How do we manage it? a Customer   experience has been prioritised as a key component of our strategy. Our   customer experience programme has been implemented across the business to   deliver a range of system capability improvements to support an enhanced   customer experience a We track and monitor our performance in delivering a   superior customer experience through a range of KPIs; the most critical being   our NPS and Brand Consideration metrics a We communicate with our customers   clearly and transparently particularly around tariffs and roaming costs a We   provide a leading customer experience through our My Vodafone app and online   channels Strengthening our approach to risk management To support the   implementation of this framework, the following actions have been put in   place during the 2016 financial year. a Created a Group Risk function   reporting to the Group Risk & Compliance Director a Brought together a   global risk community from local markets and specialist risk areas to support   the delivery of the framework and share best practices a Completed an   integrated assurance mapping project to identify and enable oversight into   the mitigations and level of assurance in place for the key risks in all   local markets and entities a Assigned Executive Committee owners and Senior   Leadership champions for each principal risk Further enhancements are planned   during the 2017 financial year, including the implementation of a Risk &   Integrated Assurance platform that can bring the framework to life and   support the ongoing development of integrated assurance across the “three   lines of defence”1. Note: 1 A term used to describe the systematic approach   to how we manage risk and provide assurance to the Board that risks are   managed effectively. The first line of defence typically sits in the business   operations (e.g. Technology), the second line of defence has oversight over   the first line of defence (e.g. Compliance or Risk Management), and the third   line of defence are the independent assurance providers (e.g. Internal   Audit). 81 Vodafone Group Plc Annual Report on Form 20-F 2016 Overview   Strategy review Performance Governance Financials Additional information   Customer Experience Non-compliance with laws and regulation 

 

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Report of   independent registered public accounting firm To the Board of directors and   shareholders of Vodafone Group Plc In our opinion, the accompanying   consolidated statement of financial position and the related consolidated   income statement, consolidated statement of comprehensive income,   consolidated statement of changes in equity and consolidated statement of   cash flows present fairly, in all material respects, the financial position   Vodafone Group Plc and its subsidiaries (“the Company”) at 31 March 2016 and   31 March 2015, and the results of their operations and their cash flows for   the years ended 31 March 2016 and 31 March 2015 in conformity with   International Financial Reporting Standards as issued by the International   Accounting Standards Board and in conformity with International Financial   Reporting Standards as adopted by the European Union. Also in our opinion,   the Company maintained, in all material respects, effective internal control   over financial reporting as of 31 March 2016, based on criteria established   in Internal Control – Integrated Framework 2013 issued by the Committee of   Sponsoring Organizations of the Treadway Commission (‘COSO’). The Company’s   management is responsible for these financial statements, for maintaining   effective internal control over financial reporting and for its assessment of   the effectiveness of internal control over financial reporting, included in   Management’s report on internal control over financial reporting. Our   responsibility is to express opinions on these financial statements and on   the Company’s internal control over financial reporting based on our   integrated audit. We conducted our audits in accordance with the standards of   the Public Company Accounting Oversight Board (United States) and   International Standards on Auditing. Those standards require that we plan and   perform the audits to obtain reasonable assurance about whether the financial   statements are free of material misstatement and whether effective internal   control over financial reporting was maintained in all material respects. Our   audits of the financial statements included examining, on a test basis,   evidence supporting the amounts and disclosures in the financial statements,   assessing the accounting principles used and significant estimates made by   management, and evaluating the overall financial statement presentation. Our   audit of internal control over financial reporting included obtaining an   understanding of internal control over financial reporting, assessing the   risk that a material weakness exists, and testing and evaluating the design   and operating effectiveness of internal control based on the assessed risk.   Our audits also included performing such other procedures as we considered   necessary in the circumstances. We believe that our audits provide a   reasonable basis for our opinion. A company’s internal control over financial   reporting is a process designed to provide reasonable assurance regarding the   reliability of financial reporting and the preparation of financial   statements for external purposes in accordance with generally accepted   accounting principles. A company’s internal control over financial reporting   includes those policies and procedures that (i) pertain to the maintenance of   records that, in reasonable detail, accurately and fairly reflect the   transactions and dispositions of the assets of the company; (ii) provide   reasonable assurance that transactions are recorded as necessary to permit   preparation of financial statements in accordance with generally accepted   accounting principles, and that receipts and expenditures of the company are   being made only in accordance with authorizations of management and directors   of the company; and (iii) provide reasonable assurance regarding prevention   or timely detection of unauthorized acquisition, use, or disposition of the   company’s assets that could have a material effect on the financial   statements. Because of its inherent limitations, internal control over   financial reporting may not prevent or detect misstatements. Also, projections   of any evaluation of effectiveness to future periods are subject to the risk   that controls may become inadequate because of changes in conditions, or that   the degree of compliance with the policies or procedures may deteriorate. We   have audited the adjustments to the 2014 financial statements to reflect   retrospectively the change in presentation of the segment information, as   described in note 2. Our audit procedures that were applied to the restated   disclosures for comparative 2014 reportable segments included: (i) agreeing   the adjusted amounts of each segment to the underlying records obtained from   management, and (ii) determining the mathematical accuracy of the   reconciliations of segment amounts to the consolidated financial statements.   In our opinion, such adjustments are appropriate and have been properly   applied. We were not engaged to audit, review, or apply any procedures to the   2014 financial statements of the Company other than with respect to the   adjustments and, accordingly, we do not express an opinion or any other form   of assurance on the 2014 financial statements taken as a whole. /s/   PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP London, United Kingdom   17 May 2016 82 Vodafone Group Plc Annual Report on Form 20-F 2016 

 

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Report of   Independent Registered Public Accounting Firm to the members of Vodafone   Group Plc We have audited, before the effects of the retrospective   adjustments to the segment disclosures in note 2 to the consolidated   financial statements, the accompanying consolidated income statement,   consolidated statement of comprehensive income, consolidated statement of   changes in equity and consolidated statement of cash flows for the year ended   31 March 2014 (the 2014 consolidated financial statements before the effects   of the retrospective adjustments to the segment disclosures in note 2 to the   consolidated financial statements are not presented herein). These financial   statements are the responsibility of the Group’s management. Our   responsibility is to express an opinion on the financial statements based on   our audit. We conducted our audit in accordance with the standards of the   Public Company Accounting Oversight Board (United States). Those standards   require that we plan and perform the audit to obtain reasonable assurance   about whether the financial statements are free of material misstatement. An   audit includes examining, on a test basis, evidence supporting the amounts   and disclosures in the financial statements. An audit also includes assessing   the accounting principles used and significant estimates made by management,   as well as evaluating the overall financial statement presentation. We believe   that our audit provides a reasonable basis for our opinion. In our opinion,   such 2014 consolidated financial statements, before the effects of the   retrospective adjustments to the segment disclosures in note 2 to the   consolidated financial statements, present fairly, in all material respects,   the results of its operations and cash flows for the year ended 31 March   2014, in conformity with International Financial Reporting Standards as   issued by the International Accounting Standards Board. We were not engaged   to audit, review, or apply any procedures to the retrospective adjustments   made in 2015 and 2016 to the segment disclosures in note 2 to the   consolidated financial statements and, accordingly, we do not express an   opinion or any other form of assurance about whether such retrospective   adjustments are appropriate and have been properly applied. Those   retrospective adjustments were audited by other auditors. /s/ Deloitte LLP   Deloitte LLP London, United Kingdom 20 May 2014 83 Vodafone Group Plc Annual Report   on Form 20-F 2016 Overview Strategy review Performance Governance Financials   Additional information 

 

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Consolidated   income statement for the years ended 31 March 2016 £m 2015 £m 2014 £m Note   Note: 1 Profit attributable to non-controlling interests solely derives from   continuing operations. for the years ended 31 March 2016 £m 2015 £m 2014 £m   Note Further details on items in the consolidated statement of comprehensive   income can be found in the consolidated statement of changes in equity on   page 89. 87 Vodafone Group Plc Annual Report on Form 20-F 2016 Overview   Strategy review Performance Governance Financials Additional information   (Loss)/profit for the financial year (3,818) 5,91759,420 Other comprehensive   income: Items that may be reclassified to profit or loss in subsequent years:   (Losses)/gains on revaluation of available-for-sale investments, net of tax   (2) 4(119) Foreign exchange translation differences, net of tax 3,540   (6,516)(4,104) Foreign exchange losses/(gains) transferred to the income   statement 70 (1) 1,493 Fair value gains transferred to the income statement –   (9)(25) Other, net of tax 34 7– Total items that may be reclassified to   profit or loss in subsequent years 3,642 (6,515)(2,755) Items that will not   be reclassified to profit or loss in subsequent years: Net actuarial   gains/(losses) on defined benefit pension schemes, net of tax 26 126 (212)37   Total items that will not be reclassified to profit or loss in subsequent   years 126 (212)37 Other comprehensive income/(expense) 3,768 (6,727)(2,718)   Total comprehensive expense/(income) for the year (50) (810)56,702   Attributable to: – Owners of the parent (123) (1,076)56,711 – Non-controlling   interests 73 266(9) (50) (810)56,702 Consolidated statement of comprehensive   income Revenue 2 40,973 42,22738,346 Cost of sales (30,435) (30,882)(27,942)   Gross profit 10,538 11,34510,404 Selling and distribution expenses (3,570)   (3,455)(3,033) Administrative expenses (5,110) (5,746) (4,245) Share of   results of equity accounted associates and joint ventures 44 (63) 278   Impairment losses 4 (450) –(6,600) Other income and expense (75) (114)(717)   Operating profit/(loss)3 1,377 1,967(3,913) Non-operating income and expense   (2) (19) (149) Investment income 5 300 883346 Financing costs 5 (2,124)   (1,736)(1,554) (Loss)/profit before taxation (449) 1,095(5,270) Income tax   (expense)/credit 6 (3,369) 4,76516,582 (Loss)/profit for the financial year   from continuing operations (3,818) 5,86011,312 Profit for the financial year   from discontinued operations 7 – 57 48,108 (Loss)/profit for the financial   year (3,818) 5,91759,420 Attributable to: – Owners of the parent (4,024)   5,76159,254 – Non-controlling interests 1 206 156166 (Loss)/profit for the   financial year (3,818) 5,91759,420 (Loss)/earnings per share From continuing   operations: – Basic (15.08)p 21.53p 42.10p – Diluted (15.08)p 21.42p 41.77p   Total Group: – Basic 8 (15.08)p 21.75p 223.84p – Diluted 8 (15.08)p 21.63p 222.07p   

 

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Consolidated   statement of financial position at 31 March 31 March 2016 £m 31 March 2015 £m   Note The consolidated financial statements on pages 87 to 162 were approved   by the Board of Directors and authorised for issue on 17 May 2016 and were   signed on its behalf by: /s/ Vittorio Colao Vittorio Colao Chief Executive   /s/ Nick Read Nick Read Chief Financial Officer 88 Vodafone Group Plc Annual   Report on Form 20-F 2016 Non-current assets Goodwill10 22,789 22,537 Other   intangible assets10 23,979 20,953 Property, plant and equipment11 28,082   26,603 Investments in associates and joint ventures 12 (82) (3) Other   investments 13 3,662 3,757 Deferred tax assets6 22,382 23,845 Post employment   benefits26 177 169 Trade and other receivables15 4,580 4,865 105,569 102,726   Current assets Inventory14 565 482 Taxation recoverable 1,109 575 Trade and   other receivables15 9,141 8,053 Other investments 13 4,220 3,855 Cash and   cash equivalents20 10,218 6,882 Assets held for sale 7 2,891 – 28,144 19,847   Total assets 133,713 122,573 Equity Called up share capital18 3,792 3,792   Additional paid-in capital 119,925 117,054 Treasury shares (6,940) (7,045)   Accumulated losses (56,608) (49,471) Accumulated other comprehensive income   5,716 1,815 Total attributable to owners of the parent 65,885 66,145   Non-controlling interests 1,437 1,595 Put options over non-controlling   interests (5) (7) Total non-controlling interests 1,432 1,588 Total equity   67,317 67,733 Non-current liabilities Long-term borrowings21 29,327 22,435   Deferred tax liabilities6 446 595 Post employment benefits26 447 567   Provisions17 1,280 1,082 Trade and other payables16 1,501 1,264 33,001 25,943   Current liabilities Short-term borrowings21 16,020 12,623 Taxation   liabilities 540 599 Provisions17 757 767 Trade and other payables16 15,732   14,908 Liabilities for sale7 346 – 33,395 28,897 Total equity and liabilities   133,713 122,573 

 

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Consolidated   statement of changes in equity for the years ended 31 March Equity   share-holders’ funds £m Other comprehensive income Additional paid-in   capital2 £m Non-controlling interests £m Share capital1 £m Treasury shares £m   Retained losses £m Currency reserve3 £m Pensions reserve £m Investment   Revaluation reserve4 £m surplus5 £m Other6 £m Total £m 1 April 2013 3,866   154,279 (9,029) (88,834) 10,600 (648) 135 1,040 68 71,477 1,011 72,488 Issue   or reissue of shares – 2 194 (173) – – – – – 23 – 23 Redemption or   cancellation of shares (74) 74 1,648 (1,648) – – – – – – – – Capital   reduction and creation of B and C shares 16,613 (37,470) – 20,857 – – – – – –   – – Cancellation of B shares (16,613) – – 1,115 – – – – – (15,498) – (15,498)   887 Share-based payments – – – – – – – –88 – 88 Transactions with   non-controlling interests in subsidiaries – – – (1,451) – – – – –(1,451) 260   (1,191) Dividends – – – (40,566) – – – – – (40,566) (284) (40,850)   Comprehensive income – – – 59,254 (2,436) 37 (119) – (25) 56,711 (9) 56,702   Other – – – 18 – – – – – 18 1 19 31 March 2014 3,792 116,973 (7,187) (51,428)   8,164 (611) 16 1,040 43 70,802 979 71,781 Issue or reissue of shares – 2 142   (126) – – – – – 18 – 18 957 Share-based payments – – – – – – – – 95 – 95   Transactions with non-controlling interests in subsidiaries – – – (756) – – –   – – (756) 605 (151) Dividends – – – (2,930) – – – – – (2,930) (262) (3,192)   Comprehensive income – – – 5,761 (6,627) (212) (5) – 7 (1,076) 266 (810)   Other – (16) – 8 – – – – – (8) – (8) 31 March 2015 3,792 117,054 (7,045)   (49,471) 1,537 (823) 11 1,040 50 66,145 1,588 67,733 Notes: 1 See note 18   “Called up share capital”. 2 Includes share premium, capital reserve, capital   redemption reserve, merger reserve and share-based payment reserve. The   merger reserve was derived from acquisitions made prior to 31 March 2004 and   subsequently allocated to additional paid-in capital on adoption of IFRS. 3   The currency reserve is used to record cumulative translation differences on   the assets and liabilities of foreign operations. The cumulative translation   differences are recycled to the income statement on disposal of the foreign   operation. 4 The investment reserve is used to record the cumulative fair   value gains and losses on available-for-sale financial assets. The cumulative   gains and losses are recycled to the income statement on disposal of the   assets. 5 The revaluation surplus derives from acquisitions of subsidiaries   made before the Group’s adoption of IFRS 3 (Revised) on 1 April 2010 and   comprises the amounts arising from recognising the Group’s pre-existing   equity interest in the acquired subsidiary at fair value. 6 Includes the   impact of the Group’s cash flow hedges with £267 million net gain deferred to   other comprehensive income during the year (2015: £607 million net gain;   2014: £129 million net loss) and £233 million net gain (2015: £649 million   net gain; 2014: £171 million net loss) recycled to the income statement. 7   Includes £3 million tax credit (2015: £7 million tax credit; 2014: £12   million charge). 8 Includes the equity component of mandatory convertible   bonds which are compound instruments issued in the year. 89 Vodafone Group   Plc Annual Report on Form 20-F 2016 Overview Strategy review Performance   Governance Financials Additional information Issue or reissue of shares –1105(93)   –––––13–13 Share-based payments –1167–– –––––116–116 Issue of mandatory   convertible bonds8 –2,754–– –––––2,754–2,754 Transactions with   non-controlling interests in subsidiaries –––(31) –––––(31) (13) (44)   Dividends –––(2,998) ––––– (2,998) (238) (3,236) Comprehensive income   –––(4,024) 3,743126(2) –34(123)73(50) Profit –––(4,024) –––––(4,024)206   (3,818) OCI – before tax –––– 3,789156(3) –463,988(130) 3,858 OCI – taxes   –––– (116)(30) 1–(12)(157)(3) (160) Transfer to the income statement ––––   70––––70–70 Other –––9 –––––92231 31 March 2016 3,792 119,925 (6,940)   (56,608) 5,280(697)9 1,04084 65,885 1,432 67,317   Profit–––5,761–––––5,7611565,917 OCI – before tax–––– (6,842) (269)   4–12(7,095) 113 (6,982) OCI – taxes––––21657––(5) 268(3) 265 Transfer to the   income statement ––––(1) –(9)––(10) –(10) Profit–––59,254––––– 59,254166   59,420 OCI – before tax–––– (3,932)57(119)–3 (3,991)(172) (4,163) OCI –   taxes––––3(20) ––(3)(20) (3)(23) Transfer to the income statement   ––––1,493–––(25) 1,468–1,468 

 

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Consolidated   statement of cash flows for the years ended 31 March 2016 £m 2015 £m 2014 £m   Note During the year ended 31 March 2014 there were a number of material   non-cash investing and financing activities that arose in relation to the   disposal of our interest in Verizon Wireless, the acquisition of the   remaining 23% of Vodafone Italy and the return of value to shareholders. Full   details of these material non-cash transactions are included in note 28 to   the consolidated financial statements. 90 Vodafone Group Plc Annual Report on   Form 20-F 2016 Inflow from operating activities 19 10,481 9,7156,227 Cash   flows from investing activities Purchase of interests in subsidiaries, net of   cash acquired28 (43) (3,093)(4,279) Purchase of interests in associates and joint   ventures (2) (85) (11) Purchase of intangible assets10 (5,018) (2,315)(2,327)   Purchase of property, plant and equipment11 (6,836) (6,568)(4,396) Purchase   of investments13 (77) (207)(214) Disposal of interests in associates and   joint ventures 12 – 2734,919 Disposal of property, plant and equipment11 140   17879 Disposal of investments13 1,357 8991,483 Dividends received from   associates and joint ventures 67 5834,897 Dividends received from investments   – –10 Interest received 261 254582 (Outflow)/inflow from investing activities   (10,151) (10,327)30,743 Cash flows from financing activities Issue of   ordinary share capital and reissue of treasury shares18 13 1838 Net movement   in short-term borrowings 5 4,722(2,887) Proceeds from issue of long-term   borrowings 7,504 2,4321,060 Repayment of borrowings (2,738) (4,070)(9,788)   Purchase of treasury shares – –(1,033) B and C share payments – –(14,291)   Issue of subordinated mandatory convertible bonds 2,754 –– Equity dividends   paid9 (2,998) (2,927)(5,076) Dividends paid to non-controlling shareholders   in subsidiaries (223) (247)(264) Other transactions with non-controlling   shareholders in subsidiaries (48) (718)(111) Other movements in loans with   associates and joint ventures (22) (52) – Interest paid (1,287) (1,576)(1,897)   Inflow/(outflow) from financing activities 2,960 (2,418)(34,249) Net cash   inflow/(outflow) 3,290 (3,030)2,721 Cash and cash equivalents at beginning of   the financial year20 6,861 10,1127,506 Exchange gain/(loss) on cash and cash   equivalents 58 (221) (115) Cash and cash equivalents at end of the financial   year20 10,209 6,86110,112 

 

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Notes to the   consolidated financial statements . Basis of preparatio This section   describes the critical accounting judgements that management has identified   as having a potentially material impact on the Group’s consolidated financial   statements and sets out our significant accounting policies that relate to   the financial statements as a whole. Where an accounting policy is generally   applicable to a specific note to the financial statements, the policy is   described within that note. We have also detailed below the new accounting   pronouncements that we will adopt in future years and our current view of the   impact they will have on our financial reporting. The consolidated financial   statements are prepared in accordance with International Financial Reporting   Standards (‘IFRS’) as issued by the International Accounting Standards Board   (‘IASB’) and are also prepared in accordance with IFRS adopted by the   European Union (‘EU’), the Companies Act 2006 and Article 4 of the EU IAS   Regulations. The consolidated financial statements are prepared on a going   concern basis. The preparation of financial statements in conformity with   IFRS requires management to make estimates and assumptions that affect the   reported amounts of assets and liabilities and disclosure of contingent   assets and liabilities at the date of the financial statements and the   reported amounts of revenue and expenses during the reporting period. A   discussion on the Group’s critical accounting judgements and key sources of   estimation uncertainty is detailed below. Actual results could differ from   those estimates. The estimates and underlying assumptions are reviewed on an   ongoing basis. Revisions to accounting estimates are recognised in the period   in which the estimate is revised if the revision affects only that period;   they are recognised in the period of the revision and future periods if the   revision affects both current and future periods. Amounts in the consolidated   financial statements are stated in pounds sterling. With effect from 1 April   2016, the presentation currency of the Group will change from sterling to the   euro to better align with the geographic split of the Group’s operations.   Vodafone Group Plc is incorporated and domiciled in England and Wales   (registration number 1833679). The registered address of the Company is   Vodafone House, The Connection, Newbury, Berkshire, RG14 2FN, England. IFRS   requires the Directors to adopt accounting policies that are the most   appropriate to the Group’s circumstances. These have been applied   consistently to all the years presented, unless otherwise stated. In determining   and applying accounting policies, Directors and management are required to   make judgements in respect of items where the choice of specific policy,   accounting estimate or assumption to be followed could materially affect the   Group’s reported financial position, results or cash flows; it may later be   determined that a different choice may have been more appropriate. Management   has identified accounting estimates and assumptions relating to revenue   recognition, taxation, business combinations and goodwill, joint   arrangements, finite lived intangible assets, property, plant and equipment,   post employment benefits, provisions and contingent liabilities and   impairment that it considers to be critical due to their impact on the   Group’s financial statements. These critical accounting judgements,   assumptions and related disclosures have been discussed with the Company’s   Audit and Risk Committee. Critical accounting judgements and key sources of   estimation uncertainty Revenue recognition Arrangements with multiple   deliverables In revenue arrangements where more than one good or service is   provided to the customer, customer consideration is allocated between the   goods and services using relative fair value principles. The fair values   determined for deliverables may impact the timing of the recognition of   revenue. Determining the fair value of each deliverable can require complex   estimates. The Group generally determines the fair value of individual   elements based on prices at which the deliverable is regularly sold on a   stand-alone basis after considering any appropriate volume discounts. Gross   versus net presentation When the Group sells goods or services as a   principal, income and payments to suppliers are reported on a gross basis in   revenue and operating costs. If the Group sells goods or services as an   agent, revenue and payments to suppliers are recorded in revenue on a net   basis, representing the margin earned. Whether the Group is considered to be   the principal or an agent in the transaction depends on analysis by   management of both the legal form and substance of the agreement between the   Group and its business partners; such judgements impact the amount of   reported revenue and operating expenses but do not impact reported assets,   liabilities or cash flows. Taxation The Group’s tax charge on ordinary   activities is the sum of the total current and deferred tax charges. The   calculation of the Group’s total tax charge involves estimation and judgement   in respect of certain matters where the tax impact is uncertain until a   conclusion is reached with the relevant tax authority or through a legal   process. The final resolution of some of these items may give rise to   material profits, losses and/or cash flows. Resolving tax issues can take   many years as it is not always within the control of the Group and often   depends on the efficiency of legal processes in the relevant tax   jurisdiction. Recognition of deferred tax assets Significant items on which   the Group has exercised accounting estimation and judgement include the   recognition of deferred tax assets in respect of losses in Luxembourg,   Germany, Spain and India and capital allowances in the United Kingdom. The   recognition of deferred tax assets, particularly in respect of tax losses, is   based upon whether it is probable that there will be sufficient and suitable   taxable profits in the relevant legal entity or tax group against which to   utilise the assets in the future. Judgement is required when determining   probable future taxable profits. The Group assesses the availability of   future taxable profits using the same undiscounted five year forecasts for   the Group’s operations as are used in the Group’s value in use calculations   (see “Impairment reviews” below). Where tax losses are forecast to be   recovered beyond the five year period, the availability of taxable profits is   assessed using the cash flows and long-term growth rates used for the value   in use calculations. 91 Vodafone Group Plc Annual Report on Form 20-F 2016   Overview Strategy review Performance Governance Financials Additional   information 1 n 

 

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Notes to the   consolidated financial statements (continued) 1. Basis of preparation   (continued) The cash flows inherent in these forecasts include the   unsystematic risks of operating in the telecommunications business including   the potential impacts of changes in the market structure, trends in customer   pricing, the costs associated with the acquisition and retention of   customers, future technological evolutions and potential regulatory changes,   such as our ability to acquire and/or renew spectrum licences. Changes in the   assumptions which underpin the Group’s forecasts could have an impact on the   amount of future taxable profits and could have a significant impact on the   period over which the deferred tax asset would be recovered. The Group only   considers substantively enacted tax laws when assessing the amount and   availability of tax losses to offset against the future taxable profits. See   note 6 “Taxation” to the consolidated financial statements. Business   combinations and goodwill When the Group completes a business combination,   the fair values of the identifiable assets and liabilities acquired,   including intangible assets, are recognised. The determination of the fair   values of acquired assets and liabilities is based, to a considerable extent,   on management’s judgement. If the purchase consideration exceeds the fair   value of the net assets acquired then the incremental amount paid is   recognised as goodwill. If the purchase price consideration is lower than the   fair value of the assets acquired then the difference is recorded as a gain   in the income statement. Allocation of the purchase price between finite   lived assets (discussed below) and indefinite lived assets such as goodwill   affects the subsequent results of the Group as finite lived intangible assets   are amortised, whereas indefinite lived intangible assets, including   goodwill, are not amortised. On transition to IFRS the Group elected not to   apply IFRS 3 “Business combinations” retrospectively as the difficulty in   applying these requirements to business combinations completed by the Group   between incorporation and 1 April 2004 exceeded any potential benefits.   Goodwill recorded before the date of transition to IFRS amounted to £78,753   million. If the Group had elected to apply IFRS 3 retrospectively it may have   led to an increase or decrease in goodwill, licences, customer bases, brands   and related deferred tax liabilities recognised on acquisition. See note 28   “Acquisitions and disposals” to the consolidated financial statements for   further details. Joint arrangements The Group participates in a number of   joint arrangements where control of the arrangement is shared with one or   more other parties. A joint arrangement is classified as a joint operation or   as a joint venture, depending on management’s assessment of the legal form   and substance of the arrangement. The classification can have a material   impact on the consolidated financial statements. The Group’s share of assets,   liabilities, revenue, expenses and cash flows of joint operations are included   in the consolidated financial statements on a line-by-line basis, whereas the   Group’s investment and share of results of joint ventures are shown within   single line items in the consolidated statement of financial position and   consolidated income statement respectively. See note 12 “Investments in   associates and joint arrangements” to the consolidated financial statements.   Finite lived intangible assets Other intangible assets include amounts spent   by the Group acquiring licences and spectrum, customer bases and brands and   the costs of purchasing and developing computer software. Where intangible   assets are acquired through business combinations and no active market for   the assets exists, the fair value of these assets is determined by   discounting estimated future net cash flows generated by the asset. Estimates   relating to the future cash flows and discount rates used may have a material   effect on the reported amounts of finite lived intangible assets. Estimation   of useful life The useful life over which intangible assets are amortised   depends on management’s estimate of the period over which economic benefit   will be derived from the asset. Reducing the useful life will increase the   amortisation charge in the consolidated income statement. Useful lives are periodically   reviewed to ensure that they remain appropriate. The basis for determining   the useful life for the most significant categories of intangible assets is   discussed below. Licence and spectrum fees The estimated useful life is   generally the term of the licence unless there is a presumption of renewal at   negligible cost; this is adjusted if necessary, for example taking into   account the impact of any expected changes in technology. Customer bases The   estimated useful life principally reflects management’s view of the average   economic life of the customer base and is assessed by reference to customer   churn rates. An increase in churn rates may lead to a reduction in the   estimated useful life and an increase in the amortisation charge. Capitalised   software For computer software, the useful life is based on management’s   view, considering historical experience with similar products as well as   anticipation of future events which may impact their life such as changes in   technology. The useful life will not exceed the duration of a licence.   Property, plant and equipment Property, plant and equipment represents 21.0%   (2015: 21.7%) of the Group’s total assets; estimates and assumptions made may   have a material impact on their carrying value and related depreciation   charge. See note 11 “Property, plant and equipment” to the consolidated   financial statements for further details. Estimation of useful life The   depreciation charge for an asset is derived using estimates of its expected   useful life and expected residual value, which are reviewed annually.   Increasing an asset’s expected life or residual value would result in a   reduced depreciation charge in the consolidated income statement. Management   determines the useful lives and residual values for assets when they are   acquired, based on experience with similar assets and taking into account   other relevant factors such as any expected changes in technology. The useful   life of network infrastructure is assumed not to exceed the duration of   related operating licences unless there is a reasonable expectation of   renewal or an alternative future use for the asset. 92 Vodafone Group Plc   Annual Report on Form 20-F 2016 

 

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Post employment   benefits Management judgement is exercised when determining the Group’s   liabilities and expenses arising for defined benefit pension schemes.   Management is required to make assumptions regarding future rates of   inflation, salary increases, discount rates and longevity of members, each of   which may have a material impact on the defined benefit obligations that are   recorded. Further details, including a sensitivity analysis, are included in   note 26 “Post employment benefits” to the consolidated financial statements.   Provisions and contingent liabilities The Group exercises judgement in   measuring and recognising provisions and the exposures to contingent   liabilities related to pending litigation or other outstanding claims subject   to negotiated settlement, mediation, arbitration or government regulation, as   well as other contingent liabilities (see note 30 “Contingent liabilities and   legal proceedings” to the consolidated financial statements). Judgement is   necessary to assess the likelihood that a pending claim will succeed, or a   liability will arise, and to quantify the possible range of any financial   settlement. The inherent uncertainty of such matters means that actual losses   may materially differ from estimates. Impairment reviews IFRS requires   management to perform impairment tests annually for indefinite lived assets   and, for finite lived assets, if events or changes in circumstances indicate   that their carrying amounts may not be recoverable. Impairment testing   requires management to judge whether the carrying value of assets can be   supported by the net present value of future cash flows that they generate.   Calculating the net present value of the future cash flows requires   assumptions to be made in respect of highly uncertain matters including   management’s expectations of: a growth in adjusted EBITDA, calculated as   adjusted operating profit before depreciation and amortisation; a timing and   amount of future capital expenditure, licence and spectrum payments; a   long-term growth rates; and a appropriate discount rates to reflect the risks   involved. Management prepares formal five year forecasts for the Group’s   operations, which are used to estimate their value in use. In certain   developing markets ten year forecasts are used if it is considered that the   fifth year of a forecast is not indicative of expected long-term future   performance as operations may not have reached maturity. For operations where   five year forecasts are used for the Group’s value in use calculations, a   long-term growth rate into perpetuity has been determined as the lower of: a   the nominal GDP growth rates for the country of operation; and a the   long-term compound annual growth rate in adjusted EBITDA in years six to ten   estimated by management. For operations where ten year forecasts are used for   the Group’s value in use calculations, a long-term growth rate into   perpetuity has been determined as the lower of: a the nominal GDP growth   rates for the country of operation; and a the compound annual growth rate in   adjusted EBITDA in years nine to ten of the management plan. Changing the   assumptions selected by management, in particular the discount rate and   growth rate assumptions used in the cash flow projections, could   significantly affect the Group’s impairment evaluation and hence reported   assets and profits or losses. Further details, including a sensitivity   analysis, are included in note 4 “Impairment losses” to the consolidated   financial statements. 93 Vodafone Group Plc Annual Report on Form 20-F 2016   Overview Strategy review Performance Governance Financials Additional   information 

 

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Notes to the   consolidated financial statements (continued) 1. Basis of preparation   (continued) Significant accounting policies applied in the current reporting   period that relate to the financial statements as a whole Accounting   convention The consolidated financial statements are prepared on a historical   cost basis except for certain financial and equity instruments that have been   measured at fair value. Basis of consolidation The consolidated financial   statements incorporate the financial statements of the Company, subsidiaries   controlled by the Company (see note 33 “Related undertakings” to the   consolidated financial statements) and joint operations that are subject to   joint control (see note 12 “Investments in associates and joint arrangements”   to the consolidated financial statements). Foreign currencies The   consolidated financial statements are presented in sterling, which was the   parent company’s functional currency. Each entity in the Group determines its   own functional currency and items included in the financial statements of   each entity are measured using that functional currency. With effect from 1   April 2016 the functional currency of the Company changed from sterling to   the euro. The euro is now the primary currency in which the Company’s financing   activities and investment returns are denominated. The consolidated financial   statements are presented in sterling. With effect from 1 April 2016, the   Group’s presentation currency will change from sterling to the euro to better   align with the geographic split of the Group’s operations. The change of   presentation and functional currency will not change either the Group’s or   Company’s foreign exchange management strategy. Transactions in foreign   currencies are initially recorded at the functional currency rate prevailing   at the date of the transaction. Monetary assets and liabilities denominated   in foreign currencies are retranslated into the respective functional   currency of the entity at the rates prevailing on the reporting period date.   Non-monetary items carried at fair value that are denominated in foreign   currencies are retranslated at the rates prevailing on the initial   transaction dates. Non-monetary items measured in terms of historical cost in   a foreign currency are not retranslated. Changes in the fair value of   monetary securities denominated in foreign currency classified as   available-for-sale are analysed between translation differences and other   changes in the carrying amount of the security. Translation differences are   recognised in the income statement and other changes in carrying amount are   recognised in equity. Translation differences on non-monetary financial   assets, such as investments in equity securities classified as   available-for-sale, are reported as part of the fair value gain or loss and   are included in equity. For the purpose of presenting consolidated financial   statements, the assets and liabilities of entities with a functional currency   other than sterling are expressed in sterling using exchange rates prevailing   at the reporting period date. Income and expense items and cash flows are   translated at the average exchange rates for the period and exchange   differences arising are recognised directly in equity. On disposal of a   foreign entity, the cumulative amount previously recognised in equity   relating to that particular foreign operation is recognised in profit or   loss. Goodwill and fair value adjustments arising on the acquisition of a   foreign operation are treated as assets and liabilities of the foreign   operation and translated accordingly. In respect of all foreign operations,   any exchange differences that have arisen before 1 April 2004, the date of   transition to IFRS, are deemed to be nil and will be excluded from the   determination of any subsequent profit or loss on disposal. The net foreign   exchange loss recognised in the consolidated income statement for the year   ended 31 March 2016 is £802 million (31 March 2015: £273 million gain; 2014:   £1,688 million loss). The net gains and net losses are recorded within   operating profit (2016: £2 million credit; 2015: £8 million charge; 2014: £16   million charge), other income and expense and non-operating income and   expense (2016: £70 million charge; 2015: £1 million credit; 2014: £1,493   million charge), investment and financing income (2016: £726 million charge;   2015: £276 million credit; 2014: £180 million charge) and income tax expense   (2016: £8 million charge; 2015: £4 million credit; 2014: £1 million credit).   The foreign exchange gains and losses included within other income and expense   and non-operating income and expense arise on the disposal of interests in   joint ventures, associates and investments from the recycling of foreign   exchange gains previously recorded in the consolidated statement of   comprehensive income. New accounting pronouncements adopted on 1 April 2015   On 1 April 2015 the Group adopted the following new accounting policies to   comply with amendments to IFRS. The accounting pronouncements, none of which   is considered by the Group as significant on adoption, are: a Amendments to   IAS 19 “Defined Benefit Plans: Employee Contributions”; a “Improvements to   IFRS 2010–2012 cycle” amendment to IFRS 8 “Operating Segments”; and a   “Improvements to IFRS 2011–2013 cycle”. 94 Vodafone Group Plc Annual Report   on Form 20-F 2016 

 

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New accounting   pronouncements to be adopted on 1 April 2016 The following pronouncements   which are potentially relevant to the Group have been issued by the IASB are   effective for annual periods beginning on or after 1 January 2016 and have   been endorsed for use in the EU: a Amendments to IAS 1 “Disclosure   Initiative”; a Amendments to IAS 16 and IAS 38 “Clarification of Acceptable   Methods of Depreciation and Amortisation”; a Amendments to IFRS 11   “Accounting for Acquisitions of Interests in Joint Operations”; and a   “Improvements to IFRS: 2012–2014 cycle”. The Group’s financial reporting will   be presented in accordance with the new standards above, which are not   expected to have a material impact on the consolidated results, financial   position or cash flows of the Group, from 1 April 2016. New accounting   pronouncements to be adopted on or after 1 April 2017 On 1 April 2017 the   Group will adopt “Recognition of Deferred Tax Assets for Unrealised Losses,   Amendments to IAS 12” and “Disclosure Initiative, Amendments to IAS 7” which   are effective for accounting periods on or after 1 January 2017 and which   have not yet been endorsed by the EU. The Group is currently confirming the   impacts of the above new pronouncements on its results, financial position   and cash flows, which are not expected to be material. IFRS 15 “Revenue from   Contracts with Customers” IFRS 15 “Revenue from Contracts with Customers” was   issued in May 2014 and subsequent amendments, “Clarifications to IFRS 15”,   were issued in April 2016. IFRS 15, as amended, is effective for accounting   periods beginning on or after 1 January 2018; it has not yet been adopted by   the EU. IFRS 15 will have a material impact on the Group’s reporting of   revenue and costs as follows: a IFRS 15 will require the Group to identify   deliverables in contracts with customers that qualify as “performance   obligations”. The transaction price receivable from customers must be   allocated between the Group’s performance obligations under the contracts on   a relative stand-alone selling price basis. Currently revenue allocated to   deliverables is restricted to the amount that is receivable without the   delivery of additional goods or services; this restriction will no longer be   applied under IFRS 15. The primary impact on revenue reporting will be that   when the Group sells subsidised devices together with airtime service   agreements to customers, revenue allocated to equipment and recognised when   control of the device passes to the customer will increase and revenue   recognised as services are delivered will reduce. Where additional up-front   unbilled revenue is recorded for the sale of devices, this will be reflected   in the balance sheet as a contract asset. a Under IFRS 15, certain   incremental costs incurred in acquiring a contract with a customer will be   deferred on the balance sheet and amortised as revenue is recognised under   the related contract; this will generally lead to the later recognition of   charges for some commissions payable to third party dealers and employees. a   Certain costs incurred in fulfilling customer contracts will be deferred on   the balance sheet under IFRS 15 and recognised as related revenue is   recognised under the contract. Such deferred costs are likely to relate to   the provision of deliverables to customers that do not qualify as performance   obligations and for which revenue is not recognised; currently such costs are   generally expensed as incurred. The Group is continuing to assess the impact   of these and other accounting changes that will arise under IFRS 15; however,   the changes highlighted above will have a material impact on the consolidated   income statement and consolidated statement of financial position after the   Group adopts IFRS 15 on 1 April 2018. When IFRS 15 is adopted, it can be   applied either on a fully retrospective basis, requiring the restatement of   the comparative periods presented in the financial statements, or with the   cumulative retrospective impact of IFRS 15 applied as an adjustment to equity   on the date of adoption; when the latter approach is applied it is necessary   to disclose the impact of IFRS 15 on each line item in the financial   statements in the reporting period. The Group currently intends to reflect   the cumulative impact of IFRS 15 in equity on the date of adoption. IFRS 9   “Financial Instruments” IFRS 9 “Financial Instruments” was issued in July   2014 to replace IAS 39 “Financial Instruments: Recognition and Measurement”.   The standard is effective for accounting periods beginning on or after 1   January 2018 with early adoption permitted but has not yet been endorsed for   use in the EU. The standard will impact the classification and measurement of   the Group’s financial instruments and will require certain additional   disclosures. The changes to recognition and measurement of financial   instruments and changes to hedge accounting rules are not currently   considered likely to have any major impact on the Group’s current accounting   treatment or hedging activities. The Group will not consider early adoption   of IFRS 9 until the standard has been endorsed by the EU which is currently   expected in the second half of 2016. IFRS 16 “Leases” IFRS 16 “Leases” was   issued in January 2016 to replace IAS 17 “Leases”. The standard is effective   for accounting periods beginning on or after 1 January 2019 with early   adoption permitted if IFRS 15 “Revenue from Contracts with Customers” has been   adopted. IFRS 16 has not yet been adopted by the EU. IFRS 16 will primarily   change lease accounting for lessees; lease agreements will give rise to the   recognition of an asset representing the right to use the leased item and a   loan obligation for future lease payables. Lease costs will be recognised in   the form of depreciation of the right to use asset and interest on the lease   liability. Lessee accounting under IFRS 16 will be similar to existing IAS 17   accounting for finance leases, but will be substantively different for   operating leases where rental charges are currently recognised on   straight-line basis and no lease asset or lease loan obligation is   recognised. Lessor accounting under IFRS 16 is similar to existing IAS 17   accounting. The Group is assessing the impact of the accounting changes that   will arise under IFRS 16; however, the changes are expected to have a   material impact on the consolidated income statement and consolidated   statement of financial position. The Group has not yet decided whether to   adopt IFRS 16 when IFRS 15 is adopted, on 1 April 2018, or on 1 April 2019.   95 Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy   review Performance Governance Financials Additional information 

 

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Notes to the   consolidated financial statements (continued) 2. Segmental analysis The   Group’s businesses are managed on a geographical basis. Selected financial   data is presented on this basis below. The Group’s operating segments are   established on the basis of those components of the Group that are evaluated   regularly by the chief operating decision maker in deciding how to allocate   resources and in assessing performance. The Group has a single group of   related services and products, being the supply of communications services   and products. Revenue is attributed to a country or region based on the   location of the Group company reporting the revenue. Transactions between   operating segments are charged at arm’s-length prices. Segment information is   provided on the basis of geographic areas, being the basis on which the Group   manages its worldwide interests, with each country in which the Group   operates treated as an operating segment. The aggregation of operating   segments into the Europe and AMAP regions reflects, in the opinion of   management, the similar economic characteristics within each of those regions   as well the similar products and services offered and supplied, classes of   customers and the regulatory environment. In the case of the Europe region   this largely reflects membership of the European Union, while for the AMAP   region this largely includes emerging and developing economies that are in   the process of rapid growth and industrialisation. Certain financial   information is provided separately within the Europe region for Germany,   Italy, the UK and Spain, and within the AMAP region for India and Vodacom, as   these operating segments are individually material for the Group. During the   year ended 31 March 2016, the Group amended its segmental reporting to   reflect changes in the internal management of its Enterprise business. The   primary change has been that on 1 April 2015, the Group redefined its   segments to report international voice transit revenue and costs within   common functions rather than within the results disclosed for each country   and region. The results presented for the years ended 31 March 2015 and 31   March 2014 have been restated onto a comparable basis. There is no impact on   total Group revenue or cost. Accounting policies Revenue Revenue is   recognised to the extent the Group has delivered goods or rendered services   under an agreement, the amount of revenue can be measured reliably and it is   probable that the economic benefits associated with the transaction will flow   to the Group. Revenue is measured at the fair value of the consideration   receivable, exclusive of sales taxes and discounts. The Group principally   obtains revenue from providing mobile and fixed telecommunication services   including: access charges, voice and video calls, messaging, interconnect   fees, fixed and mobile broadband and related services such as providing   televisual and music content, connection fees and equipment sales. Products   and services may be sold separately or in bundled packages. Revenue for   access charges, voice and video calls, messaging and fixed and mobile   broadband provided to contract customers is recognised as services are   performed, with unbilled revenue resulting from services already provided   accrued at the end of each period and unearned revenue from services to be   provided in future periods deferred. Revenue from the sale of prepaid credit   is deferred until such time as the customer uses the airtime, or the credit   expires. Revenue from interconnect fees is recognised at the time the   services are performed. Revenue for the provision of televisual and music   content is recognised when or as the Group performs the related service and,   depending on the nature of the service, is recognised either at the gross   amount billed to the customer or the amount receivable by the Group as   commission for facilitating the service. Customer connection revenue is   recognised together with the related equipment revenue to the extent that the   aggregate equipment and connection revenue does not exceed the fair value of   the equipment delivered to the customer. Any customer connection revenue not   recognised together with related equipment revenue is deferred and recognised   over the period in which services are expected to be provided to the   customer. Revenue for device sales is recognised when the device is delivered   to the end customer and the significant risks and rewards of ownership have   transferred. For device sales made to intermediaries, revenue is recognised   if the significant risks associated with the device are transferred to the   intermediary and the intermediary has no general right to return the device   to receive a refund. If the significant risks are not transferred, revenue   recognition is deferred until sale of the device to an end customer by the   intermediary or the expiry of any right of return. In revenue arrangements   including more than one deliverable, the arrangements are divided into   separate units of accounting. Deliverables are considered separate units of   accounting if the following two conditions are met: (i) the deliverable has   value to the customer on a stand-alone basis and (ii) there is evidence of   the fair value of the item. The arrangement consideration is allocated to   each separate unit of accounting based on its relative fair value. Revenue   allocated to deliverables is restricted to the amount that is receivable   without the delivery of additional goods or services. This restriction   typically applies to revenue recognised for devices provided to customers,   including handsets. Commissions Intermediaries are given cash incentives by   the Group to connect new customers and upgrade existing customers. For intermediaries   who do not purchase products and services from the Group, such cash   incentives are accounted for as an expense. Such cash incentives to other   intermediaries are also accounted for as an expense if: a the Group receives   an identifiable benefit in exchange for the cash incentive that is separable   from sales transactions to that intermediary; and a the Group can reliably   estimate the fair value of that benefit. Cash incentives that do not meet   these criteria are recognised as a reduction of the related revenue. 96   Vodafone Group Plc Annual Report on Form 20-F 2016 

 

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Segmental   revenue and profit Segment revenue £m Intra-region revenue £m Regional   revenue £m Inter-region revenue £m Group revenue £m Adjusted EBITDA £m 31   March 2015 restated Germany 8,384 (16) 8,368 (22) 8,346 2,659 Italy 4,587   (13) 4,574 (1) 4,573 1,535 UK 6,199 (13) 6,186 (2) 6,184 1,345 Spain 3,614   (18) 3,596 (2) 3,594 782 Other Europe 4,993 (30) 4,963 (1) 4,962 1,573 Europe   27,777 (90) 27,687 (28) 27,659 7,894 India 4,309 (11) 4,298 (15) 4,283 1,282   Vodacom 4,341 – 4,341 – 4,341 1,527 Other AMAP 4,743 – 4,743 (10) 4,733 1,277   AMAP 13,393 (11) 13,382 (25) 13,357 4,086 Common Functions 1,257 – 1,257 (46)   1,211 (65) Group 42,427 (101) 42,326 (99) 42,227 11,915 31 March 2014   restated Germany 8,220 (9) 8,211 (11) 8,200 2,688 Italy 518 (1) 517 – 517 181   UK 6,248 (9) 6,239 (3) 6,236 1,398 Spain 3,471 (14) 3,457 (2) 3,455 786 Other   Europe 5,514 (9) 5,505 (3) 5,502 1,735 Europe 23,971 (42) 23,929 (19) 23,910   6,788 India 3,939 – 3,939 (3) 3,936 1,135 Vodacom 4,718 – 4,718 – 4,718 1,716   Other AMAP 4,730 – 4,730 (9) 4,721 1,279 AMAP 13,387 – 13,387 (12) 13,375   4,130 Common Functions 1,065 – 1,065 (4) 1,061 166 Group 38,423 (42) 38,381   (35) 38,346 11,084 Discontinued operations Verizon Wireless 2 9,955 4,274   Notes: 1 With effect from 1 April 2015, Vodacom changed its accounting for   the acquisition of handsets by certain customers through Vodacom SA’s   indirect distribution channels. This had the effect of reducing equipment   revenue and decreasing direct expenses, with no impact on profits or cash   flows. The impact on prior years is not material. 2 Discontinued operations   comprise our US group whose principal asset was a 45% interest in Verizon   Wireless, which was sold on 21 February 2014. Refer to note 7 “Discontinued   operations and assets held for sale” to the consolidated financial statements   for further details. Total revenue recorded in respect of the sale of goods   for the year ended 31 March 2016 was £3,269 million (2015: £3,211 million,   2014: £2,660 million). The Group’s measure of segment profit, adjusted   EBITDA, excludes depreciation, amortisation, impairment loss, restructuring   costs, loss on disposal of fixed assets, the Group’s share of results in   associates and joint ventures and other income and expense. A reconciliation   of adjusted EBITDA to operating profit/(loss) is shown overleaf. For a   reconciliation of operating profit/(loss) to profit for the financial year,   see the consolidated income statement on page 87. 97 Vodafone Group Plc   Annual Report on Form 20-F 2016 Overview Strategy review Performance Governance   Financials Additional information 31 March 2016 Germany 7,787(26) 7,761(7)   7,7542,537 Italy 4,405(15) 4,390(1) 4,3891,478 UK 6,173(13) 6,160(7)   6,1531,289 Spain 3,633(19) 3,614(1) 3,613915 Other Europe 4,835(42) 4,793(3)   4,7901,467 Europe 26,833(115)26,718(19)26,6997,686 India 4,516(9)4,507(14)   4,4931,331 Vodacom1 3,887–3,887–3,8871,484 Other AMAP 4,814–4,814(15)   4,7991,227 AMAP 13,217(9)13,208(29)13,179 4,042 Common Functions   1,160–1,160(65) 1,095(116) Group 41,210(124)41,086(113)40,97311,612 

 

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Notes to the   consolidated financial statements (continued) 2. Segmental analysis   (continued) 2016 £m 2015 £m 2014 £m Segmental assets and cash flow Other   expenditure on intangible assets £m Depreciation and amortisation £m Restated   Operating free cash flow3 £m Non-current assets1 £m Capital expenditure2 £m   Impairment loss £m 31 March 2015 Germany 19,521 2,003 3 2,574 – 992 Italy   6,938 1,105 95 1,334 – 542 UK 7,759 980 15 1,363 – 185 Spain 8,154 858 – 954   – (30) Other Europe 8,189 1,083 193 1,017 – 541 Europe 50,561 6,029 306 7,242   – 2,230 India 8,599 882 140 863 – 332 Vodacom 4,712 745 2 566 – 762 Other   AMAP 4,915 919 35 900 – 398 AMAP 18,226 2,546 177 2,329 – 1,492 Common   Functions 1,306 622 1 (6) – (859) Group 70,093 9,197 484 9,565 – 2,863 31   March 2014 Germany 22,780 1,312 3 2,036 4,900 1,695 Italy 7,984 180 – 164 –   251 UK 8,031 932 – 1,290 – 602 Spain 3,653 511 – 587 800 254 Other Europe   8,736 800 273 1,047 900 978 Europe 51,184 3,735 276 5,124 6,600 3,780 India   7,824 633 1,938 828 – 811 Vodacom 4,560 663 3 593 – 1,174 Other AMAP 4,850   711 11 932 – 605 AMAP 17,234 2,007 1,952 2,353 – 2,590 Common Functions 1,121   571 – 83 – 209 Group 69,539 6,313 2,228 7,560 6,600 6,579 Notes: 1 Comprises   goodwill, other intangible assets and property, plant and equipment. 2   Includes additions to property, plant and equipment and computer software,   reported within intangibles. Excludes licences and spectrum additions. 3 The   Group’s measure of segment cash flow is reconciled to the closest equivalent   GAAP measure cash generated by operations, on page 191. 98 Vodafone Group Plc   Annual Report on Form 20-F 2016 31 March 2016 Germany 22,306 1,737 1,501   2,443– 651 Italy 7,748 1,123 170 1,223– 373 UK 7,508 890 103 1,393– 265 Spain   9,148 867 355 1,060– (111) Other Europe 5,984 1,015 6 1,004450 409 Europe   52,694 5,632 2,135 7,123450 1,587 India 11,115 812 2,731 937– 544 Vodacom   4,183 621 17 530– 792 Other AMAP 5,381 864 593 859– 385 AMAP 20,679 2,297   3,341 2,326– 1,721 Common Functions 1,477 670 – 49– (424) Group 74,850 8,599   5,476 9,498450 2,884 Adjusted EBITDA 11,612 11,91511,084 Depreciation,   amortisation and loss on disposal of fixed assets (8,539) (8,345)(7,098)   Share of results in associates and joint ventures 44 (63) 324 Adjusted   operating profit 3,117 3,5074,310 Impairment loss (450) –(6,600)   Restructuring costs (236) (157)(355) Amortisation of acquired customer based   and brand intangible assets (979) (1,269)(551) Other income and expense (75)   (114)(717) Operating profit/(loss) 1,377 1,967(3,913) 

 

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3. Operating   profit/(loss) Detailed below are the key amounts recognised in arriving at   our operating profit/(loss) 2016 £m 2015 £m 2014 £m The total remuneration of   the Group’s auditor, PricewaterhouseCoopers LLP and other member firms of   PricewaterhouseCoopers International Limited, for services provided to the   Group during the year ended 31 March 2016 is analysed below.   PricewaterhouseCoopers LLP was appointed as the Group’s auditor for the year   ended 31 March 2015. Accordingly, comparative figures in the table below for   the year ended 31 March 2014 are in respect of remuneration paid to the   Group’s previous auditor, Deloitte LLP and other member firms of Deloitte   Touche Tohmatsu Limited. 2016 £m 2015 £m 2014 £m Notes: 1 2 Relates to fees   for statutory and regulatory filings. Amount for 2014 primarily arose from   regulatory filings and shareholder documentation requirements in respect of   the disposal of Verizon Wireless and the acquisition of the outstanding   minority stake in Vodafone Italy. At the time of the Board decision to   recommend PricewaterhouseCoopers LLP as the statutory auditor for the year   ended 31 March 2015 in February 2014, PricewaterhouseCoopers LLP were   providing a range of services to the Group. All services that were prohibited   by the Securities and Exchange Commission (‘SEC’) for a statutory auditor to   provide, ceased by 31 March 2014. All engagements that are not prohibited by   the SEC, but would not have met the Group’s own internal approval policy for   non-audit services, ceased by 30 June 2014 to enable a transition to   alternative suppliers, where required. These services had a value of   approximately £3 million through to completion and are included in the table   above. 3 99 Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy   review Performance Governance Financials Additional information Parent   company 2 21 Subsidiaries 10 108 Audit fees: 12 12 9 Audit-related fees1 1 11   Other assurance services2, 3 – 13 Tax fees3 – 2– Non-audit fees: 1 4 4 Total   fees 13 16 13 Net foreign exchange (gains)/losses (2) 816 Depreciation of   property, plant and equipment (note 11): Owned assets 5,189 5,0023,990 Leased   assets 57 4448 Amortisation of intangible assets (note 10) 4,252 4,5193,522   Impairment of goodwill in subsidiaries, associates and joint arrangements   (note 4) 450 –6,600 Staff costs (note 25) 4,411 4,1943,875 Operating lease   rentals payable 2,315 2,3032,153 Loss on disposal of property, plant and   equipment and intangible assets 20 4985 Own costs capitalised attributable to   the construction or acquisition of property, plant and equipment (562)   (547)(455) 

 

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Notes to the   consolidated financial statements (continued) 4. Impairment losses Impairment   occurs when the carrying value of assets is greater than the present value of   the net cash flows they are expected to generate. We review the carrying   value of assets for each country in which we operate at least annually. For   further details of our impairment review process see “Critical accounting   judgements and key sources of estimation uncertainty” in note 1 “Basis of   preparation” to the consolidated financial statements. Accounting policies   Goodwill Goodwill is not subject to amortisation but is tested for impairment   annually or whenever there is an indication that the asset may be impaired.   For the purpose of impairment testing, assets are grouped at the lowest   levels for which there are separately identifiable cash flows, known as   cash-generating units. If the recoverable amount of the cash-generating unit   is less than the carrying amount of the unit, the impairment loss is   allocated first to reduce the carrying amount of any goodwill allocated to   the unit and then to the other assets of the unit pro-rata on the basis of   the carrying amount of each asset in the unit. Impairment losses recognised   for goodwill are not reversible in subsequent periods. The recoverable amount   is the higher of fair value less costs to sell and value in use. In assessing   value in use, the estimated future cash flows are discounted to their present   value using a pre-tax discount rate that reflects current market assessments   of the time value of money and the risks specific to the asset for which the   estimates of future cash flows have not been adjusted. The Group prepares and   approves formal five year management plans for its operations, which are used   in the value in use calculations. In certain developing markets the fifth   year of the management plan may not be indicative of the long-term future   performance as operations may not have reached maturity. For these   operations, the Group may extend the plan data for an additional five year period.   Property, plant and equipment and finite lived intangible assets At each   reporting period date, the Group reviews the carrying amounts of its   property, plant and equipment and finite lived intangible assets to determine   whether there is any indication that those assets have suffered an impairment   loss. If any such indication exists, the recoverable amount of the asset is   estimated in order to determine the extent, if any, of the impairment loss.   Where it is not possible to estimate the recoverable amount of an individual   asset, the Group estimates the recoverable amount of the cash-generating unit   to which the asset belongs. If the recoverable amount of an asset or   cash-generating unit is estimated to be less than its carrying amount, the   carrying amount of the asset or cash-generating unit is reduced to its   recoverable amount and an impairment loss is recognised immediately in the   income statement. Where an impairment loss subsequently reverses, the   carrying amount of the asset or cash-generating unit is increased to the   revised estimate of its recoverable amount, not to exceed the carrying amount   that would have been determined had no impairment loss been recognised for   the asset or cash-generating unit in prior years and an impairment loss   reversal is recognised immediately in the income statement. Impairment losses   Following our annual impairment review, the impairment charges recognised in   the consolidated income statement within operating profit in respect of   goodwill are stated below. The impairment losses were based on value in use   calculations. 2016 £m 2015 £m 2014 £m Cash-generating unit Reportable segment   Goodwill The remaining carrying value of goodwill at 31 March was as follows:   2016 £m 2015 £m 100 Vodafone Group Plc Annual Report on Form 20-F 2016   Germany 9,867 9,019 Italy 2,889 2,641 Spain 3,015 2,755 15,771 14,415 Other   7,018 8,122 22,789 22,537 Germany Germany – –4,900 Spain Spain – –800   Portugal Other Europe – –500 Czech Republic Other Europe – –200 Romania Other   Europe 450 –200 450 –6,600 

 

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Key assumptions   used in the value in use calculations The key assumptions used in determining   the value in use are: Assumption How determined Budgeted adjusted EBITDA   Budgeted adjusted EBITDA has been based on past experience adjusted for the   following: a voice and messaging revenue is expected to benefit from   increased usage from new customers, especially in emerging markets, the   introduction of new services and traffic moving from fixed networks to mobile   networks, though these factors will be offset by increased competitor   activity, which may result in price declines, and the trend of falling   termination and other regulated rates; a non-messaging data revenue is   expected to continue to grow as the penetration of 3G (plus 4G where   available) enabled devices and smartphones rise along with higher data bundle   attachment rates, and new products and services are introduced; and a margins   are expected to be impacted by negative factors such as the cost of acquiring   and retaining customers in increasingly competitive markets and the   expectation of further termination rate cuts by regulators and by positive   factors such as the efficiencies expected from the implementation of Group   initiatives. Budgeted capital expenditure The cash flow forecasts for capital   expenditure are based on past experience and include the ongoing capital expenditure   required to roll out networks in emerging markets, to provide voice and data   products and services and to meet the population coverage requirements of   certain of the Group’s licences. Capital expenditure includes cash outflows   for the purchase of property, plant and equipment and computer software.   Budgeted licence and spectrum payments The cash flow forecasts for licence   and spectrum payments for each operating company for the initial five years   include amounts for expected renewals and newly available spectrum. Beyond   that period, a long-run cost of spectrum is assumed. Long-term growth rate   For businesses where the five year management plans are used for the Group’s   value in use calculations, a long-term growth rate into perpetuity has been determined   as the lower of: a the nominal GDP rates for the country of operation; and a   the long-term compound annual growth rate in adjusted EBITDA in years six to   ten estimated by management. Pre-tax risk adjusted discount rate The discount   rate applied to the cash flows of each of the Group’s operations is generally   based on the risk free rate for ten year bonds issued by the government in   the respective market. Where government bond rates contain a material   component of credit risk, high quality local corporate bond rates may be   used. These rates are adjusted for a risk premium to reflect both the   increased risk of investing in equities and the systematic risk of the   specific Group operating company. In making this adjustment, inputs required   are the equity market risk premium (that is the required increased return   required over and above a risk free rate by an investor who is investing in   the market as a whole) and the risk adjustment, beta, applied to reflect the   risk of the specific Group operating company relative to the market as a   whole. In determining the risk adjusted discount rate, management has applied   an adjustment for the systematic risk to each of the Group’s operations   determined using an average of the betas of comparable listed mobile telecommunications   companies and, where available and appropriate, across a specific territory.   Management has used a forward-looking equity market risk premium that takes   into consideration both studies by independent economists, the average equity   market risk premium over the past ten years and the market risk premiums   typically used by investment banks in evaluating acquisition proposals. Year   ended 31 March 2016 During the year ended 31 March 2016 impairment charges of   £450 million were recorded in respect of the Group’s investments in Romania.   The impairment charge relates solely to goodwill. The recoverable amount of   Romania is £0.7 billion. The impairment charges were driven by lower   projected cash flows within the business plans resulting in our reassessment   of expected future business performance in the light of the current trading   environment. The table below shows key assumptions used in the value in use   calculations. Assumptions used in value in use calculation Romania % Germany   % Spain % Pre-tax risk adjusted discount rate 9.7 8.2 9.7 Long-term growth   rate 1.0 0.5 1.5 Budgeted adjusted EBITDA1 (0.3) 3.1 8.8 Budgeted capital   expenditure2 11.5–18.8 14.5–15.6 11.2–19.7 Notes: 1 Budgeted adjusted EBITDA   is expressed as the compound annual growth rates in the initial five years   for all cash-generating units of the plans used for impairment testing. 2   Budgeted capital expenditure, which excludes licences and spectrum, is   expressed as the range of capital expenditure as a percentage of revenue in   the initial five years for all cash-generating units of the plans used for   impairment testing. 101 Vodafone Group Plc Annual Report on Form 20-F 2016   Overview Strategy review Performance Governance Financials Additional   information 

 

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Notes to the   consolidated financial statements (continued) 4. Impairment losses   (continued) Sensitivity analysis Other than as disclosed below, management   believes that no reasonably possible change in any of the above key   assumptions would cause the carrying value of any cash-generating unit to   materially exceed its recoverable amount. The estimated recoverable amounts   of the Group’s operations in Romania, Germany and Spain are equal to, or not   materially greater than, their carrying values; consequently, any adverse   change in key assumptions would, in isolation, cause a further impairment   loss to be recognised. The estimated recoverable amounts of the Group’s   operations in Germany and Spain exceed their carrying values by £1.6 billion   and £0.8 billion respectively. Change required for carrying value to equal   the recoverable amount Germany pps Spain pps Pre-tax risk adjusted discount   rate 0.5 0.6 Long-term growth rate (0.5) (0.8) Budgeted adjusted EBITDA1   (0.9) (1.2) Budgeted capital expenditure2 4.4 4.8 The changes in the   following table to assumptions used in the impairment review would have, in   isolation, led to an (increase)/decrease to the aggregate impairment loss   recognised in the year ended 31 March 2016. Romania Increase by 2pps £bn   Decrease by 2pps £bn Pre-tax risk adjusted discount rate (0.2) 0.3 Long-term   growth rate 0.3 (0.1) Budgeted adjusted EBITDA1 0.2 (0.2) Budgeted capital   expenditure2 – – Notes: 1 Budgeted adjusted EBITDA is expressed as the   compound annual growth rates in the initial five years for all   cash-generating units of the plans used for impairment testing. 2 Budgeted   capital expenditure, which excludes licences and spectrum, is expressed as   the range of capital expenditure as a percentage of revenue in the initial   five years for all cash-generating units of the plans used for impairment   testing. Year ended 31 March 2015 During the year ended 31 March 2015, no   impairment charges were recorded in respect of the Group’s goodwill balances.   The table below shows key assumptions used in the value in use calculations.   Assumptions used in value in use calculation Germany % Italy % Spain %   Pre-tax risk adjusted discount rate 8.2 10.5 9.8 Long-term growth rate 0.5   1.0 1.5 Budgeted adjusted EBITDA1 3.2 0.8 11.0 Budgeted capital expenditure2   11.6–21.7 12.5–25.6 11.5–23.3 Notes: 1 Budgeted adjusted EBITDA is expressed   as the compound annual growth rates in the initial five years for all   cash-generating units of the plans used for impairment testing. 2 Budgeted   capital expenditure, which excludes licences and spectrum, is expressed as   the range of capital expenditure as a percentage of revenue in the initial   five years for all cash-generating units of the plans used for impairment   testing. Sensitivity analysis Other than as disclosed below, management   believed that no reasonably possible change in any of the above key   assumptions would cause the carrying value of any cash-generating unit to   materially exceed its recoverable amount. The estimated recoverable amounts   of the Group’s operations in Germany, Italy and Spain exceeded their carrying   values by £2.2 billion, £1.3 billion and £0.3 billion respectively. Change   required for carrying value to equal the recoverable amount Germany pps Italy   pps Spain pps Pre-tax risk adjusted discount rate 0.8 1.6 0.3 Long-term   growth rate (0.9) (1.8) (0.3) Budgeted adjusted EBITDA1 (7.3) (7.5) (2.6)   Budgeted capital expenditure2 2.1 2.9 0.7 Notes: 1 Budgeted adjusted EBITDA   is expressed as the compound annual growth rates in the initial five years   for all cash-generating units of the plans used for impairment testing. 2   Budgeted capital expenditure, which excludes licences and spectrum, is   expressed as a percentage of revenue in the initial five years for all   cash-generating units of the plans used for impairment testing. 102 Vodafone   Group Plc Annual Report on Form 20-F 2016 

 

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Year ended 31   March 2014 During the year ended 31 March 2014 impairment charges of £4,900   million, £800 million, £500 million, £200 million and £200 million were   recorded in respect of the Group’s investments in Germany, Spain, Portugal,   Czech Republic and Romania respectively. The impairment charges related   solely to goodwill. The recoverable amounts of Germany, Spain, Portugal,   Czech Republic and Romania were £23.0 billion, £3.3 billion, £1.3 billion,   £0.6 billion and £1.2 billion respectively. The impairment charges were   driven by lower projected cash flows within the business plans resulting in   our reassessment of expected future business performance in the light of   current trading and economic conditions. The table below shows key   assumptions used in the value in use calculations. Assumptions used in value   in use calculation Germany % Italy % Spain % Portugal % Czech Republic %   Romania % Greece % Pre-tax risk adjusted discount rate 7.7 10.5 9.9 11.1 8.0   11.0 24.3 Long-term growth rate 0.5 1.0 1.9 1.5 0.8 1.0 1.0 Budgeted adjusted   EBITDA1 2.8 (2.2) (0.7) (0.8) (0.6) 1.7 4.7 Budgeted capital expenditure2   12.5–21.7 11.1–25.5 9.0–23.5 11.0–28.3 15.9–21.2 10.5–17.3 7.6–12.2 Notes: 1   Budgeted adjusted EBITDA is expressed as the compound annual growth rates in   the initial five years for all cash-generating units of the plans used for   impairment testing. 2 Budgeted capital expenditure, which excludes licences   and spectrum, is expressed as the range of capital expenditure as a   percentage of revenue in the initial five years for all cash-generating units   of the plans used for impairment testing. Sensitivity analysis Other than as   disclosed below, management believed that no reasonably possible change in   any of the above key assumptions would cause the carrying value of any cash-generating   unit to exceed its recoverable amount. The estimated recoverable amounts of   the Group’s operations in Germany, Italy, Spain, Portugal, Czech Republic,   Romania and Greece were equal to, or not materially greater than, their   carrying values; consequently, any adverse change in key assumptions would,   in isolation, have caused a further impairment loss to be recognised. The   changes in the following table to assumptions used in the impairment review   would, in isolation, have led to an (increase)/decrease to the aggregate   impairment loss recognised in the year ended 31 March 2014. Germany Spain   Portugal Increase by 2pps £bn Decrease by 2pps £bn Increase by 2pps £bn   Decrease by 2pps £bn Increase by 2pps £bn Decrease by 2pps £bn Pre-tax risk   adjusted discount rate (7.1) 4.9 (0.9) 0.8 (0.3) 0.4 Long-term growth rate   4.9 (5.2) 0.8 (0.8) 0.4 (0.2) Budgeted adjusted EBITDA1 0.8 (0.8) 0.2 (0.2)   0.1 (0.1) Budgeted capital expenditure2 (2.4) 2.4 (0.8) 0.8 (0.2) 0.2 Czech   Republic Romania Increase by 2pps £bn Decrease by 2pps £bn Increase by 2pps   £bn Decrease by 2pps £bn Pre-tax risk adjusted discount rate (0.2) 0.2 (0.2)   0.2 Long-term growth rate 0.2 (0.2) 0.2 (0.2) Budgeted adjusted EBITDA1 – –   0.1 (0.1) Budgeted capital expenditure2 – – – – Notes: 1 Budgeted adjusted   EBITDA is expressed as the compound annual growth rates in the initial five   years for all cash-generating units of the plans used for impairment testing.   2 Budgeted capital expenditure is expressed as a percentage of revenue in the   initial five years for all cash-generating units of the plans used for   impairment testing. 103 Vodafone Group Plc Annual Report on Form 20-F 2016   Overview Strategy review Performance Governance Financials Additional   information 

 

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Notes to the   consolidated financial statements (continued) 5. Investment income and   financing costs Investment income comprises interest received from short-term   investments, bank deposits, government bonds and results from foreign   exchange contracts which are used to hedge net debt. Financing costs mainly   arise from interest due on bonds and commercial paper issued, bank loans and   the results of hedging transactions used to manage foreign exchange and   interest rate movements. 2016 £m 2015 £m 2014 £m Notes: 1 Amounts for 2016   include net foreign exchange losses of £433 million (2015: £526 million gain;   2014: £21 million gain) arising from net foreign exchange movements on   certain intercompany balances. The Group capitalised £179 million of interest   expense in the year (2015: £142 million; 2014: £3 million) predominantly in   relation to interest on India spectrum licence debt with a capitalisation   rate of 10% (2015: 10%) Amounts for 2016 include net foreign exchange losses   of £293 million (2015: £250 million; 2014: £201 million). Amounts for 2016   include an increase in provision for potential interest on tax issues. Amounts   for 2015 and 2014 includes reductions of the provision for potential interest   on tax issues. Includes amounts in relation to the Group’s arrangements with   its non-controlling interests. 2 3 4 5 104 Vodafone Group Plc Annual Report   on Form 20-F 2016 Investment income: Available-for-sale investments:   Dividends received – –10 Loans and receivables at amortised cost 293 324184   Fair value through the income statement (held for trading): Derivatives –   foreign exchange contracts – –82 Other1 7 55970 300 883 346 Financing costs:   Items in hedge relationships: Other loans 171 245265 Interest rate and cross   currency interest rate swaps (96) (123)(196) Fair value hedging instrument   (106) (461)386 Fair value of hedged item 125 418(363) Other financial   liabilities held at amortised cost: Bank loans and overdrafts2 669 842557   Bonds and other loans3 767 677770 Interest charge/(credit) on settlement of   tax issues4 15 (4) (15) Equity put rights and similar arrangements5 – 11143   Fair value through the income statement (held for trading): Derivatives –   forward starting swaps and futures 146 1311 Other1 433 –6 2,124 1,7361,554   Net financing costs 1,824 853 1,208 

 

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6. Taxation   This note explains how our Group tax charge arises. The deferred tax section   of the note also provides information on our expected future tax charges and   sets out the tax assets held across the Group together with our view on   whether or not we expect to be able to make use of these in the future.   Accounting policies Income tax expense represents the sum of the current and   deferred taxes. Current tax payable or recoverable is based on taxable profit   for the year. Taxable profit differs from profit as reported in the income   statement because some items of income or expense are taxable or deductible   in different years or may never be taxable or deductible. The Group’s   liability for current tax is calculated using UK and foreign tax rates and   laws that have been enacted or substantively enacted by the reporting period   date. Deferred tax is the tax expected to be payable or recoverable in the   future arising from temporary differences between the carrying amounts of   assets and liabilities in the financial statements and the corresponding tax   bases used in the computation of taxable profit. It is accounted for using   the statement of financial position liability method. Deferred tax   liabilities are generally recognised for all taxable temporary differences   and deferred tax assets are recognised to the extent that it is probable that   temporary differences or taxable profits will be available against which   deductible temporary differences can be utilised. Such assets and liabilities   are not recognised if the temporary difference arises from the initial   recognition (other than in a business combination) of assets and liabilities   in a transaction that affects neither the taxable profit nor the accounting   profit. Deferred tax liabilities are not recognised to the extent they arise   from the initial recognition of non-tax deductible goodwill. Deferred tax liabilities   are recognised for taxable temporary differences arising on investments in   subsidiaries and associates, and interests in joint arrangements, except   where the Group is able to control the reversal of the temporary difference   and it is probable that the temporary difference will not reverse in the   foreseeable future. The carrying amount of deferred tax assets is reviewed at   each reporting period date and adjusted to reflect changes in the Group’s   assessment that sufficient taxable profits will be available to allow all or   part of the asset to be recovered. Deferred tax is calculated at the tax   rates that are expected to apply in the period when the liability is settled   or the asset realised, based on tax rates that have been enacted or   substantively enacted by the reporting period date. Tax assets and   liabilities are offset when there is a legally enforceable right to set off   current tax assets against current tax liabilities and when they either   relate to income taxes levied by the same taxation authority on either the   same taxable entity or on different taxable entities which intend to settle   the current tax assets and liabilities on a net basis. Tax is charged or   credited to the income statement, except when it relates to items charged or   credited to other comprehensive income or directly to equity, in which case   the tax is recognised in other comprehensive income or in equity. Income tax   expense 2016 £m 2015 £m 2014 £m Notes: 1 Relates to a claim under   international conventions for the avoidance of double taxation. 2 The income   statement tax charge includes tax relief on capitalised interest. UK   operating profits are more than offset by statutory allowances for capital   investment in the UK network and systems plus ongoing interest costs   including those arising from the £6.8 billion of spectrum payments to the UK   Government in 2000 and 2013. 105 Vodafone Group Plc Annual Report on Form   20-F 2016 Overview Strategy review Performance Governance Financials   Additional information United Kingdom corporation tax income/(expense):   Current year1 (94) –– Adjustments in respect of prior years 49 1117 (45) 11   17 Overseas current tax expense: Current year 609 8463,114 Adjustments in   respect of prior years (329) (149)(25) 280 697 3,089 Total current tax   expense 235 708 3,106 Deferred tax on origination and reversal of temporary   differences: United Kingdom deferred tax (20) (39) 57 Overseas deferred tax   3,154 (5,434)(19,745) Total deferred tax expense/(income) 3,134   (5,473)(19,688) Total income tax expense/(income)2 3,369 (4,765)(16,582) 

 

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Notes to the   consolidated financial statements (continued) 6. Taxation (continued) Tax on   discontinued operations 2016 £m 2015 £m 2014 £m Tax (credited)/charged   directly to other comprehensive income 2016 £m 2015 £m 2014 £m Tax   (credited)/charged directly to equity 2016 £m 2015 £m 2014 £m Factors affecting   the tax expense for the year The table below explains the differences between   the expected tax expense at the UK statutory tax rate of 20% (2015: 21% and   2014: 23%), and the Group’s total tax expense for each year. 2016 £m 2015 £m   2014 £m Notes: 1 See commentary regarding deferred tax asset recognition in   Luxembourg and Germany on page 108. 2 Amounts for 2014 include the US tax   charge of £2,210 million on the rationalisation and reorganisation of non-US   assets prior to the disposal of our interest in Verizon Wireless. 106   Vodafone Group Plc Annual Report on Form 20-F 2016 Continuing (loss)/profit   before tax as shown in the consolidated income statement (449) 1,095(5,270)   Expected income tax (income)/expense at UK statutory tax rate (90) 230(1,212)   Effect of different statutory tax rates of overseas jurisdictions 142   138(328) Impairment losses with no tax effect 90 –1,958 Disposal of Group   investments – –211 Effect of taxation of associates and joint ventures,   reported within profit before tax 21 2561 Derecognition/(recognition) of   deferred tax assets for losses including Luxembourg and Germany1 1,001   (3,341)(19,318) Deferred tax charge/(credit) following revaluation of   investments in Luxembourg1 2,277 (2,127) – Tax charge on rationalisation and   re-organisation of non-US assets prior to VZW disposal2 – –1,365 Previously   unrecognised temporary differences we expect to use in the future – (40)   (164) Previously unrecognised temporary differences we used in the year (6)   –– Current year temporary differences (including losses) that we currently do   not expect to use 119 342215 Adjustments in respect of prior year tax   liabilities (32) (245)(43) Restructuring and simplification of our Indian   business (340) –– Impact of tax credits and irrecoverable taxes (43) 6637 Deferred   tax on overseas earnings 14 384 Effect of current year changes in statutory   tax rates on deferred tax balances 72 118158 Expenses not deductible for tax   purposes 248 148210 Tax on income derived from discontinued operations – –418   Exclude taxation of associates and joint ventures (104) (117)(154) Income tax   expense/(income) 3,369 (4,765)(16,582) Current tax (5) (4) 12 Deferred tax 2   (3) – Total tax (credited)/charged directly to equity (3) (7)12 Current tax   (58) 2– Deferred tax 218 (267)23 Total tax charged/(credited) directly to   other comprehensive income 160 (265)23 Tax (credit)/charge on profit from   ordinary activities of discontinued operations – (57) 1,709 Total tax   (credit)/charge on discontinued operations – (57)1,709 

 

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Deferred tax   Analysis of movements in the net deferred tax balance during the year: £m   Deferred tax assets and liabilities, before offset of balances within   countries, are as follows: Amount (charged)/ credited in income statement £m   Net recognised deferred tax (liability)/ asset £m Gross deferred tax asset £m   Gross deferred tax liability £m Less amounts unrecognised1 £m Note: 1 Other   unrecognised temporary differences include £141 million relating to Minimum   Alternative Tax credits in India, of which £47 million expire within 0–5   years and £94 million expire within 6–10 years. Deferred tax assets and   liabilities are analysed in the statement of financial position, after offset   of balances within countries, as follows: £m At 31 March 2015, deferred tax   assets and liabilities, before offset of balances within countries, were as   follows: Amount credited/ (charged) in income statement £m Net recognised   deferred tax (liability)/ asset £m Gross deferred tax asset £m Gross deferred   tax liability £m Less amounts unrecognised £m Accelerated tax depreciation   382 1,183 (1,355) (61) (233) Intangible assets 195 107 (1,704) 13 (1,584) Tax   losses 4,866 28,080 – (4,430) 23,650 Deferred tax on overseas earnings (38) –   (40) – (40) Other temporary differences 68 1,695 (94) (144) 1,457 31 March   2015 5,473 31,065 (3,193) (4,622) 23,250 At 31 March 2015 deferred tax assets   and liabilities were analysed in the statement of financial position, after   offset of balances within countries, as follows: £m Deferred tax asset 23,845   Deferred tax liability (595) 31 March 2015 23,250 Factors affecting the tax   charge in future years The Group’s future tax charge, and effective tax rate,   could be affected by several factors including; tax reform in countries   around the world, including any arising from the implementation of the OECD’s   BEPS actions and European Commission initiatives such as the proposed   anti-tax avoidance directive, tax and financial reporting directive or as a   consequence of state aid investigations, future corporate acquisitions and   disposals, any restructuring of our businesses and the resolution of open tax   issues (see below). The Group is routinely subject to audit by tax   authorities in the territories in which it operates and, specifically, in   India these are usually resolved through the Indian legal system. We consider   each issue on its merits and, where appropriate, hold provisions in respect   of the potential tax liability that may arise. However, the amount ultimately   paid may differ materially from the amount accrued and could therefore affect   the Group’s overall profitability and cash flows in future periods. See note   30 “Contingent liabilities and legal proceedings” to the consolidated   financial statements. 107 Vodafone Group Plc Annual Report on Form 20-F 2016   Overview Strategy review Performance Governance Financials Additional   information Deferred tax asset 22,382 Deferred tax liability (446) 31 March   2016 21,936 Accelerated tax depreciation 2431,264 (1,309)(37) (82) Intangible   assets 2767 (1,610)12(1,531) Tax losses (3,588)26,929 –(4,828)22,101 Deferred   tax on overseas earnings (14) – (53) –(53) Other temporary differences   1981,818 (98) (219)1,501 31 March 2016 (3,134)30,078 (3,070)(5,072)21,936 1   April 2015 23,250 Exchange movements 2,043 Charged to the income statement   (continuing operations) (3,134) Charged directly to OCI (218) Charged   directly to equity (2) Reclassifications 8 Arising on acquisition and   disposals (11) 31 March 2016 21,936 

 

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Notes to the   consolidated financial statements (continued) 6. Taxation (continued) At 31   March 2016, the gross amount and expiry dates of losses available for carry   forward are as follows: Expiring within 5 years £m Expiring within 6–10 years   £m Unlimited £m Total £m At 31 March 2015, the gross amount and expiry dates   of losses available for carry forward were as follows: Expiring within 5   years £m Expiring within 6–10 years £m Unlimited £m Total £m Losses for which   a deferred tax asset is recognised 104 64 87,246 87,414 Losses for which no   deferred tax is recognised 1,124 543 16,084 17,751 1,228 607 103,330 105,165   Deferred tax assets on losses in Luxembourg Included in the table above are   losses of £64,186 million (2015: £70,576 million) that have arisen in   Luxembourg companies, principally as a result of revaluations of those   companies’ investments for local GAAP purposes. These losses do not expire. A   deferred tax asset of £18,931 million (2015: £20,755 million) has been   recognised in respect of these losses as we conclude it is probable that the   Luxembourg entities will continue to generate taxable profits in the future   against which we can utilise these losses. The Luxembourg companies’ income   is derived from the Group’s internal financing and procurement and roaming   activities. The Group has reviewed the latest forecasts for the Luxembourg   companies, including their ability to continue to generate income beyond the   forecast period under the tax laws substantively enacted at the balance sheet   date. The assessment also considered whether the structure of the Group would   continue to allow the generation of taxable income. Based on this the Group   concludes that it is probable that the Luxembourg companies will continue to   generate taxable income in the future. Based on the current forecasts the   losses will be fully utilised over the next 50 to 60 years. A 5%–10% change   in the forecast income in Luxembourg would change the period over which the   losses will be fully utilised by 2–6 years. Any future changes in tax law or   the structure of the Group could have a significant effect on the use of   losses, including the period over which the losses are utilised. In February   2016 the Luxembourg Government announced their intention to reduce the   corporate tax rate (including municipal business tax) to 27.1% for the year   ending 31 March 2017 and 26.1% for the year ending 31 March 2018. The   announced decrease in the corporate tax rate would reduce the value of our   deferred tax assets by approximately £2.1 billion. During the current year we   utilised £2,277 million of our deferred tax asset as a result of the   revaluation of investments based upon the local GAAP financial statements at   31 March 2016 (2015: recognition of an additional asset of £2,127 million).   The revaluation of investments for local GAAP purposes, which are based on   the Group’s value in use calculations, can give rise to impairments or the   reversal of previous impairments. These can result in a significant change to   our deferred tax assets and the period over which these assets will be   utilised. During the year the Group de-recognised a deferred tax asset of   £930 million relating to losses in Luxembourg as a result of the absence of   complete clarity on the tax treatment of certain revaluations of investments   for Luxembourg GAAP purposes, combined with the length of time which would be   likely to elapse before these losses would be utilised. We also have £7,642   million (2015: £7,642 million) of Luxembourg losses in a former Cable &   Wireless Worldwide Group company, for which no deferred tax asset has been   recognised as it is uncertain whether these losses will be utilised. Deferred   tax assets on losses in Germany The Group has tax losses of £14,597 million   (2015: £13,600 million) in Germany arising on the write down of investments   in Germany in 2000. The losses are available to use against both German   federal and trade tax liabilities and they do not expire. A deferred tax   asset of £2,260 million (2015: £2,086 million) has been recognised in respect   of these losses as we conclude it is probable that the German business will   continue to generate taxable profits in the future against which we can   utilise these losses. The Group has reviewed the latest forecasts for the   German business which incorporate the unsystematic risks of operating in the   telecommunications business (see pages 22 to 28). In the period beyond the 5   year forecast we have reviewed the profits inherent in the terminal period   and based on these and our expectations for the German business we believe it   is probable the German losses will be fully utilised. Based on the current   forecasts the losses will be fully utilised over the next 10 to 15 years. A   5%–10% change in the forecast profits of the German business would change the   period over which the losses will be fully utilised by one year. Deferred tax   assets on losses in Spain During the 2015 year end, the Group acquired Grupo   Corporativo Ono S.A. which had tax losses of £2,375 million in Spain and   which are available to offset against the future profits of the Spanish   business. The losses do not expire. A deferred tax asset of £673 million   (2015: £603 million) has been recognised in respect of Ono’s losses as we   conclude it is probable that the Spanish business will continue to generate   taxable profits in the future against which we can utilise these losses. The   Group has reviewed the latest forecasts for the Spanish business which   incorporate the unsystematic risks of operating in the telecommunications   business (see pages 22 to 28). In the period beyond the 5 year forecast we   have reviewed the profits inherent in the value in use calculations and based   on these and our expectations for the Spanish business we believe it is   probable the losses will be fully utilised. Based on the current forecasts   the losses will be fully utilised over the next 8 to 10 years. A 5%–10%   change in the forecast profits of the Spanish business would not   significantly alter the utilisation period. 108 Vodafone Group Plc Annual   Report on Form 20-F 2016 Losses for which a deferred tax asset is recognised   564482,63082,730 Losses for which no deferred tax is recognised 27851   18,88719,216 334 95 101,517101,946 

 

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Other tax   losses The Group has losses amounting to £6,724 million (2015: £6,735   million) in respect of UK subsidiaries which are only available for offset   against future capital gains and since it is uncertain whether these losses   will be utilised, no deferred tax asset has been recognised, in line with the   prior year. The remaining losses relate to a number of other jurisdictions   across the Group. There are also £384 million (2015: £310 million) of   unrecognised other temporary differences. The Group holds a deferred tax   liability of £53 million (2015: £40 million) in respect of deferred taxation   that would arise if temporary differences on investments in subsidiaries,   associates and interests in joint ventures were to be realised after the   balance sheet date (see table above). No deferred tax liability has been   recognised in respect of a further £14,106 million (2015: £14,925 million) of   unremitted earnings of subsidiaries, associates and joint ventures because   the Group is in a position to control the timing of the reversal of the   temporary difference and it is probable that such differences will not   reverse in the foreseeable future. It is not practicable to estimate the   amount of unrecognised deferred tax liabilities in respect of these   unremitted earnings. 7. Discontinued operations and assets held for sale   Discontinued operations On 21 February 2014 we completed the sale of our US   group whose principal asset was its 45% interest in Verizon Wireless. The   results of these discontinued operations are detailed below. Income statement   and segment analysis of discontinued operations 2016 £m 2015 £m 2014 £m Gain   on disposal of discontinued operations 2016 £m 2015 £m 2014 £m Note: 1   Includes dividends received from Verizon Wireless after the date of the   announcement of the disposal. Profit for the financial year from discontinued   operations 2016 £m 2015 £m 2014 £m Earnings per share from discontinued   operations 2016 Pence per share 2015 Pence per share 2014 Pence per share   Total comprehensive income for the financial year from discontinued   operations 2016 £m 2015 £m 2014 £m Cash flows from discontinued operations1   2016 £m 2015 £m 2014 £m Note: 1 During the year ended 31 March 2015, the   Group received a final tax distribution from Verizon Wireless of £359 million   and a taxation refund of £84 million in relation to our disposed US Group. 109   Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information Net cash flows from   operating activities – –(2,617) Net cash flows from investing activities –   –4,830 Net cash flows from financing activities – –(2,225) Net decrease in   cash and cash equivalents – –(12) Cash and cash equivalents at the beginning   of the financial year – –– Exchange gain on cash and cash equivalents – –12   Cash and cash equivalents at the end of the financial year – –– Attributable   to owners of the parent – 57 48,108 – Basic – 0.22p 181.74p – Diluted – 0.21p   180.30p Profit for the financial year from discontinued operations – 571,509   Net gain on disposal of discontinued operations – –46,599 Profit for the financial   year from discontinued operations – 57 48,108 Gain on disposal of   discontinued operations before taxation (see note 28) – –44,996 Other items   arising from the disposal1 – –1,603 Net gain on disposal of discontinued   operations – –46,599 Share of result in associates – –3,191 Net financing   income – –27 Profit before taxation – –3,218 Taxation relating to performance   of discontinued operations – 57(1,709) Post-tax profit from discontinued   operations – 57 1,509 

 

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Notes to the   consolidated financial statements (continued) 7. Discontinued operations and   assets held for sale (continued) Assets held for sale On 15 February 2016 the   Group agreed with Liberty Global Europe Holding B.V. to merge operations in   the Netherlands as a 50:50 joint venture. As a part of the agreement,   Vodafone agreed to pay cash consideration totalling €1 billion to equalise   ownership in the joint venture. Assets and liabilities relating to our   operations in the Netherlands have been classed as held for sale on the   Statement of Financial Position. The relevant assets and liabilities are detailed   in the table below. Assets and liabilities held for sale 2016 £m 110 Vodafone   Group Plc Annual Report on Form 20-F 2016 Non-current assets Goodwill 680   Other intangible assets 1,099 Plant, property and equipment 847 Trade and   other receivables 27 2,653 Current assets Inventory 25 Taxation recoverable 6   Trade and other receivables 193 Cash and cash equivalents 14 238 Total assets   held for sale 2,891 Non-current liabilities Deferred tax liabilities 6   Provisions for liabilities and charges 14 20 Current liabilities Provisions   for liabilities and charges 4 Trade and other payables 322 326 Total   liabilities held for sale 346 

 

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8. Earnings per   share Basic earnings per share is the amount of profit generated for the   financial year attributable to equity shareholders divided by the weighted   average number of shares in issue during the year. 2016 Millions 2015   Millions 2014 Millions 2016 £m 2015 £m 2014 £m On 19 February 2014, we   announced a “6 for 11” share consolidation effective 24 February 2014. This   had the effect of reducing the number of shares in issue from 52,821,751,216   ordinary shares (including 4,351,833,492 ordinary shares held in Treasury) as   at the close of business on 18 February 2014 to 28,811,864,298 new ordinary   shares in issue immediately after the share consolidation on 24 February   2014. 9. Equity dividends Dividends are one type of shareholder return,   historically paid to our shareholders in February and August. 2016 £m 2015 £m   2014 £m On 2 September 2013 Vodafone announced that it had reached agreement   to dispose of its US group whose principal asset was its 45% interest in   Verizon Wireless (‘VZW’) to Verizon Communications Inc. (‘Verizon’), for a   total consideration of US$130 billion (£79 billion). At a General Meeting of   the Company on 28 January 2014, shareholders approved the transactions and   following completion on 21 February 2014, Vodafone shareholders received all   of the Verizon shares and US$23.9 billion (£14.3 billion) of cash (the   ‘Return of Value’) totalling US$85.2 billion (£51.0 billion). The Return of   Value was carried out in the form of a B share scheme pursuant to a   Court-approved scheme of arrangement and associated reduction of capital (the   ‘Scheme’). The Scheme provided shareholders (other than shareholders in the   United States and certain other jurisdictions) with the flexibility to receive   their proceeds as either an income or capital return. Under the Scheme,   Vodafone shareholders were issued unlisted, non-voting bonus shares, which   were shortly thereafter either cancelled in consideration of the relevant   amount of Verizon shares and cash or the holders received the relevant amount   of Verizon shares and cash in satisfaction of a special distribution on the   bonus shares, depending on shareholder elections and subject to applicable   securities laws. 111 Vodafone Group Plc Annual Report on Form 20-F 2016   Overview Strategy review Performance Governance Financials Additional   information Declared during the financial year: Final dividend for the year   ended 31 March 2015: 7.62 pence per share (2014: 7.47 pence per share, 2013:   6.92 pence per share) 2,020 1,9753,365 Interim dividend for the year ended 31   March 2016: 3.68 pence per share (2015: 3.60 pence per share, 2014: 3.53   pence per share) 978 9551,711 Special dividend for the year ended 31 March   2016: nil (2015: nil, 2014: 172.94 US cents per share – see below) – –35,490   2,998 2,93040,566 Proposed after the end of the reporting period and not   recognised as a liability: Final dividend for the year ended 31 March 2016:   7.77 pence per share (2015: 7.62 pence per share, 2014: 7.47 pence per share)   2,064 2,0201,975 Basic (loss)/earnings per share (15.08)p 21.75p 223.84p   Diluted (loss)/earnings per share (15.08)p 21.63p 222.07p (Loss)/earnings for   basic and diluted earnings per share (4,024) 5,76159,254 Weighted average   number of shares for basic earnings per share 26,692 26,48926,472 Effect of   dilutive potential shares: restricted shares and share options – 140210   Weighted average number of shares for diluted earnings per share 26,692   26,62926,682 

 

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Notes to the   consolidated financial statements (continued) 10. Intangible assets Our   statement of financial position contains significant intangible assets,   mainly in relation to goodwill and licences and spectrum. Goodwill, which   arises when we acquire a business and pay a higher amount than the fair value   of its net assets primarily due to the synergies we expect to create, is not   amortised but is subject to annual impairment reviews. Licences and spectrum   are amortised over the life of the licence. For further details see “Critical   accounting judgements” in note 1 “Basis of preparation” to the consolidated   financial statements. Accounting policies Identifiable intangible assets are   recognised when the Group controls the asset, it is probable that future economic   benefits attributed to the asset will flow to the Group and the cost of the   asset can be reliably measured. Goodwill Goodwill arising on the acquisition   of an entity represents the excess of the cost of acquisition over the   Group’s interest in the net fair value of the identifiable assets,   liabilities and contingent liabilities of the entity recognised at the date   of acquisition. Goodwill is initially recognised as an asset at cost and is   subsequently measured at cost less any accumulated impairment losses.   Goodwill is not subject to amortisation but is tested for impairment or   whenever there is evidence that it may be required. Goodwill is denominated   in the currency of the acquired entity and revalued to the closing exchange   rate at each reporting period date. Negative goodwill arising on an   acquisition is recognised directly in the income statement. On disposal of a   subsidiary or a jointly controlled entity, the attributable amount of   goodwill is included in the determination of the profit or loss recognised in   the income statement on disposal. Goodwill arising before the date of   transition to IFRS, on 1 April 2004, has been retained at the previous UK   GAAP amounts, subject to being tested for impairment at that date. Goodwill   written off to reserves under UK GAAP prior to 1998 has not been reinstated   and is not included in determining any subsequent profit or loss on disposal.   Finite lived intangible assets Intangible assets with finite lives are stated   at acquisition or development cost, less accumulated amortisation. The   amortisation period and method is reviewed at least annually. Changes in the   expected useful life or the expected pattern of consumption of future   economic benefits embodied in the asset are accounted for by changing the   amortisation period or method, as appropriate, and are treated as changes in   accounting estimates. Licence and spectrum fees Amortisation periods for   licence and spectrum fees are determined primarily by reference to the   unexpired licence period, the conditions for licence renewal and whether   licences are dependent on specific technologies. Amortisation is charged to   the income statement on a straight-line basis over the estimated useful lives   from the commencement of related network services. Computer software Computer   software comprises computer software purchased from third parties as well as   the cost of internally developed software. Computer software licences are   capitalised on the basis of the costs incurred to acquire and bring into use   the specific software. Costs that are directly associated with the production   of identifiable and unique software products controlled by the Group, and are   probable of producing future economic benefits, are recognised as intangible   assets. Direct costs of software development include employee costs and   directly attributable overheads. Software integral to an item of hardware   equipment is classified as property, plant and equipment. Costs associated   with maintaining computer software programs are recognised as an expense when   they are incurred. Internally developed software is recognised only if all of   the following conditions are met: a an asset is created that can be   separately identified; a it is probable that the asset created will generate   future economic benefits; and a the development cost of the asset can be   measured reliably. Amortisation is charged to the income statement on a   straight-line basis over the estimated useful life from the date the software   is available for use. Other intangible assets Other intangible assets,   including brands and customer bases, are recorded at fair value at the date   of acquisition. Amortisation is charged to the income statement, over the   estimated useful lives of intangible assets from the date they are available   for use, on a straight-line basis, with the exception of customer   relationships which are amortised on a sum of digits basis. The amortisation   basis adopted for each class of intangible asset reflects the Group’s   consumption of the economic benefit from that asset. 112 Vodafone Group Plc   Annual Report on Form 20-F 2016 

 

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Estimated   useful lives The estimated useful lives of finite lived intangible assets are   as follows: a Licence and spectrum fees 3–25 years a Computer software 3–5   years a Brands 1–10 years a Customer bases 2–10 years Licences and spectrum   £m Computer software £m Goodwill £m Other £m Total £m Cost: 1 April 2014   77,121 30,592 10,212 5,332 123,257 Exchange movements (8,756) (1,235) (1,036)   (542) (11,569) Arising on acquisition 1,634 – 48 905 2,587 Additions – 467   1,844 17 2,328 Disposals – – (464) (12) (476) Other – (20) 11 – (9) 31 March   2015 69,999 29,804 10,615 5,700 116,118 Accumulated impairment losses and   amortisation: 1 April 2014 53,806 13,420 6,864 2,479 76,569 Exchange   movements (6,344) (717) (707) (234) (8,002) Amortisation charge for the year   – 1,751 1,491 1,277 4,519 Disposals – – (454) (12) (466) Other – – 8 – 8 31   March 2015 47,462 14,454 7,202 3,510 72,628 Net book value: 31 March 2015   22,537 15,350 3,413 2,190 43,490 Note: 1 Disposals of licences and spectrum   comprise the removal of fully amortised assets that have expired. For   licences and spectrum and other intangible assets, amortisation is included   within the cost of sales line within the consolidated income statement.   Licences and spectrum with a net book value of £1,124 million (2015: £2,059   million) have been pledged as security against borrowings. The net book value   and expiry dates of the most significant licences are as follows: 2016 £m   2015 £m Expiry date The remaining amortisation period for each of the   licences in the table above corresponds to the expiry date of the respective   licence. A summary of the Group’s most significant spectrum licences can be   found on pages 187 and 188. 113 Vodafone Group Plc Annual Report on Form 20-F   2016 Overview Strategy review Performance Governance Financials Additional   information Germany 2016/2020/2025/2033 4,267 2,843 Italy 2018/2021/2029   1,262 1,094 UK 2023/2033 2,779 3,050 India 2016–2035 6,437 3,994 Qatar 2028/2029   942 987 Netherlands 2020/2029/2030 932 940 31 March 2016 22,789   18,8543,7971,32846,768 Exchange movements 4,078 467 481 735,099 Amortisation   charge for the year – 1,707 1,559 9864,252 Impairment losses (note 4) 450 – –   –450 Disposals – (2,362)1 (410) (2) (2,774) Transfer of assets held for   resale – (722) (209) (7) (938) Other – – 17 –17 31 March 2016 51,990 13,544   8,640 4,56078,734 Exchange movements 5,443 1,136 688 1627,429 Arising on   acquisition 17 – 5 2749 Additions – 5,474 1,850 107,334 Disposal – (2,362)1   (445) (2) (2,809) Transfer of assets held for resale (680) (1,654) (374)   (9)(2,717) Other – – 98 –98 31 March 2016 74,779 32,398 12,437 5,888125,502 

 

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Notes to the   consolidated financial statements (continued) 11. Property, plant and   equipment We make significant investments in network equipment and   infrastructure – the base stations and technology required to operate our   networks – that form the majority of our tangible assets. All assets are   depreciated over their useful economic lives. For further details on the   estimation of useful economic lives, see “Critical accounting judgements” in   note 1 “Basis of preparation” to the consolidated financial statements.   Accounting policies Land and buildings held for use are stated in the   statement of financial position at their cost, less any subsequent   accumulated depreciation and any accumulated impairment losses. Amounts for   equipment, fixtures and fittings, which includes network infrastructure   assets and which together comprise an all but insignificant amount of the   Group’s property, plant and equipment, are stated at cost less accumulated   depreciation and any accumulated impairment losses. Assets in the course of   construction are carried at cost, less any recognised impairment losses.   Depreciation of these assets commences when the assets are ready for their   intended use. The cost of property, plant and equipment includes directly   attributable incremental costs incurred in their acquisition and   installation. Depreciation is charged so as to write off the cost of assets,   other than land, using the straight-line method, over their estimated useful   lives, as follows: Land and buildings a Freehold buildings 25–50 years a   Leasehold premises the term of the lease Equipment, fixtures and fittings a   Network infrastructure and other 1–35 years Depreciation is not provided on   freehold land. Assets held under finance leases are depreciated over their   expected useful lives on the same basis as owned assets or, where shorter,   the term of the relevant lease. The gain or loss arising on the disposal or   retirement of an item of property, plant and equipment is determined as the   difference between any sale proceeds and the carrying amount of the asset and   is recognised in the income statement. 114 Vodafone Group Plc Annual Report   on Form 20-F 2016 

 

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Equipment,   fixtures and fittings £m Land and buildings £m Total £m Cost: 1 April 2014   1,646 48,563 50,209 Exchange movements (117) (4,107) (4,224) Arising on   acquisition 7 3,443 3,450 Additions 172 7,181 7,353 Disposals (52) (1,664) (1,716)   Other 13 14 27 31 March 2015 1,669 53,430 55,099 Accumulated depreciation and   impairment: 1 April 2015 732 26,626 27,358 Exchange movements (62) (2,296)   (2,358) Charge for the year 118 4,928 5,046 Disposals (24) (1,550) (1,574)   Other (10) 34 24 31 March 2015 754 27,742 28,496 Net book value: 31 March   2015 915 25,688 26,603 The net book value of land and buildings and   equipment, fixtures and fittings includes £27 million and £592 million   respectively (2015: £24 million and £468 million) in relation to assets held   under finance leases. Included in the net book value of land and buildings   and equipment, fixtures and fittings are assets in the course of   construction, which are not depreciated, with a cost of £26 million and   £1,527 million respectively (2015: £85 million and £1,705 million). Property,   plant and equipment with a net book value of £nil (2015: £nil) has been   pledged as security against borrowings. 115 Vodafone Group Plc Annual Report   on Form 20-F 2016 Overview Strategy review Performance Governance Financials   Additional information 31 March 2016 990 27,09228,082 Exchange movements   311,3751,406 Charge for the year 1315,1155,246 Disposals (26) (1,488)(1,514)   Transfer of assets held for resale (2) (922)(924) Other 14(18) (4) 31 March   2016 902 31,80432,706 Exchange movements 332.3822,415 Additions 1336,6086,741   Disposals (37) (1,583)(1,620) Transfer of assets held for resale (2)   (1,769)(1,771) Other 96(172)(76) 31 March 2016 1,89258,89660,788 

 

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Notes to the   consolidated financial statements (continued) 12. Investments in associates   and joint arrangements We hold interests in several associates where we have   significant influence, with the most significant being Safaricom Limited   following the disposal of Verizon Wireless on 21 February 2014 as well as   interests in a number of joint arrangements where we share control with one   or more third parties. For further details see “Critical accounting   judgements” in note 1 “Basis of preparation” to the consolidated financial   statements. Accounting policies Interests in joint arrangements A joint   arrangement is a contractual arrangement whereby the Group and other parties   undertake an economic activity that is subject to joint control; that is,   when the relevant activities that significantly affect the investee’s returns   require the unanimous consent of the parties sharing control. Joint   arrangements are either joint operations or joint ventures. Joint operations   A joint operation is a joint arrangement whereby the parties that have joint   control have the rights to the assets, and obligations for the liabilities,   relating to the arrangement or that other facts and circumstances indicate   that this is the case. The Group’s share of assets, liabilities, revenue,   expenses and cash flows are combined with the equivalent items in the   financial statements on a line-by-line basis. Any goodwill arising on the   acquisition of the Group’s interest in a jointly controlled entity is   accounted for in accordance with the Group’s accounting policy for goodwill   arising on the acquisition of a subsidiary. Joint ventures A joint venture is   a joint arrangement whereby the parties that have joint control have the   rights to the net assets of the arrangement. At the date of acquisition, any   excess of the cost of acquisition over the Group’s share of the net fair   value of the identifiable assets, liabilities and contingent liabilities of   the joint venture is recognised as goodwill. The goodwill is included within   the carrying amount of the investment. The results and assets and liabilities   of joint ventures are incorporated in the consolidated financial statements   using the equity method of accounting. Under the equity method, investments   in joint ventures are carried in the consolidated statement of financial   position at cost as adjusted for post-acquisition changes in the Group’s   share of the net assets of the joint venture, less any impairment in the   value of the investment. The Group’s share of post-tax profits or losses are   recognised in the consolidated income statement. Losses of a joint venture in   excess of the Group’s interest in that joint venture are recognised only to   the extent that the Group has incurred legal or constructive obligations or   made payments on behalf of the joint venture. Associates An associate is an   entity over which the Group has significant influence and that is neither a   subsidiary nor an interest in a joint venture. Significant influence is the   power to participate in the financial and operating policy decisions of the   investee but do not have control or joint control over those policies. At the   date of acquisition, any excess of the cost of acquisition over the Group’s   share of the net fair value of the identifiable assets, liabilities and   contingent liabilities of the associate is recognised as goodwill. The   goodwill is included within the carrying amount of the investment. The results   and assets and liabilities of associates are incorporated in the consolidated   financial statements using the equity method of accounting. Under the equity   method, investments in associates are carried in the consolidated statement   of financial position at cost as adjusted for post-acquisition changes in the   Group’s share of the net assets of the associate, less any impairment in the   value of the investment. The Group’s share of post-tax profits or losses are   recognised in the consolidated income statement. Losses of an associate in   excess of the Group’s interest in that associate are recognised only to the   extent that the Group has incurred legal or constructive obligations or made   payments on behalf of the associate. Joint operations The Company’s principal   joint operation has share capital consisting solely of ordinary shares and is   indirectly held, and principally operates in the UK. The financial and   operating activities of the operation are jointly controlled by the   participating shareholders and are primarily designed for all but an   insignificant amount of the output to be consumed by the shareholders.   Country of incorporation or registration Percentage1 shareholdings Name of   joint operation Principal activity Cornerstone Telecommunications Infrastructure   Limited Network infrastructure UK 50.0 Note: 1 Effective ownership   percentages of Vodafone Group Plc at 31 March 2016 rounded to the nearest   tenth of one percent. 116 Vodafone Group Plc Annual Report on Form 20-F 2016 

 

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Joint ventures   and associates 2016 £m 2015 £m Joint ventures The financial and operating   activities of the Group’s joint ventures are jointly controlled by the   participating shareholders. The participating shareholders have rights to the   net assets of the joint ventures though their equity shareholdings. Unless   otherwise stated, the Company’s principal joint ventures all have share   capital consisting solely of ordinary shares and are all indirectly held. The   country of incorporation or registration of all joint ventures is also their   principal place of operation. Country of incorporation or registration   Percentage1 shareholdings Name of joint venture Principal activity Indus   Towers Limited2 Network infrastructure India 42.0 Vodafone Hutchison   Australia Pty Limited3 Network operator Australia 50.0 Notes: 1 Effective   ownership percentages of Vodafone Group Plc at 31 March 2016 rounded to the   nearest tenth of one percent. 2 42% of Indus Towers Limited is held by   Vodafone India Limited (‘VIL’). 3 Vodafone Hutchison Australia Pty Limited   has a year end of 31 December. Joint ventures included the results of the   Vodafone Omnitel B.V. until 21 February 2014. On 21 February 2014 the Group   acquired the remaining 23.1% interest upon which date the results of the   wholly-acquired entity were consolidated in the Group’s financial statements.   The following table provides aggregated financial information for the Group’s   joint ventures as it relates to the amounts recognised in the income   statement, statement of comprehensive income and statement of financial   position. (Loss)/profit from continuing operations Other comprehensive income   Total comprehensive (expense)/income Investment in joint ventures 2016 £m   2015 £m 2014 £m 2016 £m 2015 £m 2014 £m 2016 £m 2015 £m 2014 £m 2016 £m 2015   £m 2014 £m Note: 1 Prior to 21 February 2014 the other participating   shareholder held substantive veto rights such that the Group did not   unilaterally control the financial and operating policies of Vodafone Omnitel   B.V. The summarised financial information for each of the Group’s material   equity accounted joint ventures on a 100% ownership basis is set out below.   Vodafone Hutchison Australia Pty Limited Vodafone Omnitel B.V.1 Indus Towers   Limited 2016 £m 2015 £m 2014 £m 2016 £m 2015 £m 2014 £m 2016 £m 2015 £m 2014   £m Note: 1 Prior to 21 February 2014 the other participating shareholder held   substantive veto rights such that the Group did not unilaterally control the   financial and operating policies of Vodafone Omnitel B.V. The Group did not   receive a dividend in the year to 31 March 2016 (2015: £166 million; 2014:   £26 million) from Indus Towers Limited. 117 Vodafone Group Plc Annual Report   on Form 20-F 2016 Overview Strategy review Performance Governance Financials   Additional information Income statement and statement of comprehensive income   Revenue – – 4,931 1,669 1,580 1,547 1,722 1,838 2,032 Depreciation and   amortisation – –(937) (358) (407)(507) (379) (415)(423) Interest income – –1   7 2920 2 210 Interest expense – –(15) (62) (75) (124) (197) (228)(212) Income   tax (expense)/income – –(174) (137) (182)39 – –1 Profit or loss from   continuing operations – –339 176 4451 (225) (320)(132) Other comprehensive   (expense)/income – –– – –– (1) 2– Total comprehensive income/(expense) – –339   176 4451 (226) (318)(132) Statement of financial position Non-current assets   – – 1,494 1,482 2,119 2,285 Current assets – – 239 278 395 424 Non-current   liabilities – – (519) (686) (2,591) (3,473) Current liabilities – – (461)   (487) (1,735) (743) Equity shareholders’ funds – – (753) (587) 1,812 1,507   Cash and cash equivalents within current assets – – 37 6 123 90 Non-current   liabilities excluding trade and other payables and provisions – – (301) (481)   (2,532) (3,325) Current liabilities excluding trade and other payables and   provisions – – (170) (188) (1,152) (90) Vodafone Omnitel B.V.1 – –– – –261 –   –– – –261 Indus Towers Limited 316 247373 74 1821 – –– 74 1821 Vodafone   Hutchison Australia Pty Limited (816) (667)(559) (112) (160)(66) (1) 1– (113)   (159) (66) Other 62 8928 (29) (9)5 – –– (29) (9)5 Total (438) (331) (158)   (67) (151)221 (1) 1 – (68) (150)221 Investment in joint ventures (438) (331)   Investment in associates 356 328 31 March (82) (3) 

 

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Notes to the   consolidated financial statements (continued) 12. Investments in associates   and joint arrangements (continued) Associates Unless otherwise stated, the   Company’s principal associates all have share capital consisting solely of   ordinary shares and are all indirectly held. The country of incorporation or   registration of all associates is also their principal place of operation.   Country of incorporation or registration Percentage1 shareholdings Name of   associate Principal activity Safaricom Limited2,3 Network operator Kenya 40.0   Notes: 1 Effective ownership percentages of Vodafone Group Plc at 31 March   2016 rounded to the nearest tenth of one percent. 2 The Group also holds two   non-voting shares. 3 At 31 March 2016 the fair value of Safaricom Limited was   KES 270 billion (£1,851 million) based on the closing quoted share price on   the Nairobi Stock Exchange. On 21 February 2014 the Group disposed of its 45%   interest in Cellco Partnership which traded under the name Verizon Wireless.   Results from discontinued operations are disclosed in note 7 “Discontinued   operations and assets held for resale” to the consolidated financial   statements. The Group received £4,828 million of dividends in the year to 31   March 2014 from Cellco Partnership. The following table provides aggregated   financial information for the Group’s associates as it relates to the amounts   recognised in the income statement, statement of comprehensive income and   consolidated statement of financial position. Profit from continuing   operations Other comprehensive expense Total comprehensive expense Investment   in associates 2016 £m 2015 £m 2014 £m 2016 £m 2015 £m 2014 £m 2016 £m 2015 £m   2014 £m 2016 £m 20152014 £m £m The summarised financial information for the   Group’s former material equity accounted associate on a 100% ownership basis   is set out below. Cellco Partnership 2016 £m 2015 £m 2014 £m 118 Vodafone   Group Plc Annual Report on Form 20-F 2016 Income statement and statement of   comprehensive income Revenue – – 22,122 Depreciation and amortisation –   –(2,186) Interest income – –1 Interest expense – –(38) Income tax   (expense)/income – –(111) Post-tax profit from discontinued operations –   –7,092 Other comprehensive expense – –(2) Total comprehensive income – –7,090   Statement of financial position Non-current assets – – Current assets – –   Non-current liabilities – – Current liabilities – – Equity shareholders’   funds – – Cash and cash equivalents within current assets – – Non-current   liabilities excluding trade and other payables and provisions – – Current   liabilities excluding trade and other payables and provisions – – Cellco   Partnership – –– – –– – –(1) – –3,190 Other 356 328272 111 8857 – –– 111 8857   Total 356 328 272 111 88 57 – –(1) 111 88 3,247 

 

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13. Other   investments We hold a number of other listed and unlisted investments, mainly   comprising US$5.0 billion of loan notes from Verizon Communications Inc.   Accounting policies Other investments are recognised and derecognised on a   trade date where a purchase or sale of an investment is under a contract   whose terms require delivery of the investment within the timeframe   established by the market concerned, and are initially measured at fair   value, including transaction costs. Other investments classified as held for   trading and available-for-sale are stated at fair value. Where securities are   held for trading purposes, gains and losses arising from changes in fair   value are included in net profit or loss for the period. For   available-for-sale investments, gains and losses arising from changes in fair   value are recognised directly in equity, until the security is disposed of or   is determined to be impaired, at which time the cumulative gain or loss   previously recognised in equity, determined using the weighted average cost   method, is included in the net profit or loss for the period. Other   investments classified as loans and receivables are stated at amortised cost   using the effective interest method, less any impairment. 2016 £m 2015 £m The   listed and unlisted securities are classified as available-for-sale. Public   debt and bonds are classified as held for trading, and other debt and bonds   which are not quoted in an active market, are classified as loans and   receivables. Unlisted equity investments are recorded at fair value where   appropriate. Other debt and bonds includes loan notes of US$5.0 billion   (£3,481 million) issued by Verizon Communications Inc. as part of the Group’s   disposal of its interest in Verizon Wireless all of which is recorded within   non-current assets. The carrying amount of these loan notes approximates fair   value. Current other investments comprise the following: 2016 £m 2015 £m   Public debt and bonds are classified as held for trading. Cash held in   restricted deposits are classified as loans and receivables and include   amounts held in qualifying assets by Group insurance companies to meet   regulatory requirements. Other debt and bonds includes £967 million (2015:   £2,016 million) of assets held for trading in managed investment funds with   liquidity of up to 90 days and £1,574 million (2015: £38 million) of assets   classified as loans and receivables comprising collateral paid on derivative   financial instruments. Collateral passed in 2016 includes £1,460 million in   relation to put options issued with regard to the mandatory convertible   bonds’ hedging strategy. Current public debt and bonds include government   bonds of £659 million (2015: £830 million) which consist of highly liquid   index linked gilts with less than two years to maturity held on an effective   floating rate basis. For public debt and bonds, other debt and bonds and cash   held in restricted deposits, the carrying amount approximates fair value. 119   Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information Included within   current assets: Debt securities: Public debt and bonds 888 982 Other debt and   bonds 2,541 2,223 Cash and other investments held in restricted deposits 791   650 4,220 3,855 Included within non-current assets: Equity securities: Listed   3 4 Unlisted 82 222 Debt securities: Public debt and bonds 95 148 Other debt   and bonds 3,482 3,383 3,662 3,757 

 

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Notes to the   consolidated financial statements (continued) 14. Inventory Our inventory   primarily consists of mobile handsets and is presented net of an allowance   for obsolete products. Accounting policies Inventory is stated at the lower   of cost and net realisable value. Cost is determined on the basis of weighted   average costs and comprises direct materials and, where applicable, direct   labour costs and those overheads that have been incurred in bringing the   inventories to their present location and condition. 2016 £m 2015 £m   Inventory is reported net of allowances for obsolescence, an analysis of   which is as follows: 2016 £m 2015 £m 2014 £m Cost of sales includes amounts   related to inventory of £5,427 million (2015: £5,701 million; 2014: £5,340   million). 120 Vodafone Group Plc Annual Report on Form 20-F 2016 1 April (74)   (88) (89) Exchange movements (3) 86 Amounts (debited)/credited to the income   statement (22) 6(5) 31 March (99) (74)(88) Goods held for resale 565 482 

 

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15. Trade and   other receivables Our trade and other receivables mainly consist of amounts   owed to us by customers and amounts that we pay to our suppliers in advance.   Trade receivables are shown net of an allowance for bad or doubtful debts.   Derivative financial instruments with a positive market value are reported   within this note. Accounting policies Trade receivables do not carry any   interest and are stated at their nominal value as reduced by appropriate   allowances for estimated irrecoverable amounts. Estimated irrecoverable   amounts are based on the ageing of the receivable balances and historical   experience. Individual trade receivables are written off when management   deems them not to be collectible. 2016 £m 2015 £m The Group’s trade   receivables are stated after allowances for bad and doubtful debts based on   management’s assessment of creditworthiness, an analysis of which is as   follows: 2016 £m 2015 £m 2014 £m The carrying amounts of trade and other   receivables approximate their fair value and are predominantly non-interest   bearing. The fair values of the derivative financial instruments are   calculated by discounting the future cash flows to net present values using   appropriate market interest rates and foreign currency rates prevailing at 31   March. 2016 £m 2015 £m 121 Vodafone Group Plc Annual Report on Form 20-F 2016   Overview Strategy review Performance Governance Financials Additional   information Included within “Derivative financial instruments”: Fair value   through the income statement (held for trading): Interest rate swaps 2,027   2,378 Cross currency interest rate swaps 236 218 Options 36 – Foreign   exchange contracts 231 33 2,530 2,629 Designated hedge relationships:   Interest rate swaps 384 88 Cross currency interest rate swaps 1,390 1,288   4,304 4,005 1 April 802 589770 Exchange movements 4 (60) (67) Amounts charged   to administrative expenses 498 541347 Other (209) (268)(461) 31 March 1,095   802 589 Included within non-current assets: Trade receivables 371 288 Amounts   owed by associates and joint ventures 96 85 Other receivables 493 190   Prepayments 130 566 Derivative financial instruments 3,490 3,736 4,580 4,865   Included within current assets: Trade receivables 4,401 3,944 Amounts owed by   associates and joint ventures 173 133 Other receivables 954 930 Prepayments   1,040 938 Accrued income 1,759 1,839 Derivative financial instruments 814 269   9,141 8,053 

 

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Notes to the   consolidated financial statements (continued) 16. Trade and other payables   Our trade and other payables mainly consist of amounts we owe to our   suppliers that have been invoiced or are accrued. They also include taxes and   social security amounts due in relation to our role as an employer.   Derivative financial instruments with a negative market value are reported   within this note. Accounting policies Trade payables are not interest bearing   and are stated at their nominal value. 2016 £m 2015 £m The carrying amounts   of trade and other payables approximate their fair value. The fair values of   the derivative financial instruments are calculated by discounting the future   cash flows to net present values using appropriate market interest and   foreign currency rates prevailing at 31 March. 2016 £m 2015 £m 122 Vodafone   Group Plc Annual Report on Form 20-F 2016 Included within “Derivative   financial instruments”: Fair value through the income statement (held for   trading): Interest rate swaps 885 672 Cross currency interest rate swaps 347   229 Options 64 11 Foreign exchange contracts 59 46 1,355 958 Designated hedge   relationships Interest rate swaps 22 10 Cross currency interest rate swaps   187 16 1,564 984 Included within non-current liabilities: Other payables 98   86 Accruals 144 161 Deferred income 130 123 Derivative financial instruments   1,129 894 1,501 1,264 Included within current liabilities: Trade payables   5,867 5,054 Amounts owed to associates and joint ventures 53 44 Other taxes   and social security payable 1,040 1,028 Other payables 760 621 Accruals 6,022   6,408 Deferred income 1,555 1,663 Derivative financial instruments 435 90   15,732 14,908 

 

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17. Provisions   A provision is a liability recorded in the statement of financial position,   where there is uncertainty over the timing or amount that will be paid, and   is therefore often estimated. The main provisions we hold are in relation to   asset retirement obligations, which include the cost of returning network   infrastructure sites to their original condition at the end of the lease, and   claims for legal and regulatory matters. For further details see “Critical   accounting judgements” in note 1 “Basis of preparation” to the consolidated   financial statements. Accounting policies Provisions are recognised when the   Group has a present obligation (legal or constructive) as a result of a past   event, it is probable that the Group will be required to settle that   obligation and a reliable estimate can be made of the amount of the   obligation. Provisions are measured at the Directors’ best estimate of the   expenditure required to settle the obligation at the reporting date and are   discounted to present value where the effect is material. Asset retirement   obligations In the course of the Group’s activities, a number of sites and   other assets are utilised which are expected to have costs associated with   de-commissioning. The associated cash outflows are substantially expected to   occur at the dates of exit of the assets to which they relate, which are   long-term in nature, primarily in periods up to 25 years from when the asset   is brought into use. Legal and regulatory The Group is involved in a number   of legal and other disputes, including notifications of possible claims. The   Directors of the Company, after taking legal advice, have established   provisions after taking into account the facts of each case. The timing of   cash outflows associated with the majority of legal claims are typically less   than one year, however, for some legal claims the timing of cash flows may be   long-term in nature. For a discussion of certain legal issues potentially   affecting the Group see note 30 “Contingent liabilities and legal   proceedings” to the consolidated financial statements. Other provisions Other   provisions comprises various provisions including those for restructuring   costs and property. The associated cash outflows for restructuring costs are   primarily less than one year. The timing of the cash flows associated with   property is dependent upon the remaining term of the associated lease. Asset   retirement obligations £m Legal and regulatory £m Other £m Total £m 1 April   2014 485 557 767 1,809 Exchange movements (34) (18) (47) (99) Arising on   acquisition – 26 59 85 Amounts capitalised in the year 58 – – 58 Amounts   charged to the income statement – 277 270 547 Utilised in the year -   payments (13) (51) (385) (449) Amounts released to the income statement (30)   (100) (96) (226) Other – 143 (19) 124 31 March 2015 466 834 549 1,849 123   Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information Exchange movements   21 193070 Amounts capitalised in the year 31 ––31 Amounts charged to the   income statement – 172386558 Utilised in the year - payments (38) (60)   (260)(358) Amounts released to the income statement (15) (58) (76) (149)   Transfer of liabilities held for resale (14) (1)(3) (18) Other – 55(1) 54 31   March 2016 451 961 625 2,037 

 

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Notes to the   consolidated financial statements (continued) 17. Provisions (continued)   Provisions have been analysed between current and non-current as follows: 31   March 2016 Asset retirement obligations £m Legal and regulatory £m Other £m   Total £m 31 March 2015 Asset retirement obligations £m Legal and regulatory   £m Other £m Total £m Current liabilities 14 311 442 767 Non-current   liabilities 452 523 107 1,082 466 834 549 1,849 18. Called up share capital   Called up share capital is the number of shares in issue at their par value.   A number of shares were allotted during the year in relation to employee   share schemes. Accounting policies Equity instruments issued by the Group are   recorded at the amount of the proceeds received, net of direct issuance costs.   2016 2015 Number £m Number £m Note: 1 At 31 March 2016, the Group held   2,254,825,696 (2015: 2,300,749,013) treasury shares with a nominal value of   £297 million (2015: £303 million). The market value of shares held was £4,988   million (2015: £5,072 million). During the year 45,923,317 (2015: 71,213,894)   treasury shares were reissued under Group share schemes. Allotted during the   year Nominal value £m Net proceeds £m Number On 19 February 2016, we   announced the placing of subordinated mandatory convertible bonds totalling   £1.44 billion with an 18 months maturity date due in 2017 and £1.44 billion   with a 3 year maturity due in 2019. The bonds are convertible into a total of   1,325,356,650 ordinary shares with a conversion price of £2.1730 per share.   For further details see note 22 “Liquidity and capital resources”. 124   Vodafone Group Plc Annual Report on Form 20-F 2016 UK share awards –– – US   share awards 608,910– 1 Total share awards 608,910 – 1 Ordinary shares of   2020 21 US cents each allotted, issued and fully paid:1 1 April   28,812,787,0983,792 28,811,923,1283,792 Allotted during the year 608,910–   863,970– 31 March 28,813,396,0083,792 28,812,787,0983,792 Current liabilities   12242 503757 Non-current liabilities 439719 1221,280 451 961 625 2,037 

 

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19.   Reconciliation of net cash flow from operating activities The table below   shows how our profit for the year from continuing operations translates into   cash flows generated from our operating activities. 2016 £m 2015 £m 2014 £m   Notes 20. Cash and cash equivalents The majority of the Group’s cash is held   in bank deposits, money market funds or in repurchase agreements which have a   maturity of three months or less to enable us to meet our short-term   liquidity requirements. Accounting policies Cash and cash equivalents   comprise cash in hand and call deposits, and other short-term highly liquid   investments that are readily convertible to a known amount of cash and are   subject to an insignificant risk of changes in value. 2016 £m 2015 £m Cash   and cash equivalents are held by the Group on a short-term basis with all   having an original maturity of three months or less. The carrying amount   approximates their fair value. Cash and cash equivalents of £1,284 million   (2015: £1,722 million) are held in countries with restrictions on remittances   but where the balances could be used to repay subsidiaries’ third party   liabilities. Of the balance at 31 March 2015, INR 57,863 million (£623   million) was used to settle India spectrum licence obligations on 8 April   2015. 125 Vodafone Group Plc Annual Report on Form 20-F 2016 Overview   Strategy review Performance Governance Financials Additional information Cash   at bank and in hand 1,737 2,379 Money market funds 5,781 2,402 Repurchase   agreements 2,700 2,000 Commercial paper – 101 Cash and cash equivalents as   presented in the statement of financial position 10,218 6,882 Bank overdrafts   (9) (21) Cash and cash equivalents as presented in the statement of cash   flows 10,209 6,861 (Loss)/profit for the financial year (3,818) 5,91759,420   Profit for the financial year from discontinued operations7 – (57) (48,108)   (Loss)/profit for the financial year from continuing operations (3,818)   5,86011,312 Non-operating income and expense 2 19149 Investment income (300)   (883)(346) Financing costs 2,124 1,7361,554 Income tax expense /(credit)6   3,369 (4,765)(16,582) Operating profit/(loss) 1,377 1,967(3,913) Adjustments   for: Share-based payments27 117 8892 Depreciation and amortisation10, 11   9,498 9,5657,560 Loss on disposal of property, plant and equipment and   intangible assets3 20 4985 Share of result of equity accounted associates and   joint ventures 12 (44) 63(278) Impairment losses4 450 –6,600 Other income and   expense 75 114620 (Increase)/decrease in inventory 14 (98) (73) 4   (Increase)/decrease in trade and other receivables15 (547) (230)526   Increase/(decrease) in trade and other payables16 372 (1,146) 851 Cash   generated by operations 11,220 10,39712,147 Net tax paid (739) (682)(5,920)   Net cash flow from operating activities 10,481 9,7156,227 

 

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Notes to the   consolidated financial statements (continued) 21. Borrowings The Group’s   sources of borrowing for funding and liquidity purposes come from a range of   committed bank facilities and through short-term and long-term issuances in   the capital markets including bond and commercial paper issues and bank   loans. We manage the basis on which we incur interest on debt between fixed   interest rates and floating interest rates depending on market conditions   using interest rate derivatives. The Group enters into foreign exchange   contracts to mitigate the impact of exchange rate movements on certain   monetary items. Accounting policies Capital market and bank borrowings   Interest bearing loans and overdrafts are initially measured at fair value   (which is equal to cost at inception), and are subsequently measured at   amortised cost, using the effective interest rate method, except where they   are identified as a hedged item in a designated hedge relationship. Any   difference between the proceeds net of transaction costs and the amount due   on settlement or redemption of borrowings is recognised over the term of the   borrowing. Where bonds issued with certain conversion rights are identified   as compound instruments they are initially measured at fair value with the   nominal amounts recognised as a component in equity and the fair value of   future coupons included in borrowings. These are subsequently measured at   amortised cost using the effective interest rate method. Carrying value and   fair value information 2016 2015 Short-term borrowings £m Long-term   borrowings £m Short-term borrowings £m Long-term borrowings £m Total £m Total   £m Notes: 1 At 31 March 2016, amount includes £2,837 million (2015: £2,542   million) in relation to collateral support agreements. 2 Includes a £1.4   billion (2015: £1.3 billion) liability for payments due to holders of the   equity shares in Kabel Deutschland AG under the terms of a domination and profit   and loss transfer agreement. Amount also includes £50 million (2015: £nil)   and £69 million (2015: £nil) in short and long-term borrowings respectively   in relation to the debt component of the mandatory convertible bonds maturing   on 25 August 2017 and 25 February 2019. These are compound instruments with   nominal values recorded in equity. The initial fair value of future coupons   is recognised as debt and subsequently measured at amortised cost using the   effective interest rate method. Bank loans include INR 629 billion (£6.6   billion) (2015: INR 457 billion (£4.9 billion)) of loans held by Vodafone   India Limited (‘VIL’) and its subsidiaries (the “VIL Group”). The VIL Group   has a number of security arrangements supporting certain licences secured   under the terms of agreements between the Group, the Department of   Telecommunications and the Government of India including certain pledges of   the shares within the VIL Group. The terms and conditions of the security   arrangements mean that, should members of the VIL Group not meet all of their   loan payment and performance obligations, the lenders may sell the pledged   shares and enforce rights over the certain licences under the terms of the   tri-party agreements to recover their losses, with any remaining sales proceeds   being returned to the VIL Group. Each of the eight legal entities within the   VIL Group provide cross guarantees to the lenders in respect of debt   contracted by the other entities. The fair value and carrying value of the   Group’s short-term borrowings are as follows: Sterling equivalent nominal   value Fair value Carrying value 2016 £m 2015 £m 2016 £m 2015 £m 2016 £m 2015   £m Note: 1 Amounts for 2016 include £50 million in relation to the short   -term debt component of the mandatory convertible bonds. 126 Vodafone Group   Plc Annual Report on Form 20-F 2016 Financial liabilities measured at   amortised cost1 13,737 10,689 13,995 10,843 13,987 10,837 Bonds: 395 1,265   399 1,309 412 1,297 5.125% euro 500 million bond due April 2015 – 361 – 362 –   379 6.25% euro 1,250 million bond due January 2016 – 904 – 947 – 918 4.75%   euro 500 million bond due June 2016 395 – 399 – 412 – Bonds in designated   hedge relationships: 1,598 489 1,637 489 1,621 489 2.15% Japanese yen 3,000   million bond due April 2015 – 17 – 17 – 17 Floating rate note US dollar 700   million due February 2016 – 472 – 472 – 472 5.625% US dollar 1,300 million   bond due February 2017 903 – 939 – 927 – 1.625% US dollar 1,000 million bond   due March 2017 695 – 698 – 694 – Short-term borrowings 15,730 12,443 16,031   12,641 16,020 12,623 Financial liabilities measured at amortised cost: Bank   loans 2,2546,9579,211 1,8765,1287,004 Bank overdrafts 9–9 21–21 Commercial   paper 7,396–7,396 5,077–5,077 Bonds 41211,28711,699 1,2976,6847,981 Other   liabilities1,2 4,3282354,563 3,8631333,996 Bonds in designated hedge   relationships 1,62110,84812,469 48910,49010,979 16,020 29,327 45,347   12,62322,43535,058 

 

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The fair value   and carrying value of the Group’s long-term borrowings are as follows:   Sterling equivalent nominal value Fair value Carrying value 2016 £m 2015 £m   2016 £m 2015 £m 2016 £m 2015 £m Note: 1 Amounts for 2016 include £69 million   in relation to the long-term debt component of the mandatory convertible   bonds. Fair values of bonds and financial liabilities measured at amortised   cost are based on level 1 and 2 of the fair value hierarchy respectively,   using quoted market prices or discounted cash flows with a discount rate   based upon forward interest rates available to the Group at the reporting   date. Further information can be found in note 23 “Capital and financial risk   management”. 127 Vodafone Group Plc Annual Report on Form 20-F 2016 Overview   Strategy review Performance Governance Financials Additional information   Financial liabilities measured at amortised cost: 5,533 5,306 7,260 5,346   7,192 5,261 Bank loans 5,298 5,173 7,025 5,213 6,957 5,128 Other liabilities1   235 133 235 133 235 133 Bonds: 10,707 6,002 11,475 6,908 11,287 6,684 4.75%   euro 500 million bond due June 2016 – 268 – 283 – 287 5.375% sterling 600   million bond due December 2017 549 549 583 605 566 568 5% euro 750 million   bond due June 2018 593 542 656 622 617 564 8.125% sterling 450 million bond   due November 2018 450 450 524 553 473 476 Floating rate note euro 1,750   million bond due February 2019 1,384 – 1,397 – 1,386 – 1% euro 1,750 million   bond due September 2020 1,384 1,265 1,402 1,283 1,383 1,263 0% convertible   sterling 600 million bond due November 2020 600 – 600 – 553 – 0.875% euro 750   million bond due November 2020 593 – 597 – 591 – Floating rate note US dollar   60 million bond due March 2021 42 – 42 – 41 – 1.25% euro 1,250 million bond   due August 2021 988 – 1,012 – 985 – 4.65% euro 1,250 million bond due January   2022 988 904 1,192 1,129 1,157 1,081 5.375% euro 500 million bond due June   2022 395 361 497 475 513 484 1.75% euro 1,250 million bond due August 2023   988 – 1,026 – 986 – 1.875% euro 1,000 million bond due September 2025 791 723   817 768 790 721 5.625% sterling 250 million bond due December 2025 250 250   299 313 335 343 5.9% sterling 450 million bond due November 2032 450 450 545   592 647 656 2.75% euro 332 million bond due December 2034 262 240 286 285 264   241 Bonds in designated hedge relationships: 9,680 9,397 10,218 10,201 10,848   10,490 5.625% US dollar 1,300 million bond due February 2017 – 876 – 946 –   920 1.625% US dollar 1,000 million bond due March 2017 – 674 – 679 – 672   1.25% US dollar 1,000 million bond due September 2017 695 674 693 670 694 672   1.5% US dollar 1,400 million bond due February 2018 973 943 973 942 972 941   4.625% US dollar 500 million bond due July 2018 347 337 369 367 376 375 5.45%   US dollar 1,250 million bond due June 2019 868 842 957 955 957 938 4.375% US   dollar 500 million bond due March 2021 347 337 379 371 363 346 2.5% US dollar   1,000 million bond due September 2022 695 674 694 654 713 667 2.95% US dollar   1,600 million bond due February 2023 1,112 1,078 1,100 1,066 1,199 1,121   3.125% norwegian krona 850 million bond due November 2025 71 – 78 – 72 – 2.2%   euro 1,750 million bond due August 2026 1,384 – 1,451 – 1,379 – 6.6324% euro   50 million bond due December 2028 40 36 115 109 102 86 7.875% US dollar 750   million bond due February 2030 521 505 665 711 781 771 6.25% US dollar 495   million bond due November 2032 344 333 399 410 454 445 6.15% US dollar 1,700   million bond due February 2037 1,181 1,145 1,327 1,392 1,615 1,578 4.375% US   dollar 1,400 million bond due February 2043 973 943 886 929 1,040 958 5.35% US   dollar 186 million bond due December 2045 129 – 132 – 131 – Long-term   borrowings 25,920 20,705 28,953 22,455 29,327 22,435 

 

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Notes to the   consolidated financial statements (continued) 21. Borrowings (continued)   Maturity of borrowings and other financial liabilities The maturity profile   of the anticipated future cash flows including interest in relation to the   Group’s non-derivative financial liabilities on an undiscounted basis which,   therefore, differs from both the carrying value and fair value, is as   follows: Loans in designated hedge relationships £m Bank loans £m Commercial   paper £m Other liabilities £m Bonds £m Total £m Within one year 1,928 5,092   1,588 3,885 873 13,366 In one to two years 831 – 610 18 1,256 2,715 In two to   three years 1,090 – 831 11 2,650 4,582 In three to four years 920 – 1,191 12   626 2,749 In four to five years 862 – 135 12 1,101 2,110 In more than five   years 1,660 – 4,958 115 8,118 14,851 7,291 5,092 9,313 4,053 14,624 40,373   Effect of discount/financing rates (287) (15) (1,332) (36) (3,645) (5,315) 31   March 2015 7,004 5,077 7,981 4,017 10,979 35,058 The maturity profile of the   Group’s financial derivatives (which include interest rate swaps, cross   currency interest rate swaps and foreign exchange swaps) using undiscounted   cash flows, is as follows: 2016 2015 Payable £m Receivable £m Payable £m   Receivable £m Payables and receivables are stated separately in the table   above as settlement is on a gross basis. The net effect of discount/financing   rates is £1,183 million (2015: £3,073 million), leaving a £2,740 million   (2015: £3,021 million) net receivable in relation to financial instruments.   This is split £1,564 million (2015: £984 million) within trade and other   payables and £4,304 million (2015: £4,005 million) within trade and other   receivables. Gains and losses recognised in the hedging reserve in equity on   cross currency interest rate swaps as at 31 March 2016 will be continuously   released to the income statement within financing costs until the repayment   of certain bonds classified as loans designated in hedge relationships in the   table of maturities of non-derivative financial liabilities above. The   currency split of the Group’s foreign exchange derivatives (which includes   cross currency interest rate swaps and foreign exchange swaps) is as follows:   2016 2015 Payable £m Receivable £m Payable £m Receivable £m Payables and   receivables are stated separately in the table above as settlement is on a   gross basis. The net effect of discount/financing rates is £40 million (2015:   £192 million), leaving a £1,264 million (2015: £1,248 million) net receivable   in relation to foreign exchange financial instruments. This is split £593   million (2015: £291 million) within trade and other payables and £1,857   million (2015: £1,539 million) within trade and other receivables. 128   Vodafone Group Plc Annual Report on Form 20-F 2016 Sterling 17,890 14,253   11,46112,578 Euro 11,672 19,369 8,1586,228 US dollar 7,748 10,178 5,5989,908   Japanese yen 673 – 59417 Other 5,388 795 3,2381,374 43,371 44,595   29,04930,105 Within one year 25,990 26,912 2,6473,537 In one to two years   8,429 8,632 5,4574,005 In two to three years 3,807 4,147 4,1794,617 In three   to four years 2,088 2,363 1,4301,942 In four to five years 1,913 2,050   1,1452,164 In more than five years 18,851 20,897 13,17717,864 61,078 65,001   28,03534,129 Within one year 2,4447,4057034,3381,30416,194 In one to two   years 1,257– 88957 2,7874,990 In two to three years 1,599– 2,68143 6865,009   In three to four years 1,297– 18014 1,1752,666 In four to five years 1,106–   2,79815 6304,549 In more than five years 4,716– 5,816141 9,74120,414 12,4197,405   13,0674,608 16,32353,822 Effect of discount/financing rates (3,208)(9)   (1,368)(36) (3,854)(8,475) 31 March 2016 9,2117,396 11,6994,572 12,46945,347 

 

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The present   value of minimum lease payments under finance lease arrangements under which   the Group has leased certain of its equipment is included within other   liabilities and is analysed as follows: 2016 £m 2015 £m Interest rate and   currency of borrowings is as follows: Total borrowings £m Floating rate   borrowings £m Fixed rate borrowings1 £m Other borrowings2 £m Currency   Sterling 2,108 55 2,046 7 Euro 19,531 4,252 13,972 1,307 US dollar 7,962   7,782 180 – Other 5,457 2,898 2,559 – 31 March 2015 35,058 14,987 18,757   1,314 Notes: 1 The weighted average interest rate for the Group’s sterling   denominated fixed rate borrowings is 4.6% (2015: 6.3%). The weighted average   time for which these rates are fixed is 6.4 years (2015: 8.1 years). The   weighted average interest rate for the Group’s euro denominated fixed rate   borrowings is 2.7% (2015: 3.4%). The weighted average time for which the   rates are fixed is 6.5 years (2015: 7.5 years). The weighted average interest   rate for the Group’s US dollar denominated fixed rate borrowings is 3.6%   (2015: 2.8%). The weighted average time for which the rates are fixed is 2.0   years (2015: 3.5 years). The weighted average interest rate for the Group’s   other currency fixed rate borrowings is 9.4% (2015: 9.6%). The weighted   average time for which the rates are fixed is 6.8 years (2015: 0.6 years). 2   At 31 March 2016 other borrowings of £1,554 million (2015: £1,314 million)   include a £1.4 billion (2015: £1.3 billion) liability for payments due to   holders of the equity shares in Kabel Deutschland AG under the terms of a   domination and profit and loss transfer agreement. The figures shown in the   tables above take into account interest rate swaps used to manage the   interest rate profile of financial liabilities. Interest on floating rate   borrowings is generally based on national LIBOR equivalents or government   bond rates in the relevant currencies. Additional protection from euro   interest rate movements is provided by fixing interest rates or reducing   floating interest rates using interest rate swaps or interest rate futures1.   2016 2015 Interest rate futures £m Interest rate swaps £m Interest rate   futures £m Interest rate swaps £m Notes: 1 In the table above, figures shown   as positive indicate an increase in fixed interest debt and figures shown in   brackets indicate a reduction in fixed interest debt. 2 Figures shown as “in   more than five years” relate to the periods from March 2021 to March 2022   (2015: March 2020 to March 2021). 129 Vodafone Group Plc Annual Report on   Form 20-F 2016 Overview Strategy review Performance Governance Financials   Additional information Within one year (2,953)1,696 (2,282)655 In one to two   years 2,7001,518 1,659– In two to three years 1,6071,429 3,000– In three to   four years –5,625 1,687– In four to five years –(1,429) (20) 4,782 In more   than five years2 –(2,411) –(5,258) Sterling 2,789 902,575124 Euro 29,900   11,62116,8491,430 US dollar 5,632 5,443189– Other 7,026 2,3814,645– 31 March   2016 45,347 19,53524,2581,554 Within one year 12 14 In two to five years 50   40 In more than five years 109 85 

 

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Notes to the   consolidated financial statements (continued) 21. Borrowings (continued)   Borrowing facilities Committed facilities expiry 2016 2015 Drawn £m Undrawn   £m Drawn £m Undrawn £m At 31 March 2016, the Group’s most significant   committed facilities comprised two revolving credit facilities which remained   undrawn throughout the year of US$4.1 billion (£2.8 billion) and €4.0 billion   (£3.2 billion) maturing in five years. Under the terms of these bank   facilities, lenders have the right, but not the obligation, to cancel their   commitment 30 days from the date of notification of a change of control of   the Company and have outstanding advances repaid on the last day of the   current interest period. The facility agreements provide for certain   structural changes that do not affect the obligations of the Company to be   specifically excluded from the definition of a change of control. This is in   addition to the rights of lenders to cancel their commitment if the Company   has committed an event of default. The terms and conditions of the Group’s   drawn facilities obtained in relation to projects in its Italian, German,   Turkish and Romanian operations of €1.2 billion in aggregate (£0.9 billion)   and the undrawn facilities in the Group’s UK and Irish operations totalling   £0.5 billion and the undrawn facility in the German operation of €0.4 billion   (£0.3 billion) are similar to those of the US dollar and euro revolving   credit facilities. Further information on these facilities can be found in   note 22 “Liquidity and capital resources”. 22. Liquidity and capital   resources This section includes an analysis of net debt, which we use to   manage capital, and committed borrowing facilities. Net debt Net debt was   £29.2 billion at 31 March 2016 and includes liabilities for amounts payable   under the domination agreement in relation to Kabel Deutschland AG (£1.4   billion) and deferred spectrum licence costs in India (£4.1 billion). This   increased by £6.9 billion in the year as a result of payments for spectrum   licences and equity shareholder dividends which outweighed positive free cash   flow. Net debt represented 45.8% of our market capitalisation at 31 March   2016 compared to 35.1% at 31 March 2015. Average net debt at month end   accounting dates over the 12 month period ended 31 March 2016 was £25.9   billion and ranged between net debt of £22.3 billion and £30.8 billion. Our   consolidated net debt position at 31 March was as follows: 2016 £m 2015 £m   Notes: 1 2 At 31 March 2016 US$471 million was drawn under the US commercial   paper programme and €8,907 million and US$38 million were drawn under the   euro commercial paper programme. Includes a £1.4 billion (2015: £1.3 billion)   liability for payments due to holders of the equity shares in Kabel   Deutschland AG under the terms of a domination and profit and loss transfer   agreement. At 31 March 2016 the amount includes £2,837 million (2015: £2,542   million) in relation to cash received under collateral support agreements.   Amount also includes £50 million (2015: £nil) in relation to the short-term   debt component of the mandatory convertible bonds maturing on 25 August 2017   and 25 February 2019. At 31 March 2016 the amount includes £69 million (2015:   £nil) in relation to the long -term debt component of the mandatory   convertible bonds maturing on 25 August 2017 and 25 February 2019. Comprises   mark-to-market adjustments on derivative financial instruments which are   included as a component of trade and other receivables £4,304 million (2015:   £4,005 million) and trade and other payables £1,564 million (2015: £984   million). Amount also includes short-term investments primarily in index   linked government bonds and managed investment funds included as a component   of other investments and cash paid as collateral £3,200 million (2015: £2,884   million). 3 4 5 130 Vodafone Group Plc Annual Report on Form 20-F 2016 Cash   and cash equivalents 10,218 6,882 Short-term borrowings Bonds (2,033) (1,786)   Commercial paper1 (7,396) (5,077) Put options over non-controlling interests2   (1,430) (1,307) Bank loans (2,254) (1,876) Other short-term borrowings3   (2,907) (2,577) (16,020) (12,623) Long-term borrowings Put options over   non-controlling interests (5) (7) Bonds, loans and other long-term   borrowings4 (29,322) (22,428) (29,327) (22,435) Other financial instruments5   5,940 5,905 Net debt (29,189) (22,271) Within one year 1,317 1,816 1,065– In   one to two years 694 9 431– In two to three years 971 7 736– In three to four   years 691 230 757573 In four to five years 662 5,855 3172,790 In more than   five years 609 280 1,0653,257 31 March 4,944 8,197 4,3716,620 

 

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At 31 March   2016 we had £10,218 million of cash and cash equivalents which are held in   accordance with the counterparty and settlement risk limits of the Board   approved treasury policy. The main forms of liquid investment at 31 March   2016 were managed investment funds, money market funds, UK index linked   government bonds, tri-party repurchase agreements and bank deposits. The cash   received from collateral support agreements mainly reflects the value of our   interest rate swap and cross currency interest rate swap portfolios which are   substantially net present value positive. See note 23 “Capital and financial   risk management” for further details on these agreements. Commercial paper   programmes We currently have US and euro commercial paper programmes of US$15   billion and £8 billion respectively which are available to be used to meet   short-term liquidity requirements. At 31 March 2016 amounts external to the   Group of €8,907 million (£7,043 million) and US$38 million (£26 million) were   drawn under the euro commercial paper programme and US$471 million (£327   million) were drawn down under the US commercial paper programme, with such   funds being provided by counterparties external to the Group. At 31 March   2015 amounts external to the Group of €3,928 million (£2,839 million) were   drawn under the euro commercial paper programme and US$3,321 million (£2,237   million) were drawn down under the US commercial paper programme, with such   funds being provided by counterparties external to the Group. The commercial   paper facilities were supported by US$4.1 billion (£2.8 billion) and €4.0   billion (£3.2 billion) of syndicated committed bank facilities (see   “Committed facilities” below). No amounts had been drawn under either bank   facility. Bonds We have a €30 billion euro medium-term note programme and a   US shelf programme which are used to meet medium to long-term funding   requirements. At 31 March 2016 the total amounts in issue under these   programmes split by currency were US$14.1 billion, £2.3 billion, €12.9   billion and NOK 850 million. At 31 March 2016 we had bonds outstanding with a   nominal value of £22,380 million (2015: £17,153 million). In the year ended   31 March 2016 bonds with a nominal value equivalent of £129 million and   £5,450 million were issued under the US shelf programme and euro medium-term   note programme respectively. The bonds issued in the year were: Nominal   amount m Sterling equivalent £m Date of bond issue Maturity of bond Programme   Currency On 26 November 2015, the Group issued £600 million zero-coupon   equity linked bonds maturing on 26 November 2020. On 25 February 2016, the   Group issued £2.9 billion of subordinated mandatory convertible bonds issued   in two tranches, with the first £1.4 billion maturing on 25 August 2017 and a   further £1.4 billion maturing on 25 February 2019 with coupons of 1.5% and   2.0% respectively. At the initial conversion price of £2.1730, at maturity   the bonds will convert to 1, 325,356,650 Vodafone Group Plc shares   representing approximately 5% of Vodafone’s share capital. The mandatory   bonds are compound instruments with nominal values of £2.8 billion recognised   as a component of shareholders’ funds in equity. The initial fair value of   future coupons of £0.1 billion is recognised as a financial liability in   borrowings and subsequently measured at amortised cost using the effective   interest rate method. Refer to the consolidated statement of changes in   equity on page 89. The Group has hedged its exposure under the subordinated   mandatory convertible bonds to any future movements in its share price by an   option strategy designed to hedge the economic impact of share price   movements during the term of the bonds. Should the Group decide to buy back   ordinary shares to mitigate the dilution resulting from the conversion, the   hedging strategy will provide a hedge for the repurchase price. Own shares   The Group held a maximum of 2,300,749,013 of its own shares during the year   which represented 8.0 % of issued share capital at that time. 131 Vodafone   Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information 25 February 201625   February 2019EMTN Euro 1,750 1,384 17 November 201517 November 2020EMTN Euro   750 593 30 March 201630 March 2021EMTN US dollar 60 42 25 February 201625   August 2021EMTN Euro 1,250 988 25 February 201625 August 2023EMTN Euro 1,250   988 27 November 201527 November 2025EMTN Norwegian krona 850 71 25 February 201625   August 2026EMTN Euro 1,750 1,384 3 December 20153 December 2045US shelf US   dollar 186 129 

 

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Notes to the   consolidated financial statements (continued) 22. Liquidity and capital   resources (continued) Committed facilities In aggregate we have committed   facilities of approximately £13,141 million, of which £8,197 million was   undrawn and £4,944 million was drawn at 31 March 2016. The following table   summarises the committed bank facilities available to us at 31 March 2016.   Committed bank facilities Amounts drawn Terms and conditions 28 March 2014   €4.0 billion syndicated revolving credit facility, maturing 28 March 2021. No   drawings have been made against this facility. The facility supports our   commercial paper programmes and may be used for general corporate purposes   including acquisitions. Lenders have the right, but not the obligation, to   cancel their commitments and have outstanding advances repaid no sooner than   30 days after notification of a change of control. This is in addition to the   rights of lenders to cancel their commitment if we commit an event of   default; however, it should be noted that a material adverse change clause   does not apply. The facility matures on 28 March 2021. From 28 March 2020 the   facility size will be €3.9 billion as one lender did not extend the facility   as per the request from the Company. 27 February 2015 US$4.1 billion   syndicated revolving credit facility, maturing 27 February 2021. No drawings   have been made against this facility. The facility supports our commercial   paper programmes and may be used for general corporate purposes including   acquisitions. Lenders have the right, but not the obligation, to cancel their   commitments and have outstanding advances repaid no sooner than 30 days after   notification of a change of control. This is in addition to the rights of   lenders to cancel their commitment if we commit an event of default; however,   it should be noted that a material adverse change clause does not apply. The   facility matures on 27 February 2021, with each lender having the option to   extend the facility for a further year prior to the second anniversary of the   facility, if requested by the Company. From 27 February 2020 the facility   size will be US$3.9 billion as one lender did not extend the facility as per   the request from the Company. 27 November 2013 £0.5 billion loan facility,   maturing 12 December 2021. This facility was drawn down in full in euros, as   allowed by the terms of the facility, on 12 December 2014. As per the   syndicated revolving credit facilities with the addition that, should our UK   and Irish operating companies spend less than the equivalent of £0.9 billion   on capital expenditure, we will be required to repay the drawn amount of the   facility that exceeds 50% of the capital expenditure. 15 September 2009 €0.4   billion loan facility, maturing 30 July 2017. This facility was drawn down in   full on 30 July 2010. As per the syndicated revolving credit facilities with   the addition that, should our German operating company spend less than the   equivalent of €0.8 billion on VDSL related capital expenditure, we will be   required to repay the drawn amount of the facility that exceeds 50% of the   VDSL capital expenditure. 29 September 2009 US$0.7 billion export credit   agency loan facility, final maturity date 19 September 2018. This facility is   fully drawn down and is amortising. As per the syndicated revolving credit   facilities with the addition that the Company was permitted to draw down   under the facility based upon the eligible spend with Ericsson up until the   final draw down date of 30 June 2011. Quarterly repayments of the drawn   balance commenced on 30 June 2012 with a final maturity date of 19 September   2018. 8 December 2011 €0.4 billion loan facility, maturing on 5 June 2020.   This facility was drawn down in full on 5 June 2013. As per the syndicated   revolving credit facilities with the addition that, should our Italian   operating company spend less than the equivalent of €1.3 billion on capital   expenditure, we will be required to repay the drawn amount of the facility   that exceeds 50% of the capital expenditure. 20 December 2011 €0.3 billion   loan facility, maturing 18 September 2019. This facility was drawn down in   full on 18 September 2012. As per the syndicated revolving credit facilities   with the addition that, should our Turkish and Romanian operating companies   spend less than the equivalent of €1.3 billion on capital expenditure, we   will be required to repay the drawn amount of the facility that exceeds 50%   of the capital expenditure. 4 March 2013 €0.1 billion loan facility, maturing   4 December 2020. This facility was drawn down in full on 4 December 2013. 132   Vodafone Group Plc Annual Report on Form 20-F 2016 

 

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Committed bank   facilities Amounts drawn Terms and conditions 2 December 2014 US$0.85 billion   loan facility, maturing 2 June 2018. US$ 0.8 billion was drawn from the   facility on 8 June 2015. The remaining US$ 0.05 billion was cancelled on the   same date. As per the syndicated revolving credit facilities with the   addition that the expenditure should be spent on projects involving Canadian   domiciled entities. 17 December 2014 €0.35 billion loan facility, maturing on   the seven year anniversary of the first drawing. This facility is undrawn and   has an availability period of 18 months. The facility is available to finance   a project to upgrade and expand the mobile network in Germany. As per the   syndicated revolving credit facilities with the addition that, should our   German operating company spend less than the equivalent of €0.7 billion on   capital expenditure, we will be required to repay the drawn amount of the   facility that exceeds 50% of the capital expenditure. 9 September 2015 US$1.0   billion loan facility, maturing 8 September 2016. No drawings have been made   against this facility. The facility supports our commercial paper programmes   and may be used for general corporate purposes including acquisitions. As per   the syndicated revolving credit facilities. 9 November 2015 US$1.0 billion   loan facility, maturing 8 November 2016. No drawings have been made against   this facility. The facility supports our commercial paper programmes and may   be used for general corporate purposes including acquisitions. As per the   syndicated revolving credit facilities. Furthermore, certain of our   subsidiaries are funded by external facilities which are non-recourse to any   member of the Group other than the borrower. These facilities may only be   used to fund their operations. At 31 March 2016, Vodafone India had   facilities of INR242 billion (£2.5 billion) of which INR236 billion (£2.5   billion) was drawn. Vodafone Egypt had undrawn revolving credit facilities of   US$120 million (£83 million) and EGP4 billion (£313 million). Vodacom had a   fully drawn facility of US$184 million (£128 million) and a facility of   ZAR3.5 billion (£166 million) of which ZAR2.2 billion (£102 million) was   drawn. Ghana had fully drawn facilities of US$192 million (£134 million) and   GHS60 million (£11 million). Dividends from associates and to non-controlling   shareholders Dividends from our associates are generally paid at the   discretion of the Board of Directors or shareholders of the individual   operating and holding companies, and we have no rights to receive dividends   except where specified within certain of the Group’s shareholders’   agreements. Similarly, other than ongoing dividend obligations to the KDG   minority shareholders should they continue to hold their minority stake, we   do not have existing obligations under shareholders’ agreements to pay   dividends to non-controlling interest partners of our subsidiaries or joint   ventures. The amount of dividends received and paid in the year are disclosed   in the consolidated statement of cash flows. Potential cash outflows from   option agreements and similar arrangements Under the terms of the sale and   purchase agreement governing the disposal of the US Group, including the 45%   interest in Verizon Wireless, the Group retains the responsibility for any   tax liabilities of the US Group, excluding those relating to the Verizon   Wireless partnership, for periods up to the completion of the transaction on   21 February 2014. Put options issued as part of the hedging strategy for the   mandatory convertible bonds permit the holders to exercise against the Group   if there is decrease in our share price. Under the terms of the options,   settlement must be made in cash which will equate to the reduced value of   shares from the initial conversion price on 1,325 million shares. Off-balance   sheet arrangements We do not have any material off-balance sheet arrangements   as defined in item 5.E.2. of the SEC’s Form 20-F. Please refer to notes 29   and 30 for a discussion of our commitments and contingent liabilities. 133   Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information 

 

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Notes to the   consolidated financial statements (continued) 23. Capital and financial risk   management This note details our treasury management and financial risk   management objectives and policies, as well as the exposure and sensitivity   of the Group to credit, liquidity, interest and foreign exchange risk, and   the policies in place to monitor and manage these risks. Accounting policies   Financial instruments Financial assets and financial liabilities, in respect   of financial instruments, are recognised on the Group’s statement of   financial position when the Group becomes a party to the contractual   provisions of the instrument. Financial liabilities and equity instruments   Financial liabilities and equity instruments issued by the Group are classified   according to the substance of the contractual arrangements entered into and   the definitions of a financial liability and an equity instrument. An equity   instrument is any contract that provides a residual interest in the assets of   the Group after deducting all of its liabilities and includes no obligation   to deliver cash or other financial assets. The accounting policies adopted   for specific financial liabilities and equity instruments are set out below.   Put option arrangements over non-controlling interest The potential cash   payments related to put options issued by the Group over the equity of   subsidiary companies are accounted for as financial liabilities when such   options may only be settled by exchange of a fixed amount of cash or another   financial asset for a fixed number of shares in the subsidiary. The amount   that may become payable under the option on exercise is initially recognised   at present value within borrowings with a corresponding charge directly to   equity. The charge to equity is recognised separately as written put options   over non-controlling interests, adjacent to non-controlling interests in the   net assets of consolidated subsidiaries. The Group recognises the cost of   writing such put options, determined as the excess of the present value of   the option over any consideration received, as a financing cost. Such options   are subsequently measured at amortised cost, using the effective interest   rate method, in order to accrete the liability up to the amount payable under   the option at the date at which it first becomes exercisable; the charge   arising is recorded as a financing cost. In the event that the option expires   unexercised, the liability is derecognised with a corresponding adjustment to   equity. Derivative financial instruments and hedge accounting The Group’s   activities expose it to the financial risks of changes in foreign exchange   rates and interest rates which it manages using derivative financial   instruments. The use of financial derivatives is governed by the Group’s policies   approved by the Board of Directors, which provide written principles on the   use of financial derivatives consistent with the Group’s risk management   strategy. Changes in values of all derivatives of a financing nature are   included within investment income and financing costs in the income statement   unless designated in an effective cash flow hedge relationship or a hedge of   a net investment in foreign operations when changes in value are deferred to   other comprehensive income or equity respectively. The Group does not use   derivative financial instruments for speculative purposes. Derivative   financial instruments are initially measured at fair value on the contract   date and are subsequently remeasured to fair value at each reporting date.   The Group designates certain derivatives as: a hedges of the change of fair   value of recognised assets and liabilities (“fair value hedges”); or a hedges   of highly probable forecast transactions or hedges of foreign currency or   interest rate risks of firm commitments (“cash flow hedges”); or a hedges of   net investments in foreign operations. Hedge accounting is discontinued when   the hedging instrument expires or is sold, terminated or exercised, or no   longer qualifies for hedge accounting, or if the Company chooses to end the   hedging relationship. Fair value hedges The Group’s policy is to use   derivative instruments (primarily interest rate swaps) to convert a   proportion of its fixed rate debt to floating rates in order to hedge the   interest rate risk arising, principally, from capital market borrowings. The   Group designates these as fair value hedges of interest rate risk with   changes in fair value of the hedging instrument recognised in the income   statement for the period together with the changes in the fair value of the hedged   item arising from the hedged risk, to the extent the hedge is effective.   Gains or losses relating to any ineffective portion are recognised   immediately in the income statement. Cash flow hedges Cash flow hedging is   used by the Group to hedge certain exposures to variability in future cash   flows. The portion of gains or losses relating to changes in the fair value   of derivatives that are designated and qualify as effective cash flow hedges   is recognised in other comprehensive income; gains or losses relating to any   ineffective portion are recognised immediately in the income statement. When   the hedged item is recognised in the income statement, amounts previously   recognised in other comprehensive income and accumulated in equity for the   hedging instrument are reclassified to the income statement. However, when   the hedged transaction results in the recognition of a non-financial asset or   a non-financial liability, the gains and losses previously recognised in   other comprehensive income and accumulated in equity are transferred from   equity and included in the initial measurement of the cost of the   non-financial asset or non-financial liability. When hedge accounting is   discontinued, any gain or loss recognised in other comprehensive income at   that time remains in equity and is recognised in the income statement when   the hedged transaction is ultimately recognised in the income statement. If a   forecast transaction is no longer expected to occur, the gain or loss   accumulated in equity is recognised immediately in the income statement. 134   Vodafone Group Plc Annual Report on Form 20-F 2016 

 

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Net investment   hedges Exchange differences arising from the translation of the net   investment in foreign operations are recognised directly in equity. Gains and   losses on those hedging instruments (which include bonds, commercial paper,   cross currency swaps and foreign exchange contracts) designated as hedges of   the net investments in foreign operations are recognised in equity to the   extent that the hedging relationship is effective; these amounts are included   in exchange differences on translation of foreign operations as stated in the   statement of comprehensive income. Gains and losses relating to hedge   ineffectiveness are recognised immediately in the income statement for the   period. Gains and losses accumulated in the translation reserve are included   in the income statement when the foreign operation is disposed of. Capital   management The following table summarises the capital of the Group at 31   March: 2016 £m 2015 £m 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 generated from operations, are loaned internally or   contributed as equity to certain subsidiaries. The Board has approved three   internal debt protection ratios being: net interest to operating cash flow   (plus dividends from associates); retained cash flow (operating cash flow   plus dividends from associates less interest, tax, dividends to   non-controlling shareholders and equity dividends) to net debt; and operating   cash flow (plus dividends from associates) to net debt. These internal ratios   establish levels of debt that the Group should not exceed other than for   relatively short periods of time and are shared with the Group’s debt rating   agencies being Moody’s, Fitch Ratings and Standard & Poor’s. Financial   risk management The Group’s treasury function provides a centralised service   to the Group for funding, foreign exchange, interest rate management and   counterparty risk management. Treasury operations are conducted within a   framework of policies and guidelines authorised and reviewed by the Board,   most recently on 3 November 2015. A treasury risk committee comprising the   Group’s Chief Financial Officer, Group General Counsel and Company Secretary,   Group Financial Controller, Group Treasury Director and Director of Financial   Reporting meets three times a year to review treasury activities and its   members receive management information relating to treasury activities on a quarterly   basis. The Group’s accounting function, which does not report to the Group   Treasury Director, provides regular update reports of treasury activity to   the Board. The Group’s internal auditor reviews the internal control   environment regularly. The Group uses a number of derivative instruments for   currency and interest rate risk management purposes only that are transacted   by specialist treasury personnel. The Group mitigates banking sector credit   risk by the use of collateral support agreements. Credit risk The Group   considers its exposure to credit risk at 31 March to be as follows: 2016 £m   2015 £m 135 Vodafone Group Plc Annual Report on Form 20-F 2016 Overview   Strategy review Performance Governance Financials Additional information Bank   deposits 1,737 2,379 Repurchase agreements 2,700 2,000 Cash held in   restricted deposits 791 650 UK government bonds 659 830 Money market fund   investments 5,781 2,402 Derivative financial instruments 4,304 4,005 Other   investments – debt and bonds 6,347 5,906 Trade receivables 4,772 4,232 Other   receivables and accrued income 3,206 2,959 30,297 25,363 Financial assets:   Cash and cash equivalents (10,218) (6,882) Fair value through the income   statement (held for trading) (4,160) (5,513) Loans and receivables (1,570) –   Derivative instruments in designated hedge relationships (1,774) (1,376)   Financial liabilities: Fair value through the income statements (held for   trading) 1,355 958 Derivative instruments in designated hedge relationships   209 26 Financial liabilities held at amortised cost 45,347 35,058 Net debt   29,189 22,271 Equity 67,317 67,733 Capital 96,506 90,004 

 

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Notes to the   consolidated financial statements (continued) 23. Capital and financial risk   management (continued) The Group invested in UK index linked government bonds   on the basis that they generated a floating rate return in excess of £ LIBOR   and are amongst the most creditworthy of investments available. The Group has   two managed investment funds. These funds hold fixed income sterling   securities and the average credit quality is high double A. Money market   investments are in accordance with established internal treasury policies   which dictate that an investment’s long-term credit rating is no lower than   mid BBB. Additionally, the Group invests in AAA unsecured money market mutual   funds where the investment is limited to 10% of each fund. The Group has   investments in repurchase agreements which are fully collateralised   investments. The collateral is sovereign and supranational debt with at least   one AAA rating denominated in euros, sterling and US dollars and can be   readily converted to cash. In the event of any default, ownership of the   collateral would revert to the Group. Detailed below is the value of the   collateral held by the Group at 31 March: 2016 £m 2015 £m In respect of   financial instruments used by the Group’s treasury function, the aggregate   credit risk the Group may have with one counterparty is limited by (i)   reference to the long-term credit ratings assigned for that counterparty by   Moody’s, Fitch Ratings and Standard & Poor’s; (ii) that counterparty’s   five year credit default swap (‘CDS’) spread; and (iii) the sovereign credit   rating of that counterparty’s principal operating jurisdiction. Furthermore,   collateral support agreements were introduced from the fourth quarter of   2008. Under collateral support agreements the Group’s exposure to a   counterparty with whom a collateral support agreement is in place is reduced   to the extent that the counterparty must post cash collateral when there is   value due to the Group under outstanding derivative contracts that exceeds a   contractually agreed threshold amount. When value is due to the counterparty   the Group is required to post collateral on identical terms. Such cash   collateral is adjusted daily as necessary. In the event of any default,   ownership of the cash collateral would revert to the respective holder at   that point. Detailed below is the value of the cash collateral, which is   reported within short-term borrowings, held by the Group at 31 March: 2016 £m   2015 £m The majority of the Group’s trade receivables are due for maturity   within 90 days and largely comprise amounts receivable from consumers and   business customers. At 31 March 2016 £3,227 million (2015: £2,869 million) of   trade receivables were not yet due for payment. Overdue trade receivables   consisted of £1,293 million (2015: £1,141 million) relating to the Europe   region, and £252 million (2015: £222 million) relating to the AMAP region.   Financial statements are monitored by management and provisions for bad and   doubtful debts raised where it is deemed appropriate. The following table   presents ageing of receivables that are past due and provisions for doubtful   receivables that have been established: 2016 2015 Gross receivables £m Less   provisions £m Net receivables £m Gross receivables £m Less provisions £m Net   receivables £m Concentrations of credit risk with respect to trade   receivables are limited given that the Group’s customer base is large and   unrelated. Due to this, management believes there is no further credit risk   provision required in excess of the normal provision for bad and doubtful   receivables. Amounts charged to administrative expenses during the year ended   31 March 2016 were £498 million (2015: £541 million; 2014: £347 million) (see   note 15 “Trade and other receivables”). As discussed in note 30 “Contingent liabilities   and legal proceedings”, the Group has covenanted to provide security in   favour of the trustee of the Vodafone Group UK Pension Scheme in respect of   the funding deficit in the scheme. The security takes the form of an English   law pledge over UK index linked government bonds. 136 Vodafone Group Plc   Annual Report on Form 20-F 2016 30 days or less 727(272)455 417(61) 356   Between 31 and 60 days 261(69)192 231(35) 196 Between 61 and 180 days 394(89)   305 288(67) 221 Greater than 180 days 1,108(515)593 1,205(615)590   2,490(945)1,545 2,141(778)1,363 Cash collateral 2,837 2,542 Sovereign 2,700   1,977 Supranational – 23 2,700 2,000 

 

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Liquidity risk   At 31 March 2016 the Group had €4.0 billion and US$4.1 billion syndicated   committed undrawn bank facilities which support the US$15 billion and £8   billion commercial paper programme available to the Group. The Group uses   commercial paper and bank facilities to manage short-term liquidity and   manages long-term liquidity by raising funds in the capital markets. The euro   syndicated committed facility has a maturity date of 28 March 2021. From 28   March 2020 the facility will be downsized to €3.9 billion as one lender did   not exercise the option to extend the facility for a further year as   requested by the Company. The US$ syndicated committed facility has a   maturity date of 27 February 2021 with each lender having the option to   extend the facility for a further year prior to the second anniversary of the   facility, if requested by the Company. From 27 February 2020 the facility   will be downsized to US$3.9 billion as one lender did not exercise the option   to extend the facility for a further year as requested by the Company. Both   facilities have remained undrawn throughout the financial year and since year   end and provide liquidity support. The Group manages liquidity risk on   long-term borrowings by maintaining a varied maturity profile with a cap on the   level of debt maturity in any one calendar year, therefore minimising   refinancing risk. Long-term borrowings mature between one and 29 years.   Liquidity is reviewed daily on at least a 12 month rolling basis and stress   tested on the assumption that all commercial paper outstanding matures and is   not reissued. The Group maintains substantial cash and cash equivalents which   at 31 March 2016 amounted to £10,218 million (2015: £6,882 million). Market   risk Interest rate management Under the Group’s interest rate management   policy, interest rates on monetary assets and liabilities denominated in   euros, US dollars and sterling are maintained on a floating rate basis except   for periods up to six years where interest rate fixing has to be undertaken   in accordance with treasury policy. Where assets and liabilities are   denominated in other currencies interest rates may also be fixed. In   addition, fixing is undertaken for longer periods when interest rates are   statistically low. For each one hundred basis point fall or rise in market   interest rates for all currencies in which the Group had borrowings at 31   March 2016 there would be an increase or decrease in profit before tax by   approximately £23 million (2015: increase or decrease by £36 million)   including mark-to-market revaluations of interest rate and other derivatives   and the potential interest on outstanding tax issues. There would be no   material impact on equity. Foreign exchange management As Vodafone’s primary   listing is on the London Stock Exchange its share price is quoted in   sterling. Since the sterling share price represents the value of its future   multi-currency cash flows, principally in euro, South African rand, Indian   rupee and sterling, the Group maintains the currency of debt and interest   charges in proportion to its expected future principal multi-currency cash   flows and has a policy to hedge external foreign exchange risks on   transactions denominated in other currencies above certain de minimis levels.   At 31 March 2016, 109% of net debt was denominated in currencies other than   sterling (59% euro, 26% India rupee, 10% US dollar and 14% other) while 9% of   net debt had been purchased forward in sterling in anticipation of sterling   denominated shareholder returns via dividends. This allows euro, US dollar and   other debt to be serviced in proportion to expected future cash flows and   therefore provides a partial hedge against income statement translation   exposure, as interest costs will be denominated in foreign currencies. Under   the Group’s foreign exchange management policy, foreign exchange transaction   exposure in Group companies is generally maintained at the lower of €5   million per currency per month or €15 million per currency over a six month   period. The Group recognises foreign exchange movements in equity for the   translation of net investment hedging instruments and balances treated as   investments in foreign operations. However, there is no net impact on equity   for exchange rate movements on net investment hedging instruments as there   would be an offset in the currency translation of the foreign operation. At   31 March 2016 the Group held financial liabilities in a net investment   against the Group’s consolidated euro net assets. Sensitivity to foreign   exchange movements on the hedging liabilities, analysed against a   strengthening of the euro by 8% (2015: 5%) would result in a decrease in   equity of £1,350 million (2015: £876 million) which would be fully offset by   foreign exchange movements on the hedged net assets. The following table   details the Group’s sensitivity of the Group’s adjusted operating profit to a   strengthening of the Group’s major currency in which it transacts. The   percentage movement applied to the currency is based on the average movements   in the previous three annual reporting periods. Amounts are calculated by   retranslating the operating profit of each entity whose functional currency   is euro. 2016 £m 2015 £m Note: 1 Operating profit before impairment losses   and other income and expense. At 31 March 2016 the Group’s sensitivity to   foreign exchange movements, analysed against a strengthening of the US dollar   by 8% (2015: 9%) on its external US dollar exposure, would decrease the   profit before tax by £60 million (2015: £71 million). Foreign exchange on   certain internal balances analysed against a strengthening of the US dollar   of 8% (2015: 9%) and euro of 8% (2015: 5%) would increase the profit before   tax by £0.8 million (2015: decrease profit by £65 million) and decrease   profit before tax by £318 million (2015: £186 million) for US dollar and euro   respectively. Equity risk There is no material equity risk relating to the   Group’s equity investments which are detailed in note 13 “Other investments”.   The Group has hedged its exposure under the subordinated mandatory   convertible bonds to any future movements in its share price by an option   strategy designed to hedge the economic impact of share price movements   during the term of the bonds. As at 31 March 2016 the Group’s sensitivity to   a movement of 5% in its share price would result in an increase or decrease   in profit before tax of approximately £144 million. 137 Vodafone Group Plc   Annual Report on Form 20-F 2016 Overview Strategy review Performance   Governance Financials Additional information Euro 8% (2015: 5%) change –   Operating profit1 109 81 

 

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Notes to the   consolidated financial statements (continued) 23. Capital and financial risk   management (continued) Fair value of financial instruments The table below   sets out the valuation basis1 of financial instruments held at fair value by   the Group at 31 March. Level 12 Level 23 Total 2016 £m 2015 £m 2016 £m 2015   £m 2016 £m 2015 £m Notes: 1 There were no changes made during the year to   valuation methods or the processes to determine classification and no   transfers were made between the levels in the fair value hierarchy. 2 Level 1   classification comprises financial instruments where fair value is determined   by unadjusted quoted prices in active markets for identical assets or   liabilities. 3 Level 2 classification comprises items where fair value is   determined from inputs other than quoted prices that are observable for the   asset or liability, either directly or indirectly. Derivative financial   instrument fair values are present values determined from future cash flows   discounted at rates derived from market sourced data. 4 Listed and unlisted   securities are classified as held for sale financial assets and fair values   are derived from observable quoted market prices for similar items. Details   are included in note 13 “Other investments”. Fair value and carrying value   information The fair values and carrying values of the Group’s financial   assets and financial liabilities held at amortised cost are set out in the   table below1. Unless otherwise stated, the valuation basis is level 2,   comprising financial instruments where fair value is determined from inputs   other than quoted prices observable for the asset or liability either   directly or indirectly. The fair value of bonds are based on level 1 of the   fair value hierarchy, using unadjusted quoted market prices for identical   assets or liabilities. Fair value Carrying value 2016 £m 2015 £m 2016 £m 2015   £m Notes: 1 2 3 4 5 The Group’s trade and other receivables and trade and   other payables are not shown in the table above. The carrying amounts of both   categories approximate their fair values. Cash and cash equivalents are held   by the Group on a short-term basis with all having a maturity of three months   or less. The carrying value approximates their fair value. Other debt and   bonds is predominantly comprised of loan notes from Verizon Communications   Inc. (refer to note 13 “Other investments”) and collateral paid on derivative   financial instruments. The Group’s bonds are held at amortised cost with fair   values available from market observable prices. Commercial paper and other   banks loans are held at amortised cost with fair values calculated from   market observable data where appropriate. 138 Vodafone Group Plc Annual   Report on Form 20-F 2016 (28,923) (24,013) (29,286) (23,975) Cash and cash   equivalents2 10,218 6,882 10,218 6,882 Cash and other investments held in   restricted deposits2 791 650 791 650 Other debt and bonds3 5,052 3,551 5,052   3,551 16,061 11,083 16,061 11,083 Short-term borrowings: Bonds4 (2,036)   (1,798) (2,033) (1,786) Commercial paper5 (7,396) (5,077) (7,396) (5,077)   Bank loans and other short-term borrowings5 (6,599) (5,766) (6,591) (5,760)   (16,031) (12,641) (16,020) (12,623) Long-term borrowings: Bonds4 (21,693)   (17,109) (22,135) (17,174) Bank loans and other long-term borrowings5 (7,260)   (5,346) (7,192) (5,261) (28,953) (22,455) (29,327) (22,435) Financial assets:   Fair value through the income statement – – 1,950 3,184 1,950 3,184   Derivative financial instruments: Interest rate swaps – – 2,411 2,466 2,411   2,466 Cross currency interest rate swaps – – 1,626 1,506 1,626 1,506 Interest   rate options – – 36 – 36 – Foreign exchange contracts – – 231 33 231 33   Interest rate futures – – 4 8 4 8 – – 6,258 7,197 6,258 7,197 Financial   investments available-for-sale: Listed equity securities4 3 4 – – 3 4   Unlisted equity securities4 – – 82 222 82 222 3 4 82 222 85 226 3 4 6,340   7,419 6,343 7,423 Financial liabilities: Derivative financial instruments:   Interest rate swaps – – 907 682 907 682 Cross currency interest rate swaps –   – 534 245 534 245 Interest rate options – – 64 11 64 11 Foreign exchange   contracts – – 59 46 59 46 – – 1,564 984 1,564 984 

 

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Net financial   instruments The table below shows the Group’s financial assets and   liabilities that are subject to offset in the balance sheet and the impact of   enforceable master netting or similar agreements. At 31 March 2016 Related   amounts not set off in the balance sheet Amounts presented in balance sheet   £m Right of set off with derivative counterparties £m Gross amount £m Amount   set off £m Cash collateral £m Net amount £m At 31 March 2015 Related amounts   not set off in the balance sheet Amounts presented in balance sheet £m Right   of set off with derivative counterparties £m Gross amount £m Amount set off   £m Cash collateral £m Net amount £m Derivative financial assets 4,005 – 4,005   (726) (2,542) 737 Derivative financial liabilities (984) – (984) 726 30 (228)   Total 3,021 – 3,021 – (2,512) 509 Financial assets and liabilities are offset   and the amount reported in the consolidated balance sheet when there is a   legally enforceable right to offset the recognised amounts and there is an   intention to settle on a net basis or realise the asset and settle the   liability simultaneously. Derivative financial instruments that do not meet   the criteria for offset could be settled net in certain circumstances under   ISDA (International Swaps and Derivatives Association) agreements where each   party has the option to settle amounts on a net basis in the event of default   from the other. Collateral may be offset and net settled against derivative   financial instruments in the event of default by either party. The   aforementioned collateral balances are recorded in “other short-term investments”   or “short-term debt” respectively. 4. Directors and key management   compensatio This note details the total amounts earned by the Company’s   Directors and members of the Executive Committee. Directors Aggregate   emoluments of the Directors of the Company were as follows: 2016 £m 2015 £m   2014 £m Notes: 1 Excludes gains from long-term incentive plans. 2 Includes   the value of the cash allowance taken by some individuals in lieu of pension   contributions. The aggregate gross pre-tax gain made on the exercise of share   options in the year ended 31 March 2016 by one Director who served during the   year was £0.2 million (2015: one Director, <£0.1 million; 2014: three   Directors, £4.0 million). Key management compensation Aggregate compensation   for key management, being the Directors and members of the Executive   Committee, was as follows: 2016 £m 2015 £m 2014 £m 139 Vodafone Group Plc   Annual Report on Form 20-F 2016 Overview Strategy review Performance   Governance Financials Additional information Short-term employee benefits 22   1817 Share-based payments 20 1821 42 36 38 Salaries and fees 4 44 Incentive   schemes1 2 32 Other benefits2 1 11 7 8 7 2 n Derivative financial assets   4,304–4,304 (1,216)(2,837) 251 Derivative financial liabilities   (1,564)–(1,564) 1,216110 (238) Total 2,740–2,740 –(2,727) 13 

 

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Notes to the   consolidated financial statements (continued) 25. Employees This note shows   the average number of people employed by the Group during the year, in which   areas of our business our employees work and where they are based. It also   shows total employment costs. 2016 Employees 2015 Employees 2014 Employees   The cost incurred in respect of these employees (including Directors) was:   2016 £m 2015 £m 2014 £m The Group has dialogue with recognised labour unions   if required. In particular, there are regular meetings with the Vodafone   European Employee Consultative Council (the ‘EECC’). The delegates of this   body are locally elected Vodafone employee representatives, most of them   union and works council members. There has been no material disruption to operations   as a result of union activity during the financial year. 140 Vodafone Group   Plc Annual Report on Form 20-F 2016 Wages and salaries 3,632 3,4693,261   Social security costs 455 442364 Other pension costs (note 26) 207 195158   Share-based payments (note 27) 117 8892 4,411 4,1943,875 By activity:   Operations 18,869 17,60214,947 Selling and distribution 38,325 35,62931,342   Customer care and administration 54,490 52,06942,857 111,684 105,30089,146 By   segment: Germany 14,862 14,52010,623 Italy 6,676 6,7571,123 Spain 5,935   5,3243,552 UK 13,323 12,43712,979 Other Europe 16,058 15,19015,392 Europe   56,854 54,22843,669 India 13,346 12,30311,925 Vodacom 7,515 7,2607,176 Other   Africa, Middle East and Asia Pacific 14,262 14,31216,002 Africa, Middle East   and Asia Pacific 35,123 33,87535,103 Non-Controlled Interests and Common   Functions 19,707 17,19710,374 Total 111,684 105,30089,146 

 

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26. Post   employment benefits We operate a number of defined benefit and defined   contribution pension plans for our employees. The Group’s largest defined   benefit scheme is in the UK. For further details see “Critical accounting   judgements and key sources of estimation uncertainty” in note 1 “Basis of   preparation” to the consolidated financial statements. Accounting policies   For defined benefit retirement plans, the difference between the fair value   of the plan assets and the present value of the plan liabilities is   recognised as an asset or liability on the statement of financial position.   Scheme liabilities are assessed using the projected unit funding method and   applying the principal actuarial assumptions at the reporting period date.   Assets are valued at market value. Actuarial gains and losses are taken to   the statement of comprehensive income as incurred. For this purpose,   actuarial gains and losses comprise both the effects of changes in actuarial   assumptions and experience adjustments arising because of differences between   the previous actuarial assumptions and what has actually occurred. The return   on plan assets, in excess of interest income, is also taken to other   comprehensive income. Other movements in the net surplus or deficit are   recognised in the income statement, including the current service cost, any   past service cost and the effect of any settlements. The interest cost less   the expected interest income on assets is also charged to the income statement.   The amount charged to the income statement in respect of these plans is   included within operating costs or in the Group’s share of the results of   equity accounted operations, as appropriate. Cumulative actuarial gains and   losses at 1 April 2004, the date of transition to IFRS, were recognised in   the statement of financial position. The Group contributions to defined   contribution pension plans are charged to the income statement as they fall   due. Background At 31 March 2016 the Group operated a number of pension plans   for the benefit of its employees throughout the world, with varying rights   and obligations depending on the conditions and practices in the countries   concerned. The Group’s pension plans are provided through both defined   benefit and defined contribution arrangements. Defined benefit schemes   provide benefits based on the employees’ length of pensionable service and   their final pensionable salary or other criteria. Defined contribution   schemes offer employees individual funds that are converted into benefits at   the time of retirement. The Group operates defined benefit schemes in   Germany, Ghana, India, Ireland, Italy, the UK and the United States. Defined   contribution pension schemes are currently provided in Australia, Egypt,   Germany, Greece, Hungary, India, Ireland, Italy, the Netherlands, New   Zealand, Portugal, South Africa, Spain and the UK. Income statement expense   2016 £m 2015 £m 2014 £m 141 Vodafone Group Plc Annual Report on Form 20-F   2016 Overview Strategy review Performance Governance Financials Additional   information Defined contribution schemes 163 155124 Defined benefit schemes   44 207 4034 Total amount charged to income statement (note 25) 195 158 

 

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Notes to the   consolidated financial statements (continued) 26. Post employment benefits   (continued) Defined benefit schemes The Group’s main defined benefit scheme   is in the UK, being the Vodafone UK Group Pension Scheme (‘Vodafone UK   plan’). There are two segregated sections of the Vodafone UK plan, the   pre-existing assets and liabilities of the Vodafone UK plan in the Vodafone   Section and the former Cable & Wireless Worldwide Retirement Plan   (‘CWWRP’) assets and liabilities, which were transferred into the Vodafone UK   plan on 6 June 2014, in the CWW Section, with the CWWRP then being wound up.   The pre-existing Vodafone UK plan and the former CWWRP plan closed to future   accrual on 31 March 2010 and 30 November 2013 respectively. Until 30 November   2013 the CWWRP allowed employees to accrue a pension at a rate of 1/85th of   their final salary for each year of service until the retirement age of 60   with a maximum pension of two thirds of final salary. Employees contributed   5% of their salary into the scheme. The defined benefit plans are   administered by Trustee Boards that are legally separated from the Group. The   Trustee Board of each pension fund consists of representatives who are   employees, former employees or are independent from the Company. The Boards   of the pension funds are required by law to act in the best interest of the   plan participants and are responsible for setting certain policies, such as   investment and contribution policies, and the governance of the fund. The   defined benefit pension schemes expose the Group to actuarial risks such as   longer than expected longevity of members, lower than expected return on   investments and higher than expected inflation, which may increase the   liabilities or reduce the value of assets of the plans. The UK pensions   environment is regulated by the Pensions Regulator whose statutory objectives   are set out in legislation and include promoting and improving understanding   of the good administration of work-based pensions, protecting member benefits   and regulating occupational defined benefit and contribution schemes. The   Pensions Regulator is a non-departmental public body established under the   Pensions Act 2004 and sponsored by the Department for Work And Pensions,   operating within a legal regulatory framework set by the UK Parliament. The   Pensions Regulator’s statutory objectives and regulatory powers are described   on its website at thepensionsregulator.gov.uk. The Vodafone UK plan is   registered as an occupational pension plan with HMRC and is subject to UK   legislation and oversight from the Pensions Regulator. UK legislation   requires that pension schemes are funded prudently and that valuations are   undertaken at least every three years. Separate valuations are required for   the Vodafone Section and CWW Section. Within 15 months of each valuation   date, the plan trustees and the Group must agree any contributions required   to ensure that the plan is fully funded over time on a suitably prudent   measure. The publication by the International Accounting Standards Board in   June 2015 of its Exposure Draft of amendments to IFRIC 14 IAS 19 – The Limit   on a Defined Benefit Asset, Minimum Funding Requirements and their   Interaction, has provided additional clarity on the role of trustees’ rights   in an assessment of the recoverability of a surplus in an employee pension   fund. The trustees of the Vodafone UK plan have neither a unilateral right to   wind up the plan and purchase annuities nor a unilateral right to improve   members’ benefits and consequently the Exposure Draft as currently proposed   is not expected to have a material impact on the Group’s results. The most   recent valuations for the Vodafone and CWWRP sections of the Vodafone UK plan   were carried out as at 31 March 2013 by independent actuaries appointed by   the plan trustees. These valuations revealed a total deficit of £437 million   on the schemes’ funding basis. Following the valuation, the Group paid   special one-off contributions totalling £365 million in April 2014 (£325   million into the Vodafone Section and £40 million into the CWW Section).   These lump sum contributions represented accelerated funding amounts that   would otherwise have been due over the period to 31 March 2020. No further   contributions were therefore due to the Vodafone UK plan for the period to 31   March 2016. The next valuation, which is being performed as at 31 March 2016,   will be completed during the 2017 financial year after which the position of   the scheme will be reassessed. Funding plans are individually agreed for each   of the Group’s defined benefit pension schemes with the respective trustees,   taking into account local regulatory requirements. It is expected that   ordinary contributions relating to future service of £39 million will be paid   into the Group’s defined benefit pension schemes during the year ending 31   March 2017. The main UK defined benefit scheme will be carrying out a Pension   Increase Exchange (‘PIE’) exercise between May and August 2016. All eligible   pensioners will be given the opportunity to exchange future increases on part   or all of their pension and receive a higher pension immediately. If they   accept the offer (after taking financial advice), they will no longer receive   future increases on that part of their pension. It is expected that this   exercise will reduce the future liabilities of the scheme which will be   reflected in next year’s accounts The Group has also provided certain   guarantees in respect of the Vodafone UK plan; further details are provided   in note 30 “Contingent liabilities and legal proceedings” to the consolidated   financial statements. Actuarial assumptions The Group’s scheme liabilities   are measured using the projected unit credit method using the principal   actuarial assumptions set out below: 2016 % 2015 % 2014 % Notes: 1 Figures   shown represent a weighted average assumption of the individual schemes. 2   The rate of increase in pensions in payment and deferred payment is the rate   of inflation. Mortality assumptions used are based on recommendations from   the individual scheme actuaries which include adjustments for the experience   of the Group where appropriate. The Group’s largest scheme is the Vodafone UK   plan. Further life expectancies assumed for the UK schemes are 24.0/25.3   years (2015: 24.5/25.8 years; 2014: 23.3/24.7 years) for a male/female   pensioner currently aged 65 and 26.6/28.1 years (2015: 27.1/28.7 years; 2014:   25.9/27.5 years) from age 65 for a male/female non-pensioner member currently   aged 40. 142 Vodafone Group Plc Annual Report on Form 20-F 2016 Weighted   average actuarial assumptions used at 31 March1: Rate of inflation2 2.8   3.03.2 Rate of increase in salaries 2.6 2.83.1 Discount rate 3.2 3.04.2 

 

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Charges made to   the consolidated income statement and consolidated statement of comprehensive   income (‘SOCI’) on the basis of the assumptions stated above are: 2016 £m   2015 £m 2014 £m Note: 1 Amounts disclosed in the SOCI are stated net of £30   million of tax (2015: £57 million; 2014: £20 million). Fair value of the   assets and present value of the liabilities of the schemes The amount   included in the statement of financial position arising from the Group’s   obligations in respect of its defined benefit schemes is as follows: Assets   £m Liabilities £m Net deficit £m 1 April 2014 3,842 (4,391) (549) Service   cost – (37) (37) Interest income/(cost) 176 (179) (3) Return on plan assets   excluding interest income 721 – 721 Actuarial losses arising from changes in   financial assumptions – (982) (982) Actuarial losses arising from experience   adjustments – (8) (8) Employer cash contributions 404 – 404 Member cash   contributions 9 (9) – Benefits paid (95) 95 – Exchange rate movements (83)   116 33 Other movements (18) 41 23 31 March 2015 4,956 (5,354) (398) An   analysis of net (deficit)/assets is provided below for the Group as a whole.   2016 £m 2015 £m 2014 £m 2013 £m 2012 £m Note: 1 Pension assets are deemed to   be recoverable and there are no adjustments in respect of minimum funding   requirements as future economic benefits are available to the Company either   in the form of future refunds or, for plans still open to benefit accrual, in   the form of possible reductions in future contributions. 143 Vodafone Group   Plc Annual Report on Form 20-F 2016 Overview Strategy review Performance   Governance Financials Additional information Analysis of net deficit: Total   fair value of scheme assets 4,925 4,9563,8423,7231,604 Present value of   funded scheme liabilities (5,129) (5,288)(4,325)(4,239)(1,853) Net deficit   for funded schemes (204) (332)(483)(516)(249) Present value of unfunded   scheme liabilities (66) (66) (66) (12)(12) Net deficit (270)   (398)(549)(528)(261) Net deficit is analysed as: Assets1 177 169355231   Liabilities (447) (567)(584)(580)(292) Service cost –(36) (36) Interest income/(cost)   149(157)(8) Return on plan assets excluding interest income (151)–(151)   Actuarial gains arising from changes in demographic assumptions –7171   Actuarial gains arising from changes in financial assumptions –276276   Actuarial losses arising from experience adjustments –(40) (40) Employer cash   contributions 27–27 Member cash contributions 7(7) – Benefits paid (118)118–   Exchange rate movements 59(84)(25) Other movements (4) 1814 31 March 2016   4,925(5,195)(270) Current service cost 36 3714 Net interest charge 8 320   Total included within staff costs 44 40 34 Actuarial (gains)/losses   recognised in the SOCI1 (156) 269(57) 

 

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Notes to the   consolidated financial statements (continued) 26. Post employment benefits   (continued) An analysis of net assets/(deficit) is provided below for the   Group’s largest defined benefit pension scheme in the UK, which is a funded   scheme. Following the merger of the Vodafone UK plan and the CWWRP plan on 6   June 2014 the assets and liabilities of the CWW Section are segregated from   the Vodafone Section and hence are reported separately below. CWW Section1   Vodafone Section2 2016 £m 2015 £m 2014 £m 2013 £m 2016 £m 2015 £m 2014 £m   2013 £m 2012 £m Notes: 1 Cable & Wireless Worldwide Retirement Plan until   6 June 2014. 2 Vodafone UK plan until 6 June 2014. 3 Pension assets are   deemed to be recoverable and there are no adjustments in respect of minimum funding   requirements as future economic benefits are available to the Company either   in the form of future refunds or, for plans still open to benefit accrual, in   the form of possible reductions in future contributions. Duration of the   benefit obligations The weighted average duration of the defined benefit   obligation at 31 March 2016 is 22.3 years (2015: 22.7 years; 2014: 21.7   years). Fair value of pension assets 2016 £m 2015 £m Note: 1 Derivatives   include collateral held in the form of cash. The schemes have no direct   investments in the Group’s equity securities or in property currently used by   the Group. Each of the plans manages risks through a variety of methods and   strategies including equity protection, to limit downside risk in falls in   equity markets, inflation and interest rate hedging and, in the CWW Section   of the Vodafone UK plan, a substantial insured pensioner buy-in policy. The   actual return on plan assets over the year to 31 March 2016 was a loss of £2   million (2015: £897 million return). Sensitivity analysis Measurement of the   Group’s defined benefit retirement obligation is sensitive to changes in   certain key assumptions. The sensitivity analysis below shows how a   reasonably possible increase or decrease in a particular assumption would, in   isolation, result in an increase or decrease in the present value of the   defined benefit obligation as at 31 March 2016. Rate of inflation Rate of   increase in salaries Discount rate Life expectancy Decrease by 0.5% £m   Increase by 0.5% £m Decrease by 0.5% £m Increase by 0.5% £m Decrease by 0.5%   £m Increase by 0.5% £m Increase by 1 year Decrease by 1 year £m £m   (Decrease)/increase in present value of defined obligation (395) 448 (4) 4   597 (511) 126 (126) The sensitivity analysis may not be representative of an   actual change in the defined benefit obligation as it is unlikely that   changes in assumptions would occur in isolation of one another. In presenting   this sensitivity analysis, the change in the present value of the defined   benefit obligation has been calculated on the same basis as prior years using   the projected unit credit method at the end of the reporting period, which is   the same as that applied in calculating the defined benefit obligation   liability recognised in the statement of financial position. 144 Vodafone   Group Plc Annual Report on Form 20-F 2016 Cash and cash equivalents 87 97   Equity investments: With quoted prices in an active market 1,487 1,489   Without quoted prices in an active market 157 154 Debt instruments: With   quoted prices in an active market 2,747 2,567 Property: With quoted prices in   an active market 8 7 Without quoted prices in an active market 15 12   Derivatives:1 With quoted prices in an active market (292) 99 Without quoted   prices in an active market – – Investment fund 231 – Annuity policies –   Without quoted prices in an active market 485 531 Total 4,925 4,956 Analysis   of net assets/(deficit): Total fair value of scheme assets 2,184   2,2511,7801,827 1,904 1,9121,3431,3281,218 Present value of scheme   liabilities (2,011) (2,085)(1,732)(1,874) (2,015) (2,133) (1,677)   (1,647)(1,444) Net assets/(deficit) 173 166 48 (47) (111)   (221)(334)(319)(226) Net assets/(deficit) are analysed as: Assets3 173 16648–   – –––– Liabilities – ––(47) (111) (221) (334)(319)(226) 

 

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27. Share-based   payments We have a number of share plans used to award shares to Directors   and employees as part of their remuneration package. A charge is recognised   over the vesting period in the consolidated income statement to record the   cost of these, based on the fair value of the award on the grant date.   Accounting policies The Group issues equity-settled share-based payments to   certain employees. Equity-settled share-based payments are measured at fair   value (excluding the effect of non-market-based vesting conditions) at the   date of grant. The fair value determined at the grant date of the   equity-settled share-based payments is expensed on a straight-line basis over   the vesting period, based on the Group’s estimate of the shares that will   eventually vest and adjusted for the effect of non-market-based vesting   conditions. A corresponding increase in retained earnings is also recognised.   Some share awards have an attached market condition, based on total   shareholder return (‘TSR’), which is taken into account when calculating the   fair value of the share awards. The valuation for the TSR is based on   Vodafone’s ranking within the same group of companies, where possible, over   the past five years. The fair value of awards of non-vested shares is equal   to the closing price of the Group’s shares on the date of grant, adjusted for   the present value of the delay in receiving dividends where appropriate. The   maximum aggregate number of ordinary shares which may be issued in respect of   share options or share plans will not (without shareholder approval) exceed:   a 10% of the ordinary share capital of the Company in issue immediately prior   to the date of grant, when aggregated with the total number of ordinary   shares which have been allocated in the preceding ten year period under all   plans; and a 5% of the ordinary share capital of the Company in issue   immediately prior to the date of grant, when aggregated with the total number   of ordinary shares which have been allocated in the preceding ten year period   under all plans, other than any plans which are operated on an all-employee   basis. Share options Vodafone Group executive plans No share options have   been granted to any Directors or employees under the Company’s discretionary   share option plans in the year ended 31 March 2016. There are options   outstanding under the Vodafone Group 1999 Long-Term Stock Incentive Plan and   the Vodafone Global Incentive Plan. These options are normally exercisable   between three and ten years from the date of grant. The vesting of some of   these options was subject to satisfaction of performance conditions. Grants   made to US employees are made in respect of American Depositary Shares   (‘ADS’). Vodafone Group Share save Plan The Vodafone Group 2008 Share save   Plan enables UK staff to acquire shares in the Company through monthly   savings of up to £250 over a three and/or five year period, at the end of   which they may also receive a tax free bonus. The savings and bonus may then   be used to purchase shares at the option price, which is set at the beginning   of the invitation period and usually at a discount of 20% to the then   prevailing market price of the Company’s shares. Share plans Vodafone Group   executive plans Under the Vodafone Global Incentive Plan awards of shares are   granted to Directors and certain employees. The release of these shares is   conditional upon continued employment and, for some awards, achievement of   certain performance targets measured over a three year period. Vodafone Share   Incentive Plan The Vodafone Share Incentive Plan enables UK staff to acquire   shares in the Company through monthly purchases of up to £125 per month or 5%   of salary, whichever is lower. For each share purchased by the employee, the   Company provides a free matching share. 145 Vodafone Group Plc Annual Report   on Form 20-F 2016 Overview Strategy review Performance Governance Financials   Additional information 

 

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Notes to the   consolidated financial statements (continued) 27. Share-based payments   (continued) Movements in outstanding ordinary share and ADS options ADS options   Ordinary share options 2016 Millions 2015 Millions 2014 Millions 2016   Millions 2015 Millions 2014 Millions Summary of options outstanding and   exercisable at 31 March 2016 Outstanding Exercisable Weighted average   remaining contractual life Months Weighted average remaining contractual life   Months Weighted average exercise price Weighted average exercise price   Outstanding shares Millions Exercisable shares Millions Share awards   Movements in non-vested shares are as follows: 2016 2015 2014 Weighted average   fair value at grant date Weighted average fair value at grant date Weighted   average fair value at grant date Millions Millions Millions Other information   The total fair value of shares vested during the year ended 31 March 2016 was   £58 million (2015: £84 million; 2014: £90 million). The compensation cost   included in the consolidated income statement in respect of share options and   share plans was £117 million (2015: £88 million; 2014: £92 million) which is   comprised principally of equity-settled transactions. The average share price   for the year ended 31 March 2016 was 224.2 pence (2015: 212.7 pence; 2014:   212.2 pence). 146 Vodafone Group Plc Annual Report on Form 20-F 2016 1 April   217£1.56 243£1.44294£1.27 Granted 63£2.22 83£1.6384£1.58 Vested (32) £1.80   (62) £1.35(81) £1.11 Forfeited (50) £1.40 (47) £1.35(54) £1.19 31 March 198   £1.77 217 £1.56243 £1.44 Vodafone Group savings related and Share save Plan:   £1.01–£2.00 23£1.62 29–– – Vodafone Group 1999 Long-Term Stock Incentive   Plan: £1.01–£2.00 1£1.68 161£1.68 16 1 April – 25 2740 Granted during the   year – –– 7 712 Forfeited during the year – –– (1) (2) (1) Exercised during   the year – –– (5) (6) (22) Expired during the year – –– (2) (1) (2) 31 March   – –– 24 25 27 Weighted average exercise price: 1 April – –US$22.16 £1.49   £1.42£1.41 Granted during the year – –– £1.89 £1.56£1.49 Forfeited during the   year – –– £1.54 £1.45£1.34 Exercised during the year – –US$29.31 £1.42   £1.25£1.43 Expired during the year – –– £1.59 £1.45£1.37 31 March – –– £1.62   £1.49£1.42 

 

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28.   Acquisitions and disposals We completed a number of small acquisitions during   the year. The note below provides details of these transactions as well as   those in the prior year including, most significantly, the acquisition of   Grupo Corporativo Ono, S.A. (‘Ono’). For further details see “Critical   accounting judgements and key sources of estimation uncertainty” in note 1   “Basis of preparation” to the consolidated financial statements. Accounting   policies Business combinations Acquisitions of subsidiaries are accounted for   using the acquisition method. The cost of the acquisition is measured at the   aggregate of the fair values at the date of exchange of assets given,   liabilities incurred or assumed and equity instruments issued by the Group.   Acquisition-related costs are recognised in the income statement as incurred.   The acquiree’s identifiable assets and liabilities are recognised at their   fair values at the acquisition date. Goodwill is measured as the excess of   the sum of the consideration transferred, the amount of any non-controlling   interests in the acquiree and the fair value of the Group’s previously held   equity interest in the acquiree, if any, over the net amounts of identifiable   assets acquired and liabilities assumed at the acquisition date. The interest   of the non-controlling shareholders in the acquiree may initially be measured   either at fair value or at the non-controlling shareholders’ proportion of   the net fair value of the identifiable assets acquired, liabilities and   contingent liabilities assumed. The choice of measurement basis is made on an   acquisition-by-acquisition basis. Acquisition of interests from   non-controlling shareholders In transactions with non-controlling parties   that do not result in a change in control, the difference between the fair   value of the consideration paid or received and the amount by which the   non-controlling interest is adjusted is recognised in equity. Acquisitions   The aggregate cash consideration in respect of purchases of interests in   subsidiaries, net of cash acquired, is as follows: £m Acquisitions During the   2016 financial year, the Group completed a number of acquisitions for an   aggregate net cash consideration of £43 million. The aggregate fair values of   goodwill, identifiable assets and liabilities of the acquired operations were   £17 million, £38 million and £12 million respectively. In addition, the Group   completed the acquisition of certain non-controlling interests for a net cash   consideration of £48 million. Grupo Corporativo Ono, S.A. (‘Ono’) On 23 July   2014, the Group acquired the entire share capital of Ono for a cash   consideration of £2,945 million. The primary reason for acquiring the   business was to create a leading integrated communications operator in Spain,   offering customers unified communication services. The purchase price   allocation is set out in the table below: Fair value £m Notes: 1 Identifiable   intangible assets of £777 million consisted of customer contracts and   relationships of £710 million, brand of £33 million and software of £34 million.   2 The goodwill arising on acquisition is principally related to the synergies   expected to arise following the integration of the Ono business. These   principally relate to synergies expected to arise following integration of   the respective networks, operating cost rationalisation and revenue synergies   driven by the larger network footprint and incremental revenue streams from   integrated services. 3 Transaction costs of £11 million were charged in the   Group’s consolidated income statement in the year ended 31 March 2015. 147   Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information Net assets acquired:   Identifiable intangible assets1 777 Property, plant and equipment 3,272 Other   investments 7 Trade and other receivables 156 Cash and cash equivalents 143   Current and deferred taxation 647 Short and long-term borrowings (3,001)   Trade and other payables (391) Provisions (83) Net identifiable assets   acquired 1,527 Non-controlling interests (5) Goodwill2 1,423 Total   consideration3 2,945 Cash consideration paid: Acquisitions completed during   the year 44 Net cash acquired (1) 43 

 

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Notes to the   consolidated financial statements (continued) 28. Acquisitions and disposals   (continued) Vodafone Omnitel B.V. (‘Vodafone Italy’) On 21 February 2014 the   Group acquired a 100% interest in Vodafone Italy, having previously held a   76.9% stake which was accounted for as a joint venture. The Group acquired   the additional 23.1% equity as part of the consideration received for the   disposal of the Group’s interests in Verizon Wireless (see “Disposals”   below). There was no observable market for Verizon shares and so the fair   value of consideration paid by the Group for the acquisition was considered   to be more reliably determined based on the acquisition-date fair value of   Group’s existing equity interest in Vodafone Italy. Using a value in use basis,   the consideration paid for the acquisition was determined to be £7,121   million, comprising £5,473 million for the Group’s existing 76.9% equity   interest and £1,648 million for the additional 23.1% equity interest.   Disposals Verizon Wireless (‘VZW’) On 21 February 2014 the Group sold its US   sub-group which included its entire 45% shareholding in VZW to Verizon   Communications Inc. for a total consideration of £76.7 billion before tax and   transaction costs, comprising cash of £35.2 billion, shares in Verizon   Communications Inc. of £36.7 billion, loan notes issued by Verizon   Communications Inc. of £3.1 billion and a 21.3% interest in Vodafone Italy   valued at £1.7 billion. The Group recognised a net gain on disposal of   £44,996 million, reported in profit for the financial year from discontinued   operations. 29. Commitments A commitment is a contractual obligation to make   a payment in the future, mainly in relation to leases and agreements to buy   assets such as network infrastructure and IT systems. These amounts are not   recorded in the consolidated statement of financial position since we have   not yet received the goods or services from the supplier. The amounts below   are the minimum amounts that we are committed to pay. Accounting policies   Leases are classified as finance leases whenever the terms of the lease   transfer substantially all the risks and rewards of ownership of the asset to   the lessee. All other leases are classified as operating leases. Assets held   under finance leases are recognised as assets of the Group at their fair   value at the inception of the lease or, if lower, at the present value of the   minimum lease payments as determined at the inception of the lease. The   corresponding liability to the lessor is included in the statement of   financial position as a finance lease obligation. Lease payments are   apportioned between finance charges and reduction of the lease obligation so   as to achieve a constant rate of interest on the remaining balance of the   liability. Finance charges are recognised in the income statement. Rentals   payable under operating leases are charged to the income statement on a   straight-line basis over the term of the relevant lease. Benefits received   and receivable as an incentive to enter into an operating lease are also   spread on a straight-line basis over the lease term. Operating lease   commitments The Group has entered into commercial leases on certain   properties, network infrastructure, motor vehicles and items of equipment.   The leases have various terms, escalation clauses, purchase options and   renewal rights, none of which are individually significant to the Group.   Future minimum lease payments under non-cancellable operating leases   comprise: 2016 £m 2015 £m The total of future minimum sublease payments   expected to be received under non-cancellable subleases is £397 million   (2015: £358 million). Capital commitments Company and subsidiaries Share of   joint operations Group 2016 £m 2015 £m 2016 £m 2015 £m 2016 £m 2015 £m Note:   1 Commitment includes contracts placed for property, plant and equipment and   intangible assets. Capital commitments at 31 March 2015 included £2,682   million in relation to spectrum acquired in 12 telecom circles in India, the   purchase of which was completed during the year. 148 Vodafone Group Plc   Annual Report on Form 20-F 2016 Contracts placed for future capital   expenditure not provided in the financial statements1 1,954 4,871 97 86 2,051   4,957 Within one year 1,527 1,403 In more than one year but less than two   years 1,096 925 In more than two years but less than three years 988 797 In   more than three years but less than four years 797 698 In more than four   years but less than five years 632 550 In more than five years 2,822 2,207   7,862 6,580 

 

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Acquisition   commitments On 15 February 2016 Vodafone announced that Liberty Global Europe   Holding B.V. and Vodafone International Holdings B.V. had reached an agreement   to merge their operating businesses in the Netherlands to form a 50:50 joint   venture. The joint venture will operate under both the Vodafone and Ziggo   brands and will create a nationwide integrated communications provider in the   Netherlands. Based upon the enterprise value of each business, and after   deducting Ziggo’s €7.3 billion of net debt, Vodafone will make a cash payment   to Liberty Global of €1 billion to equalise ownership in the JV, reflecting   the €2 billion difference in the two companies’ equity value. Vodafone   Netherlands will be contributed to the JV on a debt and cash free basis. The   transaction is expected to close around the end of 2016 and is subject to   regulatory approvals and consultations with the Works Councils. During the   year ended 31 March 2016 Vodafone agreed to acquire You Broadband (India)   Private Limited and You System Integration Private Limited in India for £35   million. The transaction, which is expected to close later this year, is   subject to regulatory approval by the Foreign Investment Promotion Board. 30.   Contingent liabilities and legal proceedings Contingent liabilities are   potential future cash outflows, where the likelihood of payment is considered   more than remote, but is not considered probable or cannot be measured   reliably. 2016 £m 2015 £m Notes: 1 Performance bonds require the Group to   make payments to third parties in the event that the Group does not perform   what is expected of it under the terms of any related contracts or commercial   arrangements. 2 Other guarantees principally comprise Vodafone Group Plc’s   guarantee of the Group’s 50% share of an AUD 1.7 billion loan facility and a   US$3.5 billion loan facility of its joint venture, Vodafone Hutchison   Australia Pty Limited. UK pension schemes The Group’s main defined benefit   scheme is the Vodafone UK Group Pension Scheme which has two segregated   sections, the Vodafone Section and the CWW Section, as detailed in note 26.   The Group has covenanted to provide security in favour of the Vodafone UK   Group Pension Scheme – Vodafone Section whilst there is a deficit in this   section. The deficit is measured on a prescribed basis agreed between the   Group and Trustee. In 2010 the Group and Trustee agreed security of a charge   over UK index linked gilts (‘ILG’) held by the Group. The level of the   security has varied since inception in line with the movement in the Scheme   deficit. At the 31 March 2016 the Scheme retains security over £264.5 million   (notional value) 2017 ILGs and £76.3 million (notional value) 2016 ILGs. The   security may be substituted either on a voluntary or mandatory basis. As and   when alternative security is provided, the Group has agreed that the security   cover should include additional headroom of 33%, although if cash is used as   the security asset the ratio will revert to 100% of the relevant liabilities   or, where the proposed replacement security asset is listed on an   internationally recognised stock exchange in certain core jurisdictions, the   trustee may decide to agree a lower ratio than 133%. The Company has also   provided two guarantees to the Vodafone Section of the scheme for a combined   value up to £1.25 billion to provide security over the deficit under certain   defined circumstances, including insolvency of the employers. The Company has   also agreed a similar guarantee of up to £1.25 billion for the CWW Section.   An additional smaller UK defined benefit scheme, the THUS Plc Group Scheme,   has a guarantee from the Company for up to £110 million. Legal proceedings   The Company and its subsidiaries are currently, and may from time to time   become, involved in a number of legal proceedings, including inquiries from,   or discussions with, governmental authorities that are incidental to their   operations. However, save as disclosed below, the Company does not believe   that it or its subsidiaries are currently involved in (i) any legal or   arbitration proceedings (including any governmental proceedings which are   pending or known to be contemplated) which may have, or have had in the 12   months preceding the date of this report, a material adverse effect on the   financial position or profitability of the Company or its subsidiaries; or   (ii) any material proceedings in which any of the Company’s Directors,   members of senior management or affiliates are either a party adverse to the   Company or its subsidiaries or have a material interest adverse to the   Company or its subsidiaries. Due to inherent uncertainties, the Company   cannot make any accurate quantification of any cost, or timing of such cost,   which may arise from any of the legal proceedings referred to in this Annual   Report. Telecom Egypt arbitration In October 2009 Telecom Egypt began an   arbitration against Vodafone Egypt in Cairo alleging breach of   non-discrimination provisions in an interconnection agreement as a result of   lower interconnection rates paid to Vodafone Egypt by Mobinil. Telecom Egypt   also sought to join Vodafone International Holdings BV (‘VIHBV’), Vodafone   Europe BV (‘VEBV’) and Vodafone Group Plc to the arbitration. In January 2015   the arbitral tribunal issued its decision. It held unanimously that it had no   jurisdiction to arbitrate the claim against VIHBV, VEBV and Vodafone Group   Plc. The tribunal also held by a three to two majority that Telecom Egypt had   failed to establish any liability on the part of Vodafone Egypt. Telecom   Egypt applied to the Egyptian court to set aside the decision. On 15 March   2016 the Court of Appeal dismissed Telecom Egypt’s application to annul the   arbitration award. Telecom Egypt had 60 days to appeal to the Cour de Cassation,   which has now expired. Vodafone Egypt has applied for a certificate to   confirm that no appeal has been filed. 149 Vodafone Group Plc Annual Report   on Form 20-F 2016 Overview Strategy review Performance Governance Financials   Additional information Performance bonds1 849 766 Other guarantees and   contingent liabilities2 2,543 2,539 

 

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Notes to the   consolidated financial statements (continued) 30. Contingent liabilities and   legal proceedings (continued) Indian tax case In August 2007 and September   2007, Vodafone India Limited (‘VIL’) and VIHBV respectively received notices   from the Indian tax authority alleging potential liability in connection with   an alleged failure by VIHBV to deduct withholding tax from consideration paid   to the Hutchison Telecommunications International Limited group (‘HTIL’) in   respect of HTIL’s gain on its disposal to VIHBV of its interests in a   wholly-owned subsidiary that indirectly holds interests in VIL. In January   2012 the Indian Supreme Court handed down its judgement, holding that VIHBV’s   interpretation of the Income Tax Act 1961 was correct, that the HTIL   transaction in 2007 was not taxable in India, and that consequently, VIHBV   had no obligation to withhold tax from consideration paid to HTIL in respect   of the transaction. The Indian Supreme Court quashed the relevant notices and   demands issued to VIHBV in respect of withholding tax and interest. On 20   March 2012 the Indian Government returned VIHBV’s deposit of INR 25 billion   and released the guarantee for INR 85 billion, which was based on the demand   for payment issued by the Indian tax authority in October 2010, for tax of   INR 79 billion plus interest. On 28 May 2012 the Finance Act 2012 became law.   The Finance Act 2012 contained provisions intended to tax any gain on   transfer of shares in a non-Indian company, which derives substantial value   from underlying Indian assets, such as VIHBV’s transaction with HTIL in 2007.   Further it seeks to subject a purchaser, such as VIHBV, to a retrospective   obligation to withhold tax. VIHBV received a letter on 3 January 2013   reminding it of the tax demand raised prior to the Indian Supreme Court’s   judgement and purporting to update the interest element of that demand to a   total amount of INR 142 billion. On 17 January 2014, VIHBV served an amended   trigger notice on the Indian Government under the Dutch-India Bilateral   Investment Treaty (‘Dutch BIT’), supplementing a trigger notice filed on 17   April 2012, immediately prior to the Finance Act 2012 becoming effective, to   add claims relating to an attempt by the Indian Government to tax aspects of   the transaction with HTIL under transfer pricing rules. VIHBV arbitration   proceedings On 17 April 2014, VIHBV served its notice of arbitration under   the Dutch BIT, formally commencing the Dutch BIT arbitration proceedings. An   arbitrator has been appointed by VIHBV. The Indian Government has also   appointed its arbitrator. The two party-appointed arbitrators failed to   appoint a chairman. Consequently, the President of the International Court of   Justice will now appoint the third arbitrator who will act as the presiding   arbitrator. On 15 June 2015, Vodafone Group Plc and Vodafone Consolidated Holdings   Limited served a trigger notice on the Indian Government under the United   Kingdom-India Bilateral Investment Treaty (’UK BIT’) in respect of   retrospective tax claims under the Finance Act 2012. On 4 February 2016,   VIHBV received a reminder of an outstanding tax demand of INR 221 billion.   The latest reminder threatens enforcement action if the demand is not   satisfied. Separate proceedings in the Bombay High Court taken against VIHBV   to seek to treat it as an agent of HTIL in respect of its alleged tax on the   same transaction, as well as penalties of up to 100% of the assessed   withholding tax for the alleged failure to have withheld such taxes, were   listed for hearing at the request of the Indian Government on 21 April 2016   despite the issue having been ruled upon by the Indian Supreme Court. The   hearing was adjourned to a date yet to be listed. Should a further demand for   taxation be received by VIHBV or any member of the Group as a result of the   retrospective legislation, we believe it is probable that we will be able to   make a successful claim under the Dutch BIT and/or UK BIT. We did not carry a   provision for this litigation or in respect of the retrospective legislation   at 31 March 2016, or at previous reporting dates. Other Indian tax cases VIL   and Vodafone India Services Private Limited (‘VISPL’) (formerly 3GSPL) are   involved in a number of tax cases with total claims exceeding £1.4 billion   plus interest, and penalties of up to 300% of the principal. VISPL tax claims   VISPL has been assessed as owing tax of approximately £223 million (plus   interest of £123 million) in respect of (i) a transfer pricing margin charged   for the international call centre of HTIL prior to the 2007 transaction with   Vodafone for HTIL assets in India; (ii) the sale of the international call   centre by VISPL to HTIL; and (iii) the acquisition of and/or the alleged   transfer of options held by VISPL for VIL. The first two of the three heads   of tax are subject to an indemnity by HTIL. The larger part of the potential   claim is not subject to any indemnity. VISPL unsuccessfully challenged the   merits of the tax demand in the statutory tax tribunal and the jurisdiction   of the tax office to make the demand in the High Court. The Tax Appeal   Tribunal heard the appeal and ruled in the Tax Office’s favour. VISPL lodged   an appeal (and stay application) in the Bombay High Court which was concluded   in early May 2015. On 13 July 2015 the tax authorities issued a revised tax   assessment reducing the tax VISPL had previously been assessed as owing in respect   of (i) and (ii) above. In the meantime, (i) a stay of the tax demand on a   deposit of £20 million and (ii) a corporate guarantee by VIHBV for the   balance of tax assessed remain in place. On 8 October 2015, the Bombay High   Court ruled in favour of Vodafone in relation to the options and the call   centre sale. The Tax Office has recently appealed to the Supreme Court of   India. Indian regulatory cases Litigation remains pending in the   Telecommunications Dispute Settlement Appellate Tribunal (‘TDSAT’), High   Courts and the Indian Supreme Court in relation to a number of significant   regulatory issues including mobile termination rates (‘MTRs’), spectrum and   licence fees, licence extension and 3G intra-circle roaming (‘ICR’). Public   interest litigation: Yakesh Anand v Union of India, Vodafone and others The   Petitioner brought a special leave petition in the Indian Supreme Court on 30   January 2012 against the Government of India and mobile network operators,   including VIL, seeking recovery of the alleged excess spectrum allocated to   the operators, compensation for the alleged excess spectrum held in the   amount of approximately €4.7 billion and a criminal investigation of an   alleged conspiracy between government officials and the network operators. A   claim with similar allegations was dismissed by the Indian Supreme Court in   March 2012, with an order that the Petitioner should pay a fine for abuse of   process. The case is pending before the Indian Supreme Court and is expected   to be called for hearing at some uncertain future date. 150 Vodafone Group   Plc Annual Report on Form 20-F 2016 

 

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3G inter-circle   roaming: Vodafone India and others v Union of India In April 2013, the Indian   Department of Telecommunications (‘DoT’) issued a stoppage notice to VIL’s   operating subsidiaries and other mobile operators requiring the immediate   stoppage of the provision of 3G services on other operators’ mobile networks   in an alleged breach of licence claim. The DoT also imposed a fine of   approximately €5.5 million. VIL applied to the Delhi High Court for an order   quashing the DoT’s notice. Interim relief from the notice has been granted   (but limited to existing customers at the time with the effect that VIL was   not able to provide 3G services to new customers on other operators’ 3G   networks pending a decision on the issue). The dispute was referred to the TDSAT   for decision, which ruled on 28 April 2014 that VIL and the other operators   were permitted to provide 3G services to their customers (current and future)   on other operators’ networks. The DoT has appealed the judgement and sought a   stay of the tribunal’s judgement. The DoT’s stay application was rejected by   the Indian Supreme Court. The matter is pending before the Indian Supreme   Court. One time spectrum charges: VIL v Union of India The Indian Government   has sought to impose one time spectrum charges of approximately €525 million   on certain operating subsidiaries of VIL. VIL filed a petition before the   TDSAT challenging the one time spectrum charges on the basis that they are   illegal, violate VIL’s licence terms and are arbitrary, unreasonable and discriminatory.   The tribunal stayed enforcement of the Government’s spectrum demand pending   resolution of the dispute. The matter is due to go for final hearing before   the Indian Supreme Court, and will be listed in due course. Other public   interest litigation Three public interest litigations have been initiated in   the Indian Supreme Court against the Indian Government and private operators   on the grounds that the grant of additional spectrum beyond 4.4/6.2 MHz has   been illegal. The cases seek appropriate investigation and compensation for   the loss to the exchequer. Adjusted Gross Revenue (‘AGR’) dispute before the   Indian Supreme Court: VIL and others v Union of India VIL has challenged the   tribunal’s judgement dated 23 April 2015 to the extent that it dealt with the   calculation of AGR, upon which license fees and spectrum usage charges are   based. The cumulative impact of the inclusion of these components is   approximately Rs. 2,200 Crores. The DoT also moved cross appeals challenging   the tribunal’s judgement. In the hearing before the Indian Supreme Court, the   Court orally directed the DoT not to take any coercive steps in the matter,   which was adjourned. On 29 February 2016, the Supreme Court ordered that the   DoT may continue to raise demands for fees and charges, but may not enforce   them until a final decision on the matter. Other cases in the Group Germany:   Patent litigation The telecoms industry is currently involved in significant   levels of patent litigation brought by non-practicing entities (‘NPEs’) which   have acquired patent portfolios from current and former industry companies.   Vodafone is currently a party to patent litigation cases in Germany brought   against Vodafone Germany by IPCom, St Lawrence Communications LLC (a   subsidiary of Acacia Research Corporation), and by Intellectual Ventures, all   NPEs. Vodafone has contractual indemnities from suppliers which have been   invoked in relation to the alleged patent infringement liability. Germany:   Mannesman and Kabel Deutschland takeover – class actions The German courts   are determining the adequacy of the mandatory cash offer made to minority   shareholders in Vodafone’s takeover of Mannesman. This matter has been   ongoing since 2001. The German courts are also determining whether “squeeze   out” compensation is payable to affected Mannesman shareholders in a similar   proceeding. In September 2014, the German courts awarded compensation to   minority shareholders of Mannesman in the amount of €229.58 per share, which   would result in a pay-out of €19 million (plus €10 million of accrued   interest). The German courts also ruled that the “squeeze out” compensation   should amount to €251.31 per share, which would result in a pay-out of €43.8   million (plus interest of €23 million of accrued interest). Vodafone has   appealed these decisions. Similar proceedings were initiated by 80 Kabel   Deutschland shareholders. This proceeding is in its early stages, and,   accordingly, Vodafone believes that it is too early to assess the likely   quantum of any claim (however, Vodafone does not expect that the quantum of   any such claim to be material). The next oral hearing is scheduled for 18 May   2016. Italy: British Telecom (Italy) v Vodafone Italy The Italian Competition   Authority concluded an investigation in 2007 when Vodafone Italy gave certain   undertakings in relation to allegations that it had abused its dominant   position in the wholesale market for mobile termination. In 2010, British   Telecom (Italy) brought a civil damages claim against Vodafone Italy on the   basis of the Competition Authority’s investigation and Vodafone Italy’s   undertakings. British Telecom (Italy) seeks damages in the amount of €280   million for abuse of dominant position by Vodafone Italy in the wholesale   fixed to mobile termination market for the period from 1999 to 2007. A court   appointed expert delivered an opinion to the Court that the range of damages   in the case should be in the region of €10 million to €25 million which was   reduced in a further supplementary report published in September 2014 to a   range of €8 million to €11 million. Judgement was handed down by the court in   August 2015, awarding €12 million, (including interest) to British Telecom   (Italy). British Telecom (Italy) has appealed the amount of the damages to   the Court of Appeal of Milan. In addition, British Telecom (Italy) has asked   again for a reference to the European Court of Justice for an interpretation   of the European community law on antitrust damages. Vodafone Italy has filed   an appeal. Italy: FASTWEB v Vodafone Italy The Italian Competition Authority   concluded an investigation in 2007 when Vodafone Italy gave certain   undertakings in relation to allegations it had abused its dominant position   in the wholesale market for mobile termination. In 2010, FASTWEB brought a   civil damages claim against Vodafone Italy on the basis of the Competition   Authority’s investigation and Vodafone Italy’s undertakings. FASTWEB sought   damages in the amount of €360 million for abuse of dominant position by   Vodafone Italy in the wholesale fixed to mobile termination market. A court   appointed expert delivered an opinion to the Court that the range of damages   in the case should be in the region of €0.5 million to €2.3 million. On 15   October 2014, the Court decided to reject FASTWEB’s damages claim in its   entirety. FASTWEB appealed the decision and the first appeal hearing took   place in September 2015. The Court has scheduled a final hearing for   September 2016. 151 Vodafone Group Plc Annual Report on Form 20-F 2016   Overview Strategy review Performance Governance Financials Additional   information 

 

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Notes to the   consolidated financial statements (continued) 30. Contingent liabilities and   legal proceedings (continued) Italy: Telecom Italia v Vodafone Italy (Teletu)   Telecom Italia brought civil claims against Vodafone Italy in relation to   TeleTu’s alleged anti-competitive retention of customers. Telecom Italia   seeks damages in the amount of €101 million. The Court decided on 9 June 2015   to appoint an expert to verify whether TeleTu has put in place   anticompetitive retention activities. The experts’ work is now underway, and   the parties have been invited by the Court to consider settlement. Greece:   Papistas Holdings SA, Mobile Trade Stores (formerly Papistas SA) and   Athanasios and Loukia Papistas v Vodafone Greece, Vodafone Group Plc and   certain Directors and Officers of Vodafone. In December 2013, Mr and Mrs   Papistas, and companies owned or controlled by them, brought three claims in   the Greek court in Athens against Vodafone Greece, Vodafone Group Plc and   certain Directors and officers of Vodafone Greece and Vodafone Group Plc for   purported damage caused by the alleged abuse of dominance and wrongful   termination of a franchise arrangement with a Papistas company. Approximately   €1.0 billion of the claim is directed exclusively at one former and one   current Director of Vodafone Greece. The balance of the claim (approximately   €285.5 million) is sought from Vodafone Greece and Vodafone Group Plc on a   joint and several basis. Both cases have been adjourned until September 2018,   but it is possible that Papistas may re-file his claim under the new Greek   civil procedure regime (which aims to hear trials within one year).   Netherlands: Consumer credit/handset case In February 2016, the Dutch Supreme   Court ruled on the Dutch implementation of the EU Consumer Credit Directive   and “instalment sales agreements” (a Dutch law concept), holding that bundled   ‘all-in’ mobile subscription agreements (i.e. Device along with mobile   services) are considered consumer credit agreements. As a result Vodafone   Netherlands, together with the industry, has been working with the Ministry   of Finance and the Competition Authority on compliance requirements going   forward for such offers. The ruling also has retrospective effect and a claim   has been submitted by a claims organisation, which is currently being   reviewed by Vodafone Netherlands. South Africa: GH Investments (GHI) v   Vodacom Congo Vodacom Congo contracted with GHI to install ultra-low cost   base stations on a revenue share basis. After rolling out three sites, GHI   stopped and sought to renegotiate the terms. Vodacom Congo refused. GHI   accused it of bad faith and infringement of intellectual property rights. In   April 2015, GHI issued a formal notice for a claim of US$1.16 billion,   although there does not seem to be a proper basis nor any substantiation for   the compensation claimed. The dispute has been submitted to mediation under   the International Chamber of Commerce. A mediator was appointed in September   2015 who convened a first meeting which took place in early November 2015. A   follow-up mediation meeting was scheduled for December 2015, but has been   postponed without a new date having been fixed. South Africa: CWN v Vodacom   There are various legal matters relating to Vodacom’s investment in Vodacom   Congo (DRC) SA (‘VDRC‘), the most recent of which is a claim brought by Mr   Alieu Badara Mohamed Conteh (‘Conteh’) in the Commercial Court of   Kinshasa/Gombe against Vodacom International Limited (‘VCOMIL’) and VDRC.   Conteh is the controlling shareholder of Congolese Wireless Network s.a.r.l (‘CWN’),   a company incorporated in the DRC. CWN is a minority shareholder in VDRC.   These proceedings seek to invalidate a court decision removing Conteh as the   statutory manager of CWN, as well as the liquidation of VDRC and the payment   of various sums to CWN and Conteh. The action also includes an   unsubstantiated claim for US$14 billion against VCOMIL for its alleged role   in helping to undermine Conteh’s position as former statutory manager of CWN.   The Court of Appeal of Kinshasa/Gombe in December 2015 dismissed Conteh’s   case against VCOMIL on the grounds of a lack of proper service of legal   process. South Africa: Makate v Vodacom (Proprietary) Limited (‘Vodacom’) In   2008, Mr Makate instituted legal proceedings to claim compensation for a   business idea that led to a product known as ‘Please Call Me’. On 1 July   2014, the South Gauteng High Court, Johannesburg (‘the High Court’) found   that Mr Makate had proven the existence of a contract. However, the High   Court ruled that the Company was not bound by that contract because the   responsible director of product development and services did not have   authority to enter into any such agreement on the Company’s behalf. The High   Court also rejected Mr Makate’s claim on the basis that it had lapsed in   terms of the Prescription Act 68 of 1969. The High Court and Supreme Court of   Appeal turned down Mr Makate’s application for leave to appeal on 11 December   2014 and 2 March 2015, respectively. Mr Makate applied for leave to appeal in   the Constitutional Court. On 26 April 2016, after having heard the   application on 1 September 2015, the Constitutional Court granted leave to   appeal and upheld Mr Makate’s appeal. In doing so, the Constitutional Court   ordered that: (i) the Company is bound by the agreement concluded between Mr   Makate and the then director of product development and services; (ii) the   Company is to commence negotiations in good faith with Mr Makate to determine   reasonable compensation; and (iii) in the event of the parties failing to   agree on the reasonable compensation, the matter must be submitted to   Vodacom’s Chief Executive Officer for determination of the amount within a   reasonable time. Negotiations between the Company and Mr Makate will commence   in accordance with the order of the Constitutional Court. 152 Vodafone Group   Plc Annual Report on Form 20-F 2016 

 

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31. Related   party transactions The Group has a number of related parties including joint   arrangements and associates, pension schemes and Directors and Executive   Committee members (see note 12 “Investments in associates and joint   arrangements”, note 26 “Post employment benefits” and note 24 “Directors and   key management compensation”). Transactions with joint arrangements and   associates Related party transactions with the Group’s joint arrangements and   associates primarily comprise fees for the use of products and services   including network airtime and access charges, fees for the provision of   network infrastructure and cash pooling arrangements. No related party   transactions have been entered into during the year which might reasonably   affect any decisions made by the users of these consolidated financial   statements except as disclosed below. 2016 £m 2015 £m 2014 £m Note: 1 Amounts   arise primarily through Vodafone Italy, Vodafone Hutchison Australia, Indus   Towers Limited and Cornerstone Telecommunications Infrastructure Limited.   Interest is paid in line with market rates. Dividends received from   associates and joint ventures are disclosed in the consolidated statement of   cash flows. Transactions with Directors other than compensation During the   three years ended 31 March 2016, and as of 17 May 2016, no Director nor any   other executive officer, nor any associate of any Director or any other   executive officer, was indebted to the Company. During the three years ended   31 March 2016 and as of 17 May 2016, the Company has not been a party to any   other material transaction, or proposed transactions, in which any member of   the key management personnel (including Directors, any other executive   officer, senior manager, any spouse or relative of any of the foregoing or   any relative of such spouse) had or was to have a direct or indirect material   interest. 32. Subsequent events Euro reporting With effect from 1 April 2016   the functional currency of the Company has been changed from pounds sterling   to the euro. The euro is now the primary currency in which the Company’s   financing activities and investment returns are denominated. Similarly, with   effect from 1 April 2016, the Group’s presentation currency has been changed   from pounds sterling to the euro to better align with the geographic split of   the Group’s operations. 153 Vodafone Group Plc Annual Report on Form 20-F   2016 Overview Strategy review Performance Governance Financials Additional   information Sales of goods and services to associates 30 32231 Purchase of   goods and services from associates 92 85109 Sales of goods and services to   joint arrangements 16 612 Purchase of goods and services from joint   arrangements 598 566570 Net interest income receivable from joint   arrangements1 66 7975 Trade balances owed: by associates 1 33 to associates 3   43 by joint arrangements 183 18282 to joint arrangements 55 48170 Other   balances owed by joint arrangements1 85 6157 Other balances owed to joint   arrangements1 84 5463 

 

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Notes to the   consolidated financial statements (continued) 33. Related undertakings A full   list of all of our subsidiaries, joint arrangements and associated   undertakings is detailed below. A full list of subsidiaries, joint   arrangements and associated undertakings (as defined in the Large and   Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008) as   at 31 March 2016 is detailed below. The registered office address for each   entity is also disclosed as additional information. No subsidiaries are   excluded from the Group consolidation. Unless otherwise stated the Company’s   subsidiaries all have share capital consisting solely of ordinary shares and   are indirectly held. The percentage held by Group companies reflect both the   proportion of nominal capital and voting rights unless otherwise stated.   Subsidiaries Accounting policies A subsidiary is an entity controlled by the   Company. Control is achieved where the Company has existing rights that give   it the current ability to direct the activities that affect the Company’s   returns and exposure or rights to variable returns from the entity. The   results of subsidiaries acquired or disposed of during the year are included   in the consolidated income statement from the effective date of acquisition or   up to the effective date of disposal, as appropriate. Where necessary,   adjustments are made to the financial statements of subsidiaries to bring   their accounting policies into line with those used by the Group. All   intra-group transactions, balances, income and expenses are eliminated on   consolidation. Non-controlling interests in the net assets of consolidated   subsidiaries are identified separately from the Group’s equity therein.   Non-controlling interests consist of the amount of those interests at the date   of the original business combination and the non-controlling shareholder’s   share of changes in equity since the date of the combination. Total   comprehensive income is attributed to non-controlling interests even if this   results in the non-controlling interests having a deficit balance. % held by   Group companies % held by Group companies % held by Group companies Company   name Share class Company name Share class Company name Share class Albania   Brazil Congo, The Democratic Republic of the Vodacash s.p.r.l.3 Vodafone   M-PESA SH.P.K. 99.94 Ordinary shares 33.15 Ordinary shares Cobra do Brasil   Serviços de Telemàtica ltda. 70.00 Ordinary shares Vodacom Congo (RDC) SA3,4   Vodafone Albania Sh.A 99.94 Ordinary shares 33.15 Ordinary shares, 4%   redeemable preference shares Angola Côte d’Ivoire Vodafone Serviços   Empresariais Brasil Ltda. 100.00 Ordinary shares Vodacom Business Limitada3   65.00 Ordinary shares Argentina Vodacom Business Cote D’ivoire S.A.R.L.3   65.00 Ordinary shares Datora Mobile Telecomunicacoes S.A10 N/A N/A CWGNL S.A.   100.00 Ordinary shares Cyprus Cameroon Australia Vodafone Mobile Operations   Limited 100.00 Ordinary shares Vodacom Business Cameroon SA365.00 Ordinary   shares Bluefish Australia Pty Ltd 100.00 Ordinary shares Czech Republic   Canada Vodafone Enterprise Australia Pty Limited 100.00 Ordinary shares Cable   & Wireless Canada Inc 100.00 Common shares Vodafone Czech Republic A.S.   100.00 Ordinary shares Cayman Islands Oskar Mobil S.R.O. 100.00 Basic capital   shares Quickcomm Pty Limited 100.00 Ordinary shares, Redeemable convertible   preference shares CGP Investments (Holdings) Limited 100.00 Ordinary shares   Nadace Vodafone Česká republika 100.00 Ordinary shares PPL Pty Limited   100.00 Ordinary shares Chile Vodafone Enterprise Europe (UK) Limited – Czech Branch   100.00 Branch Talkland Australia Pty Limited100.00 Ordinary shares VAPL No. 2   Pty Limited 100.00 Ordinary shares Vodafone Enterprise Chile SA 100.00   Regular nominative shares Denmark Austria China Vodafone Enterprise Denmark   A/S 100.00 Ordinary shares Vodafone Enterprise Austria GmbH 100.00 Ordinary   shares Cobra (Beijing) Automotive Technologies Co, Ltd 100.00 Ordinary shares   Bahrain Avenue, Chaoyang District, Beijing 100004, China Vodafone Enterprise   Bahrain W.L.L. 100.00 Ordinary shares Vodafone China Limited (China)   100.00Equity interest shares Belgium Vodafone Belgium SA/NV 100.00 Ordinary   shares Cable & Wireless Communications Technical Services (Shanghai) Co.   Ltd 100.00 Ordinary shares Ipergy Communications NV 100.00 Ordinary shares   154 Vodafone Group Plc Annual Report on Form 20-F 2016 Zaventemsesteenweg 162   1831 Diegem, Belgium Malta House, rue Archimède 25, 1000 Bruxelles, Belgium   Unit 558-560, Regus SCB Tower, No. 210 Century Avenue, Pudong District,   Shanghai, 200120, China Unit 3626, China World Tower 1, No. 1 Jianguomenwai   Office 304, Building 60 Falcon Tower, Road 1701, Diplomatic Area, Manama,   317, Bahrain Building 21, 11, Kangding St., BDA, Beijing, 100176 - China,   Kohlmarkt 8-10, 1010, Wien, Austria c/o BDO, Havneholmen 29, 1561, København   V, Denmark 222 Miraflores, P.28, Santiago, Metrop 97-763 Olbrachtova 1980/5,   Krč, 140 00 Praha 4, Czech Republic Level 7, 40 Mount Street, North   Sydney NSW 2060, Australia náměstí Junkových 2, Praha 5, Stodůlky,   155 00, Czech Republic 190 Elgin Avenue, George Town, Grand Cayman, KY1-9005,   Cayman Islands Level 7, 210 George Street, Sydney NSW 2000, Australia   Náměstí Junkových 2, Prague 5, Czech Republic, 13000, Czech Republic 53   Glenellen Drive East, Etobicoke ON M8Y 2G7, Canada Level 12, 210 George Street,   Sydney NSW 2001, Australia HLB Mann Judd (NSW) Pty Ltd, Level 19, 207 Kent   Street, Sydney NSW NSW 2000, Australia Ali Rıza Efendi Caddesi No:33/A   Ortaköy, Lefkoşa, Cyprus Porte 201A 3eme Etage Entree C, immeuble SOCAR,   Boulevard de la liberte, Akwa, Douala, Cameroon Cerrito 348, 5to B, C1010AAH,   Buenos Aires, Argentina Rua Iguatemi, 1521. 29 anddar, Sao Paulo, Brazil No   62, Rue du Docteur Blanchard, Zone 4C, Abidjan, Cote d’Ivoire Avenida Che   Guevara, No 49, Maculusso, Luanda, Angola Avenida Cidade Jardim, 400, 7th and   20th Floors, Jardim Paulistano, Sao Paulo, Brazil, 01454-000, Brazil 292   Avenue de la Justice, Commune de la Gombe, Kinshasa, Congo Av José Rocha   Bonfim, 214, Cond Praça Capital – Edifício Toronto, sls 228/229 13080-900   Jardim Santa Genebra, Campinas, São Paulo, Brazil Autostrada Tirane-Durres,   Rruga: “Pavaresia”, Nr 61, Kashar, Tirana, Albania 

 

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% held by Group   companies % held by Group companies % held by Group companies Company name   Share class Company name Share class Company name Share class Egypt India   Kabelfernsehen Munchen Servicenter GmbH & Co. KG7 23.18 Ordinary shares   Sarmady Communications 54.91 Ordinary shares Ag Mercantile Company Private   Limited 100.00 Equity shares Urbana Teleunion Rostock GmbH 53.69 Ordinary   shares Misrfone Trading Company LLC 54.38 Ordinary shares Co.KG & Jaykay   Finholding (India) Private Limited 100.00 Equity shares Verwaltung “Urbana   Teleunion” Rostock GmbH7 38.35 Ordinary shares Nadal Trading Company Private   Limited 100.00 Equity shares Vodafone Data 54.93 Ordinary shares Omega   Telecom Holdings Private Limited 100.00 Equity shares KABELCOM Wolfsburg   Gesellschaft Fur Breitbandkabel-Kommunikation Mit Beschrankter Haftung7 76.70   Ordinary shares Vodafone International Services LLC 54.93 Ordinary shares   Plustech Mercantile Company Private Limited 100.00 Equity shares SMMS   Investments Pvt Limited 100.00 Equity shares Vodafone Egypt   Telecommunications S.A.E. 54.93 Ordinary shares Vodafone Kabel Deutschland   Field 76.70 Ordinary shares Telecom Investments India Private100.00 Limited   Equity shares Services GmbH7 Ghana Starnet 54.93 Ordinary shares France UMT   Investments Limited 100.00 Equity shares Usha Martin Telematics Limited   100.00 Equity shares Vodacom Business (Ghana) Limited3 65.00 Ordinary shares   and non-voting, irredeemable, non-cumulative preference shares Vodafone   Automotive Telematics Development S.A.S 100.00 Ordinary shares Vodafone   Mobile Services Limited 100.00 Equity shares Vodafone Towers Limited 100.00   Equity shares Vodafone Automotive France S.A.S 50.94 Ordinary shares Ghana   Telecommunications Company Limited 70.00 Ordinary shares MV Healthcare   Services Private Limited 100.00 Equity shares Vodafone Enterprise France SAS   100.00 New euro shares National Communications Backbone Company Limited 70.00   Ordinary shares Germany ND Callus Info Services Private Limited 100.00 Equity   shares Greece Scorpios Beverages Pvt. Ltd 100.00 Equity shares TKS Telepost   Kabel-Service Kaiserslautern Beteiligungs GmbH7 76.70 Ordinary shares   Vodafone Global Enterprise Telecommunications (Hellas) A.E. 100.00 Ordinary   shares TKS Telepost Kabel-Service Kaiserslautern GmbH & Co. KG7 76.70 Ordinary   shares Vodafone Global Services Private Limited 100.00 Equity shares   Vodafone-Panafon Hellenic Telecommunications Company S.A. 99.87 Ordinary   shares Kabel Deutschland Holding AG7 76.70 Ordinary shares Kabel Deutschland   Holding Erste 76.70 Ordinary shares Vodafone India Limited 100.00 Equity   shares 7 B=eteiligungs GmbH Hellas Online S.A. 99.87 Ordinary shares Vodafone   m-pesa Limited 100.00 Equity shares Kabel Deutschland Holding Zweite 76.70   Ordinary shares 7 B eteilgungs GmbH Vodafone Technology Solutions Limited   100.00 Equity shares Kabel Deutschland Siebte Beteiligungs GmbH7 76.70   Ordinary shares Victus Networks S.A. 50.00 Ordinary shares Mobile Commerce   Solutions Limited 100.00 Equity shares Vodafone Kabel Deutschland GmbH7 76.70   Ordinary shares Zelitron S.A. 99.87 Ordinary shares Vodafone Foundation   100.00 Equity shares Vodafone Kabel Deutschland Kundenbetreuung GmbH7 76.70   Ordinary shares 360 Connect S.A. 99.87 Ordinary shares Cable & Wireless   Global (India) Private Limited 100.00 Ordinary shares Hong Kong Vodafone   Automotive Deutschland GmbH 100.00 Ordinary shares Vodafone Global Enterprise   (Hong Kong) Limited 100.00 Ordinary shares Bluefish Communications GmbH   100.00 Ordinary shares Connect (India) Mobile Technologies Private Limited   100.00 Equity shares Vodafone Erste 100.00 Ordinary shares   Beteiligungsgesellschaft mbH odafone GmbH V= 100.00 Ordinary A shares   Vodafone China Limited (Hong Kong)1 100.00 Ordinary shares Cable &   Wireless Networks India Private Limited 74.00 Equity shares Vodafone Group   Services GmbH 100.00 Ordinary shares Vodafone Institut für Gesellschaft und   Kommunikation GmbH 100.00 Ordinary shares Vodafone Stiftung Deutschland   Gemeinnutzige GmbH7 76.70 Ordinary shares Vodafone Enterprise Global Network   HK Ltd 100.00 Ordinary shares Vodafone Business Services Limited 100.00   Equity shares Vodafone Vierte Verwaltungs AG 100.00 Ordinary shares Vodafone   Enterprise Hong Kong Ltd 100.00 Ordinary shares Vodafone India Services   Private Limited 100.00 Ordinary shares Vouchercloud GmbH 82.89 Ordinary   shares Hungary VSSB Vodafone Shared Services Budapest Private Limited Company   100.00 Registered ordinary shares KABELCOM Braunschweig Gesellschaft Fur   Breitbandkabel-Kommunikation Mit Beschrankter Haftung7 76.70 Ordinary shares   TESCO MBL Telecommunications Company Limited by Shares9 100.00 Ordinary   shares Vodafone Enterprise Germany GmbH 100.00 Ordinary shares, Vodafone   Magyarorszag Mobile Tavkozlesi Zartkoruen Mukodo Reszvenytarsasag2 100.00   Series A registered common shares Ordinary #2 shares 155 Vodafone Group Plc   Annual Report on Form 20-F 2016 Overview Strategy review Performance   Governance Financials Additional information Landsberger Strasse 155, 80687   Munich, Germany 6 Lechner Ödön fasor, Budapest, 1096, Hungary 40-44 Hungaria   Krt. Budapest, H-1087, Hungary Friedrich-Wilhelm-Strasse 2, 38100,   Braunschweig, Germany Vodafone House, Corporate Road, Prahladnagar, Off S. G.   Highway, Ahmedabad, Gujarat, 380051, India Level 24, Dorset House, Taikoo   Place, 979 King’s Road, Quarry Bay, Hong Kong Unit 2B, Creator, Itpl,   Whitefield Road, Bangalore, Bangalore, Karnataka, 560066, India 35th Floor,   Bank of China Tower, 1 Garden Road, Central Hong Kong, Hong Kong   Ferdinand-Braun-Platz 1, 40549, Duesseldorf, Germany Skyline Ikon, 1st Floor,   86/92, Andheri Kurla Road, Marol Naka, Andheri East, Mumbai, Maharashtra,   400059, India 2207-08, 22/F, St. George’s Building, No. 2 Ice House Street,   Central, Hong Kong Buschurweg 4, 76870 Kandel, Germany Unit 1A & 1B   Creator ITPL Whitefield Road Bangalore KA 56006 Pireos 74A Avenue, Neo   Faliro, Neo Faliro, 18547, Greece Parnithos 43 & Dilou, Metamorfosi,   Athens Marathonos Ave 18 km & Pylou, Pallini, Attica, Pallini, Attica,   15351, Greece 2 Adrianiou & Papada, Athens, 115 25, Greece Peninsula   Corporate Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai, Maharashtra,   400013, India Betastraße 6-8, 85774 Unterföhring, Germany Flat No.6, 3rd   Floor, Plot No. 22, Dsk, Nishigandh, Opp. Joshi Sweets, Erandwane,   Pune-411038 India 1-3 Tzavella str, 152 31 Halandri, Athens, Greece Altes Forsthaus   2, 67661, Kaiserslautern, Germany Tour Neptune – 20, Place de Seine, 92400   Courbevoie, France First Floor, Annexe Building, 30,Nizamuddin East, New   Delhi, 110013, India Telecom House, Nswam Road, Accra-North, Greater Accra   Region, PMB 221, Ghana 144, Avenue Roger Salengro, 92372 – Chaville Cedex,   France C-48, Okhla Industrial Estate, Phase - II, New Delhi, 110 020, India   1300 route de Cretes, Le WTC, Bat I1, 06560, Valbonne Soph, France 25 Sir   Arku Korsah Road, Airport Residential Area, Accra, Ghana 8th Floor, RDB   Boulevard, Plot K-1, Block-EP & GP, Sector - V, Saltlake City, Kolkata,   West Bengal, 700091, India 37 Kaser El Nil St, 4th. Floor, Cairo, Egypt   Sudwestpark 15, 90449, Nurnberg, Germany Site No 15/3C, Central Axis, 6th   October City, Egypt Piece No. 1215, Plot of Land No. 1/14A, 6th October City,   Egypt Seilerstrasse 18, 38440, Wolfsburg, Germany 2 Building, 36 Central   road, Giza, Egypt 17 Port Said Street, Maadi El Sarayat, Cairo, Egypt   Nobelstrasse 55, 18059, Rostock, Germany 127, Maker Chamber III, Nariman   Point, Mumbai, Maharashtra, 400021, India 14 Wadi el Nile ST, Dokki, Giza,   Egypt, Egypt Medienallee 24, 85774, Unterfohring, Germany 

 

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Notes to the   consolidated financial statements (continued) 33. Related undertakings   (continued) % held by Group companies % held by Group companies % held by   Group companies Share class Company name Share class Company name Share class   Company name Ireland Japan Malaysia Siro Limited 50.00 Ordinary shares   Vodafone Global Enterprise (Japan) K.K. 100.00 Ordinary shares Vodafone   Global Enterprise 100.00 Ordinary shares (Malaysia) Sdn Bhd Vodafone Ireland   Marketing Limited 100.00 Ordinary shares Malta Vodafone Japan K.K 100.00   Ordinary shares Cable & Wireless (Ireland) Limited 100.00 Ordinary shares   Cable & Wireless GN Limited 100.00 Ordinary shares Cable & Wireless   U.K. - Japan Branch 100.00 Branch Multi Risk Benefits Limited 100.00 Ordinary   A shares, ordinary B shares Vodafone Ireland Property Holdings Limited 100.00   Ordinary shares Kenya Multi Risk Indemnity Company Limited 100.00 A shares, B   shares, ordinary A shares Cable & Wireless Services (Ireland) Limited   100.00 Ordinary shares Multi Risk Limited 100.00 Ordinary A shares, ordinary   B shares Energis Communications (Ireland) Limited8 100.00 Ordinary shares   Vodacom Business (Kenya) Limited3 52.00 Ordinary shares and ordinary B shares   Vodafone Malta Limited 100.00 Ordinary shares Person To Person Limited 100.00   Ordinary shares Stentor Limited 100.00 Ordinary shares Mauritius Talk To Me   Limited 100.00 Ordinary shares M-PESA Holding Co. Limited 100.00 Ordinary   shares Vodafone Enterprise Global Limited 100.00 Ordinary shares Vodafone   Kenya Limited 100.00 Ordinary voting shares Mobile Wallet VM13 65.00 Ordinary   shares Vodafone Global Network Limited 100.00 Ordinary shares Vodacom   International Limited3 65.00 Ordinary shares, non cumulative preference   shares Vodafone Ireland Distribution Limited 100.00 Ordinary shares M-PESA   Foundation 100.00 N/A Mobile Wallet VM23 65.00 Ordinary shares Vodafone   Ireland Limited 100.00 Ordinary shares VBA (Mauritius) Limited3 65.00   Ordinary shares Vodafone Ireland Retail Limited 100.00 Ordinary shares Korea,   Republic of Vodafone Ireland Sales Limited 100.00 Ordinary shares Al-Amin   Investments Limited 100.00 Ordinary shares Western Cellular Limited 100.00   Ordinary shares Vodafone Automotive Korea Limited 100.00 Ordinary shares   Array Holdings Limited 100.00 Ordinary shares Interfusion Networks Limited   100.00 Ordinary shares Asian Telecommunication Investments (Mauritius)   Limited 100.00 Ordinary shares Complete Network Technology Limited 100.00   Ordinary shares CCII (Mauritius), Inc. 100.00 Ordinary shares Vodafone Group   Services Ireland Limited 100.00 Ordinary shares VGE South Korea Limited   100.00 Ordinary shares CGP India Investments Ltd. 100.00 Ordinary shares   Lesotho Italy Euro Pacific Securities Ltd. 100.00 Ordinary shares Mobilvest   100.00 Ordinary shares Prime Metals Ltd. 100.00 Ordinary shares Vodacom   Lesotho (Pty) Limited3 52.00 Ordinary shares Vodafone Automotive Italia S.p.A   100.00 Ordinary shares Trans Crystal Ltd. 100.00 Ordinary shares Luxembourg   Vodafone Mauritius Ltd. 100.00 Ordinary shares Vodafone Automotive Electronic   Systems S.r.L 100.00 Ordinary shares Vodafone Telecommunications (India)   Limited 100.00 Ordinary shares Vodafone Asset Management Services S.à r.l.   100.00 Ordinary shares Vodafone Automotive SpA 100.00 Ordinary shares   Vodafone Tele-Services (India) Holdings Limited 100.00 Ordinary shares   Vodafone Enterprise Global Businesses S.à r.l. 100.00 Ordinary shares   Vodafone Enterprise Italy S.r.L 100.00 Euro shares Mexico Vodafone   International 1 S.à r.l. 100.00 Ordinary shares Vodafone Gestioni S.p.A.   100.00 Ordinary shares Vodafone International M S.à r.l. 100.00 Ordinary   shares Vodafone Empresa México S.de R.L. de C.V. 100.00 Corporate certificate   series A shares, corporate certificate series B shares Vodafone Servizi E   Tecnologie S.R.L. 100.00 Equity shares Vodafone Investments Luxembourg S.à   r.l. 100.00 Ordinary shares Vodafone Luxembourg 5 S.à r.l. 100.00 Ordinary   shares Vodafone Global Enterprise (Italy) S.R.L. 100.00 Ordinary shares   Vodafone Luxembourg S.à r.l. 100.00 Ordinary shares Vodafone Payment Solutions   S.à r.l. 100.00 Ordinary shares Morocco Vodafone Procurement Company S.à r.l.   100.00 Ordinary shares Vodafone Italia S.p.A. 100.00 Ordinary shares Vodafone   Maroc SARL 79.75 Ordinary shares Vodafone Roaming Services S.à r.l. 100.00   Ordinary shares Vodafone Enterprise Luxembourg S.A. 100.00 Ordinary shares   156 Vodafone Group Plc Annual Report on Form 20-F 2016 129 Rue du Prince   Moulay, Abdellah, Casablanca, Morocco Via Jervis 13, 10015, Ivrea, Tourin,   Italy Viale Bianca Maria 23, 20122, Milan, Italy Ejercito Nacional 904, Piso   12, Polanco Los Morales, Miguel Hidalgo, C.P, 11510 MEXICO D.F, Mexico Via   Lorenteggio 240, 20147, Milan, Italy Via Battistotti Sassi 11, 20133, Milano,   Italy 15 rue Edward Steichen, Luxembourg, 2540, Luxembourg Via Astico 41, 21100   Varese, Italy Block B, Level 7, Development House, Kingsway Road, Maseru,   Lesotho SS 33 del Sempione KM 35, 212, 21052 Busto Arsizio (VA), Italy   Seocho-dong, Gangnam Building, 16th Floor, 396, Seocho-daero, Seocho-gu,   Seoul 3rd Floor, 54 Gongse-ro, Gieheung-gu, Yongin-si, Gyeonggi-do, Korea,   Republic of Fifth Floor, Ebene Esplanade, 24 Cybercity, Ebene, Mauritius 8th   floor, Lonrho House, Standard Street, Nairobi, LR No 209/, Kenya DTOS Ltd   10th Floor, Raffles Tower, 19, Cybercity, Ebene, Mauritius 6th Floor, ABC   Towers, ABC Place, Waiyaki Way, Nairobi, 00100, Kenya 3rd Floor, The   Rahimtulla Towers, Upper Hill Road, Nairobi, Kenya 1-1-1 Uchisaiwai cho,   Chiyoda-ku, Tokyo 111-0011 Japan SkyParks Business Centre, Malta   International Airport, Luqa, LQA 4000, Malta KAKiYa building, 9F, 2-7-17   Shin-Yokohama, Kohoku-ku, Yokoha-City, Kanagawa, 222-0033, Japan   Mountainview, Leopardstown, Dublin 18, Ireland Level 18, The Gardens North   Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia   5-2-32 Minami-azabu, Minato-ku, Tokyo, 106-0047, Japan 27 Lower Fitzwilliam   Street, Dublin 2, Ireland 

 

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% held by Group   companies % held by Group companies % held by Group companies Company name   Share class Company name Share class Company name Share class Mozambique   Qatar South Africa Vodafone And Qatar Foundation L.L.C 51.00 Ordinary shares   VM, SA3 55.25 Ordinary shares and redeemable preference shares XLink   Communications (Proprietary) Limited3 73.23 Ordinary A shares Vodafone Qatar   Q.S.C.4 22.95 Ordinary shares Romania Netherlands Cable and Wireless   Worldwide South Africa (Pty) Ltd 65.00 Ordinary shares Vodafone Libertel B.V.   100.00 Ordinary shares Vodafone Shared Services Romania SRL 100.00 Ordinary   shares Waterberg Lodge (Proprietary) Limited3 65.00 Ordinary shares Wiericke   B.V. 100.00 Ordinary shares Vodafone Holdings (SA) Proprietary Limited 100.00   Ordinary shares Vodafone România Technologies SRL 100.00 Ordinary shares mITE   Systems B.V. 100.00 Ordinary shares Judet Ilfov, Romania Vodafone Investments   (SA) Proprietary Limited 100.00 Ordinary A shares, “B” ordinary no par value   shares Cable & Wireless Aspac BV 100.00 Ordinary shares Vodafone România   M - Payments SRL 52.32 Ordinary shares European Networks B.V. 100.00 Ordinary   shares Vodafone Enterprise Netherlands BV 100.00 Ordinary shares Vodafone   Europe B.V. 100.00 Ordinary shares Vodafone Romania S.A 100.00 Nominactive   shares, Ordinary shares GS Telecom (Pty) Limited3 65.00 Ordinary shares   Vodafone International Holdings B.V. 100.00 Ordinary shares Motifpros 1   (Proprietary) Limited3 60.94 Ordinary shares Vodafone Panafon International   Holdings B.V. 100.00 Ordinary shares Russian Federation Scarlet Ibis   Investments 23 (Pty) Limited3 60.94 Ordinary shares XM Mobile B.V. 100.00   Ordinary shares Vodacom (Pty) Limited3 60.94 Ordinary shares Cable &   Wireless Internet Service Provider B.V. 100.00 Ordinary shares Cable &   Wireless CIS Svyaz LLC 100.00 Charter Capital shares Vodacom Business Africa   Group 65.00 Ordinary shares (Pty) Limited3 New Zealand Vodacom Financial   Services (Proprietary) Limited3 60.94 Ordinary shares Vodafone Global   Enterprise Russia LLC 100.00 Equity shares Vodacom Group Limited3 65.00   Ordinary shares Vodafone Mobile NZ Limited 100.00 Ordinary shares Vodacom   Insurance Administration Company (Proprietary) Limited3 60.94 Ordinary shares   Seychelles Vodafone New Zealand Foundation Limited 100.00 Ordinary shares   Vodacom Insurance Company(RF) Limited3 65.00 Ordinary shares Vodafone New   Zealand Limited 100.00 Ordinary shares Cavalry Holdings Ltd3 31.85 Ordinary A   and Ordinary B shares Vodafone Next Generation Services Limited 100.00   Ordinary shares Vodacom International Holdings (Pty) Limited3 65.00 Ordinary   shares East Africa Investment (Mauritius) 31.85Ordinary A and 3 L=imited   Ordinary B shares Vodacom Life Assurance Company 60.94 Ordinary shares (RF)   Limited 3 Sierra Leone TNAS Limited 50.00 Ordinary shares Vodacom Payment   Services (Proprietary) Limited3 60.94 Ordinary shares Nigeria Vodacom   Properties No 1 (Proprietary) Limited3 60.94 Ordinary shares VBA   International (SL) Limited3 65.00 Ordinary shares Spar Aerospace (Nigeria)   Limited3 65.00 Ordinary shares Vodacom Properties No.2 (Pty) Limited3 60.94   Ordinary shares Singapore Vodacom Business Africa (Nigeria) Limited3 65.00   Ordinary shares and preference shares Wheatfields Investments 276   (Proprietary) Limited3 65.00 Ordinary shares Bluefish Apac Communications   100.00 Ordinary shares Wheatfields Investments No 261 (Proprietary) Limited3   65.00 Ordinary shares Pte. Ltd C &W Worldwide Nigeria Limited 100.00   Ordinary shares Vodafone Enterprise Global Network Pte. Ltd. 100.00 Ordinary   shares Jupicol (Proprietary) Limited3 42.65 Ordinary shares Norway Mezzanine   Ware Proprietary Limited (RF)3 45.07 Ordinary shares Vodafone Enterprise   Regional Business Singapore Pte.Ltd. 100.00 Ordinary shares Storage   Technology Services (Pty) Limited3 31.00 Ordinary shares Vodafone Enterprise   Singapore Pte.Ltd 100.00 Ordinary shares Vodafone Enterprise Norway AS 100.00   Ordinary shares Portugal Slovakia Vodafone Global Network Limited – Slovakia   Branch 100.00 Branch Oni Way – Infocomunicacoes, S.A 100.00 Ordinary shares   Vodafone Portugal – Comunicacoes Pessoais, S.A.1 100.00 Ordinary shares   Vodafone Enterprise Spain, S.L.U. – Portugal Branch 100.00 Branch 157   Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information Av. da República, 50   - 10o, 1069-211, Lisboa, Portugal Namestie, SNP15, Bratislava, 811 06,   Slovakia Av. D. Joao II, Lote 1.04.01, 8 Piso, Parques Das Nacoes, 1990-093   Lisboa, Portugal Sørkedalsveien 6 in Oslo, post address is PB. Box. 7000,   Majorstuen, 0306 Oslo ICT Lawyers & Consultants, 2nd Floor, Oakland   Center, Plot 2940, Aguyi Ironi Street, Maitama, Abuja, Nigeria Asia Square   Tower 2, 12 Marina View, #17-01, Singapore, 018961, Singapore 3A Aja   Nwachukwu Close, Ikoyi, Lagos, Nigeria 12 White Street, Brookfield, Off   Railway Line, Freetown, Sierra Leone Level 1, Building C, 14-22 Triton Drive,   Albany, New Zealand F20, 1st Floor, Eden Plaza, Eden Island, Seychelles Level   1, 20 Viaduct Harbour Avenue, Auckland, 1010, New Zealand Sadovnicheskaya st.   82, bld.2, 115035, Moscow, Russian Federation Chayanova ulitsa 14/10,   stroenye 2, 125047 Moscow, Russia Vodacom Corporate Park, 082 Vodacom   Boulevard, Midrand, 1685, South Africa Sector 1, 15 Charles de Gaulle Piata,   Bucharest, Romania Oraş Voluntari, Şoseaua Pipera, Tunari, Nr.   2/II, Etaj 5, 9 Kinross Street, PO Box 4119, Germiston South, 1411, Germiston   South, 1401, South Africa Rivium Quadrant 173, 15th Floor, 2909 LC, Capelle   Aan Den Ijssel, Netherlands Kronenburgplantsoen 10, 3401 BP, Ijsselstein,   Netherlands 9 Kinross Street, Germiston South, 1401, South Africa Oraş   Voluntari, Şoseaua Pipera, Tunari, Nr. 2/II, Etaj 3, Ilfov, Oras   Voluntari, Romania Klipperaak 2 D, 2411 ND, Bodegraven, Netherlands 76 Maude   Street, Sandton, Johannesberg, 2196, South Africa Avenue Ceramique 300, 6221   KX, Maastricht, Netherlands 15 Charles de Gaulle Square, 10 floor, Bucharest,   District 1, Romania 319 Frere Road, Glenwood, 4001, South Africa 15 Burnside   Island, 410 Jan Smuts Avenue, Craighall, 2024, South Africa P.O. Box 27727,   Doha, Qatar Rua dos Desportistas, Numero 649, Cidade de Maputo, Mozambique 

 

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Notes to the   consolidated financial statements (continued) 33. Related undertakings   (continued) % held by Group companies % held by Group companies % held by   Group companies Company name Share class Company name Share class Company   name Share class Cable & Wireless a-Services Limited 100.00 Ordinary shares   Spain United Kingdom Cable & Wireless Aspac Holdings Limited 100.00   Ordinary shares Vodafone Automotive Espana S.L 100.00 Ordinary shares Cable   & Wireless Capital Limited 100.00 Ordinary shares Thus Group Holdings   Limited 100.00 Ordinary shares Cable & Wireless CIS Services Limited   100.00 Ordinary shares Thus Profit Sharing Trustees Limited 100.00 Ordinary   shares Grupo Corporativo ONO, S.A.U. 100.00 Ordinary shares Cable &   Wireless Communications Data Network Services Limited 100.00 ‘A’ Ordinary   shares, ‘B’ Ordinary shares Vodafone Espana S.A.U. 100.00 Ordinary shares   Thus Group Limited 100.00 Ordinary shares Vodafone Holdings Europe S.L.U.   100.00 Ordinary shares Cable & Wireless Communications Starclass Limited   100.00 Ordinary shares Vodafone ONO, S.A.U. 100.00 Ordinary A shares Vodafone   Enabler España, S.L. 100.00 Ordinary shares Cable & Wireless Europe   Holdings Limited 100.00 Ordinary shares Cable & Wireless Worldwide   Pension Trustee Limited 100.00 Ordinary shares Vodafone Enterprise Spain SLU   100.00 Ordinary shares Cable & Wireless Global Business Services Limited   100.00 Ordinary shares Tenaria, S.A.U. 100.00 Ordinary shares Apollo   Submarine Cable System Limited 100.00 Ordinary shares Cable & Wireless   Global Holding Limited 100.00 Ordinary shares Sweden Cable & Wireless   Global Telecommunication Services Limited 100.00 Ordinary shares Talkmobile   Limited 100.00 Ordinary shares Vodafone Enterprise Sweden AB 100.00 Ordinary   shares Cable & Wireless Holdco Limited 100.00 Ordinary shares Switzerland   Cable & Wireless U.K. 100.00 Ordinary shares Vodafone Automotive UK   Limited 100.00 Ordinary shares Cable & Wireless UK Holdings Limited   100.00 Ordinary shares Vodafone Enterprise Switzerland AG 100.00 Ordinary   shares Cable & Wireless UK Services Limited 100.00 Ordinary shares   Vodafone (NI) Limited 100.00 Ordinary shares Vodafone Automotive Telematics   S.A 100.00 Ordinary shares Cable & Wireless Waterside Holdings Limited   100.00 Ordinary shares Taiwan Cable & Wireless Worldwide plc 100.00   Ordinary shares Pinnacle Cellular Group Limited 100.00 Ordinary shares Cable   & Wireless Worldwide Services Limited 100.00 Ordinary shares Pinnacle   Cellular Limited 100.00 Ordinary shares Vodafone (Scotland) Limited 100.00   Ordinary shares Vodafone Global Enterprise Taiwan Limited 100.00 Ordinary   shares Cable & Wireless Worldwide Voice Messaging Limited 100.00 Ordinary   shares Woodend Cellular Limited 100.00 Ordinary shares Tanzania, United   Republic of Woodend Communications Limited 100.00 Ordinary shares Cable and   Wireless (India) Limited 100.00 Ordinary shares Woodend Group Limited 100.00   Ordinary shares Cable and Wireless Nominee Limited 100.00 Ordinary shares   Woodend Holdings Limited 100.00 Ordinary shares Cellops Limited 100.00   Ordinary shares Gateway Communications Tanzania Limited3 65.00 Ordinary   shares Cellular Operations Limited 100.00 Ordinary shares Energis (Ireland)   Limited 100.00 A Ordinary shares, B Ordinary shares Central Communications   Group Limited 100.00 Ordinary shares, Ordinary A shares Vodacom Tanzania   Limited3 53.40 Ordinary shares Central Telecom (Northern) Limited 100.00   Ordinary shares Vodacom Tanzania Limited Zanzibar3 53.40 Ordinary shares   Chelys Limited 100.00 Ordinary shares Navtrak Ltd 100.00 Ordinary shares City   Cable (Holdings) Limited 100.00 Ordinary shares CT Networks Limited 100.00   Ordinary shares Mirambo Limited3 31.85 Ordinary shares CWW Operations Limited   100.00 Ordinary shares Vodacom Business Africa Group Services Limited3 65.00   Ordinary shares and preference shares Turkey Dataroam Limited 100.00 Ordinary   shares, Ordinary A shares Vodacom UK Limited3 65.00 Ordinary shares, ordinary   A shares Digital Island (UK) Ltd 100.00 Ordinary shares Vodafone Holding A.S.   100.00 Registered shares Emtel Europe Limited 100.00 Ordinary shares Vodafone   Dagitim Hizmetleri A.S. 100.00 Registered shares Energis Communications   Limited 100.00 Ordinary shares Vodafone Net İletişim Hizmetleri   A.Ş. 100.00 Ordinary shares Energis Holdings Limited 100.00 Ordinary   shares AAA (Euro) Limited 100.00 Ordinary shares Vodafone Elektronik Para Ve   Ödeme Hizmetleri A.Ş. 100.00 Registered shares Energis Local Access   Limited 100.00 Ordinary shares AAA (MCR) Limited 100.00 Ordinary shares   Energis Management Limited 100.00 Ordinary shares AAA (UK) Limited 100.00   Ordinary shares Vodafone Telekomunikasyon A.S 100.00 Registered shares   Energis Squared Limited 100.00 Ordinary shares Acorn Communications   Limited100.00 Ordinary shares Vodafone Bilgi Ve Iletisim Hizmetleri AS 100.00   Registered shares Erudite Systems Limited 100.00 Ordinary shares Aspective Limited   100.00 Ordinary shares, A preference shares, B preference shares and C   preference shares Eurocall Holdings Limited 100.00 Ordinary shares Flexphone   Limited 100.00 Ordinary shares Vodafone Teknoloji Hizmetleri A.S. 100.00   Registered shares FM Associates (UK) Limited 100.00 Ordinary shares Astec   Communications Limited100.00 Ordinary shares Ukraine General Mobile   Corporation Limited 100.00 Ordinary shares Bluefish Communications Limited   100.00 Ordinary B shares, ordinary A shares, ordinary C shares, ordinary D   shares Generation Telecom Limited 100.00 Ordinary shares LLC Vodafone   Enterprise Ukraine 100.00 Ordinary shares Global Cellular Rental Limited   50.00 Ordinary shares United Arab Emirates Business Serve Limited 100.00   Ordinary shares How2 Telecom Limited 100.00 Ordinary shares C.S.P. Solutions   Limited 100.00 Ordinary shares Intercell Communications Limited 100.00   Ordinary shares Intercell Limited 100.00 Ordinary shares Cable & Wireless   Access Limited 100.00 Ordinary-A shares, ordinary-B shares, series A   convertible preference shares Vodafone Enterprise Europe (UK) Limited – DUBAI   BRANCH 100.00 Branch Internet Network Services Limited100.00 Ordinary shares   Invitation Digital Limited 82.89 Ordinary shares, series A preferred shares   158 Vodafone Group Plc Annual Report on Form 20-F 2016 Premises 2120, Floor   21, Building AL Shatha Tower, Dubai, United Arab Emirates 01033, Kyiv, Haydar   Street 50, Ukraine İTÜ Ayazağa Kampüsü, Koru Yolu, Arı   Teknokent Arı 3 Binası, Maslak, İstanbul, 586553, Turkey   Vodafone House, The Connection, Newbury, Berkshire, RG14 2FN, United Kingdom   Büyükdere Cad. No:251 Maslak, Şişli, İstanbul, Turkey, 34398,   Turkey Staple Court, 11 Staple Inn Building, London, WC1V 7QH, United Kingdom   Plot No 77, Kipawa industrial area, P. O. Box 40985, Dar es Salaam, Tanzania   Shuttleworh House, 21 Bridgewater Close, Network 65 Business Park, Hapton,   Burnley, Lancashire, England, BB11 5TE, United Kingdom Mlimani City Office   Park, Mlimani City, Sam Nujoma Road, Dar es Salaam, Tanzania, United Republic   of Quarry Corner, Dundonald, Belfast, BT16 1UD, Northern Ireland 3rd Floor,   Maktaba (Library), ComplexBibi, Titi Mohaned Road, Dar es Salaam, Tanzania,   United Republic of 13F, No. 156, Sec. 3, Minsheng E. Rd., Songshan District,   Taipei City 10596, Taiwan (R.O.C.) Leven House, 10 Lochside Place, Edinburgh   Park, Edinburgh, Scotland, EH12 9RG, United Kingdom Via Franscini 10, 6850   Mendrisio, Switzerland Imperial House, 4–10 Donegall Square East, Belfast,   BT1 5HD BDO Ltd, Fabrikstrasse 50, CH-8031, Zurich, Switzerland Crossgate   House, Cross Street, Sale, Cheshire, M33 7FT, United Kingdom c/o Hellström   advokatbyrå, Box 7305, 103 90, Stockholm, Sweden Avon House, Horizon West,   Canal View Road, Newbury, Berkshire, RG15 5XF, United Kingdom 90 Long Acre,   London, WC2E 9NP, England Ctra. Zaragoza, Km. 3, 31191, Cordovilla, Navarra,   Spain 5th Floor Legal Department, Group Corporate Secretariat, 1 Kingdom   Street, Paddington, London, England, W26BY, United Kingdom Avenida de América   115, 28042, Madrid, Spain 1-2 Berkeley Square, 99 Berkeley Street, Glasgow,   G3 7HR, Scotland Antracita, 7 – 28045, Madrid CIF B-91204453, Spain 

 

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% held by Group   companies % held by Group companies % held by Group companies Company name   Share class Company name Share class Company name Share class Vodafone   Connect 2 Limited 100.00 Ordinary shares Vodafone Panafon UK 100.00 Ordinary   shares United Kingdom (continued) Vodafone Connect Limited 100.00 Ordinary   shares Vodafone Partner Services Limited 100.00 Ordinary shares Vodafone   Consolidated Holdings Limited 100.00 Ordinary shares Vodafone Property   Investments Limited 100.00 Ordinary shares Isis Telecommunications Management   Limited 100.00 A ordinary shares, C ordinary shares, Vodafone Corporate   Limited 100.00 Ordinary shares Vodafone Retail (Holdings) Limited 100.00   Ordinary shares B ordinary shares Vodafone Corporate Secretaries 100.00   Ordinary shares Vodafone Retail Limited 100.00 Ordinary shares imited1 L=   Jaguar Communications Limited 100.00 Ordinary shares Vodafone Sales &   Services Limited 100.00 Ordinary shares Vodafone DC Pension Trustee Company   Limited1 100.00 Ordinary shares Legend Communications Plc 100.00 Ordinary   shares Vodafone Satellite Services Limited 100.00 Ordinary shares London   Hydraulic Power Company 100.00 Ordinary shares, 5% non-cumulative Vodafone   Specialist Communications Limited 100.00 Ordinary shares Vodafone   Distribution Holdings Limited 100.00 Ordinary shares Vodafone UK Content   Services Limited 100.00 Ordinary shares preference shares Vodafone Enterprise   Equipment Limited 100.00 Ordinary shares MetroHoldings Limited 100.00   Ordinary shares Vodafone UK Investments Limited 100.00 Ordinary shares   Vodafone Enterprise Europe (UK) Limited 100.00 Ordinary shares ML Integration   Group Limited 100.00 Ordinary shares Vodafone UK Limited1 100.00 Ordinary   shares ML Integration Limited 100.00 Ordinary shares Vodafone Euro Hedging   Limited 100.00 Ordinary shares Vodafone Ventures Limited1 100.00 Ordinary   shares ML Integration Services Limited 100.00 Ordinary shares Vodafone Euro   Hedging Two 100.00 Ordinary shares Vodafone Worldwide Holdings 100.00   Ordinary shares Mobile Phone Centre Limited 100.00 Ordinary shares Limited   Vodafone Europe UK 100.00 Ordinary shares Mobiles 4 Business.com Limited   100.00 Ordinary shares Vodafone Yen Finance Limited100.00 Ordinary shares   Vodafone European Investments1 100.00 Ordinary shares Nat Comm Air Limited   100.00 Ordinary shares Vodafone-Central Limited 100.00 Ordinary shares   Vodafone European Portal Limited1 100.00 Ordinary shares Netforce Group   Public Limited Company 100.00 Ordinary shares Vodaphone Limited 100.00   Ordinary shares Vodafone Finance Limited1 100.00 Ordinary shares Vodata   Limited 100.00 Ordinary shares Vodafone Finance Luxembourg Limited 100.00   Ordinary shares Oxygen Solutions Limited 100.00 Ordinary shares, redeemable   preference shares, participating preference shares Your Communications Group   Limited 100.00 Ordinary shares Vodafone Finance Sweden 100.00 Ordinary shares   Vodafone Finance UK Limited100.00 Ordinary shares P.C.P. (North West) Limited   100.00 Ordinary shares Vodafone Financial Operations 100.00 Ordinary shares   FB Holdings Limited 100.00 Ordinary shares Vodafone Global Content Services   Limited 100.00 Ordinary shares Peoples Phone Limited 100.00 Ordinary shares   Project Telecom Holdings Limited1 100.00 Ordinary shares Vodafone Global   Enterprise Limited 100.00 Ordinary shares PT Network Services Limited 100.00   Ordinary shares Silver Stream Investments Limited 100.00 Ordinary shares PTI   Telecom Limited 100.00 Ordinary shares Vodafone Group (Directors) Trustee   Limited1 100.00 Ordinary shares Quickcomm UK Limited 100.00 Ordinary shares   Le Bunt Holdings Limited 100.00 Ordinary shares Vodafone Group Pension   Trustee Limited1 100.00 Ordinary shares Rian Mobile Limited 100.00 Ordinary   shares Singlepoint (4U) Limited 100.00 Ordinary shares Vodafone Group   Services Limited 100.00 Ordinary shares, deferred shares VBA Holdings   Limited3 65.00 Ordinary shares And non-voting irredeemable non-cumulative   preference Singlepoint Payment Services Limited 100.00 Ordinary shares   Vodafone Group Services No.2 Limited1 100.00 Ordinary shares Stentor   Communications Limited 100.00 Ordinary shares T.W. Telecom Limited 100.00   Ordinary shares Vodafone Group Share Trustee Limited1 100.00 Ordinary shares   VBA International Limited 3 65.00 Ordinary shares And non-voting irredeemable   non-convertible non-cumulative Preference T3 Telecommunications Limited   100.00 Ordinary shares Vodafone Hire Limited 100.00 Ordinary shares Talkland   Airtime Services Limited 100.00 Ordinary shares Vodafone Holdings Luxembourg   Limited 100.00 Ordinary shares Talkland Communications Limited 100.00   Ordinary shares Talkland International Limited 100.00 Ordinary shares   Vodafone Intermediate Enterprises Limited 100.00 Ordinary shares Talkland   Midlands Limited 100.00 Ordinary shares Aztec Limited 100.00 Ordinary shares   Telecommunications Europe Limited 100.00 Ordinary shares Vodafone   International Holdings Limited 100.00 Ordinary shares Globe Limited 100.00   Ordinary shares Ternhill Communications Limited 100.00 Ordinary shares, non C   redeemable preference shares Vodafone International Operations Limited 100.00   Ordinary shares Plex Limited 100.00 Ordinary shares Vizzavi Finance Limited   100.00 Ordinary shares Vodafone Investment UK 100.00 Ordinary shares Vodafone   Holdings (Jersey) Limited 100.00 Ordinary shares The Eastern Leasing Company   Limited 100.00 Ordinary shares Vodafone Investments Australia Limited 100.00   Ordinary shares Vodafone International 2 Limited 100.00 Ordinary shares The   Old Telecom Sales Co. Limited 100.00 Ordinary shares Vodafone Investments   Limited1 100.00 Ordinary shares Vodafone Jersey Dollar Holdings Limited   100.00 Ordinary shares Thus Limited 100.00 Ordinary shares Vodafone IP   Licensing Limited1 100.00 Ordinary shares Townley Communications Limited   100.00 Ordinary shares Vodafone Leasing Limited 100.00 Ordinary shares   Vodafone Jersey Finance 100.00 Ordinary shares Uniqueair Limited 100.00   Ordinary shares Vodafone Limited 100.00 Ordinary shares Vodafone Jersey Yen   Holdings 100.00 Limited liability Vizzavi Limited 100.00 Ordinary shares   Unlimited shares Vodafone M.C. Mobile Services Limited 100.00 Ordinary shares   Voda Limited 100.00 Ordinary shares Vodacall Limited1 100.00 Ordinary shares   Vodafone Marketing UK 100.00 Ordinary shares Vodafone (New Zealand) Hedging   Limited 100.00 Ordinary shares Vodafone Mobile Commerce Limited 100.00   Ordinary shares Vodafone 2. 100.00 Ordinary shares Vodafone Mobile   Communications Limited 100.00 Ordinary shares Vodafone 4 UK 100.00 Ordinary   shares Vodafone Mobile Enterprises Limited 100.00 A ordinary shares, ordinary   shares, Vodafone 5 Limited 100.00 Ordinary shares Vodafone 5 UK 100.00   Ordinary shares Vodafone Mobile Network Limited 100.00 A ordinary shares,   ordinary shares Vodafone 6 UK 100.00 Ordinary shares Vodafone Americas 4   100.00 Ordinary shares Vodafone Multimedia Limited 100.00 Ordinary shares   Vodafone Benelux Limited 100.00 Preference shares, ordinary shares Vodafone   Nominees Limited1 100.00 Ordinary shares Vodafone Oceania Limited 100.00   Ordinary shares Vodafone Business Services Limited 100.00 Ordinary shares   Vodafone Old Show Ground Site Management Limited 100.00 Ordinary shares   Vodafone Business Solutions Limited 100.00 Ordinary shares Vodafone Overseas   Finance Limited 100.00 Ordinary shares Vodafone Cellular Limited1 100.00   Ordinary shares Vodafone Overseas Holdings Limited 100.00 Ordinary shares   Vodafone Central Services Limited 100.00 Ordinary shares 159 Vodafone Group   Plc Annual Report on Form 20-F 2016 Overview Strategy review Performance   Governance Financials Additional information Ogier House, The Esplanade, St.   Helier, JE4 9WG, Jersey Roseneath, The Grange, St Peter Port, GY1 2QJ, Guernsey   P.O. Box 119, Commerce House, St Peter Port, Guernsey, Channel Islands, GY1   3HB Ogier House, St Julian’s Avenue, St Peter Port, Guernsey, GY1 1WA,   Guernsey c/o BDO MPR Management Limited, PO Box 119, Martello Court, Admiral   park, St Peter Port, Guernsey Vodafone House, The Connection, Newbury,   Berkshire, RG14 2FN, United Kingdom 

 

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Notes to the   consolidated financial statements (continued) 33. Related undertakings   (continued) Associated undertakings and joint arrangements % held by Group   companies % held by Group Companies Company name Share class Company Name   Share class % held by Group Companies United States United Kingdom Company   Name Share class Digital Mobile Spectrum Limited 25.00 Ordinary shares   Australia Bluefish Communications Inc. 100.00 Common stock shares Cornerstone   Telecommunications Infrastructure Limited 50.00 Ordinary shares Vodafone   Americas Virginia Inc. 100.00 Common stock shares H3ga Properties (No 3) Pty   Limited 50.00 Ordinary shares Mobileworld Communications Pty Limited 50.00   Ordinary shares Vodafone US Inc. 100.00 Common stock shares Cable &   Wireless Trade Mark Management Limited 50.00 Ordinary B shares Mobileworld   Operating Pty Ltd 50.00 Ordinary shares Vodafone Australia Pty Limited 50.00   Ordinary shares Notes: Vodafone Foundation Australia Pty Limited 50.00   Ordinary shares Cable & Wireless a-Services, Inc 100.00 Common shares 1 2   Entities directly held by Vodafone Group Plc. Trades as Vodafone Hungary   Mobile Telecommunications Company Limited. Shareholding is indirect through   Vodacom Group Limited. The indirect shareholding is calculated using the   65.0% ownership interest in Vodacom. The Group has rights that enable it to   control the strategic and operating decisions of Vodafone Qatar Q.S.C. and   Vodacom Congo (RDC) S.A.. The Group is assessing the impact of changes to   company law in Qatar, which will be applicable in the financial year ending   31 March 2017, on its ability to exercise control over Vodafone Qatar Q.S.C.   The Group also holds two non-voting shares. At 31 March 2016 the fair value   of Safaricom Limited was KES 270 billion (£1,851 million) based on the   closing quoted share price on the Nairobi Stock Exchange. Shareholding is   indirect through Vodafone Kabel Deutschland GmbH. The entity was merged with   its parent company Cable & Wireless Ireland Holdings Limited now re-named   Vodafone Ireland Property Holdings Limited on 31 March 2016 by means of the   domestic merger procedure, which involves passing all assets and liabilities   of the subsidiary to its direct parent. This entity is under voluntary   dissolution. Vodafone Hutchison Australia Pty Limited 50.00 Ordinary shares 3   Cable & Wireless Americas Systems, Inc. 100.00 Common stock shares   Vodafone Hutchison Finance Pty Limited 50.00 Ordinary shares 4 Vodafone   Network Pty Limited 50.00 Ordinary shares Vodafone Pty Limited 50.00 Ordinary   shares Vodafone Americas Foundation 100.00 N/A Czech Republic Zambia 5 6 COOP   Mobil s.r.o. 33.33 Ordinary shares Africonnect (Zambia) Limited3 65.00   Ordinary shares Egypt 7 Wataneya Telecommunications S.A.E 50.00 Ordinary   shares 8 India 9 Indus Towers Limited 42.00Equity shares 10 The Group holds   no shares in this entity but consolidates it by virtue of our options over   shares pursuant to a Call Option Agreement dated 12 July 2013. Ireland   MediaOne Limited 22.50 Ordinary Euro shares Fonua Limited 49.00 Ordinary   shares Kenya Safaricom Limited5,6 40.00 Ordinary shares New Zealand TSM NZ   Limited 32.50 Ordinary shares Portugal Celfocus – Solucoes Informaticas Para   Telecomunicacoes S.A 45.00 Ordinary shares Russian Federation Autoconnex   Limited 35.00 Ordinary shares South Africa Number Portability Company   (Proprietary) Limited3 20.00 Ordinary shares 160 Vodafone Group Plc Annual   Report on Form 20-F 2016 Building 13 Ground Floor East, Thornhill, Office   Park, 94 Bekker Road, Vorna Valley X67, Midrand, 1685, South Africa bld. 3,   11, Promishlennaya Street, Moscow, 115516, Russian Federation Avenida D. João   II Lote 1.03.23 Parque das Nações, 1998-017, Lisboa, Portugal 2nd Floor,   Ferry Building, 99 Quay Street, Auckland, 1010, New Zealand Safaricom, P O   Box 46350, 00100, Nairobi, Kenya Unit 2, 77 Furze Road, Sandyford Industrial   Estate, Dublin 18, Ireland 8/9 Fairview, Dublin, 3, Ireland Bharti Crescent,   1 Nelson Mandela Road, Vasant Kunj, Phase-II, New Delhi – 110070, India 23   Kasr El Nil St., Cairo, Egypt, 11211 U Rajské zahrady 1912/3, Praha 3, 130   00, Czech Republic Orange Park, Plot 35185, Alick Nkhata Road, Lusaka, Zambia   Denver Place, South Tower, 17th Floor, 999 18th Street, Denver 80202, United   States Corporation Service Company, 2711 Centerville Road, Suite 400,   Wilmington, Delaware, 19808, United States of America c/o United Corporate   Services Inc., 15 North East Street, Kent County, Dover DE 19901, United   States 62-65, Chandos Place, London, WC2N 4LP, United Kingdom Level 7, 40   Mount Street, North Sydney, NSW 2060, Australia 260 Bath Road, Slough,   Berkshire, SL1 4DX, United Kingdom 83 Baker Street, London, W1U 6AG, United   Kingdom 560 Lexington Avenue, 8th Floor, New York NY 10022, United States 

 

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The table below   shows selected financial data in respect of subsidiaries that have   non-controlling interests that are material to the Group. Vodafone Egypt   Telecommunications S.A.E. Vodacom Group Limited Vodafone Qatar Q.S.C. 2016 £m   2015 £m 2016 £m 2015 £m 2016 £m 2015 £m The voting rights held by the Group   equal the Group’s percentage shareholding as shown on pages 154 to 160. 161   Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information Summary   comprehensive income information Revenue 3,887 4,341 1,202 1,191 374 394   Profit/(loss) for the financial year 551 603 224 156 (86) (37) Other   comprehensive expense/(income) 28 (17) – – – – Total comprehensive income/(expense)   579 586 224 156 (86) (37) Other financial information Profit/(loss) for the   financial year allocated to non-controlling interests 193 205 101 71 (66)   (29) Dividends paid to non-controlling interests 196 229 2 2 16 11 Summary   financial position information Non-current assets 4,287 4,844 1,250 1,357   1,237 1,301 Current assets 1,304 1,405 690 518 96 76 Total assets 5,591 6,249   1,940 1,875 1,333 1,377 Non-current liabilities (1,586) (490) (61) (57) (205)   (8) Current liabilities (1,196) (2,478) (709) (729) (189) (339) Total assets   less total liabilities 2,809 3,281 1,170 1,089 939 1,030 Equity shareholders’   funds 2,337 2,722 708 673 215 237 Non-controlling interests 472 559 462 416   724 793 Total equity 2,809 3,281 1,170 1,089 939 1,030 Statement of cash   flows Net cash flow from operating activities 1,154 1,215 485 438 76 96 Net   cash flow from investing activities (632) (733) (235) (267) (65) (71) Net   cash flow from financing activities (584) (300) (16) (3) (15) (17) Net cash   flow (62) 182 234 168 (4) 8 Cash and cash equivalents brought forward 492 330   311 138 28 16 Exchange (loss)/gain on cash and cash equivalents (63) (20)   (56) 5 1 4 Cash and Cash Equivalents 367 492 489 311 25 28 

 

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Notes to the   consolidated financial statements (continued) 34. Subsidiaries exempt from   audit The following UK subsidiaries will take advantage of the audit   exemption set out within section 479A of the Companies Act 2006 for the year   ended 31 March 2016. Name Registration number Name Registration number AAA   (MCR) Ltd 2797823 Vodafone European Portal Limited 3973442 AAA (UK) Ltd   2484222 Vodafone Europe UK 5798451 Cable & Wireless Capital Limited   6702535 Vodafone Finance Luxembourg Limited 5754479 Cable & Wireless CIS   Services Limited 2964774 Vodafone Finance Sweden 2139168 Cable & Wireless   Europe Holdings Limited 4659719 Vodafone Finance UK Limited 3922620 Cable   & Wireless Global Holding Limited 3740694 Vodafone Financial Operations   4016558 Cable and Wireless Nominee Limited 3249884 Vodafone Global Content   Services Limited 4064873 Cable & Wireless Worldwide plc 7029206 Vodafone   Holdings Luxembourg Limited 4200970 Cable & Wireless UK Holdings Limited   3840888 Vodafone IP Licensing Limited 6846238 Cable & Wireless Waterside   Holdings Limited 6859946 Vodafone Intermediate Enterprises Limited 3869137   Cellops Limited 3942192 Vodafone International Holdings Limited 2797426   Cellular Operations Limited 3231393 Vodafone International Operations Limited   2797438 Erudite Systems Limited 3948967 Vodafone Investments Australia   Limited 2011978 Energis Communications Limited 2630471 Vodafone Investments   Limited 1530514 Energis Holdings Limited 3649524 Vodafone Investment UK   5798385 Flexphone Limited 4949207 Vodafone Marketing UK 6858585 Generation   Telecom Limited 4131101 Vodafone Mobile Communications Limited 3942221 Legend   Communications Plc 3923166 Vodafone Mobile Enterprises Limited 3961390 Oxygen   Solutions Limited 2405625 Vodafone Mobile Network Limited 3961482 The Eastern   Leasing Company Limited 1672832 Vodafone (New Zealand) Hedging Limited   4158469 Thus Group Holdings Limited SC192666 Vodafone (NI) Limited NI23033   T.W. Telecom Limited 1971198 Vodafone Nominees Limited 1172051 Vizzavi   Limited 4017435 Vodafone Oceania Limited 3973427 Vodafone 2 4083193 Vodafone   Overseas Finance Limited 4171115 Vodafone 4 UK 6357658 Vodafone Overseas   Holdings Limited 2809758 Vodafone 5 Limited 6688527 Vodafone Panafon UK   6326918 Vodafone 5 UK 2960479 Vodafone Partner Services Limited 4012582 Vodafone   Americas 4 6389457 Vodafone Property Investments Limited 3903420 Vodafone   Benelux Limited 4200960 Vodafone (Scotland) Limited SC170238 Vodafone   Business Services Limited 4321446 Vodafone UK Limited 2227940 Vodafone   Cellular Limited 896318 Vodafone Worldwide Holdings Limited 3294074 Vodafone   Consolidated Holdings Limited 5754561 Vodafone Yen Finance Limited 4373166   Vodafone Enterprise Equipment Limited 1648524 Voda Limited 1847509 Vodafone   Enterprise Europe (UK) Limited 3137479 Vodaphone Limited 2373469 Vodafone   Euro Hedging Limited 3954207 Vodata Limited 2502373 Vodafone Euro Hedging Two   4055111 Your Communications Group Limited 4171876 Vodafone European   Investments 3961908 162 Vodafone Group Plc Annual Report on Form 20-F 2016 

 

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Other unaudited   financial information Prior year operating results This section presents our   operating performance for the 2015 financial year compared to the 2014   financial year, providing commentary on how the revenue and the adjusted   EBITDA performance of the Group and its operating segments have developed   over those years. Group1,2 Restated2 Europe £m Restated2 AMAP £m Restated2   Other3 £m Restated2 Eliminations £m % change 2015 £m 2014 £m £ Organic*   Revenue 27,687 13,382 1,257 (99) 42,227 38,346 10.1 (0.8) Service revenue   25,588 11,934 1,073 (98) 38,497 35,190 9.4 (1.6) Other revenue 2,099 1,448   184 (1) 3,730 3,156 Adjusted EBITDA 7,894 4,086 (65) – 11,915 11,084 7.5   (6.9) Adjusted operating profit 1,733 1,802 (28) – 3,507 4,310 (18.6) (24.1)   Adjustments for: Impairment loss – (6,600) Restructuring costs (157) (355)   Amortisation of acquired customer bases and brand intangible assets (1,269)   (551) Other income and expense (114) (717) Operating loss 1,967 (3,913)   Notes: 1 2015 results reflect average foreign exchange rates of £1:€1.28,   £1:INR 98.51 and £1:ZAR 17.82. (2014: £1:€1.19 and £1:US$1.59). 2 The Group   has amended its reporting to reflect changes in the internal management of   its Enterprise business. The primary change has been that on 1 April 2015,   the Group redefined its segments to report international voice transit   revenue and costs within Common Functions rather than within the results   disclosed for each country and region. The results presented for the year   ended 31 March 2015 and 2014 have been restated onto a comparable basis.   There is no impact on total Group revenue or cost. 3 The “Other” segment   primarily represents the results of the partner markets and the net result of   unallocated central Group costs. Revenue Group revenue increased by 10.1% to   £42.2 billion and service revenue increased 9.4% to £38.5 billion. Reported   growth rates reflect the acquisitions of KDG in October 2013 and of Ono in   July 2014, as well as the consolidation of Italy after we increased our   ownership to 100% in February 2014. In Europe, organic service revenue   declined by 5.0%* as growing demand for 4G and data services continues to be   offset by challenging competitive and macroeconomic pressures and the impact   of MTR cuts. In AMAP, organic service revenue increased by 5.7%* driven by   continued growth in India, Turkey, Ghana, Qatar and Egypt, partially offset   by declines in Vodacom and New Zealand. Adjusted EBITDA Group adjusted EBITDA   rose 7.5% to £11.9 billion, with organic adjusted EBITDA down 6.9%*, mainly   affected by revenue declines in Europe. The Group adjusted EBITDA margin fell   0.7 percentage points to 28.2%, or 1.8* percentage points on an organic   basis. This reflects ongoing revenue declines in Europe and the growth in   operating expenses as a result of Project Spring, partially offset by   operating efficiencies. H2 adjusted EBITDA fell 3.6%*, with the improved   trend supported by the better revenue performance and continued good cost   control. Operating loss Adjusted operating profit excludes certain income and   expenses that we have identified separately to allow their effect on the   results of the Group to be assessed (see page 190). The items that are   included in operating profit but are excluded from adjusted operating profit   are discussed below. No impairment losses were recognised in the 2015   financial year (2014: £6,600 million). Further detail is provided in note 4   to the Group’s consolidated financial statements. Restructuring costs of £157   million (2014: £355 million) were incurred to improve future business   performance and reduce costs. Note: * All amounts in the Operating Results   section marked with an “*” represent organic growth which presents   performance on a comparable basis, both in terms of merger and acquisition   activity and movements in foreign exchange rates. Refer to “Organic growth”   on page 191 for further detail. 163 Vodafone Group Plc Annual Report on Form   20-F 2016 Overview Strategy review Performance Governance Financials   Additional information Operating loss Adjusted operating profit excludes   certain income and expenses that we have identified separately to allow their   effect on the results of the Group to be assessed (see page 190). The items   that are included in operating profit but are excluded from adjusted   operating profit are discussed below. No impairment losses were recognised in   the 2015 financial year (2014: £6,600 million). Further detail is provided in   note 4 to the Group’s consolidated financial statements. Restructuring costs   of £157 million (2014: £355 million) were incurred to improve future business   performance and reduce costs.

 

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Other unaudited   financial information (continued) Prior year operating results (continued)   Europe1 % change Germany £m Italy £m UK £m Spain £m Other Europe £m   Eliminations £m Europe £m £ Organic* Year ended 31 March 2015 restated   Revenue 8,384 4,587 6,199 3,614 4,993 (90) 27,687 15.7 (4.5) Service revenue   7,746 4,062 5,893 3,320 4,652 (85) 25,588 14.7 (5.0) Other revenue 638 525   306 294 341 (5) 2,099 Adjusted EBITDA 2,659 1,535 1,345 782 1,573 – 7,894   16.3 (12.3) Adjusted operating profit 530 644 26 2 531 – 1,733 (24.7) (40.6)   Adjusted EBITDA margin 31.7% 33.5% 21.7% 21.6% 31.5% 28.5% Year ended 31   March 2014 restated Revenue 8,220 518 6,249 3,470 5,515 (43) 23,929 0.2 (8.8)   Service revenue 7,687 461 5,918 3,183 5,090 (40) 22,299 0.6 (8.2) Other revenue   533 57 331 287 425 (3) 1,630 Adjusted EBITDA 2,688 181 1,399 785 1,735 –   6,788 (5.5) (17.1) Adjusted operating profit 907 372 167 179 676 – 2,301   (38.5) (41.9) Adjusted EBITDA margin 32.7% 34.9% 22.4% 22.6% 31.5% 28.4%   Note: 1 The Group has amended its reporting to reflect changes in the   internal management of its Enterprise business. The primary change has been   that on 1 April 2015, the Group redefined its segments to report   international voice transit revenue and costs within Common Functions rather   than within the results disclosed for each country and region. The results   presented for the year ended 31 March 2015 and 2014 have been restated onto a   comparable basis. There is no impact on total Group revenue or cost. Revenue   increased 15.7%. M&A activity, including KDG, Ono and the consolidation   of Vodafone Italy, contributed a 26.7 percentage point positive impact, while   foreign exchange movements contributed a 6.5 percentage point negative   impact. On an organic basis, service revenue declined 5.0%*, driven primarily   by price competition and the impact of MTR cuts. Adjusted EBITDA increased   16.3%, including a 35.6 percentage point positive impact from M&A   activity and a 7.0 percentage point negative impact from foreign exchange   movements. On an organic basis adjusted EBITDA declined 12.3%*, reflecting   the weak organic revenue trend. Germany Service revenue decreased 3.7%*   excluding KDG. Q4 service revenue was down 3.5%*. Mobile service revenue fell   3.5%*, mainly as a result of price reductions in the prior year continuing to   penetrate the consumer customer base. The contract customer base grew,   supported by a stronger commercial performance as we look to increase our   focus on direct, branded channels, falling churn and the ongoing substantial   investment in network infrastructure. We increased our 4G coverage to 77% of   the population and significantly improved voice coverage and reliability, as   evidenced in independent tests. At the end of the period we had 5.0 million   4G customers. Fixed service revenue excluding KDG fell 4.4%*, reflecting   ongoing declines in our Vodafone DSL customer base, in part from migrations   to KDG cable infrastructure. The rate of decline eased during the year (H1   -5.0%*; H2 -3.8%*), with an improving rate of gross customer additions and   increasing demand for high speed broadband (‘VDSL’), as well as stronger   growth in carrier services. KDG maintained its strong rate of growth,   contributing £1,492 million to service revenue and £676 million to adjusted   EBITDA, and adding 0.4 million broadband customers (excluding migrations from   Vodafone DSL) during the year. The integration of KDG has continued,   including the launch of a combined fixed/mobile proposition in H2. Adjusted   EBITDA declined 11.0%*, with a 3.0* percentage point decline in adjusted   EBITDA margin, driven by lower service revenue and a higher level of customer   investment year-on-year, partially compensated by a year-on-year reduction in   operating expenses. Organic change* % Other activity1 pps Foreign exchange   pps Reported change % Revenue – Europe (4.5) 26.7 (6.5) 15.7 Service revenue   Germany (3.7) 12.0 (7.5) 0.8 Italy1 (10.2) 916.7 (125.4) 781.1 U=K (1.8)1.4   –(0.4) Spain (10.9) 22.9 (7.7) 4.3 Other Europe (2.2) 0.8 (7.2) (8.6) Europe   (5.0) 26.2 (6.5) 14.7 A djusted EBITDA Germany (11.0) 17.3 (7.4) (1.1) Italy1   (15.3) 882.7 (119.3) 748.1 UK (12.4) 8.5 – (3.9) =Spain (29.5) 36.3(7.2)   (0.4) Other Europe (2.8) 0.5(7.0) (9.3) Europe (12.3) 35.6 (7.0) 16.3   Adjusted operating profit Europe (40.6) 20.6 (4.7) (24.7) Note: 1 “Other activity”   includes the impact of M&A activity. Refer to “Organic growth” on page   191 for further detail. 164 Vodafone Group Plc Annual Report on Form 20-F   2016 

 

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Italy Service   revenue declined 10.2%*. Trends in both mobile and fixed improved in H2, and   Q4 service revenue declined 4.1%*. Mobile service revenue fell 12.1%* as a   result of a decline in the prepaid customer base and lower ARPU following   last year’s price cuts. We took a number of measures to stabilise ARPU during   the year, and in Q4, consumer prepaid ARPU was up 6% year-on-year. We also   began to take a more active stance on stabilising the customer base in the   second half of the year, in what remains a very competitive market.   Enterprise performed strongly, returning to growth in H2. We now have 4G   coverage of 84%, and 2.8 million 4G customers at 31 March 2015. Fixed service   revenue was up 1.3%*. Broadband revenue continued to grow and we added   134,000 broadband customers over the year, but overall growth was partially   offset by an ongoing decline in fixed voice usage. We accelerated our fibre   roll-out plans in H2, and by March 2015 we had installed more than 5,000   cabinets. Adjusted EBITDA declined 15.3%*, with a 2.4* percentage point   decline in adjusted EBITDA margin. The decline in service revenue was   partially offset by continued strong cost control, with operating expenses   down 3.1%* and customer investment down 3.0%*. UK Service revenue fell 1.8%*   as a good performance in consumer mobile was offset by a decline in fixed.   The UK returned to service revenue growth in H2. Q4 service revenue was up   0.6%*. Mobile service revenue grew 0.5%*. Consumer contract service revenue   grew strongly, supported by customer growth and a successful commercial   strategy bundling content with 4G. Enterprise mobile revenue returned to   growth in H2, as a result of growing data demand. During the year we acquired   139 stores from the administrator of Phones 4U, taking our total portfolio to   over 500 and accelerating our direct distribution strategy. 4G coverage   reached 63% at 31 March 2015 (or 71% based on the OFCOM definition), and we   had 3.0 million 4G customers at the year end. Fixed service revenue declined   9.1%*, excluding the one-off benefit of a settlement with another network   operator in Q4. Underlying performance improved from -11.3%* in H1 to -6.8%*   in H2, driven by a strong pick-up in carrier services revenue and improving   enterprise pipeline conversion. We plan to launch our consumer fibre   broadband proposition in the coming weeks. Adjusted EBITDA declined 12.4%*,   with a 2.4* percentage point decline in adjusted EBITDA margin due mainly to   a reclassification of some central costs to the UK business. Reported   adjusted EBITDA benefited from one-off settlements with two network   operators. Spain Service revenue declined 10.9%* excluding Ono, as growth in   fixed continued to be offset by price pressure in mobile and converged   services. Q4 service revenue growth was -7.8%*. Ono Q4 local currency revenue   growth was -1.9% excluding wholesale. Mobile service revenue fell 12.7%*,   although there was some improvement in H2 with the contract customer base   stabilising year-on-year. However, ARPU continued to be under pressure   throughout the year as a result of aggressive convergence offers. During H2,   we saw an increase in the take-up of handset financing arrangements as a   result of a change in the commercial model. We reduced handset subsidies in   Q4 and introduced bigger data allowances at slightly higher price points. Our   4G network roll-out has now reached 75% population coverage, and we had 2.9   million 4G customers at March 2015. We continue to lead the market in net   promoter scores (‘NPS’) in both consumer and enterprise. Fixed service   revenue rose 7.8%* excluding Ono, supported by consistently strong broadband   net additions. Since its acquisition in July 2014, Ono contributed £699   million to service revenue and £267 million to adjusted EBITDA. Including our   joint fibre network build with Orange, we now reach 8.5 million premises with   fibre. We have made good progress with the integration of Ono, and launched   in April 2015 a fully converged service, “Vodafone One”, a new ultra   high-speed fixed broadband service with Ono Fibre, home landline, 4G mobile   telephony and Vodafone TV. Adjusted EBITDA declined 29.5%* year-on-year, with   a 4.9* percentage point decline in adjusted EBITDA margin. The margin was   impacted by falling mobile service revenue and growth in lower margin fixed   revenue, partially offset by lower direct costs and operating expenses, and   the change in the commercial model described above. Other Europe Service   revenue declined 2.2%* due to price competition, the generally weak   macroeconomic environment and MTR cuts. Again, we saw a recovery in H2, with   Q3 service revenue -1.1%* and Q4 service revenue -0.9%*. Hungary grew by   8.6%* for the full year, the Netherlands and Czech Republic returned to   growth in H2, and Greece and Ireland showed a clear improvement in trends   over the year. In the Netherlands, we have nationwide 4G coverage, and the   return to growth has been driven by continued contract customer growth,   stabilising ARPU and growth in fixed revenue. In Portugal, we continue to see   a decline in mobile service revenue driven by convergence pricing pressure   reflecting a prolonged period of intense competition, partially offset by   strong fixed revenue growth. We now reach 1.6 million homes with fibre,   including our network sharing deal with Portugal Telecom. In Ireland, 4G   coverage has reached 87%, and we have begun trials on our FTTH roll-out, with   a commercial launch planned for later in 2015. In Greece, the steady recovery   in revenue trends through the year stalled in Q4 as a result of the worsening   macroeconomic conditions. The integration of Hellas Online is continuing in   line with expectations. Adjusted EBITDA declined 2.8%*, with a 0.1*   percentage point increase in adjusted EBITDA margin, as the impact of lower   service revenue was largely offset by strong cost control. 165 Vodafone Group   Plc Annual Report on Form 20-F 2016 Overview Strategy review Performance   Governance Financials Additional information 

 

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Other unaudited   financial information (continued) Prior year operating results (continued)   Africa, Middle East and Asia Pacific1 % change India £m Vodacom £m Other AMAP   £m Eliminations £m AMAP £m £ Organic* Year ended 31 March 2015 restated   Revenue 4,309 4,341 4,743 (11) 13,382 – 6.9 Service revenue 4,291 3,489 4,166   (11) 11,935 (0.9) 5.7 Other revenue 18 852 577 – 1,447 Adjusted EBITDA 1,282   1,527 1,277 – 4,086 (1.1) 5.9 Adjusted operating profit 458 1,030 314 – 1,802   (6.7) 0.1 Adjusted EBITDA margin 29.8% 35.2% 26.9% 30.5% Year ended 31 March   2014 restated Revenue 3,939 4,718 4,730 – 13,387 (2.4) 8.9 Service revenue   3,920 3,866 4,258 – 12,044 (4.2) 6.7 Other revenue 19 852 472 – 1,343   Adjusted EBITDA 1,135 1,716 1,279 – 4,130 (1.6) 10.8 Adjusted operating   profit 327 1,228 377 – 1,932 12.0 30.7 Adjusted EBITDA margin 28.8% 36.4%   27.0% 30.9% Note: 1 The Group has amended its reporting to reflect changes in   the internal management of its Enterprise business. The primary change has   been that on 1 April 2015, the Group redefined its segments to report   international voice transit revenue and costs within Common Functions rather   than within the results disclosed for each country and region. The results   presented for the year ended 31 March 2015 and 2014 have been restated onto a   comparable basis. There is no impact on total Group revenue or cost. Revenue   remained stable as a result of a 7.4 percentage point adverse impact from   foreign exchange movements, particularly with regards to the Indian rupee,   South African rand and the Turkish lira. On an organic basis service revenue   was up 6.9%* driven by a growth in the customer base, increased voice usage,   strong demand for data and continued good commercial execution. Overall   growth was offset by MTR cuts, particularly in South Africa. Excluding MTRs,   organic growth was 7.0%. Adjusted EBITDA declined 1.1%, including a 7.1   percentage point adverse impact from foreign exchange movements. On an   organic basis, adjusted EBITDA grew 5.9%* driven by growth in India, Turkey,   Qatar and India Service revenue increased 12.4%*, driven by continued   customer base growth, an acceleration in 3G data uptake and stable voice   pricing. Q4 service revenue grew 11.7%*. We added 17.2 million mobile   customers during the year, taking the total to 183.8 million. Voice yields   were relatively flat after a period of improvement, but we saw a decline in   average minutes of use in H2 as competition increased in some circles.   Customer demand for data services has been very strong. Total data usage grew   86% year-on-year, with the active data customer base increasing 23% to 64   million. Within this, the 3G customer base increased to over 19 million,   reflecting the significant investment in our 3G network build. During the   year we added 12,585 new 3G sites, taking the total to over 35,000 and our   coverage of target urban areas to 90%. 3G internet revenue rose 140%. In   March 2015 we successfully bid for spectrum in 12 telecom circles for a total   cost of INR 258.1 billion (£2.78 billion). This included spectrum in all six   of our 900MHz circles due for extension in December 2015. We also   successfully bid for new 3G spectrum in seven circles, allowing us to address   88% of our revenue base with 3G services. We have continued to expand our   M-Pesa mobile money transfer service, and now have 89,000 agents, with a   nationwide presence. At March 2015 we had 3.1 million registered customers   and 378,000 active users. Our strategy is to focus on building scale on   specific migratory corridors. Adjusted EBITDA grew 16.3%*, with a 1.0%*   percentage point improvement in adjusted EBITDA margin as economies of scale   from growing service revenue were partly offset by the increase in operating   costs related to the Project Spring network build and higher acquisition costs.   Egypt, offset by Vodacom and New Zealand. Organic Other Foreign Reported   change* activity1 exchange change % pps pps % Revenue – AMAP 6.9 0.5 (7.4) –   Service revenue India 12.4 – (2.9) 9.5 Vodacom (1.0) – (8.8) (9.8) Other AMAP   5.2 1.8 (9.2) (2.2) AMAP 5.7 0.5 (7.1) (0.9) Adjusted EBITDA India 16.3 –   (3.4) 12.9 Vodacom (2.1) – (8.9) (11.0) Other AMAP 7.0 0.3 (7.4) (0.1) AMAP   5.9 0.1 (7.1) (1.1) Adjusted operating profit A MAP 0.1 0.1(6.9)(6.7) Note: 1   “Other activity” includes the impact of M&A activity. Refer to “Organic   growth” on page 191 for further detail. 166 Vodafone Group Plc Annual Report   on Form 20-F 2016 

 

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Vodacom Vodacom   Group service revenue declined 1.0%*, as the negative impact of MTR cuts and   a more competitive environment in South Africa offset growth in Vodacom’s   operations outside South Africa. Q4 service revenue was -0.2%*, reflecting   some easing of competition in South Africa. In South Africa, organic service   revenue declined -2.7%*. Excluding the impact of MTR cuts, service revenue   grew 1.4%*. Strong growth in smartphone penetration and data adoption drove   23.4% growth in local currency data revenue, although this was offset by   aggressive voice price competition. We have increased our 3G footprint to 96%   population coverage and 4G to 35% coverage as part of the Project Spring   programme, with 81% of sites now connected to high capacity backhaul. During   the year we began to trial our first fibre to the business services, and   fibre to the home. The regulatory authorities continue to review our proposed   acquisition of Neotel, a fibre-based fixed operator. Service revenue growth   in Vodacom’s operations outside South Africa was 4.8%*, driven by customer   base growth, data take-up and M-Pesa, Active M-Pesa customers totalled 5.6   million, with M-Pesa now representing 23% of service revenue in Tanzania.   Vodacom Group adjusted EBITDA fell 2.1%*, with a 1.1* percentage point   decline in adjusted EBITDA margin. The significant negative impact of MTR   cuts on the adjusted EBITDA margin was substantially offset by good cost   control. Other AMAP Service revenue increased 5.2%*, with growth in Turkey,   Egypt, Qatar and Ghana partially offset by a decline in New Zealand. Service   revenue in Turkey was up 9.9%*, reflecting continued strong growth in   consumer contract and enterprise revenue, including higher ARPU and data   usage, partly offset by a 1.8 percentage point negative impact from voice and   SMS MTR cuts. In Egypt, service revenue grew 2.8%* as a result of an increase   in data and voice usage and a more stable economic environment. In New   Zealand, service revenue was down 3.1%* as a result of aggressive   competition, but the contract mobile base grew 4.6% year-on-year and the   fixed base benefited from continued uptake of VDSL, TV and unlimited   broadband. Service revenue in Ghana grew 18.9%* driven by growth in   customers, voice bundles and data. Total revenue growth in Qatar was 13.2%*,   but slowed in H2 due to significantly increased price competition. Adjusted   EBITDA grew 7.0%* with a 0.3* percentage point decline in adjusted EBITDA   margin. Associates Vodafone Hutchison Australia (‘VHA’), in which Vodafone   owns a 50% stake, continued its good recovery, returning to local currency   service revenue growth in Q4 as a result of improving trends in both customer   numbers and ARPU, supported by significant network enhancements. Safaricom,   Vodafone’s 40% associate which is the number one mobile operator in Kenya,   saw local currency service revenue growth of 12.9% for the year, with local   currency adjusted EBITDA up 16.8%. The total value of deposits, customer   transfers, withdrawals and other payments handled through the M-Pesa system grew   26% to KES 4,181 billion in the 2015 financial year. Indus Towers Limited,   the Indian towers company in which Vodafone has a 42% interest, achieved   local currency revenue growth of 4.3%. Indus owns 116,000 towers, with a   tenancy ratio of 2.19x. Our shares of Indus Towers’ adjusted EBITDA and   adjusted operating profit were £285 million and £19 million respectively. 167   Vodafone Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Additional information 

 

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Shareholder   information Investor calendar Ex-dividend date for final dividend 9 June 2016   Record date for final dividend 10 June 2016 Trading update 22 July 2016   Annual general meeting 29 July 2016 Final dividend payment 3 August 2016   Half-year financial results 15 November 2016 Ex-dividend date for interim   dividend1 24 November 2016 Record date for interim dividend1 25 November 2016   Interim dividend payment1 2 February 2017 Note: 1 Provisional dates.   Dividends See pages 36 and 111 for details on dividend amount per share.   Payment of dividends by direct credit We pay cash dividends directly to   shareholders’ bank or building society accounts. This ensures secure delivery   and means dividend payments are credited to shareholders’ bank or building   society accounts on the same day as payment. A dividend confirmation covering   both the interim and final dividends paid during the financial year is sent   to shareholders at the time of the interim dividend in February. ADS holders   may alternatively have their cash dividends paid by cheque. Overseas dividend   payments Holders of ordinary shares resident in the Eurozone (defined for   this purpose as a country that has adopted the euro as its national currency)   automatically receive their dividends in euros. The sterling/ euro exchange   rate is determined by us in accordance with our Articles of Association up to   13 business days before the payment date. Holders resident outside the UK and   Eurozone automatically receive dividends in pounds sterling but may elect to   receive dividends in local currency directly into their bank account by   registering for our registrar’s (Computershare) Global Payments Service.   Visit investorcentre.co.uk for details and terms and conditions. Cash   dividends to ADS holders will be paid by the ADS depositary in US dollars.   The sterling/US dollar exchange rate for this purpose is determined by us up   to ten New York and London business days before the payment date. For the   financial year ending 31 March 2017 and beyond, dividends will be declared in   euros and paid in euros, pounds sterling and US dollars, aligning the Group’s   shareholder returns with the primary currency in which we generate free cash   flow. The foreign exchange rate at which future dividends declared in euros   will be converted into pounds sterling and US dollars will be calculated   based on the average exchange rate of the five business days during the week   prior to the payment of the dividend. The Board has determined that future   dividend growth will be calculated from the level of 14.48 eurocents per   share in 2016, which is equivalent to the 2016 total dividend payout of 11.45   pence at the year-end £:€ exchange rate of 1.2647. See vodafone.com/dividends   for further information about dividend payments or, alternatively, please   contact our registrar or the ADS depositary, as applicable. See page 176 for   their contact information. Dividend reinvestment plan We offer a dividend   reinvestment plan which allows holders of ordinary shares who choose to   participate to use their cash dividends to acquire additional shares in the   Company. These are purchased on their behalf by the plan administrator   through a low cost dealing arrangement. For ADS holders, BNY Mellon maintains   a Global BuyDIRECT Plan which is a direct purchase and sale plan for   depositary receipts with a dividend reinvestment facility. Dividend tax   allowance From April 2016 dividend tax credits will be replaced by an annual   £5,000 tax-free allowance on dividend income across an individual’s entire   share portfolio. Above this amount, individuals will pay tax in the UK on   their dividend income at a rate dependent on their income tax bracket and   personal circumstances. Vodafone will continue to provide registered   shareholders with a confirmation of the dividends paid and this should be   included with any other dividend income received when calculating and   reporting total dividend income received. It is the shareholder’s   responsibility to include all dividend income when calculating any tax   liability. This change was announced by the Chancellor, as part of the UK   Government Budget in July 2015. If you have any tax queries, please contact a   financial adviser. Managing your shares via Investor Centre Computershare   operates a portfolio service for investors in ordinary shares, called   Investor Centre. This provides our shareholders with online access to   information about their investments as well as a facility to help manage   their holdings online, such as being able to: a update dividend mandate bank   instructions and review dividend payment history; a update member details and   address changes; and a register to receive Company communications   electronically. Computershare also offers an internet and telephone share   dealing service to existing shareholders. The service can be obtained at   investorcentre.co.uk. Shareholders with any queries regarding their holding   should contact Computershare. See page 176 for their contact details.   Shareholders may also find the investors section of our corporate website,   vodafone.com/investor, useful for general queries and information about the   Company. Shareholder communications A growing number of our shareholders have   opted to receive their communications from us electronically using email and   web-based communications. The use of electronic communications, rather than   printed paper documents, means information about the Company can be received   as soon as it is available and has the added benefit of reducing costs and   our impact on the environment. Each time we issue a shareholder   communication, shareholders who have positively elected for electronic   communication (or are deemed to have consented to receive electronic   communication in accordance with the Companies Act 2006) will be sent an   email alert containing a link to the relevant documents. 175 Additional   information Vodafone Group Plc Annual Report on Form 20-F 2016 Overview   Strategy review Performance Governance Financials Unaudited information 

 

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Shareholder   information (continued) Landmark Asset Search We participate in an online   service which provides a search facility for solicitors and probate   professionals to quickly and easily trace UK shareholdings relating to   deceased estates. Visit www.landmarkfas.co.uk or call +44 (0)844 844 9967 for   further information. We encourage all our shareholders to sign up for this   service by providing us with an email address. You can register your email   address via our registrar at investorcentre.co.uk or contact them via the   telephone number provided on page 176. See vodafone.com/investor for further   information about this service. Annual General Meeting Our thirty-second annual   general meeting will be held at the Hilton London Metropole Hotel, 225   Edgware Road, London W2 1JU, on Friday 29 July 2016 at 11.00 am. The annual   general meeting will be transmitted via a live webcast which can be viewed on   our website at vodafone.com/agm on the day of the meeting. A recording will   be available to view after that date. Warning to shareholders (“boiler room”   scams) Over recent years we have become aware of investors who have received   unsolicited calls or correspondence, in some cases purporting to have been   issued by us, concerning investment matters. These callers typically make   claims of highly profitable opportunities in UK or US investments which turn   out to be worthless or simply do not exist. These approaches are usually made   by unauthorised companies and individuals and are commonly known as “boiler   room” scams. Investors are advised to be wary of any unsolicited advice or   offers to buy shares. If it sounds too good to be true, it often is. See the   FCA website at fca.org.uk/consumers/scams for more detailed information about   this or similar activities. ShareGift We support ShareGift, the charity share   donation scheme (registered charity number 1052686). Through ShareGift,   shareholders who have only a very small number of shares, which might be   considered uneconomic to sell, are able to donate them to charity. Donated   shares are aggregated and sold by ShareGift, the proceeds being passed on to   a wide range of UK charities. See sharegift.org or call +44 (0)20 7930 3737   for further details. Share price history The closing share price at 31 March   2016 was 221.20 pence (31 March 2015: 220.45 pence). The closing share price   on 16 May 2016 was 223.65 pence. The following tables set out, for the   periods indicated, (i) the reported high and low middle market quotations of   ordinary shares on the London Stock Exchange, and (ii) the reported high and   low sales prices of ADSs on NASDAQ. Quarter High Low High Low 2014/2015 First   quarter 2.27 1.90 38.26 32.00 Second quarter 2.10 1.89 34.54 32.18 Third   quarter 2.34 1.85 36.55 29.67 Fourth quarter 2.40 2.15 36.03 32.30 2015/2016   First quarter 2.55 2.20 39.21 32.71 Second quarter 2.46 2.04 38.25 30.90   London Stock Exchange Pounds per ordinary share NASDAQ Dollars per ADS Third   quarter 2.26 2.04 34.42 31.00 Year ended 31 March High Low High Low Fourth   quarter 2.25 2.00 32.72 29.19 2012 1.84 1.54 29.46 24.31 2016/2017 2013 1.92   1.54 30.07 24.42 First quarter1 2.33 2.16 33.82 30.66 2014 2.52 1.80 41.57   27.74 London Stock Exchange Pounds per ordinary share NASDAQ Dollars per ADS   2015 2.40 1.85 38.26 29.67 2016 2.55 2.00 39.21 29.19 Month High Low High Low   November 2015 2.26 2.14 34.42 32.31 December 2015 2.22 2.04 33.47 31.20   January 2016 2.24 2.10 32.54 30.05 February 2016 2.25 2.00 32.72 29.19 March   2016 2.23 2.13 32.10 30.57 April 2016 2.33 2.16 33.82 30.66 May 20161 2.25   2.18 33.01 32.08 Note: 1 Covering period up to 16 May 2016. 176 Vodafone   Group Plc Annual Report on Form 20-F 2016 Registrar and transfer office The   Registrar Holders of ordinary shares resident in Ireland Computershare   Investor Services PLC Computershare Investor Services (Ireland) Ltd The   Pavilions PO Box 9742 Bridgwater Road, Bristol BS99 6ZZ, England Dublin 18,   Ireland Telephone: +44 (0)370 702 0198 Telephone: +353 (0)818 300 999 investorcentre.co.uk/contactusinvestorcentre.co.uk/contactus   ADS depositary BNY Mellon Shareowner Services PO Box 30170 College Station,   TX 77842-3170, United States of America Telephone: +1 800 233 5601 (toll   free) or, for calls outside the United States, +1 201 680 6825 (not toll   free) and enter company number 2160 Email:   shrrelations@cpushareownerservices.com Unaudited information 

 

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Foreign   currency translation The following table sets out the pounds sterling   exchange rates of the other principal currencies of the Group, being:   “euros”, “€” or “eurocents”, the currency of the European Union (‘EU’) member   states which have adopted the euro as their currency, and “US dollars”,   “US$”, “cents” or “¢”, the currency of the United States. Major shareholders   BNY Mellon, as custodian of our ADR programme, held approximately 13.46% of   our ordinary shares of 2020/21 US cents each at 16 May 2016 as nominee. The   total number of ADRs outstanding at 16 May 2016 was 387,958,868. At this date   1,495 holders of record of ordinary shares had registered addresses in the   United States and in total held approximately 0.008% of the ordinary shares   of the Company. At 31 March 2016 the following percentage interests in the   ordinary share capital of the Company, disclosable under the Disclosure and   Transparency Rules, (DTR 5), have been notified to the Directors. 31 March   Currency (=£1) 2016 2015 % Change Average: Euro 1.37 1.28 7.0 US dollar 1.51   1.61 (6.2) Shareholder Shareholding A=t 31 March: Black Rock Investment   Management Ltd. 6.62% Euro 1.261.38(8.7) Legal & General Investment   Management Ltd. 3.19% US dollar 1.441.48(2.7) No changes in the interests disclosed   under DTR 5 have been notified to the Company between 31 March 2016 and 16   May 2016. Between 1 April 2013 and 16 May 2016 Capital Group Companies Inc.   has held more than 3% of, or 3% of voting rights attributable to, the   ordinary shares of the Company. During this period, and as notified, its   holding was reduced to below the 3% reporting threshold. The rights attaching   to the ordinary shares of the Company held by these shareholders are   identical in all respects to the rights attaching to all the ordinary shares   of the Company. The Directors are not aware at 16 May 2016 of any other   interest of 3% or more in the ordinary share capital of the Company. The   Company is not directly or indirectly owned or controlled by any foreign   government or any other legal entity. There are no arrangements known to the   Company that could result in a change of control of the Company. The   following table sets out, for the periods and dates indicated, the period   end, average, high and low exchanges rates for pounds sterling expressed in   US dollars per £1.00. Year ended 31 March 31 March Average High Low 2012 1.60   1.60 1.67 1.53 2013 1.52 1.58 1.63 1.49 2014 1.67 1.59 1.67 1.49 2015 1.48   1.61 1.71 1.46 2016 1.44 1.51 1.59 1.39 The following table sets out, for the   periods indicated, the high and low exchange rates for pounds sterling   expressed in US dollars per £1.00. Year ended 31 March High Low November 2015   1.54 1.50 December 2015 1.52 1.48 January 2016 1.47 1.42 Articles of   Association and applicable English law The following description summarises   certain provisions of the Company’s Articles of Association and applicable   English law. This summary is qualified in its entirety by reference to the   Companies Act 2006 of England and Wales and the Company’s Articles of   Association. See “Documents on display” on page 179 for information on where   copies of the Articles of Association can be obtained. The Company is a   public limited company under the laws of England and Wales. The Company is   registered in England and Wales under the name Vodafone Group Public Limited   Company with the registration number 1833679. All of the Company’s ordinary   shares are fully paid. Accordingly, no further contribution of capital may be   required by the Company from the holders of such shares. English law specifies   that any alteration to the Articles of Association must be approved by a   special resolution of the shareholders. Articles of Association The Company’s   Articles of Association do not specifically restrict the objects of the   Company. Directors The Directors are empowered under the Articles of   Association to exercise all the powers of the Company subject to any   restrictions in the Articles of Association, the Companies Act (as defined in   the Articles of Association) and any special resolution. Under the Company’s   Articles of Association a Director cannot vote in respect of any proposal in   which the Director, or any person connected with the Director, has a material   interest other than by virtue of the Director’s interest in the Company’s   shares or other securities. However, this restriction on voting does not   apply in certain circumstances set out in the Articles of Association.   February 2016 1.46 1.39 March 2016 1.45 1.39 April 2016 1.46 1.41 Markets   Ordinary shares of Vodafone Group Plc are traded on the London Stock Exchange   and in the form of ADSs on NASDAQ. ADSs, each representing ten ordinary   shares, are traded on NASDAQ under the symbol “VOD”. The ADSs are evidenced   by ADRs issued by BNY Mellon, as depositary, under a deposit agreement, dated   as of 12 October 1988, as amended and restated on 26 December 1989, 16   September 1991, 30 June 1999, 31 July 2006 and 24 February 2015 between the   Company, the depositary and the holders from time to time of ADRs issued   thereunder. ADS holders are not members of the Company but may instruct BNY   Mellon on the exercise of voting rights relative to the number of ordinary   shares represented by their ADSs. See “Articles of Association and applicable   English laws and rights attaching to the Company’s shares – Voting rights” on   page 178. Shareholders as at 31 March 2016 Number of accounts % of total   issued shares Number of ordinary shares held 1–1,000 338,780 0.22 1,001–5,000   49,830 0.38 5,001–50,000 15,606 0.64 50,001–100,000 525 0.12 100,001–500,000   672 0.54 More than 500,000 1,172 98.10 406,585 100.00 177 Additional   information Vodafone Group Plc Annual Report on Form 20-F 2016 Overview   Strategy review Performance Governance Financials 

 

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Shareholder   information (continued) The Directors are empowered to exercise all the   powers of the Company to borrow money, subject to the limitation that the   aggregate amount of all liabilities and obligations of the Group outstanding   at any time shall not exceed an amount equal to 1.5 times the aggregate of   the Group’s share capital and reserves calculated in the manner prescribed in   the Articles of Association unless sanctioned by an ordinary resolution of   the Company’s shareholders. The Company can make market purchases of its own   shares or agree to do so in the future provided it is duly authorised by its   members in a general meeting and subject to and in accordance with section   701 of the Companies Act 2006. Such authority was given at the 2015 annual   general meeting but no purchases were made during this financial year. At   each annual general meeting all Directors who were 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. However, the Board has   decided in the interests of good corporate governance that all of the   Directors wishing to continue in office should offer themselves for   re-election annually. Directors are not required under the Company’s Articles   of Association to hold any shares of the Company as a qualification to act as   a Director, although the Executive Directors are required to under the Company’s   remuneration policy. Further details are set out on pages 57 to 73. Voting   rights At a general meeting of the Company, when voting on substantive   resolutions (i.e. any resolution which is not a procedural resolution) each   shareholder who is entitled to vote and is present in person or by proxy has   one vote for every share held (a poll vote). Procedural resolutions (such as   a resolution to adjourn a general meeting or a resolution on the choice of   Chairman of a general meeting) shall be decided on a show of hands, where   each shareholder who is present at the meeting has one vote regardless of the   number of shares held, unless a poll is demanded. Shareholders entitled to   vote at general meetings may appoint proxies who are entitled to vote, attend   and speak at general meetings. Two shareholders present in person or by proxy   constitute a quorum for purposes of a general meeting of the Company. Under   English law shareholders of a public company such as the Company are not   permitted to pass resolutions by written consent. Record holders of the   Company’s ADSs are entitled to attend, speak and vote on a poll or a show of   hands at any general meeting of the Company’s shareholders by the   depositary’s appointment of them as corporate representatives with respect to   the underlying ordinary shares represented by their ADSs. Alternatively,   holders of ADSs are entitled to vote by supplying their voting instructions   to the depositary or its nominee who will vote the ordinary shares underlying   their ADSs in accordance with their instructions. Holders of the Company’s   ADSs are entitled to receive notices of shareholders’ meetings under the   terms of the deposit agreement relating to the ADSs. Employees are able to   vote any shares held under the Vodafone Group Share Incentive Plan and “My   ShareBank” (a vested nominee share account) through the respective plan’s   trustees. Holders of the Company’s 7% cumulative fixed rate shares are only   entitled to vote on any resolution to vary or abrogate the rights attached to   the fixed rate shares. Holders have one vote for every fully paid 7%   cumulative fixed rate share. Liquidation rights In the event of the   liquidation of the Company, after payment of all liabilities and deductions   in accordance with English law, the holders of the Company’s 7% cumulative   fixed rate shares would be entitled to a sum equal to the capital paid up on   such shares, together with certain dividend payments, in priority to holders   of the Company’s ordinary shares. The holders of the fixed rate shares do not   have any other right to share in the Company’s surplus assets. Pre-emptive   rights and new issues of shares Under section 549 of the Companies Act 2006   Directors are, with certain exceptions, unable to allot the Company’s   ordinary shares or securities convertible into the Company’s ordinary shares   without the authority of the shareholders in a general meeting. In addition,   section 561 of the Companies Act 2006 imposes further restrictions on the   issue of equity securities (as defined in the Companies Act 2006 which   include the Company’s ordinary shares and securities convertible into   ordinary shares) which are, or are to be, paid up wholly in cash and not   first offered to existing shareholders. The Company’s articles of association   allow shareholders to authorise Directors for a period specified in the   relevant resolution to allot (i) relevant securities generally up to an   amount fixed by the shareholders; and (ii) equity securities for cash other   than in connection with a pre-emptive offer up to an amount specified by the   shareholders and free of the pre-emption restriction in section 561. At the   2015 annual general meeting the amount of relevant securities fixed by   shareholders under (i) above and the amount of equity securities specified by   shareholders under (ii) above were both in line with corporate governance   guidelines. Further details of such proposals are provided in the 2016 notice   of annual general meeting. Rights attaching to the Company’s shares At 31   March 2016 the issued share capital of the Company was comprised of 50,000 7%   cumulative fixed rate shares of £1.00 each and 26,558,570,312 ordinary shares   (excluding treasury shares) of 2020/21 US cents each. As at 31 March 2016,   2,254,825,696 ordinary shares were held in Treasury. Dividend rights Holders   of 7% cumulative fixed rate shares are entitled to be paid in respect of each   financial year, or other accounting period of the Company, a fixed cumulative   preferential dividend of 7% per annum on the nominal value of the fixed rate   shares. A fixed cumulative preferential dividend may only be paid out of   available distributable profits which the Directors have resolved should be   distributed. The fixed rate shares do not have any other right to share in   the Company’s profits. Holders of the Company’s ordinary shares may, by   ordinary resolution, declare dividends but may not declare dividends in   excess of the amount recommended by the Directors. The Board of Directors may   also pay interim dividends. No dividend may be paid other than out of profits   available for distribution. Dividends on ordinary shares can be paid to   shareholders in whatever currency the Directors decide, using an appropriate   exchange rate for any currency conversions which are required. If a dividend   has not been claimed for one year after the date of the resolution passed at   a general meeting declaring that dividend or the resolution of the Directors   providing for payment of that dividend, the Directors may invest the dividend   or use it in some other way for the benefit of the Company until the dividend   is claimed. If the dividend remains unclaimed for 12 years after the relevant   resolution either declaring that dividend or providing for payment of that   dividend, it will be forfeited and belong to the Company. 178 Vodafone Group   Plc Annual Report on Form 20-F 2016 Unaudited information 

 

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Disclosure of   interests in the Company’s shares There are no provisions in the Articles of   Association whereby persons acquiring, holding or disposing of a certain   percentage of the Company’s shares are required to make disclosure of their   ownership percentage although such requirements exist under rules derived   from the UK Disclosure and Transparency Rules. General meetings and notices   Subject to the Articles of Association, annual general meetings are held at   such times and place as determined by the Directors of the Company. The   Directors may also, when they think fit, convene other general meetings of   the Company. General meetings may also be convened on requisition as provided   by the Companies Act 2006. An annual general meeting needs to be called on   not less than 21 days’ notice in writing. Subject to obtaining shareholder   approval on an annual basis, the Company may call other general meetings on   14 days’ notice. The Directors may determine that persons entitled to receive   notices of meetings are those persons entered on the register at the close of   business on a day determined by the Directors but not later than 21 days   before the date the relevant notice is sent. The notice may also specify the   record date, the time of which shall be determined in accordance with the Articles   of Association and the Companies Act 2006. Under section 336 of the Companies   Act 2006 the annual general meeting of shareholders must be held each   calendar year and within six months of the Company’s year end. Variation of   rights If at any time the Company’s share capital is divided into different   classes of shares, the rights attached to any class may be varied, subject to   the provisions of the Companies Act 2006, either with the consent in writing   of the holders of three quarters in nominal value of the shares of that class   or at a separate meeting of the holders of the shares of that class. At every   such separate meeting all of the provisions of the Articles of Association   relating to proceedings at a general meeting apply, except that (i) the quorum   is to be the number of persons (which must be at least two) who hold or   represent by proxy not less than one third in nominal value of the issued   shares of the class or, if such quorum is not present on an adjourned   meeting, one person who holds shares of the class regardless of the number of   shares he holds; (ii) any person present in person or by proxy may demand a   poll; and (iii) each shareholder will have one vote per share held in that   particular class in the event a poll is taken. Class rights are deemed not to   have been varied by the creation or issue of new shares ranking equally with   or subsequent to that class of shares in sharing in profits or assets of the   Company or by a redemption or repurchase of the shares by the Company.   Documents on display The Company is subject to the information requirements   of the Exchange Act applicable to foreign private issuers. In accordance with   these requirements the Company files its Annual Report on Form 20-F and other   related documents with the SEC. These documents may be inspected at the SEC’s   public reference rooms located at 100 F Street, NE Washington, DC 20549.   Information on the operation of the public reference room can be obtained in   the United States by calling the SEC on +1-800-SEC-0330. In addition, some of   the Company’s SEC filings, including all those filed on or after 4 November   2002, are available on the SEC’s website at sec.gov. Shareholders can also   obtain copies of the Company’s Articles of Association from our website at   vodafone.com/governance or from the Company’s registered office. Material   contracts At the date of this Annual Report the Group is not party to any   contracts that are considered material to the Group’s results or operations   except for: a its US$4.1 billion and €4.0 billion revolving credit facilities   which are discussed in note 22 “Liquidity and capital resources” to the   consolidated financial statements; a its subscription agreements for the £2.9   billion of subordinated mandatory convertible bonds placed on 25 February   2016 as discussed in note 22 “Liquidity and capital resources” to the   consolidated financial statements; and a the agreed form Contribution and   Transfer Agreement in respect of the Dutch joint venture with Liberty Global   as detailed in note 29 “Commitments” to the consolidated financial   statements. Exchange controls There are no UK Government laws, decrees or   regulations that restrict or affect the export or import of capital,   including but not limited to, foreign exchange controls on remittance of   dividends on the ordinary shares or on the conduct of the Group’s operations.   Taxation As this is a complex area investors should consult their own tax   advisor regarding the US federal, state and local, the UK and other tax   consequences of owning and disposing of shares and ADSs in their particular   circumstances. This section describes, primarily for a US holder (as defined   below), in general terms, the principal US federal income tax and UK tax   consequences of owning or disposing of shares or ADSs in the Company held as   capital assets (for US and UK tax purposes). This section does not, however,   cover the tax consequences for members of certain classes of holders subject   to special rules including, for example, US expatriates and former long-term   residents of the United States; officers and employees of the Company;   holders that, directly, indirectly or by attribution, hold 5% or more of the   Company’s voting stock; financial institutions; insurance companies;   individual retirement accounts and other tax-deferred accounts; tax-exempt   organisations; dealers in securities or currencies; investors that will hold   shares or ADSs as part of straddles, hedging transactions or conversion   transactions for US federal income tax purposes; investors holding shares or   ADSs in connection with a trade or business conducted outside of the US; or   investors whose functional currency is not the US dollar. Limitations on   transfer, voting and shareholding As far as the Company is aware there are no   limitations imposed on the transfer, holding or voting of the Company’s   ordinary shares other than those limitations that would generally apply to   all of the shareholders, those that apply by law (e.g. due to insider dealing   rules) or those that apply as a result of failure to comply with a notice   under section 793 of the Companies Act 2006. No shareholder has any   securities carrying special rights with regard to control of the Company. The   Company is not aware of any agreements between holders of securities that may   result in restrictions on the transfer of securities. 179 Additional   information Vodafone Group Plc Annual Report on Form 20-F 2016 Overview   Strategy review Performance Governance Financials 

 

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Shareholder   information (continued) A US holder is a beneficial owner of shares or ADSs   that is for US federal income tax purposes: Taxation of dividends UK taxation   Under current UK law, no amount will be required to be withheld on account of   UK tax from the dividends that we pay. Shareholders who are within the charge   to UK corporation tax will be subject to corporation tax on the dividends we   pay unless the dividends fall within an exempt class and certain other   conditions are met. It is expected that the dividends we pay would generally   be exempt. Individual shareholders in the Company who are residents in the UK   will be subject to the income tax on the dividends we pay. For dividends   received before 6 April 2016, a tax credit equal to one-ninth of the cash   dividend will be available. For dividends received on or after 6 April 2016   dividends received will no longer be eligible for tax credit and will be   taxable in the UK at the dividend rates applicable where the income received   is above the tax-free dividend allowance (£5,000 per tax year). US federal   income taxation Subject to the passive foreign investment company (‘PFIC’)   rules described below, a US holder is subject to US federal income taxation   on the gross amount of any dividend we pay out of our current or accumulated   earnings and profits (as determined for US federal income tax purposes).   However, the Company does not maintain calculations of its earnings and   profits in accordance with US federal income tax accounting principles. US   holders should therefore assume that any distribution by the Company with   respect to shares will be reported as ordinary dividend income. Dividends   paid to a non-corporate US holder will be taxable to the holder at the   reduced rate normally applicable to long-term capital gains provided that   certain requirements are met. Dividends must be included in income when the   US holder, in the case of shares, or the depositary, in the case of ADSs,   actually or constructively receives the dividend and will not be eligible for   the dividends-received deduction generally allowed to US corporations in   respect of dividends received from other US corporations. The amount of the   dividend distribution to be included in income will be the US dollar value of   the pound sterling payments made determined at the spot pound sterling/US   dollar rate on the date the dividends are received by the US holder, in the   case of shares, or the depositary, in the case of ADSs, regardless of whether   the payment is in fact converted into US dollars at that time. If dividends   received in pounds sterling are converted into US dollars on the day they are   received, the US holder generally will not be required to recognise any   foreign currency gain or loss in respect of the dividend income. Where UK tax   is payable on any dividends received, a foreign tax credit may be claimable   under the treaty. a an individual citizen or resident of the United States; a   a US domestic corporation; a an estate, the income of which is subject to US   federal income tax regardless of its source; or a a trust, if a US court can   exercise primary supervision over the trust’s administration and one or more   US persons are authorised to control all substantial decisions of the trust,   or the trust has validly elected to be treated as a domestic trust for US   federal income tax purposes. If an entity or arrangement treated as a   partnership for US federal income tax purposes holds the shares or ADSs, the   US federal income tax treatment of a partner will generally depend on the   status of the partner and the tax treatment of the partnership. Holders that   are entities or arrangements treated as partnerships for US federal income   tax purposes should consult their tax advisors concerning the US federal   income tax consequences to them and their partners of the ownership and   disposition of shares or ADSs by the partnership. This section is based on the   US Internal Revenue Code of 1986, as amended, its legislative history,   existing and proposed regulations thereunder, published rulings and court   decisions, and on the tax laws of the UK, the Double Taxation Convention   between the United States and the UK (the ‘treaty’) and current HM Revenue   and Customs published practice, all as currently in effect. These laws are   subject to change, possibly on a retroactive basis. This section also assumes   that the UK Finance Bill, as ordered to be published on 24 March 2016, will   be enacted without amendment. This section is further based in part upon the   representations of the depositary and assumes that each obligation in the   deposit agreement and any related agreement will be performed in accordance   with its terms. For the purposes of the treaty and the US–UK double taxation   convention relating to estate and gift taxes (the ‘Estate Tax Convention’),   and for US federal income tax and UK tax purposes, this section is based on   the assumption that a holder of ADRs evidencing ADSs will generally be   treated as the owner of the shares in the Company represented by those ADRs.   Investors should note that a ruling by the first-tier tax tribunal in the UK   has cast doubt on this view, but HMRC have stated that they will continue to   apply their long-standing practice of regarding the holder of such ADRs as   holding the beneficial interest in the underlying shares. Similarly, the US   Treasury has expressed concern that US holders of depositary receipts (such   as holders of ADRs representing our ADSs) may be claiming foreign tax credits   in situations where an intermediary in the chain of ownership between such   holders and the issuer of the security underlying the depositary receipts, or   a party to whom depositary receipts or deposited shares are delivered by the   depositary prior to the receipt by the depositary of the corresponding   securities, has taken actions inconsistent with the ownership of the   underlying security by the person claiming the credit, such as a disposition   of such security. Such actions may also be inconsistent with the claiming of   the reduced tax rates that may be applicable to certain dividends received by   certain non-corporate holders, as described below. Accordingly, (i) the   creditability of any UK taxes and (ii) the availability of the reduced tax   rates for any dividends received by certain non-corporate US Holders, each as   described below, could be affected by actions taken by such parties or   intermediaries. Generally exchanges of shares for ADRs and ADRs for shares will   not be subject to US federal income tax or to UK tax other than stamp duty or   stamp duty reserve tax (see the section on these taxes on page 181). 180   Vodafone Group Plc Annual Report on Form 20-F 2016 Unaudited information 

 

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Taxation of   capital gains UK taxation A US holder that is not resident in the UK will   generally not be liable for UK tax in respect of any capital gain realised on   a disposal of our shares or ADSs. However, a US holder may be liable for both   UK and US tax in respect of a gain on the disposal of our shares or ADSs if   the US holder: Following rulings of the European Court of Justice and the   first-tier tax tribunal in the UK, HMRC have confirmed that the 1.5% SDRT   charge will not be levied on an issue of shares to a depositary receipts   system on the basis that such a charge is contrary to EU law. No stamp duty   should in practice be required to be paid on any transfer of our ADSs   provided that the ADSs and any separate instrument of transfer are executed   and retained at all times outside the UK. A transfer of our shares in   registered form will attract ad valorem stamp duty generally at the rate of   0.5% of the purchase price of the shares. There is no charge to ad valorem   stamp duty on gifts. SDRT is generally payable on an unconditional agreement   to transfer our shares in registered form at 0.5% of the amount or value of   the consideration for the transfer, but if, within six years of the date of   the agreement, an instrument transferring the shares is executed, any SDRT   which has been paid would be repayable or, if the SDRT has not been paid, the   liability to pay the tax (but not necessarily interest and penalties) would   be cancelled. However, an agreement to transfer our ADSs will not give rise   to SDRT. PFIC rules We do not believe that our shares or ADSs will be treated   as stock of a PFIC for US federal income tax purposes for our current taxable   year or the foreseeable future. This conclusion is a factual determination   that is made annually and thus is subject to change. If we are treated as a   PFIC, US holders of shares would be required (i) to pay a special US addition   to tax on certain distributions and (ii) any gain realised on the sale or   other disposition of the shares or ADSs would in general not be treated as a   capital gain unless a US holder elects to be taxed annually on a   mark-to-market basis with respect to the shares or ADSs. Otherwise a US   holder would be treated as if he or she has realised such gain and certain   “excess distributions” rateably over the holding period for the shares or   ADSs and would be taxed at the highest tax rate in effect for each such year   to which the gain was allocated. An interest charge in respect of the tax   attributable to each such preceding year beginning with the first such year   in which our shares or ADSs were treated as stock in a PFIC would also apply.   In addition, dividends received from us would not be eligible for the reduced   rate of tax described above under “Taxation of Dividends – US federal income   taxation”. Back-up withholding and information reporting Payments of   dividends and other proceeds to a US holder with respect to shares or ADSs,   by a US paying agent or other US intermediary will be reported to the   Internal Revenue Service (‘IRS’) and to the US holder as may be required   under applicable regulations. Back-up withholding may apply to these payments   if the US holder fails to provide an accurate taxpayer identification number   or certification of exempt status or fails to comply with applicable   certification requirements. Certain US holders are not subject to back-up   withholding. US holders should consult their tax advisors about these rules   and any other reporting obligations that may apply to the ownership or   disposition of shares or ADSs, including requirements related to the holding   of certain foreign financial assets. a is a citizen of the United States and   is resident in the UK; a is an individual who realises such a gain during a   period of “temporary non-residence” (broadly, where the individual becomes   resident in the UK, having ceased to be so resident for a period of five   years or less, and was resident in the UK for at least four out of the seven   tax years immediately preceding the year of departure from the UK); a is a US   domestic corporation resident in the UK by reason of being centrally managed   and controlled in the UK; or a is a citizen or a resident of the United   States, or a US domestic corporation, that has used, held or acquired the   shares or ADSs in connection with a branch, agency or permanent establishment   in the UK through which it carries on a trade, profession or vocation in the   UK. In such circumstances, relief from double taxation may be available under   the treaty. Holders who may fall within one of the above categories should   consult their professional advisers. US federal income taxation Subject to   the PFIC rules described below, a US holder that sells or otherwise disposes   of our shares or ADSs generally will recognise a capital gain or loss for US   federal income tax purposes equal to the difference between the US dollar   value of the amount realised and the holder’s adjusted tax basis, determined   in US dollars, in the shares or ADSs. This capital gain or loss will be a   long-term capital gain or loss if the US holder’s holding period in the   shares or ADSs exceeds one year. The gain or loss will generally be income or   loss from sources within the US for foreign tax credit limitation purposes.   The deductibility of losses is subject to limitations. Additional tax   considerations UK inheritance tax An individual who is domiciled in the   United States (for the purposes of the Estate Tax Convention) and is not a UK   national will not be subject to UK inheritance tax in respect of our shares   or ADSs on the individual’s death or on a transfer of the shares or ADSs   during the individual’s lifetime, provided that any applicable US federal   gift or estate tax is paid, unless the shares or ADSs are part of the   business property of a UK permanent establishment or pertain to a UK fixed   base used for the performance of independent personal services. Where the   shares or ADSs have been placed in trust by a settlor they may be subject to   UK inheritance tax unless, when the trust was created, the settlor was   domiciled in the United States and was not a UK national. Where the shares or   ADSs are subject to both UK inheritance tax and to US federal gift or estate tax,   the estate tax convention generally provides a credit against US federal tax   liabilities for UK inheritance tax paid. UK stamp duty and stamp duty reserve   tax Stamp duty will, subject to certain exceptions, be payable on any   instrument transferring our shares to the custodian of the depositary at the   rate of 1.5% on the amount or value of the consideration if on sale or on the   value of such shares if not on sale. Stamp duty reserve tax (‘SDRT’), at the   rate of 1.5% of the amount or value of the consideration or the value of the   shares, could also be payable in these circumstances but no SDRT will be   payable if stamp duty equal to such SDRT liability is paid. 181 Additional   information Vodafone Group Plc Annual Report on Form 20-F 2016 Overview   Strategy review Performance Governance Financials 

 

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History and   development The Company was incorporated under English law in 1984 as Racal   Strategic Radio Limited (registered number 1833679). After various name   changes, 20% of Racal Telecom Plc share capital was offered to the public in   October 1988. The Company was fully demerged from Racal Electronics Plc and   became an independent company in September 1991, at which time it changed its   name to Vodafone Group Plc. Since then we have entered into various   transactions which significantly impacted on the development of the Group.   The most significant of these transactions are summarised below: a Through a   series of business transactions in 2011 and 2012, Vodafone assigned its   rights to purchase approximately 11% of VIL from the Essar Group to Piramal   Healthcare Limited (‘Piramal’). On 18 August 2011 Piramal purchased 5.5% of   VIL from the Essar Group for a cash consideration of INR 28.6 billion (£368   million). On 8 February 2012, they purchased a further 5.5% of VIL from the   Essar Group for a cash consideration of approximately INR 30.1 billion (£399   million) taking Piramal’s total shareholding in VIL to approximately 11%. a   On 9 November 2011 we sold our entire 24.4% interest in Polkomtel in Poland   for cash consideration of approximately €920 million (£784 million) before   tax and transaction costs. a The merger with AirTouch Communications, Inc.   which completed on 30 June 1999. The Company changed its name to Vodafone   AirTouch Plc in June 1999 but then reverted to its former name, Vodafone   Group Plc, on 28 July 2000. a On 27 July 2012 we acquired the entire share   capital of Cable & Wireless Worldwide plc for a cash consideration of   £1,050 million. a On 31 October 2012 we acquired TelstraClear Limited in New   a The completion on 10 July 2000 of the agreement with Bell Atlantic and GTE   to combine their US cellular operations to create the largest mobile operator   in the United States, Verizon Wireless, resulting in the Group having a 45%   interest in the combined entity. Zealand for a cash consideration of NZ$840   million (£440 million). a On 13 September 2013 we acquired a 76.57% interest   in Kabel Deutschland Holding AG in Germany for cash consideration of €5.8   billion (£4.9 billion). a The acquisition of Mannesmann AG which completed on   12 April 2000. Through this transaction we acquired businesses in Germany and   Italy and increased our indirect holding in Société Française u   Radiotéléphone S.A. (‘SFR’). a The completion on 21 February 2014 of the   agreement, announced on 2 September 2013, to dispose of our US Group whose   principal asset was its 45% interest in Verizon Wireless (‘VZW’) to Verizon   Communications Inc. (‘Verizon’), Vodafone’s joint venture partner, for a   total consideration of US$130 billion (£79 billion) including the remaining   23.1% minority interest in Vodafone Italy. Following completion, Vodafone   shareholders received Verizon shares and cash totalling US$85 billion (£51   billion). a Through a series of business transactions between 1999 and 2004   we acquired a 97.7% stake in Vodafone Japan. This was then disposed of on 27   April 2006. a On 8 May 2007 we acquired companies with controlling interests   in Vodafone India Limited (‘VIL’), formerly Vodafone Essar Limited, for   US$10.9 billion (£5.5 billion). a In March 2014 we acquired the indirect   equity interests in VIL held by Analjit Singh and Neelu Analjit Singh, taking   our stake to 89.03% and then in April 2014 we acquired the remaining 10.97%   of VIL from Piramal Enterprises Limited for cash consideration of INR 89.0   billion (£0.9 billion), taking our ownership interest to 100%. a On 20 April   2009 we acquired an additional 15.0% stake in Vodacom for cash consideration   of ZAR 20.6 billion (£1.6 billion). On 18 May 2009 Vodacom became a   subsidiary. a On 23 July 2014 we acquired the entire share capital of Grupo Corporativo   Ono, S.A. (‘Ono’) in Spain for total consideration, including associated net   debt acquired, of €7.2 billion (£5.8 billion). a On 10 September 2010 we sold   our entire 3.2% interest in China Mobile Limited for cash consideration of   £4.3 billion. a On 16 June 2011 we sold our entire 44% interest in SFR to   Vivendi for a cash consideration of €7.75 billion (£6.8 billion) and received   a final dividend from SFR of €200 million (£176 million). Details of   significant transactions that occurred during year ended 31 March 2016 are   included in note 28 “Acquisitions and disposals” and in note 29   “Commitments”. Details of significant transactions that occurred after 31   March 2016 and before the signing of this Annual Report on 17 May 2016 are   included in note 32 “Subsequent events”. a Through a series of business   transactions on 1 June and 1 July 2011, we acquired an additional 22% stake   in VIL from the Essar Group for a cash consideration of US$4.2 billion (£2.6   billion) including withholding tax. 182 Vodafone Group Plc Annual Report on   Form 20-F 2016 Unaudited information 

 

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Regulation Our   operating companies are generally subject to regulation governing the   operation of their business activities. Such regulation typically takes the   form of industry specific law and regulation covering telecommunications   services and general competition (antitrust) law applicable to all   activities. The following section describes the regulatory frameworks and the   key regulatory developments at national and supranational level and in   selected countries in which we have significant interests during the year   ended 31 March 2016. Many of the regulatory developments reported in the   following section involve ongoing proceedings or consideration of potential   proceedings that have not reached a conclusion. Accordingly, we are unable to   attach a specific level of financial risk to our performance from such   matters. In February 2016 Deutsche Telekom applied for approval of new   Unbundled Local Loop (‘ULL’) fees that would lead to an average increase of   10% and would be valid until the end of 2019. On 20 April 2016 the National   Regulatory Authority (‘BNetzA’) proposed reducing the existing ULL rates by   up to 1.7%. The rate decision will, after EU consolidation proceedings,   become effective on 1 July 2016. In April 2016 BNetzA issued its draft   decision on Deutsche Telekom’s layer 2 bitstream access product proposal. The   final BNetzA decision is expected in June 2016. Furthermore, BNetzA has   proposed to mandate an additional Virtual Unbundled Local Access (‘VULA’)   product at street cabinets which is not currently technically and   commercially defined. In May 2016 the Commission announced that BNetzA’s   proposal to allow DT the exclusive deployment of vectoring within the   nearshore areas of the main distribution frames may not be compliant with EU   law, based on the apparent restrictions it places on alternative operators.   Therefore the vectoring proposal and the associated conditions for the new   VULA product will be subject to further scrutiny, with the Commission due to   announce its decision by September 2016. Italy In September 2015 Vodafone   obtained one of the two L band TDD blocks equal to 20MHz at just under €232   million. The licence commenced on 1 January 2016 and expires on 31 December   2029. In December 2015 further to its investigation into irregularities in   the maintenance services of fixed networks, the Italian competition authority   (‘AGCM‘) announced its decision to fine Telecom Italia (‘TI’) €21.5 million   on the basis it had engaged in agreements with six other undertakings that   abused its market dominance. In accordance with the decision, TI is now   obliged to provide unbundled access to maintenance activities and to allow   their competitors to acquire maintenance services from third parties. In   December 2015 the National Regulatory Authority (‘AGCOM’) adopted the final   decision regarding the wholesale fixed access market. The decision requires   the application of the same remedies and prices nationally, cost orientation   for all wholesale copper and fibre access services and price reductions from   2015 to 2017 for VULA fibre to the cabinet (‘FTTC’) (-36%) and copper   bit-stream (-18%). For information on litigation in Italy, see note 30   “Contingent liabilities and legal proceedings” to the consolidated financial   statements. United Kingdom In September 2015 the national regulatory   authority (‘Ofcom’) published its final decision revising the annual licence   fees payable on licences for the use of spectrum in the 900MHz and 1800MHz   bands to reflect full market value, following the completion of the 4G   auction. From 31 October 2016 Vodafone UK will pay annual fees of   approximately £50 million for the spectrum. An application has been made by   Everything Everywhere (‘EE’) to appeal this decision. Vodafone has given   notice of its intention to intervene in any resulting appeal. In May 2016 the   European Commission competition authority (‘DGCOMP’) announced its decision   to prohibit the proposed Hutchison 3G acquisition of Telefonica UK (‘O2’).   Hutchinson 3G have the option to appeal to the EU’s General Court in   Luxembourg. In December 2015 Vodafone UK acquired 20MHz of 1400MHz spectrum   with an indefinite licence from Qualcomm. In January 2016 British Telecom’s   acquisition of mobile network operator EE received final approval from the   UK’s Competition and Markets Authority (’CMA’). European Union (‘EU’) In   October 2015 the European Parliament and the European Council adopted the   European Commission’s (‘the Commission’) proposed regulation known as the   Telecoms Single Market Package. The regulation requires the abolition of   retail roaming surcharges by June 2017 and introduces net neutrality rules   which come into force from 30 April 2016. In May 2015 the Commission   published the Digital Single Market strategy, aimed at producing a more   advanced digital single market. The strategy has three pillars: (i)   maximising the growth potential of the European digital economy; (ii)   creating the right conditions for digital networks and services to flourish;   and (iii) better access for consumers and businesses to online e-goods and   services across Europe. The Commission is currently undertaking various   consultations which will lead to the revision of existing, or the adoption of   new, legislation. One of these consultations considers the revision of the EU   telecoms regulatory framework that covers five areas: Next-Generation Access   (‘NGA’) regulation, spectrum, rules for communications services, universal   service, and the institutional set-up and governance. There is a clear focus   on incentivising investment in NGA (including access for mobile backhaul), the   further harmonisation of spectrum regulation and the creation of a fair and   level playing field for competing services. Other consultations we have or   are responding to include: Internet speed and quality; review of national   wholesale roaming markets, fair use policy and the sustainability mechanism;   online platforms, cloud & data, liability of intermediaries,   collaborative economy; ICT Standards; tackling unjustified geo-blocking; the   needs for internet speed and quality beyond 2020; review of the Satellite and   Cable Directive; the revision of the Audio Visual Media Services Directive;   contract rules for online purchases of digital content and tangible goods;   the e Privacy Directive; and the evaluation of Commission Recommendation   2009/396/EU on the regulatory treatment of fixed and mobile termination rates   in the EU. The Commission are also planning a consultation on the review of   safety of apps and other non-embedded software. Europe region Germany In June   2015 Vodafone Germany acquired 110MHz out of the 270MHz made available in the   spectrum auction. This consisted of 2x10MHz of 700MHz band, 2x10MHz of 900MHz   band, 1x20MHz of 1500MHz band and 2x25MHz of 1800MHz band for a total of   €2,091 million. Total auction bids amounted to €5,081 million. 183 Additional   information Vodafone Group Plc Annual Report on Form 20-F 2016 Overview   Strategy review Performance Governance Financials Unaudited information 

 

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Regulation   (continued) In February 2016 Ofcom released its initial conclusions following   its Strategic Review of Digital Communications. Ofcom’s proposals include   requirements on BT to open up its network to competitors, reforming BT   Openreach’s governance and delivering better Quality of Service for all   customers. Vodafone UK will continue to engage with Ofcom as it implements   these proposals including a consultation on Openreach governance expected in   summer 2016. Spain The fines applied to Telefónica, Orange and Vodafone Spain   in December 2012 for abuse of dominant position by imposing excessive pricing   of wholesale SMS/MMS services on mobile virtual network operators (‘MVNO’),   remain suspended until the judicial review is concluded. In June 2015 in   response to the national competition authority’s (‘CNMC’) conditional   approval of Telefónica’s acquisition of pay-TV operator Distribuidora de   Televisión Digital (‘DTS’), Vodafone Spain appealed to the National Court.   The appeal required the adoption of precautionary measures to increase the   amount of premium content made available to other operators from 50% to 75%   and to include football within the same pricing mechanism as other premium   content channels. The National Court rejected the adoption of the   precautionary measures on 18 April 2016. In January 2016 following a review   of the regulatory ex ante price squeeze test run on Telefónica’s retail   offers, CNMC issued a draft decision that proposes to modify the test to   ensure it is capable of being replicated by other operators. This was further   to Vodafone Spain’s submission to CNMC’s surveillance procedure that called   for action on the retail offers of Telefónica; the wholesale conditions of   access; and the breach by Telefónica of its commitments. In October 2015   DGCOMP approved Orange’s proposed acquisition of Jazztel, based on an   agreement that included, among other provisions, the commitment to sell a   certain amount of Jazztel’s fibre-optic assets to Masmóvil. In January 2016   Telefónica and Mediapro reached an agreement under which Telefónica acquires   the rights to broadcast the beIN Sports LaLiga channel (Spanish first   division and King’s Cup/Copa del Rey) and the beIN Sports channel (Champions   League and Europa League), for the seasons 2016/17 to 2018/19, for a total   amount of €2.4 billion. Vodafone Spain challenged the exclusive nature of the   agreement and, after obtaining CNMC’s support, in February 2016 Mediapro   initiated a second round of talks where Vodafone Spain confirmed its interest   to acquire the beIN Sports LaLiga channel on a non-exclusive basis and the   contract for the licence with Mediapro was signed on 5 April 2016. In March   2016 CNMC approved the resolution on wholesale regulation of broadband   markets (Markets 3a, 3b & 4, including NGA). Netherlands The Dutch   Government has renewed the existing 2.1GHz licences that were due to expire   by the end of 2016. The renewal is for a period of four years (2017–2020),   and provides an opportunity for a simultaneous auction with the 700MHz band.   In October 2014 the Court of Appeal (‘CBb’) decided to refer the ongoing case   of termination rates to the European Court of Justice (‘ECJ’) regarding the   legal status of the recommendation to use pure bottom up long run incremental   cost (‘BULRIC’). The CBb will be able to issue its final decision once it has   received the ruling of the ECJ, which is currently expected during the second   half of 2016. In February 2016 the Dutch Supreme Court ruled on the Dutch   implementation of the EU Consumer Credit Directive and “instalment sales   agreements” (a Dutch law concept), holding that bundled “all-in” mobile   subscription agreements (i.e. device along with mobile services) are   considered consumer credit agreements. As a result Vodafone Netherlands   together with the industry has been working with the Ministry of Finance and   the Competition Authority on compliance requirements going forward for such   offers. The ruling also has retrospective effect and a claim has been   submitted by a claims organisation which is currently being reviewed by   Vodafone Netherlands. Ireland In February 2016 further to Vodafone Ireland’s   successful appeal in the High Court against the national regulatory   authority’s (‘ComReg’) interim mobile termination rate (‘MTR’) decision,   ComReg published a revised MTR decision. Effective from 1 September 2016 and   based on a pure Long Run Incremental Cost (‘LRIC’) model, the MTR will be   0.84 eurocents per minute. ComReg confirmed that following discussions with   Vodafone Ireland they would drop their appeal to the Supreme Court. Vodafone   Ireland has agreed to accept the new rate and drop the remaining related   challenges outstanding before the High Court. Portugal In February 2016 the   national regulatory authority (‘ANACOM’) confirmed the renewal of Vodafone   Portugal’s 2.1GHz spectrum band with increased coverage obligations and   additional reporting commitments but without the requirement of an auction or   licence fee. The expiry date has been extended to 5 May 2033. In March 2016   ANACOM commenced a consultation into the 3a (Wholesale local access), 3b   (Wholesale central access) and 4 (Wholesale high-quality access) markets.   Romania In November 2015 the national regulatory authority (‘ANCOM’) announced   their decision to deregulate the wholesale local access market (market   3a/2014), removing all of the fixed wholesale access regulations previously   imposed on Telekom Romania, the former incumbent. ANCOM’s analysis concludes   that the retail broadband market in Romania is competitive and ex ante   regulation at the wholesale level cannot be justified. The decision was   unopposed by the European Commission. Greece In December 2015 Vodafone   Greece’s spectrum (2x56MHz) at 2.6GHz band licence expired. To date, we await   the Ministry of Infrastructure, Transport and Networks (‘MITN’) to take the   appropriate action for renewal, in the meantime Vodafone Greece continues to   have access to the spectrum. The MITN and the national regulatory authority,   (‘EETT’ – where currently the role of Chair is vacant) have not commenced the   formal procedure to determine price and the award process prior to the August   2016 expiration date of Vodafone Greece’s 2x15MHz spectrum at 1800MHz. Czech   Republic In June 2015 the former fixed incumbent (O2 Czech Republic) was   split into two legally separate entities (network and service company) but   both entities are still controlled by the private investment fund PPF. In   February 2016 further to the national regulatory authority (‘CTU’) consultation   on the unsold 1800MHz and 2.6GHz spectrum from 2013, an auction was announced   with bidding commencing in April 2016. The auction for the 3.7GHz spectrum is   due to commence in the second half of 2016. Hungary Vodafone Hungary has no   material items to report for 2016. 184 Vodafone Group Plc Annual Report on   Form 20-F 2016 Unaudited information 

 

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Albania In   March 2015 Vodafone M-Pesa was licensed as an e-money issuance institution   and has since been able to perform utility payments and money transfer   services for its customers. Between April and June 2015 Vodafone Albania   secured spectrum for 2x1.8MHz of 900MHz band, 2x14.4MHz of 1800MHz and   2x20+20MHz of 2.6GHz band, allowing 4G services to be made available. In   September 2015 spectrum neutrality and reshuffling in the 1800MHz spectrum   band was introduced. Malta In March 2014 the national regulatory authority   (‘MCA’) set the MTR at 0.40 eurocents per minute. Vodafone Malta has   submitted an appeal to the Administrative Review Tribunal on the basis that   there was a lack of transparency in the consultation process. For information   on litigation in India, see note 30 “Contingent liabilities and legal   proceedings” to the consolidated financial statements. Vodacom: South Africa   In March 2014 the High Court ruled in favour of Vodacom and MTN in their   challenge to the national regulatory authority’s (‘ICASA’) decision on Call   Termination Regulations (‘CTR’). This led to ICASA initiating another consultation   process and in September 2014 they published the final CTR that reduces the   rate to ZAR 0.13 cents per minute by October 2016. In December 2014 Cell C   served ICASA (including other interested parties such as Vodacom and MTN)   with a notice of motion in terms of which it is seeking an order for the   review and setting aside by the High Court, of the September 2014 CTRs.   Vodacom had filed a notice to oppose Cell C’s application. This matter was   due to be heard from 7 March 2016 however Cell C withdrew its application. In   May 2014 the national competition authority (‘CompCom’) confirmed its   intention to proceed with the investigation into an allegation by Cell C that   Vodacom and MTN have abused their market dominance in contravention of   section 8 of the Competition Act. Once the investigation is completed, the   matter may be referred to the Competition Tribunal where Vodacom will have a   further opportunity to make its case. In May 2014 Vodacom entered into a sale   and purchase agreement under which it would acquire 100% of the issued share   capital of Neotel as well as Neotel’s shareholder loans and liabilities. The   proposed acquisition of the majority of Neotel’s assets has been abandoned   due to regulatory complexities and certain conditions not being fulfilled. In   September 2015 further to its International Mobile Telecommunications (‘IMT’)   Radio Frequency Spectrum Assignment Plans (‘RFSAP’) published in March 2015   ICASA published an Information Memorandum (‘IM’) on the prospective licensing   of the 700MHz, 800MHz and 2.6GHz High Demand Spectrum bands. The IM is a   precursor to an Invitation to Apply (‘ITA’). Vodacom has raised its concerns   that the IM does not provide sufficient detail on some of the critical   aspects of the auction design and process. In February 2016 the Department of   Trade and Industry (‘DTI’) published the revised draft ICT Sector Code for   consultation. This code follows the May 2015 implementation of the revised   generic DTI Codes on Black Economic Empowerment (‘BEE’) which saw a complete overhaul   of the targets and requirements of the 2007 Codes, which included the removal   of the recognition of ZAR7.5 billion rule for ownership and retention of 30%   investing target that Vodacom must be compliant with to be eligible to bid in   future Spectrum auctions. The revised Codes are expected to be finalised in   June 2016 and will be applicable to the financial period of 1 April 2016 to   31 March 2017. Vodacom: Democratic Republic of Congo In December 2015 the   Government ordered all operators to disconnect any unregistered customers. In   February 2016 all operators received a non-compliance letter from the   National Intelligence Agency, stating sanctions would be applied. Vodacom DRC   is suspending customers with insufficient registration records and communicating   to such customers the requirement to register to avoid disconnection. To   date, no sanctions have been imposed. In September 2015 the national   regulatory authority (‘ARPTC’) retained the current on-net voice price floor   at 5.1 US cents per minute and off net 8.5 US cents per minute set in March   2015 and extended the price floor to cover international outgoing calls and   promotions until June 2016. In December 2015 Vodacom Congo’s 2G licence was   renewed with a ten-year extension taking the expiry date to 1 January 2028,   together with securing additional spectrum 2x5.8 1800MHz and 1x15 1900MHz.   Collectively, the licence and spectrum fees paid was US$22.5 million. Africa,   Middle East and Asia-Pacific region India In February 2012 Vodafone India   challenged the Department of Telecommunications (‘DoT’) at the Telecom   Tribunal on the financial requirements for approving the transfer of Vodafone   India telecom licenses that were held under seven subsidiary companies to   create two telecom licensed companies – Vodafone India Limited and its   subsidiary Vodafone Mobile Services Limited. Pleadings were completed on 6   April 2016 and the next hearing is due on 19 May 2016. In February 2015 the   national regulatory authority (‘TRAI’) announced its revised regulation on   MTRs, reducing the rate from 20 paisa to 14 paisa per minute for mobile   termination and nil termination for calls originating from, or terminating   on, a fixed line. Vodafone India has challenged TRAI’s decision in the Delhi   High Court and the hearing is due to commence in May 2016. In April 2015 TRAI   launched a consultation on the regulatory framework for Over-The-Top (‘OTT’)   services and Net Neutrality and the completion of that consultation is   awaited. In February 2016 TRAI issued a regulation prohibiting the charging   of discriminatory tariffs on the basis of content or services accessed. In   March 2015 in the spectrum auction for 800MHz, 900MHz, 1800MHz and 2.1GHz   bands, Vodafone India won spectrum in all six circles where the existing   spectrum was due for expiry in December 2015, thus ensuring continuity of   business. It also won an additional 2.1GHz spectrum in six service areas. The   total auction spend by Vodafone India was INR 258 billion. In May 2015 the   Supreme Court dismissed Vodafone India’s appeal against the DoT’s refusal to   extend its existing spectrum licences in Delhi, Mumbai and Kolkata. In   September and October 2015 guidelines for Spectrum Sharing and Spectrum   Trading were issued respectively. In January 2016 TRAI submitted its   recommendations to the DoT on the Valuation & Reserve price of Spectrum   and DoT’s decision is expected by the end of May 2016. In February 2016   further to Prime Minister Narendra Modi’s allocation of budget for the   Government’s Digital India agenda, TRAI recommended a public-private   partnership (‘PPP’) “build own operate transfer” (‘BOOT’) model as the   preferred means of the implementation strategy for BharatNet (the   Government’s national optic fibre network programme). DoT’s decision on the   TRAI recommendation is awaited. In May 2016 further to a challenge by the   telecom operators, the Indian Supreme Court held that the order announced in   October 2015 by TRAI, mandating MNOs to compensate customers for any call   drops, was “arbitrary, unreasonable and non-transparent” and therefore   cancelled. 185 Additional information Vodafone Group Plc Annual Report on   Form 20-F 2016 Overview Strategy review Performance Governance Financials 

 

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Regulation   (continued) Vodacom: Tanzania In February 2016 further to the gazetted final   regulations which set out voluntary requirements for all telecommunications   licensees to list a minimum of 20% of their ordinary share capital on the Dar   Stock Exchange to be held by Tanzanian investors, or make a one-off payment   of 0.6% of gross revenues into an ICT development fund within 12 months of   effective date of regulation, the Ministry of Communications commenced   consultations with the industry on the governance, structure and payments   into this fund. In February 2016 the national regulatory authority (‘TCRA’)   approved Vodacom Tanzania’s acquisition of Shared Networks Tanzania which   holds 2x5 900MHz spectrum which will be used to support provision of rural   services. The national competition authority’s (‘FCC’) approval is still   pending. In March 2016 TCRA commenced a Request for Proposal for spectrum   auction consultants which is required ahead of the planned 700MHz auction.   Vodacom: Mozambique In August 2015 following an announcement from the   Minister of Communications that unregistered customers must be disconnected,   a new registration regulation was introduced, which approved electronic   registration. Subsequently, the operators and regulator agreed on a joint   campaign and phased disconnection process to achieve complete registration by   November 2016. A new communications bill is being reviewed by the Parliament.   The bill introduces inter alia, a new electronic communications licence   regime, price regulation approval process, a competition law-based regulatory   regime, and new law enforcement powers. Vodacom: Lesotho In September 2015   the national regulatory authority (‘LCA’) confirmed in writing to Vodacom   Lesotho that its service licence will be renewed when it expires on 31 May   2016 at a cost of ZAR5 million. In February 2016 Vodacom Lesotho was awarded   2 x 20 1800MHz spectrum to be used for Long-Term Evolution (‘LTE’).   International roaming in Africa In November 2014 East Africa Community   (‘EAC’) Ministers of Communications met and set the national regulation   authorities (‘NRAs’) the task to implement “Phase 1” price caps for wholesale   (US 7 cents) and retail (US 10 cents). It was agreed that Phase 1 would be   interim until “Phase 2” Single Area Network regulation is issued following a   study to be conducted by the regulators for the region. In November 2015, the   Tanzania Ministry of Communications commenced a consultation on the Phase 1   price caps for EAC countries. In September 2015 further to Southern African   Development Community (‘SADC’) Ministers of Communications requirements that   the NRAs implement international roaming wholesale and retail five-year   glide-paths, the Communications Regulators’ Association of Southern Africa   (‘CRASA’) issued Regulatory Guidance and accompanying Policy. The CRASA   requested that NRAs implement the glide-paths from 1 October 2015 and   transparency measures in accordance with their applicable national law. The   policy recognised that the glide-paths should not take prices below   underlying cost and that member countries should take steps to reduce issues   which increase costs, notably taxes on international incoming calls. Vodacom   is participating in the processes conducted by NRAs in SADC member states.   Turkey In March 2015 further to Vodafone’s letter of appeal in the   administrative court to the announcement by the national regulatory authority   (‘ICTA’) in August 2014 that the scope of the 3G coverage must be broadened   to include new metropolitan areas, the Council of State adopted a motion   suspending the ICTA’s action and the lawsuit is pending. In May 2015 after   the Electronic Trade Law came into force, secondary legislation was finalised   by both the Ministry of Customs and Trade (‘MoCT’) and the ICTA. Under the   new regulations, operators will only be permitted to use their marketing   database for operator related marketing reasons. Third parties were permitted   to send one time SMSs to mobile operators’ databases asking their customers   to opt into their database, up to and including 15 September 2015. In August   2015 the 4.5G (IMT Advanced) auction was completed grossing total revenue of   €3.36 billion excluding taxes, compared to reserve prices of €2.3 billion.   Only three mobile operators bid for the spectrum bands and there were no bids   for the 2.6GHz block reserved for a fourth operator. Vodafone Turkey paid a   total of €778 million for 82.8MHz (2x10MHz in the 800MHz band, 2x1.4MHz in   900MHz band, 2x10MHz in 1800MHz band, 2x15MHz FDD in the 2.6GHz band and   1x10MHz TDD in the 2.6GHz band). The operators launched 4.5G services as of 1   April 2016. Australia The national regulatory authority (‘ACMA’) has   completed an auction of up to 60MHz of regional 1800MHz spectrum to be made   available in two to three years’ time (currently allocated for fixed link   wireless services). Vodafone Australia acquired spectrum in many regional   areas, including Canberra. After extensive lobbying by the industry, the   Government is looking to undertake the most comprehensive overhaul of   spectrum management in 15 years. Vodafone Australia is advocating for a   framework that better considers the competition effects of spectrum policy   (60% of regional spectrum is held by Telstra) and the establishment of more   market-orientated spectrum licences and a better renewal process and more   flexible payment terms. Egypt The Administrative Court ruling in favour of   Vodafone Egypt in the case filed against Telecom Egypt and the national   regulatory authority (‘NTRA’), regarding the NTRA’s authority to set MTRs   between operators has been partially implemented with Orange Egypt (formerly   Mobinil) and Telecom Egypt, however, an arbitration case is pending with   Etisalat Misr. The implementation of the Unified License remains on hold. The   4G and fixed licence proposals are being developed by the NTRA and will be   presented for approval to the Egyptian Cabinet. For information on litigation   in Egypt, see note 30 “Contingent liabilities and legal proceedings” to the   consolidated financial statements. Ghana In December 2015 the national   regulatory authority (‘NCA’) conducted a spectrum auction in the 800MHz band.   Vodafone Ghana as well as the other four mobile network operators and three   mobile broadband wireless access operators declined to participate in the   auction on the basis of the high reserve price. Scancom Ghana (trading as MTN   Ghana) was the only entity to participate and submit bids in the auction. MTN   was therefore awarded one of the blocks in the two lots of 2x10MHz at a   reserve price of US$67.5 million. New Zealand In March 2015 the New Zealand   Government announced the expansion of the existing Ultra-fast Broadband fibre   to the premises (‘FTTP’) initiative from 75% to 80% of premises passed at a   projected cost of between NZ$152 million and NZ$210 million. In addition, the   Government announced a further NZ$150 million of funding to improve broadband   coverage in rural areas and address mobile blackspots. Competitive tenders   for these initiatives are expected to be completed in 2016. 186 Vodafone   Group Plc Annual Report on Form 20-F 2016 Unaudited information 

 

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Safaricom:   Kenya Safaricom continues to operate on a periodically renewed trial licence   for the 2x15MHz 800MHz band spectrum granted in February 2015 until the   national regulatory authority (‘CA’) is ready to issue the full Commercial   Licence. The CA is also conducting a stakeholders’ consultation on the   allocation of LTE spectrum in the 800MHz band to all mobile operators. In   August 2015 CA issued new subscriber regulations to be implemented by   February 2016. Safaricom is working with the authorities on revised timelines   to ensure an effective transition to the new regime as the envisaged   timeframe wasn’t operationally feasible. The CA has announced its intention   to commission a study on competition within the telecommunications sector.   The date for the commencement of the review has not been announced. Overview   of spectrum licences at 31 March 2016 Qatar In January 2016 Qatar underwent a   significant government re-shuffle at cabinet level resulting in the   amalgamation of the Ministry of Information and Communications Technology   with the Ministry of Transport and the replacement of the incumbent Telecoms   Minister. Vodafone Qatar is currently challenging decisions made by both the   previous Ministry and national regulatory authority (‘NRA’) relating to the   application and enforcement of the dominance framework. Preliminary decisions   were issued in respect of all three actions in March 2016. The action taken   against the Ministry was rejected on technical grounds with the Court   declining to recognise the decision of the Ministry as a “final   administrative decision” under the Administrative Law. The two separate cases   relating to subsequent decisions of the NRA have been reserved for further   investigation and consideration. 700MHz 800MHz 900MHz 1400/1500MHz 1800MHz 2.1GHz   2.6GHz 3.5GHz Quantity1 (Expiry date) Quantity1 (Expiry date) Quantity1   (Expiry date) Quantity1 (Expiry date) Quantity1 (Expiry date) Quantity1   (Expiry date) Quantity1 (Expiry date) Quantity1 (Expiry date) Country by   region Europe region Germany 2x10 (2033) 2x10 (2025) 2x12 (2016) 1x20 (2033)   2x5 (2016) 2x10+5 (2020) 2x20+25 (2025) n/a 2x102 (2033) 2x252 (2033) 2x52   (2025) Italy n/a 2x10 (2029) 2x10 (2018) 1x20 (2029) 2x15 (2018) 2x15+5   (2021) 2x15 (2029) n/a 2x52 (2029) UK n/a 2x10 (2033) 2x17 See note3 1x20   (2023) 2x6 See note3 2x15 See note3 2x20+25 (2033) n/a Spain n/a 2x10 (2030)   2x10 (2028) n/a 2x20 (2030) 2x15+5 (2030) 2x20+20 (2030) n/a Netherlands n/a   2x10 (2029) 2x10 (2030) n/a 2x20 (2030) 2x20+5 (2020) 2x10 (2030) n/a Ireland   n/a 2x10 (2030) 2x10 (2030) n/a 2x25 (2030) 2x15+5 (2022) n/a n/a Portugal   n/a 2x10 (2027) 2x5 (2021) n/a 2x6 (2021) 2x20 (2033) 2x20+25 (2027) n/a 2x52   (2027) 2x142 (2027) Romania n/a 2x10 (2029) 2x10 (2029) n/a 2x30 (2029)   2x15+5 (2020) 1x15 (2029) 1x40 (2025) Greece n/a 2x10 (2030) 2x15 (2027) n/a   2x10 (2027) 2x20+5 (2021) 2x20+20 (2030) n/a 2x152 (2016) Czech Republic n/a   2x10 (2029) 2x10 (2021) n/a 2x18 (2021) 2x20 (2025) 2x20 (2029) n/a 2x42   (2029) Hungary n/a 2x10 (2029) 2x10 (2022)4 n/a 2x15 (2022)3 2x15 (2019) 2x20+25   (2029) n/a 2x1 (2029)4 Albania n/a n/a 2x8 (2016) n/a 2x9 (2016) 2x15+5   (2025) 2x20+20 (2030) n/a 2x22 (2030) 2x142 (2030) 2x52 (2029) Malta n/a n/a   2x15 (2026) n/a 2x25 (2026) 2x20+5 (2020) n/a 1x42 (2020) 187 Additional   information Vodafone Group Plc Annual Report on Form 20-F 2016 Overview   Strategy review Performance Governance Financials 

 

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Regulation   (continued) 700MHz 800MHz 900MHz 1400/1500MHz 1800MHz 2.1GHz 2.6GHz 3.5GHz   Quantity1 (Expiry date) Quantity1 (Expiry date) Quantity1 (Expiry date)   Quantity1 (Expiry date) Quantity1 (Expiry date) Quantity1 (Expiry date) Quantity1   (Expiry date) Quantity1 (Expiry date) Country by region Africa, Middle East   and Asia-Pacific India5 (2016–2035)5 (2016–2035)5 n/a n/a n/a (2030) n/a n/a   Vodacom: South Africa6 2x116 2x126 2x15+56 n/a n/a n/a n/a n/a Vodacom:   Democratic Republic of Congo n/a n/a 2x6 (2028) n/a 2x18 (2028) 2x10+15   (2032) n/a 1x30 (2026) Lesotho7 2x207 2x227 2x307 2x157 1x407 1x427 n/a n/a   Mozambique n/a n/a 2x8 (2018) n/a 2x8 (2018) 2x15+10 (2023) n/a n/a Tanzania   n/a n/a 2x8 (2031) n/a 2x10 (2031) 2x15 (2031) n/a 1x28 (2031) Turkey n/a   2x10 (2029) 2x11 (2023) n/a 2x10 (2029) 2x15+5 (2029) 2x15+10 (2029) n/a 2x12   (2029) Australia8 n/a 2x10 (850MHz) (2028) 2x8 (2028) n/a 2x30 (annual)   2x25+5 (2017) n/a n/a Egypt n/a n/a 2x13 (2022) n/a 2x10 (2022) 2x15 (2022)   n/a n/a New Zealand 2x15 (2031) n/a 2x15 (2031) n/a 2x25 (2021) 2x25+10   (2021) 2x15+5 (2028) 2x28 (2022) Safaricom: Kenya n/a 2x15 (Trial) 2x17   (2024) n/a 2x20 (2024) 2x10 (2022) n/a n/a Ghana n/a n/a 2x8 (2019) n/a 2x10   (2019) 2x15 (2023)9 n/a n/a Qatar n/a 2x10 (2029) 2x11 (2028) n/a 2x20 (2028)   2x15 (2028) n/a n/a 2x52 (2029) Notes: 1 2 3 4 5 6 Single (or unpaired)   blocks of spectrum are used for asymmetric data (non-voice) use; block   quantity has been rounded to the nearest whole number. Blocks within the same   spectrum band but with different licence expiry dates are separately   identified. UK – 900MHz, 1800MHz and 2.1GHz – indefinite licence with a   five-year notice of revocation. Hungary – 900MHz and 1800MHz – conditional   options to extend these licences to 2034. India comprises 22 separate service   area licences with a variety of expiry dates. Vodacom’s South African   spectrum licences are renewed annually. As part of the migration to a new   licensing regime the national regulator has issued Vodacom a service licence   and a network licence which will permit Vodacom to offer mobile and fixed   services. The service and network licences have a twenty-year duration and   will expire in 2028. Vodacom’s Lesotho spectrum licences are renewed   annually, N.B. 1x40MHz in 2.6GHz column is actually 2.3GHz. Australia –table   refers to Sydney/Melbourne only. In total VHA has: – 850MHz band – 2x10MHz in   Sydney/Melbourne/Brisbane/Adelaide/Perth and 2x5MHz across the rest of   Australia. – 900MHz band – 2x8MHz across Australia. – 1800MHz band – 2x30MHz   in Sydney/Melbourne, 2x25MHz in Brisbane/Adelaide/Perth/Canberra, 2x10MHz in   Victoria/North Queensland/Western Australia and 2x5MHz in   Darwin/Tasmania/South Queensland. – 2.1GHz band, VHA holds 2x25 MHz in   Sydney/Melbourne, 2x20MHz in Brisbane/Adelaide/Perth, 2x10MHz in   Canberra/Darwin/Hobart and 2x5MHz in regional Australia. Ghana – The NRA has   issued provisional licences with the intention of converting them to full   licences once the NRA has been reconvened. 7 8 9 188 Vodafone Group Plc   Annual Report on Form 20-F 2016 Unaudited information 

 

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Mobile   Termination Rates (‘MTRs’) National regulators are required to take utmost   account of the Commission’s existing recommendation on the regulation of   fixed and MTRs. This recommendation requires MTRs to be set using a long run   incremental cost methodology. Over the last three years MTRs effective for   our subsidiaries were as follows: 20141 20151 20161 1 April 20162 Country by   region Europe Germany (€ cents) 1.79 1.72 1.66 1.66 Italy (€ cents) 0.98 0.98   0.98 0.98 UK (GB £ pence) 0.85 0.67 0.68 0.51 Spain (€ cents) 1.09 1.09 1.09   1.09 Netherlands (€ cents)3 1.86 1.86 1.86 1.86 Ireland (€ cents) 2.60 2.60   2.60 0.84 (from September 2016) Portugal (€ cents) 1.27 1.27 0.83 0.79 (from   July 2016) Romania (€ cents) 0.96 0.96 0.96 0.96 Greece (€ cents) 1.19 1.099   1.081 1.081 Czech Republic (CZK) 0.27 0.27 0.27 0.27 Hungary (HUF) 7.06 7.06   1.71 1.71 Albania (ALL) 2.66 1.48 1.48 1.48 Malta (€ cents) 2.07 0.40 0.40   0.40 Africa, Middle East and Asia-Pacific India (rupees)4 0.20 0.14 0.14 0.14   Vodacom: South Africa (ZAR)5 0.40 0.20 0.16 0.13 (from October 2016) Vodacom:   Democratic Republic of Congo (USD cents) 3.70 3.40 3.40 3.40 (until June   2016) Lesotho (LSL/ZAR) 0.47 0.38 0.32 0.26 (from October 2016) Mozambique   (MZN/USD cents) 1.44 0.86 0.86 0.86 Tanzania (TZN) 32.40 30.58 28.57 26.96 (from   January 2017) Turkey (lira) 0.0258 0.0258 0.0258 0.0258 Australia (AUD cents)   3.60 3.60 1.70 1.70 Egypt (PTS/piastres) 10.00 10.00 10.00 10.00 New Zealand   (NZD cents) 3.72 3.56 3.56 3.56 Safaricom: Kenya (shilling) 1.15 1.15 0.99   0.99 Ghana (peswas) 4.00 4.00 5.00 5.00 Qatar (dirhams) 16.60 16.60 9.00 8.31   Notes: 1 2 3 4 5 All MTRs are based on end of financial year values. MTRs   established from 1 April 2016 are included at the current rate or where a   glide-path or a final decision has been determined by the national regulatory   authority. MTR under review by ECJ and decision due after June 2016. MTR   under appeal and due to be heard 18 May 2016. Please see Vodacom: South   Africa on page 185. 189 Additional information Vodafone Group Plc Annual   Report on Form 20-F 2016 Overview Strategy review Performance Governance   Financials 

 

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Non-GAAP   information In the discussion of our reported financial position, operating   results and cash flows, information is presented to provide readers with   additional financial information that is regularly reviewed by management.   However, this additional information presented is not uniformly defined by   all companies, including those in the Group’s industry. Accordingly, it may   not be comparable with similarly titled measures and disclosures by other   companies. Additionally, certain information presented is derived from   amounts calculated in accordance with IFRS but is not itself an expressly   permitted GAAP measure. Such non-GAAP measures should not be viewed in   isolation or as an alternative to the equivalent GAAP measure. Adjusted   EBITDA Adjusted EBITDA is operating profit excluding share in results of   associates, depreciation and amortisation, gains/losses on the disposal of   fixed assets, impairment losses, restructuring costs, other operating income   and expense and significant items that are not considered by management to be   reflective of the underlying performance of the Group. We use adjusted   EBITDA, in conjunction with other GAAP and non-GAAP financial measures such   as adjusted operating profit, operating profit and net profit, to assess our   operating performance. We believe that adjusted EBITDA is an operating   performance measure, not a liquidity measure, as it includes non-cash changes   in working capital and is reviewed by the Chief Executive to assess internal   performance in conjunction with adjusted EBITDA margin, which is an   alternative sales margin figure. We believe it is both useful and necessary   to report adjusted EBITDA as a performance measure as it enhances the   comparability of profit across segments. Because adjusted EBITDA does not take   into account certain items that affect operations and performance, adjusted   EBITDA has inherent limitations as a performance measure. To compensate for   these limitations, we analyse adjusted EBITDA in conjunction with other GAAP   and non-GAAP operating performance measures. Adjusted EBITDA should not be   considered in isolation or as a substitute for a GAAP measure of operating   performance. A reconciliation of adjusted EBITDA to the closest equivalent   GAAP measure, operating profit, is provided above and in note 2 “Segmental   analysis” to the consolidated financial statements. Group adjusted operating   profit and adjusted earnings per share Group adjusted operating profit   excludes non-operating income of associates, impairment losses, restructuring   costs, amortisation of customer bases and brand intangible assets, other   operating income and expense and other significant one-off items. Adjusted   earnings per share also excludes certain foreign exchange rate differences,   together with related tax effects. We believe that it is both useful and   necessary to report these measures for the following reasons: a these   measures are used for internal performance reporting; a these measures are   used in setting director and management remuneration; and a they are useful   in connection with discussion with the investment analyst community and debt   rating agencies. A reconciliation of adjusted operating profit to the   respective closest equivalent GAAP measure, operating profit, is provided   above and in note 2 “Segmental analysis” to the consolidated financial   statements. A reconciliation of adjusted earnings per share to basic earnings   per share is provided in the “Operating results” on page 31. Cash flow   measures In presenting and discussing our reported results, free cash flow and   operating free cash flow are calculated and presented even though these   measures are not recognised within IFRS. We believe that it is both useful   and necessary to communicate free cash flow to investors and other interested   parties, for the following reasons: a free cash flow allows us and external   parties to evaluate our liquidity and the cash generated by our operations.   Free cash flow does not include payments for licences and spectrum included   within intangible assets, items determined independently of the ongoing   business, such as the level of dividends, and items which are deemed   discretionary, such as cash flows relating to acquisitions and disposals or   financing activities. In addition, it does not necessarily reflect the   amounts which we have an obligation to incur. However, it does reflect the   cash available for such discretionary activities, to strengthen the   consolidated statement of financial position or to provide returns to   shareholders in the form of dividends or share purchases; a free cash flow   facilitates comparability of results with other companies, although our   measure of free cash flow may not be directly comparable to similarly titled   measures used by other companies; a these measures are used by management for   planning, reporting and incentive purposes; and a these measures are useful   in connection with discussion with the investment analyst community and debt   rating agencies. 190 Vodafone Group Plc Annual Report on Form 20-F 2016   Unaudited information 

 

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A   reconciliation of cash generated by operations, the closest equivalent GAAP   measure, to operating free cash flow and free cash flow, is provided below.   2016 £m 2015 £m 2014 £m Note: 1 Other movements for the year ended 31 March   2016 include £nil (2015: £365 million, 2014: £nil) UK pensions contribution   payment and £nil (2015: £116 million, 2014: £nil) of KDG incentive scheme   payments that vested upon acquisition. Other Certain of the statements within   the section titled “Chief Executive’s strategic review” on pages 10 to 13   contain forward-looking non-GAAP financial information for which at this time   there is no comparable GAAP measure and which at this time cannot be   quantitatively reconciled to comparable GAAP financial information. Certain   of the statements within the section titled “Looking ahead” on page 15   contain forward-looking non-GAAP financial information which at this time   cannot be quantitatively reconciled to comparable GAAP financial information.   Organic growth All amounts in this document marked with an “*” represent   organic growth which presents performance on a comparable basis, in terms of   both merger and acquisition activity and foreign exchange movements. While   “organic growth” is neither intended to be a substitute for reported growth,   nor is it superior to reported growth, we believe that the measure provides   useful and necessary information to investors and other related parties for   the following reasons: a it provides additional information on underlying   growth of the business without the effect of certain factors unrelated to its   operating performance; a it is used for internal performance analysis; and a   it facilitates comparability of underlying growth with other companies   (although the term “organic” is not a defined term under IFRS and may not,   therefore, be comparable with similarly titled measures reported by other   companies). For the quarter ended 31 March 2015 and consequently the year   ended 31 March 2015, the Group’s organic service revenue growth rate was   adjusted to exclude the beneficial impact of a settlement of a historical   interconnect rate dispute in the UK and the beneficial impact of an upward   revision to interconnect revenue in Egypt from a re-estimation by management   of the appropriate historical mobile interconnection rate. The adjustments in   relation to Vodafone UK and Vodafone Egypt also impacted the disclosed organic   growth rates for those countries. In addition, the Group’s organic service   revenue growth rates for the year ended 31 March 2015, the six months ended   30 September 2015 and the quarters ended 31 March 2015, 30 June 2015, 30   September 2015 and 31 December 2015 have been amended to exclude the adverse   impact of an adjustment to intercompany revenue. For the year ended 31 March   2016, the Group has amended its reporting to reflect changes in the internal   management of its Enterprise business. The primary change has been that, on 1   April 2015, the Group redefined its segments to report international voice   transit service revenue and costs within common functions rather than within   the service revenue and cost amounts disclosed for each country and region. The   results presented for the years ended 31 March 2015 and 31 March 2014 have   been restated on a comparable basis together with all disclosed organic   growth rates. There is no impact on total Group results. In addition, for the   quarter and six months ended 30 September 2015 and year ended 31 March 2016,   the Group’s and Vodafone UK’s organic service revenue growth rate has been   adjusted to exclude the beneficial impact of a settlement of a historical   interconnect rate dispute in the UK. 191 Additional information Vodafone   Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials Cash generated by operations (refer to note   19) 11,220 10,39712,147 Capital expenditure (8,599) (9,197) (6,313) Working   capital movement in respect of capital expenditure (63) 762456 Disposal of   property, plant and equipment 140 17879 Restructuring costs 186 336210 Other1   – 387– Operating free cash flow 2,884 2,8636,579 Taxation (689) (758)(3,449)   Dividends received from associates and investments 67 2242,842 Dividends paid   to non-controlling shareholders in subsidiaries (223) (247) (264) Interest   received and paid (1,026) (994)(1,315) Free cash flow 1,013 1,0884,393 

 

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Non-GAAP   information (continued) Reconciliation of organic growth to reported growth   is shown where used, or in the table below: Organic change % Other activity1   pps Foreign exchange pps Reported change % Period 31 March 2016 Group Revenue   FY 2.3 0.7 (6.0) (3.0) Service revenue FY 1.5 0.7 (5.7) (3.5) Service revenue   excluding the impact of MTR cuts FY 2.1 0.7 (5.7) (2.9) Enterprise service   revenue FY 2.1 1.5 (5.3) (1.7) Enterprise fixed service revenue FY 4.4 4.9   (3.7) 5.6 Vodafone Global Enterprise service revenue FY 5.9 3.2 (1.3) 7.8   Machine-to-machine revenue FY 28.6 10.8 (14.7) 24.7 Adjusted EBITDA FY 2.7   1.0 (6.2) (2.5) Percentage point change in adjusted EBITDA margin FY 0.1 0.1   (0.1) 0.1 Adjusted operating profit FY (3.9) 0.2 (7.4) (11.1) Adjusted EBITDA   H2 3.6 (2.1) (4.9) (3.4) Service revenue Q4 2.5 (1.8) (0.8) (0.1) Europe   Mobile service revenue FY (2.0) 0.2 (5.1) (6.9) Fixed service revenue FY 3.5   5.1 (5.2) 3.4 Germany – Mobile service revenue FY (1.6) – (6.6) (8.2) Germany   – Fixed service revenue FY 1.5 – (6.8) (5.3) Italy – Mobile service revenue   FY (1.1) – (6.7) (7.8) Italy – Fixed service revenue FY 1.2 – (6.7) (5.5) UK   – Mobile service revenue FY (0.7) (0.6) – (1.3) UK – Fixed service revenue FY   1.1 – – 1.1 UK – Fixed service revenue excluding carrier services FY 2.4 – –   2.4 Spain – Service revenue excluding the impact of handset financing FY 0.3   8.7 (6.6) 2.4 Spain – Mobile service revenue FY (8.0) 2.5 (6.3) (11.8) Spain   – Fixed service revenue FY 7.8 30.5 (7.1) 31.2 Netherlands – Service revenue   FY 0.3 – (6.7) (6.4) Germany – Percentage point change in adjusted EBITDA   margin FY 0.8 – 0.1 0.9 Italy – Percentage point change in adjusted EBITDA   margin FY – – – – UK – Percentage point change in adjusted EBITDA margin FY   0.2 (1.0) – (0.8) Spain – Percentage point change in adjusted EBITDA margin   FY 1.3 2.1 0.2 3.6 Other Europe – Percentage point change in adjusted EBITDA   margin FY (1.0) (0.1) – (1.1) Europe – Percentage point change in adjusted   EBITDA margin FY 0.4 – (0.1) 0.3 Adjusted EBITDA H2 2.3 (3.2) (1.9) (2.8)   Europe – Percentage point change in adjusted EBITDA margin H2 0.6 (0.8) 0.1   (0.1) Service revenue Q4 0.5 (1.1) 2.7 2.1 Mobile service revenue Q4 (1.1)   0.2 2.7 1.8 Fixed service revenue Q4 5.4 (5.3) 2.7 2.8 Germany – Service   revenue Q4 1.6 – 3.7 5.3 Italy – Service revenue Q4 1.3 – 3.6 4.9 UK –   Service revenue Q4 (0.1) (5.5) – (5.6) Spain – Service revenue Q4 (3.2) – 3.4   0.2 Other Europe – Service revenue Q4 2.1 0.1 4.1 6.3 Romania – Service   revenue Q4 7.7 – 3.9 11.6 Portugal – Service revenue Q4 3.5 – 4.0 7.5   Netherlands – Service revenue Q4 (1.3) – 3.8 2.5 Mobile service revenue Q3   (2.0) (0.3) (6.4) (8.7) Fixed service revenue Q3 3.7 1.2 (7.0) (2.1) Germany   – Service revenue Q3 (0.4) – (8.4) (8.8) Italy – Service revenue Q3 (0.3) –   (8.5) (8.8) UK – Service revenue Q3 (0.7) (0.8) – (1.5) Spain – Service   revenue Q3 (3.1) (0.1) (8.3) (11.5) Other Europe – Service revenue Q3 1.6 1.8   (8.7) (5.3) Netherlands – Service revenue Q3 0.2 – (8.3) (8.1) 192 Vodafone   Group Plc Annual Report on Form 20-F 2016 Unaudited information 

 

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Organic change   % Other activity1 pps Foreign exchange pps Reported change % Period AMAP   India – Service revenue excluding the impact of MTR cuts and other FY 10.0 –   (0.2) 9.8 South Africa – Service revenue FY 4.7 – (14.1) (9.4) Vodacom’s   international operations – Service revenue FY 10.0 – (10.1) (0.1) Turkey –   Service revenue FY 19.7 – (18.5) 1.2 Egypt – Service revenue FY 8.9 (6.3)   (2.0) 0.6 India – Percentage point change in adjusted EBITDA margin FY (0.2)   – – (0.2) Vodacom – Percentage point change in adjusted EBITDA margin FY 3.6   – (0.6) 3.0 Other AMAP – Percentage point change in adjusted EBITDA margin FY   (2.1) – 0.7 (1.4) AMAP – Percentage point change in adjusted EBITDA margin FY   0.1 – – 0.1 Service revenue Q4 8.1 (2.2) (8.7) (2.8) India – Service revenue   Q4 5.3 – (2.6) 2.7 Vodacom – Service revenue Q4 6.3 – (19.3) (13.0) South   Africa – Service revenue Q4 6.5 – (22.9) (16.4) South Africa – Data revenue   Q4 18.8 – (25.4) (6.6) Other AMAP – Service revenue Q4 12.1 (7.1) (6.5) (1.5)   Service revenue Q3 6.5 (0.1) (10.0) (3.6) India – Service revenue Q3 2.3 –   (1.8) 0.5 Vodacom – Service revenue Q3 7.2 – (17.5) (10.3) South Africa –   Service revenue Q3 7.2 – (18.7) (11.5) Other AMAP – Service revenue Q3 10.8 –   (12.7) (1.9) 31 March 2015 restated Group Revenue FY (0.8) 17.8 (6.9) 10.1   Service revenue FY (1.6) 17.7 (6.7) 9.4 Adjusted EBITDA FY (6.9) 21.4 (7.0)   7.5 Percentage point change in adjusted EBITDA margin FY (1.8) 1.2 (0.1)   (0.7) Adjusted operating profit FY (24.1) 11.0 (5.5) (18.6) Adjusted EBITDA   H2 (3.6) 18.4 (5.3) 9.5 Europe Germany – Mobile service revenue FY (3.5) –   (6.6) (10.1) Germany – Fixed service revenue FY (4.4) 40.2 (9.8) 26.0 Germany   – Service revenue Q4 (3.5) 1.6 (10.0) (11.9) Germany – Fixed service revenue   H1 (5.0) 96.0 (10.8) 80.2 Germany – Fixed service revenue H2 (3.8) 8.0 (8.5)   (4.3) Germany – Percentage point change in adjusted EBITDA margin FY (3.0)   2.0 – (1.0) Italy – Service revenue Q4 (4.1) 133.9 (28.7) 101.1 Italy –   Mobile service revenue FY (12.1) 902.8 (123.7) 767.0 Italy – Fixed service   revenue FY 1.3 998.6 (130.2) 869.7 Italy – Percentage point change in   adjusted EBITDA margin FY (2.4) 0.9 – (1.5) Italy – Operating expenses FY 3.1   (1,079.3) 149.3 (926.9) Italy – Customer costs FY 3.0 (775.9) 108.1 (664.8)   UK – Service revenue Q4 (0.6) 5.7 – 5.1 UK – Mobile service revenue FY 0.5 –   – 0.5 UK – Fixed service revenue FY (9.1) 5.8 – (3.3) UK – Fixed service   revenue H1 (11.3) – – (11.3) UK – Fixed service revenue H2 (6.8) 11.4 – 4.6   UK – Percentage point change in adjusted EBITDA margin FY (2.4) 1.7 – (0.7)   Spain – Service revenue Q4 (7.8) 35.0 (13.0) 14.2 Spain – Mobile service   revenue FY (12.7) 5.8 (6.3) (13.2) Spain – Fixed service revenue FY 7.8 201.9   (21.6) 188.1 Spain – Percentage point change in adjusted EBITDA margin FY   (4.9) 3.9 – (1.0) Other Europe – Service revenue Q4 (0.9) 2.7 (10.5) (8.7)   Other Europe – Service revenue Q3 (1.1) 0.8 (6.6) (6.9) Hungary – Service   revenue FY 8.6 – (10.8) (2.2) Other Europe – Percentage point change in   adjusted EBITDA margin FY 0.1 (0.1) – – 193 Additional information Vodafone   Group Plc Annual Report on Form 20-F 2016 Overview Strategy review   Performance Governance Financials 

 

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Non-GAAP   information (continued) Organic change % Other activity1 pps Foreign exchange   pps Reported change % Period AMAP Service revenue excluding the impact of MTR   cuts FY 7.0 0.5 (7.1) 0.4 India – Service revenue Q4 11.7 – 9.3 21.0 India –   Percentage point change in adjusted EBITDA margin FY 1.0 – (0.1) 0.9 Vodacom   – Service revenue Q4 (0.2) – 1.4 1.2 South Africa – Service revenue FY (2.7)   – (9.7) (12.4) South Africa – Service revenue excluding the impact of MTR   cuts FY 1.4 – (9.7) (8.3) Vodacom’s international operations – Service   revenue FY 4.8 – (5.3) (0.5) Turkey – Service revenue FY 9.9 – (13.4) (3.5)   Egypt – Service revenue FY 2.8 6.4 (5.5) 3.7 New Zealand – Service revenue FY   (3.1) – (2.8) (5.9) Ghana – Service revenue FY 18.9 – (40.2) (21.3) Qatar –   Total revenue FY 13.2 – (1.0) 12.2 Vodacom – Percentage point change in   adjusted EBITDA margin FY (1.1) – (0.1) (1.2) Other AMAP – Percentage point   change in adjusted EBITDA margin FY (0.3) (0.2) 0.5 – 31 March 2014 restated   Group Revenue FY (1.6) 4.9 (2.5) 0.8 Service revenue FY (2.0) 4.9 (2.4) 0.5   Adjusted EBITDA FY (6.7) 5.8 (2.4) (3.3) Adjusted operating profit FY (21.7)   57.8 (52.3) (16.2) Europe Revenue FY (8.8) 6.6 2.4 0.2 Service revenue FY   (8.2) 6.5 2.3 0.6 Adjusted EBITDA FY (17.1) 9.1 2.5 (5.5) Adjusted operating   profit FY (41.9) 1.3 2.1 (38.5) AMAP Revenue FY 8.9 0.8 (12.1) (2.4) Service   revenue FY 6.7 0.8 (11.7) (4.2) Adjusted EBITDA FY 10.8 1.1 (13.5) (1.6)   Adjusted operating profit FY 30.7 (0.1) (18.6) 12.0 Note: 1 “Other activity”   includes the impact of M&A activity. Refer to “Organic growth” on page   191 for further detail. 194 Vodafone Group Plc Annual Report on Form 20-F   2016 Unaudited information 

 

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Form 20-F cross   reference guide This annual report on Form 20-F for the fiscal year ended 31   March 2016 has not been approved or disapproved by the SEC nor has the SEC   passed judgement upon the adequacy or accuracy of this document. The table   below sets out the location in this document of the information required by   SEC Form 20-F. Item Form 20-F caption Location in this document Page 1   Identity of Directors, senior management and advisers Not applicable – 2   Offer statistics and expected timetable Not applicable – 3 Key information 3A   Selected financial data Selected financial data 202 Shareholder information:   Foreign currency translation 177 3B Capitalisation and indebtedness Not   applicable – 3C Reasons for the offer and use of proceeds Not applicable – 3D   Risk factors Principal risk factors and uncertainties 22 to 28 4 Information   on the Company 4A History and development of the Company History and   development 182 Contact details Back cover Shareholder information: Registrar   and transfer office 176 Shareholder information: Articles of association and   applicable English law 177 Chief Executive’s strategic review 10 to 13 Chief   Financial Officer’s review 14 and 15 Note 1 “Basis of preparation” 91 to 95   Note 2 “Segmental analysis” 96 to 98 Note 11 “Property, plant and equipment”   114 and 115 Note 28 “Acquisitions and disposals” 147 and 148 Note 29   “Commitments” 148 and 149 4B Business overview Performance highlights 2 At a   glance 4 and 5 Our business model: Investing in a great platform for the   future 6 and 7 Market overview: Understanding our market place 8 Market   overview: Adapting and evolving our response 9 Chief Executive’s strategic   review 10 to 13 Operating results 30 to 35 Financial position and resources   36 and 37 Prior year operating results 163 to 167 Note 2 “Segmental analysis”   – Segmental revenue and profit 97 Regulation 183 to 189 4C Organisational   structure Note 33 “Related undertakings” 154 to 161 Note 12 “Investments in   associates and joint arrangements” 116 to 118 Note 13 “Other investments” 119   4D Property, plant and equipment Chief Executive’s strategic review 10 to 13   Chief Financial Officer’s review 14 and 15 Financial position and resources   36 and 37 Note 11 “Property, plant and equipment” 114 and 115 4A Unresolved   staff comments None – 195 Additional information Vodafone Group Plc Annual   Report on Form 20-F 2016 Overview Strategy review Performance Governance   Financials Unaudited information 

 

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Form 20-F cross   reference guide (continued) Item Form 20-F caption Location in this document   Page 5 Operating and financial review and prospects 5A Operating results   Operating results 30 to 35 Prior year operating results 163 to 167 Note 21   “Borrowings” 126 to 130 Shareholder information: Foreign currency translation   177 Regulation 183 to 189 5B Liquidity and capital resources Financial   position and resources: Liquidity and capital resources 36 and 37 Note 23   “Capital and financial risk management” 134 to 139 Note 22 “Liquidity and   capital resources” 130 to 133 Note 21 “Borrowings” 126 to 130 Note 29   “Commitments” 148 and 149 5C Research and development, patents and licences,   etc. Chief Executive’s strategic review 10 to 13 Chief Financial Officer’s   review 14 and 15 Regulation: Licences 187 and 188 5D Trend information Chief   Executive’s strategic review 10 to 13 Market overview: Understanding our   market place 8 Market overview: Adapting and evolving our response 9 5E   Off-balance sheet arrangements Note 22 “Liquidity and capital resources” –   Off-balance sheet arrangements 130 to 133 Note 29 “Commitments” 148 and 149   Note 30 “Contingent liabilities and legal proceedings” 149 to 152 5F Tabular   disclosure of contractual obligations Financial position and resources:   Contractual obligations and commitments 36 5G Safe harbor Forward-looking   statements 198 and 199 6 Directors, senior management and employees 6A   Directors and senior management Board of Directors 40 and 41 Executive   Committee 42 and 43 6B Compensation Directors’ remuneration 57 to 73 Note 24   “Directors and key management compensation” 139 6C Board practices Compliance   with the 2014 UK Corporate Governance Code 54 and 55 Shareholder information:   Articles of association and applicable English law 177 Directors’   remuneration 57 to 73 Board of Directors 40 and 41 Board Committees 47 to 53   6D Employees Our people 18 and 19 Note 25 “Employees” 140 6E Share ownership   Directors’ remuneration 57 to 73 Note 27 “Share-based payments” 145 and 146 7   Major shareholders and related party transactions 7A Major shareholders   Shareholder information: Major shareholders 177 7B Related party transactions   Directors’ remuneration 57 to 73 Note 30 “Contingent liabilities and legal   proceedings” 149 to 152 Note 31 “Related party transactions” 153 7C Interests   of experts and counsel Not applicable – 8 Financial information 8A   Consolidated statements and other financial information Financials 87 to 162   Report of independent registered public accounting firm 82 Note 30   “Contingent liabilities” 149 to 152 8B Significant changes Note 32   “Subsequent events” 153 9 The offer and listing 9A Offer and listing details   Shareholder information: Share price history 176 9B Plan of distribution Not   applicable – 9C Markets Shareholder information: Markets 177 9D Selling   shareholders Not applicable – 9E Dilution Not applicable – 9F Expenses of the   issue Not applicable – 196 Vodafone Group Plc Annual Report on Form 20-F 2016   Unaudited information 

 

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Item Form 20-F   caption Location in this document Page 10 Additional information 10A Share   capital Not applicable – 10B Memorandum and articles of association   Shareholder information: Articles of association and applicable English law   177 10C Material contracts Shareholder information: Material contracts 179   10D Exchange controls Shareholder information: Exchange controls 179 10E   Taxation Shareholder information: Taxation 179 to 181 10F Dividends and   paying agents Not applicable – 10G Statement by experts Not applicable – 10H   Documents on display Shareholder information: Documents on display 179 10I   Subsidiary information Not applicable – 11 Quantitative and qualitative   disclosures about market risk Note 23 “Capital and financial risk management”   134 to 139 12 Description of securities other than equity securities 12A Debt   securities Not applicable – 12B Warrants and rights Not applicable – 12C   Other securities Not applicable – 12D American depositary shares ADR payment   information C-1 13 Defaults, dividend arrearages and delinquencies Not   applicable – 14 Material modifications to the rights of security holders and   use of proceeds Not applicable – 15 Controls and procedures Governance 38 to   56 Directors’ statement of responsibility: Management’s report on internal   control over financial reporting 77 Report of independent registered public   accounting firm 82 16 16A Audit Committee financial expert Board Committees   47 to 53 16B Code of ethics Our US listing requirements 56 16C Principal   accountant fees and services Note 3 “Operating profit/(loss)” 99 Board   Committees: Audit and Risk Committee – External audit 50 and 51 16D   Exemptions from the listing standards for audit committees Not applicable –   16E Purchase of equity securities by the issuer and affiliated purchasers Not   applicable – 16F Change in registrant’s certifying accountant Not applicable   – 16G Corporate governance Our US listing requirements 56 16H Mine safety   disclosure Not applicable – 17 Financial statements Not applicable – 18   Financial statements Financials 87 to 162 Report of Independent Registered   Public Accounting Firm 82 and 83 Separate financial statements required by   Rule 3-09 of Regulation S-X B-1 to B-28 Report of Independent Registered   Public Accounting Firm B-3 19 Exhibits Filed with the SEC Index to Exhibits   197 Additional information Vodafone Group Plc Annual Report on Form 20-F 2016   Overview Strategy review Performance Governance Financials 

 

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Forward-looking   statements This document contains “forward-looking statements” within the   meaning of the US Private Securities Litigation Reform Act of 1995 with   respect to the Group’s financial condition, results of operations and   businesses, and certain of the Group’s plans and objectives. In particular,   such forward-looking statements include statements with respect to: a   expectations regarding the Group’s access to adequate funding for its working   capital requirements and share buyback programmes, and the Group’s future   dividends or its existing investments; and a the impact of regulatory and   legal proceedings involving the Group and of scheduled or potential regulatory   changes. a the Group’s expectations and guidance regarding its financial and   operating performance, the performance of associates and joint ventures,   other investments and newly acquired businesses, expectations regarding the   Project Spring organic investment programme and expectations regarding fixed   revenue and broadband customers; Forward-looking statements are sometimes,   but not always, identified by their use of a date in the future or such words   as “will”, “anticipates”, “aims”, “could”, “may”, “should”, “expects”,   “believes”, “intends”, “plans” or “targets”. By their nature, forward-looking   statements are inherently predictive, speculative and involve risk and   uncertainty because they relate to events and depend on circumstances that   will occur in the future. There are a number of factors that could cause   actual results and developments to differ materially from those expressed or   implied by these forward-looking statements. These factors include, but are   not limited to, the following: a intentions and expectations regarding the   development of products, services and initiatives introduced by, or together   with, Vodafone or by third parties; a expectations regarding the global   economy and the Group’s operating environment and market position, including future   market conditions, growth in the number of worldwide mobile phone users and   other trends; a general economic and political conditions in the   jurisdictions in which the Group operates and changes to the associated   legal, regulatory and tax environments; a increased competition; a revenue   and growth expected from the Group’s Enterprise and total communications   strategy; a levels of investment in network capacity and the Group’s ability   to deploy new technologies, products and services; a mobile penetration and   coverage rates, MTR cuts, the Group’s ability to acquire spectrum, expected   growth prospects in the Europe and AMAP regions and growth in customers and   usage generally; a rapid changes to existing products and services and the   inability of new products and services to perform in accordance with   expectations; a anticipated benefits to the Group from cost-efficiency   programmes; a the ability of the Group to integrate new technologies,   products and a possible future acquisitions, including increases in ownership   in existing investments, the timely completion of pending acquisition   transactions and pending offers for investments; services with existing   networks, technologies, products and services; a the Group’s ability to   generate and grow revenue; a a lower than expected impact of new or existing   products, services or technologies on the Group’s future revenue, cost   structure and capital expenditure outlays; a expectations and assumptions   regarding the Group’s future revenue, operating profit, adjusted EBITDA,   adjusted EBITDA margin, free cash flow, depreciation and amortisation   charges, foreign exchange rates, tax rates and capital expenditure; a slower   than expected customer growth, reduced customer retention, reductions or   changes in customer spending and increased pricing pressure; a the Group’s   ability to expand its spectrum position, win 3G and 4G allocations and   realise expected synergies and benefits associated with 3G and 4G; 198   Vodafone Group Plc Annual Report on Form 20-F 2016 Unaudited information 

 

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A review of the   reasons why actual results and developments may differ materially from the   expectations disclosed or implied within forward-looking statements can be   found under “Principal risk factors and uncertainties” on pages 22 to 28 of   this document. All subsequent written or oral forward-looking statements   attributable to the Company or any member of the Group or any persons acting   on their behalf are expressly qualified in their entirety by the factors   referred to above. No assurances can be given that the forward-looking   statements in this document will be realised. Subject to compliance with   applicable law and regulations, Vodafone does not intend to update these   forward-looking statements and does not undertake any obligation to do so.   PricewaterhouseCoopers LLP has neither examined, compiled, nor performed any   procedures with respect to the forward looking statements, and accordingly   PricewaterhouseCoopers LLP does not express an opinion or provide any other   form of assurance on such information. Deloitte LLP has neither examined,   compiled, nor performed any procedures with respect to the forward looking   statements, and accordingly Deloitte LLP does not express an opinion or   provide any other form of assurance on such information. a the Group’s ability   to secure the timely delivery of high-quality products from suppliers; a loss   of suppliers, disruption of supply chains and greater than anticipated prices   of new mobile handsets; a changes in the costs to the Group of, or the rates   the Group may charge for, terminations and roaming minutes; a the impact of a   failure or significant interruption to the Group’s telecommunications,   networks, IT systems or data protection systems; a the Group’s ability to   realise expected benefits from acquisitions, partnerships, joint ventures,   franchises, brand licences, platform sharing or other arrangements with third   parties; a acquisitions and divestments of Group businesses and assets and   the pursuit of new, unexpected strategic opportunities; a the Group’s ability   to integrate acquired business or assets; a the extent of any future   write-downs or impairment charges on the Group’s assets, or restructuring   charges incurred as a result of an acquisition or disposition; a developments   in the Group’s financial condition, earnings and distributable funds and   other factors that the Board takes into account in determining the level of   dividends; a the Group’s ability to satisfy working capital requirements; a   changes in foreign exchange rates; a changes in the regulatory framework in   which the Group operates; a the impact of legal or other proceedings against   the Group or other companies in the communications industry; and a changes in   statutory tax rates and profit mix. 199 Additional information Vodafone Group   Plc Annual Report on Form 20-F 2016 Overview Strategy review Performance   Governance Financials 

 

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Definition of   terms 2G 2G networks are operated using global system for mobile (‘GSM’)   technology which offers services such as voice, text messaging and low speed   data. In addition, all the Group’s controlled networks support general packet   radio services (‘GPRS’), often referred to as 2.5G. GPRS allows mobile   devices to access IP based data services such as the internet and email. 3G A   cellular technology based on wide band code division multiple access   delivering voice and faster data services. 4G/LTE 4G or long-term evolution   (‘LTE’) technology offers even faster data transfer speeds than 3G/HSPA. 5G   5G is the coming fifth-generation wireless broadband technology which will   provide better speeds and coverage than the current 4G. Acquisition costs The   total of connection fees, trade commissions and equipment costs relating to   new customer connections. ADR American depositary receipts is a mechanism   designed to facilitate trading in shares of non-US companies in the US stock   markets. The main purpose is to create an instrument which can easily be   settled through US stock market clearing systems. ADS American depositary   shares are shares evidenced by American depositary receipts. ADSs are issued   by a depositary bank and represent one or more shares of a non-US issuer held   by the depositary bank. The main purpose of ADSs is to facilitate trading in   shares of non-US companies in the US markets and, accordingly, ADRs which   evidence ADSs are in a form suitable for holding in US clearing systems. AGM   Annual general meeting. AMAP The Group’s region: Africa, Middle East and Asia   Pacific. Applications (‘apps’) Apps are software applications usually   designed to run on a smartphone or tablet device and provide a convenient   means for the user to perform certain tasks. They cover a wide range of   activities including banking, ticket purchasing, travel arrangements, social   networking and games. For example, the My Vodafone app lets customers check   their bill totals on their smartphone and see the minutes, texts and data   allowance remaining. ARPU Average revenue per user, defined as revenue and   incoming revenue divided by average customers. Capital expenditure (‘capex’)   This measure includes the aggregate of property, plant and equipment   additions and capitalised software costs. Churn Total gross customer   disconnections in the period divided by the average total customers in the   period. Cloud services This means the customer has little or no equipment at   their premises and all the equipment and capability associated with the   service is run from the Vodafone network and data centres instead. This   removes the need for customers to make capital investments and instead they   have an operating cost model with a recurring monthly fee. Controlled and   jointly controlled Controlled and jointly controlled measures include 100% of   the Group’s mobile operating subsidiaries and the Group’s share of joint   ventures and the Group’s proportionate share of joint operations. Customer   costs Customer costs include acquisition costs, retention costs and expenses   related to ongoing commissions. Depreciation and other amortisation The   accounting charge that allocates the cost of a tangible or intangible asset   to the income statement over its useful life. This measure includes the   profit or loss on disposal of property, plant and equipment and computer   software. Direct costs Direct costs include interconnect costs and other   direct costs of providing services. Adjusted EBITDA Operating profit   excluding share of results in associates, depreciation and amortisation,   gains/losses on the disposal of fixed assets, impairment losses,   restructuring costs and other operating income and expense. The Group’s   definition of adjusted EBITDA may not be comparable with similarly titled   measures and disclosures by other companies. Enterprise The Group’s customer   segment for businesses. FCA Financial Conduct Authority. Fixed broadband   customer A fixed broadband customer is defined as a customer with a   connection or access point to a fixed line data network. FTTC Fibre-to-the-Cabinet   involves running fibre optic cables from the telephone exchange or   distribution point to the street cabinets which then connect to a standard   phone line to provide broadband. FTTH Fibre-to-the-Home provides an   end-to-end fibre optic connection the full distance from the exchange to the   customer’s premises. FRC Financial Reporting Council. Free cash flow   Operating free cash flow after cash flows in relation to taxation, interest,   dividends received from associates and investments and dividends paid to   non-controlling shareholders in subsidiaries but before restructuring costs   and licence and spectrum payments. For the year ended 31 March 2014 and 31   March 2013, the income dividends received from Verizon Wireless and payments   in respect of a tax case settlement were also excluded. Gbps Gigabits   (billions) of bits per second. HSPA+ An evolution of high speed packet access   (‘HSPA’). An evolution of third generation (‘3G’) technology that enhances   the existing 3G network with higher speeds for the end user. ICT Information   and communications technology. IFRS International Financial Reporting   Standards. Impairment A downward revaluation of an asset. Interconnect costs   A charge paid by Vodafone to other fixed line or mobile operators when a   Vodafone customer calls a customer connected to a different network. 200   Vodafone Group Plc Annual Report on Form 20-F 2016 Unaudited information 

 

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Internet of   Things (‘IoT’) (formerly Machine-to-Machine (‘M2M’)) The network of physical   objects embedded with electronics, software, sensors, and network   connectivity, including built-in mobile SIM cards, that enables these objects   to collect data and exchange communications with one another or a database.   IP Internet protocol (‘IP’) is the format in which data is sent from one   computer to another on the internet. IP-VPN A virtual private network (‘VPN’)   is a network that uses a shared telecommunications infrastructure, such as   the internet, to provide remote offices or individual users with secure   access to their organisation’s network. Mark-to-market Mark-to-market or fair   value accounting refers to accounting for the value of an asset or liability   based on the current market price of the asset or liability. Mbps Megabits   (millions) of bits per second. Mobile broadband Mobile broadband allows   internet access through a browser or a native application using any portable   or mobile device such as smartphone, tablet or laptop connected to a cellular   network. Mobile customer A mobile customer is defined as a subscriber   identity module (‘SIM’), or in territories where SIMs do not exist, a unique mobile   telephone number, which has access to the network for any purpose, including   data only usage. Mobile termination rate (‘MTR’) A per minute charge paid by   a telecommunications network operator when a customer makes a call to another   mobile or fixed line network operator. MVNO Mobile virtual network operators,   companies that provide mobile phone services under wholesale contracts with a   mobile network operator, but do not have their own licence or spectrum or the   infrastructure required to operate a network. Net debt Long-term borrowings,   short-term borrowings and mark-to-market adjustments on financing instruments   less cash and cash equivalents. Net promoter score (‘NPS’) Net promoter score   is a customer loyalty metric used to monitor customer satisfaction. Operating   expenses Operating expenses comprise primarily sales and distribution costs,   network and IT related expenditure and business support costs. Operating free   cash flow Cash generated from operations after cash payments for capital   expenditure (excludes capital licence and spectrum payments) and cash   receipts from the disposal of intangible assets and property, plant and   equipment, but before restructuring costs. Organic growth All amounts marked   with an “*” represent organic growth which presents performance on a   comparable basis, both in terms of merger and acquisition activity and   movements in foreign exchange rates. See page 191 “Non-GAAP information” for   further details. Partner markets Markets in which the Group has entered into   a partner agreement with a local mobile operator enabling a range of   Vodafone’s global products and services to be marketed in that operator’s   territory and extending Vodafone’s reach into such markets. Penetration   Number of SIMs in a country as a percentage of the country’s population.   Penetration can be in excess of 100% due to customers owning more than one   SIM. Petabyte A petabyte is a measure of data usage. One petabyte is a   million gigabytes. Pps Percentage points. RAN Radio access network is the   part of a mobile telecommunications system which provides cellular coverage   to mobile phones via a radio interface, managed by thousands of base stations   installed on towers and rooftops across the coverage area, and linked to the   core nodes through a backhaul infrastructure which can be owned, leased or a   mix of both. Reported growth Reported growth is based on amounts reported in   pounds sterling as determined under IFRS. Retention costs The total of trade   commissions, loyalty scheme and equipment costs relating to customer   retention and upgrade. Roaming Allows customers to make calls, send and   receive texts and data on other operators’ mobile networks, usually while   travelling abroad. Service revenue Service revenue comprises all revenue   related to the provision of ongoing services including, but not limited to,   monthly access charges, airtime usage, roaming, incoming and outgoing network   usage by non-Vodafone customers and interconnect charges for incoming calls.   Smartphone devices A smartphone is a mobile phone offering advanced   capabilities including access to email and the internet. Smartphone   penetration The number of smartphone devices divided by the number of   registered SIMs (excluding data only SIMs) and telemetric applications. SME   Small to medium-sized enterprise. Spectrum The radio frequency bands and   channels assigned for telecommunication services. SRAN Single Radio Access   network, which allows 2G, 3G and 4G services to be run from a single piece of   equipment. Supranational An international organisation, or union, whereby   member states go beyond national boundaries or interests to share in the   decision making and vote on issues pertaining to the wider grouping. Tablets   A tablet is a slate shaped, mobile data or portable computing device equipped   with a finger operated touchscreen or stylus, for example, the Apple iPad.   VGE Vodafone Global Enterprise (VGE), which serves the Group’s biggest   multi-national customers. VoIP Voice over IP is a set of facilities used to   manage the delivery of voice information over the internet in digital form   via discrete packets rather than by using the traditional public switched   telephone network. VZW Verizon Wireless, the Group’s former associate in the   United States. 201 Additional information Vodafone Group Plc Annual Report on   Form 20-F 2016 Overview Strategy review Performance Governance Financials 

 

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Selected   financial data At/for the year ended 31 March 2016 2015 2014 2013 2012 Notes:   1 See note 8 to the consolidated financial statements, “Earnings per share”.   Earnings and dividends per ADS is calculated by multiplying earnings per   ordinary share by ten, the number of ordinary shares per ADS. On 19 February   2014, we announced a “6 for 11” share consolidation effective 24 February   2014. This had the effect of reducing the number of shares in issue from   52,821,751,216 ordinary shares (including 4,351,833,492 ordinary shares held   in Treasury) as at the close of business on 18 February 2014 to   28,811,864,298 new ordinary shares in issue immediately after the share   consolidation on 24 February 2014. Earnings per share for the years ended 31   March 2013 and 2012 have been restated accordingly. The final dividend for   the year ended 31 March 2016 was proposed by the Directors on 17 May 2016 and   is payable on 3 August 2016 to holders of record as of 10 June 2016. The   total dividends have been translated into US dollars at 31 March 2016 for   purposes of the above disclosure but the dividends are payable in US dollars   under the terms of the ADS depositary agreement. For the purposes of   calculating these ratios, earnings consist of loss or profit before tax   adjusted for fixed charges, dividend income from associates, share of profits   and losses from associates, interest capitalised and interest amortised.   Fixed charges comprise one third of payments under operating leases,   representing the estimated interest element of these payments, interest   payable and similar charges and interest capitalised. 2 3 4 202 Vodafone   Group Plc Annual Report on Form 20-F 2016 Consolidated income statement data   (£m) Revenue 40,973 42,22738,34638,04138,821 Operating profit/(loss) 1,377   1,967 (3,913)(2,202)5,618 (Loss)/profit before taxation (449) 1,095   (5,270)(3,483) 4,144 (Loss)/profit for financial year from continuing   operations (3,818) 5,86011,312(3,959)3,439 (Loss)/profit for the financial   year (3,818) 5,91759,420 6576,994 Consolidated statement of financial   position data (£m) Total assets 133,713 122,573 121,840 138,324 135,450 Total   equity 67,317 67,733 71,78172,488 78,202 Total equity shareholders’ funds   65,885 66,145 70,80271,47776,935 Earnings per share1,2 Weighted average   number of shares (millions) – Basic 26,692 26,48926,47226,83127,624 – Diluted   26,692 26,62926,68226,83127,938 Basic earnings per ordinary share (15.08)p   21.75p 223.84p1.54p25.15p Diluted earnings per ordinary share (15.08)p 21.63p   222.07p1.54p24.87p Basic earnings per share from continuing operations   (15.08)p 21.53p42.10p(15.66)p12.28p Cash dividends1,3 Amount per ordinary   share (pence) 11.45p 11.22p11.00p10.19p13.52p Amount per ADS (pence) 114.5p   111.2p110.0p101.9p135.2p Amount per ordinary share (US cents) 16.49c 16.65c18.31c15.49c21.63c   Amount per ADS (US cents) 164.9c 166.5c183.1c154.9c216.3c Other data Ratio of   earnings to fixed charges4 – 1.6–1.74.3 Deficiency between fixed charges and   earnings (£m)4 672 –654–– Unaudited information 

 

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Additional   information Vodafone Group Plc Annual Report on Form 20-F 2016 Overview   Strategy review Performance Governance Financials Notes 203 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2016 Notes 204 

 

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Vodafone, the   Vodafone Portrait, the Vodafone Speechmark, Vodacom, M-Pesa, Vodafone One and   Vodafone Red are trade marks of the Vodafone Group. The Vodafone Rhombus is a   registered design of the Vodafone Group. Other product and company names   mentioned herein may be the trade marks of their respective owners. The   content of our website (vodafone.com) should not be considered to form part   of this annual report or our annual report on Form 20-F. © Vodafone Group   2016 Text printed on revive 50 silk which is made from 50% recycled and 50%   virgin fibres. The cover is on amadeus 100 revive silk, made entirely from   de-inked post-consumer waste. Both products are Forest Stewardship Council®   (‘FSC’®) certified and produced using elemental chlorine free (‘ECF’)   bleaching. The manufacturing mill also holds ISO 14001 accreditation for   environmental management. Designed and produced by Radley Yeldar ry.com 

 

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Vodafone Group   Plc Registered Office: Vodafone House The Connection Newbury Berkshire RG14   2FN England Registered in England No. 1833679 Telephone: +44 (0)1635 33251   Fax: +44 (0)1635 238080 vodafone.com Contact details: Shareholder helpline   Telephone: +44 (0)370 702 0198 (In Ireland): +353 (0)818 300 999 Investor   Relations ir@vodafone.co.uk vodafone.com/investor Media Relations   vodafone.com/media/contact Sustainability vodafone.com/sustainability Vodafone   Group Plc Annual Report on Form 20-F 2016 

 

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**Subsequent events**

 

**Events occurring subsequent to the approval of the Company’s Annual Report on 17 May 2016**

 

On 9 June 2016 Vodafone announced the merger of Sky Network Television Limited (‘SKY’) and Vodafone New Zealand Limited (‘Vodafone New Zealand’) to create a leading integrated telecommunications and media group in New Zealand. SKY will acquire all of the shares in Vodafone New Zealand for a total purchase price of NZ$3,437 million (cash and debt free) through the issue of new SKY shares giving Vodafone Europe B.V. a 51% interest in the combined group and cash consideration of NZ$1,250 million.

 

The proposed transaction is subject to SKY shareholder approval and is conditional on the consent of the New Zealand Overseas Investment Office and a clearance from the New Zealand Commerce Commission. SKY and Vodafone expect the proposed transaction to complete by the end of calendar 2016.

 

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**Cellco Partnership**

(d/b/a Verizon Wireless)

Report of Independent Registered Public Accounting Firm

Consolidated Financial Statements

For the years ended

December 31, 2013, 2012 and 2011

 

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** **

**Table of Contents**

 

**Cellco Partnership (d/b/a Verizon Wireless)**

 
| **Report of Independent   Registered Public Accounting Firm**                                                                   | **B-3**           |
|---------------------------------------------------------------------------------------------------------------------------------|-------------------|
| ** **                                                                                                                      | ** **        |
| **Consolidated Statements   of Income***For the years ended December 31,   2013, 2012 and 2011*                            | **B-4**           |
| * *                                                                                                                        | ** **        |
| **Consolidated Statements   of Comprehensive Income***For the years ended December 31,   2013, 2012 and 2011*              | **B-5**           |
| * *                                                                                                                        | ** **        |
| **Consolidated Balance   Sheets***As of December 31, 2013 and 2012*                                                        | **B-6**           |
| * *                                                                                                                        | ** **        |
| **Consolidated Statements   of Cash Flows***For the years ended December 31,   2013, 2012 and 2011*                        | **B-7**           |
| * *                                                                                                                        | ** **        |
| **Consolidated Statements   of Changes in Partners’ Capital***For the years ended December 31,   2013, 2012 and 2011* | **B-8**           |
| * *                                                                                                                        | ** **        |
| **Notes to Consolidated   Financial Statements**                                                                                | **B-9 to   B-28** |

 

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

 

To the Board of Representatives of

Cellco Partnership d/b/a Verizon Wireless:

 

We have audited the accompanying consolidated balance sheets of Cellco Partnership and subsidiaries d/b/a Verizon Wireless (the “Partnership”) as of December 31, 2013 and 2012, and the related consolidated statements of income, comprehensive income, cash flows and changes in partners’ capital for each of the three years in the period ended December 31, 2013. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.

 

/s/ Deloitte & Touche LLP

 

New York, New York

February 27, 2014

 

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** **

**Consolidated Statements of Income**

**Cellco Partnership (d/b/a Verizon Wireless)**

 
| ** **                                                                               | ** ** | **Years Ended December 31,** | ** ** |
|------------------------------------------------------------------------------------------|------------|---------------------------------------------|------------|
| **(dollars in millions)**                                                      | ** ** | **2013**                                    | ** ** | **2012** | ** ** | **2011** | ** ** |
| **Operating Revenue** (including   $102, $83 and $87 from affiliates)                    |       |                                        |       |   |   |   |   |
| Service   revenue                                                                        |       | **$**                                       | **69,033** |   | $ | 63,733 |   | $ | 59,157 |   |
| Equipment   and other                                                                    |       | **11,990**                                  |       | 12,135 |   | 10,997 |   |
| Total   operating revenue                                                                |       | **81,023**                                  |       | 75,868 |   | 70,154 |   |
|                                                                                     |       | ** **                                  |       |   |   |   |   |
| **Operating Costs and Expenses**   (including $2,295, $1,949 and $1,708 from affiliates) |       |                                        |       |   |   |   |   |
| Cost   of service (exclusive of items shown below)                                       |       | **7,295**                                   |       | 7,711 |   | 7,994 |   |
| Cost   of equipment                                                                      |       | **16,353**                                  |       | 16,779 |   | 16,092 |   |
| Selling,   general and administrative                                                    |       | **22,663**                                  |       | 21,696 |   | 19,655 |   |
| Depreciation   and amortization                                                          |       | **8,202**                                   |       | 7,960 |   | 7,962 |   |
| Total   operating costs and expenses                                                     |       | **54,513**                                  |       | 54,146 |   | 51,703 |   |
|                                                                                     |       | ** **                                  |       |   |   |   |   |
| **Operating Income**                                                                     |       | **26,510**                                  |       | 21,722 |   | 18,451 |   |
| ** **                                                                               |       | ** **                                  |       |   |   |   |   |
| **Other Income (Expenses)**                                                              |       |                                        |       |   |   |   |   |
| Interest   expense, net                                                                  |       | **(65**                                     | **)**      | (442 | ) | (610 | ) |
| Other   income, net                                                                      |       | **40**                                      |       | 96 |   | 56 |   |
| **Income Before Provision for Income Taxes**                                             |       | **26,485**                                  |       | 21,376 |   | 17,897 |   |
| Provision   for income taxes                                                             |       | **(150**                                    | **)**      | (201 | ) | (947 | ) |
| **Net Income**                                                                           |       | **$**                                       | **26,335** |   | $ | 21,175 |   | $ | 16,950 |   |
|                                                                                     |       |                                        |       |   |   |   |   |
| Net   income attributable to noncontrolling interests                                    |       | **$**                                       | **422**    |   | $ | 304 |   | $ | 280 |   |
| Net   income attributable to Cellco Partnership                                          |       | **25,913**                                  |       | 20,871 |   | 16,670 |   |
| **Net Income**                                                                           |       | **$**                                       | **26,335** |   | $ | 21,175 |   | $ | 16,950 |   |

 

See Notes to Consolidated Financial Statements.

 

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** **

**Consolidated Statements of Comprehensive Income**

**Cellco Partnership (d/b/a/ Verizon Wireless)**

 
| ** **                                                             | ** ** | **Years Ended December 31,** | ** ** |
|------------------------------------------------------------------------|------------|---------------------------------------------|------------|
| **(dollars in millions)**                                    |       | **2013**                                    |       | **2012** |   | **2011** |   |
| **Net Income**                                                         |       | **$**                                       | **26,335** |   | $ | 21,175 |   | $ | 16,950 |   |
| ** **                                                             |       |                                        |       |   |   |   |   |
| **Other comprehensive income (loss), net of taxes**                    |       |                                        |       |   |   |   |   |
| Unrealized   gain (loss) on cash flow hedges                           |       | **(32**                                     | **)**      | 21 |   | 3 |   |
| Defined   benefit pension and postretirement plans                     |       | **—**                                  |       | — |   | (1 | ) |
| Other   comprehensive income (loss) attributable to Cellco Partnership |       | **(32**                                     | **)**      | 21 |   | 2 |   |
|                                                                   |       |                                        |       |   |   |   |   |
| **Total Comprehensive Income**                                         |       | **$**                                       | **26,303** |   | $ | 21,196 |   | $ | 16,952 |   |
|                                                                   |       |                                        |       |   |   |   |   |
| Comprehensive   income attributable to noncontrolling interests        |       | **$**                                       | **422**    |   | $ | 304 |   | $ | 280 |   |
| Comprehensive   income attributable to Cellco Partnership              |       | **25,881**                                  |       | 20,892 |   | 16,672 |   |
| **Total Comprehensive Income**                                         |       | **$**                                       | **26,303** |   | $ | 21,196 |   | $ | 16,952 |   |

 

See Notes to Consolidated Financial Statements.

 

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** **

**Consolidated Balance Sheets**

**Cellco Partnership (d/b/a Verizon Wireless)**

 
| ** **                                        | ** ** | **As of December 31,** | ** **  |
|---------------------------------------------------|------------|---------------------------------------|-------------|
| **(dollars in millions)**               | ** ** | **2013**                              | ** **  | **2012** | ** ** |
| **Assets**                                        |       |                                  |        |   |   |
| Current   assets                                  |       |                                  |        |   |   |
| Cash   and cash equivalents                       |       | **$**                                 | **4,005**   |   | $ | 1,354 |   |
| Receivables,   net of allowances of $399 and $350 |       | **7,204**                             |        | 6,657 |   |
| Due   from affiliates, net                        |       | **245**                               |        | 106 |   |
| Inventories,   net                                |       | **990**                               |        | 1,044 |   |
| Prepaid   expenses and other current assets       |       | **1,459**                             |        | 525 |   |
| **Total current assets**                          |       | **13,903**                            |        | 9,686 |   |
|                                              |       |                                  |        |   |   |
| Plant,   property and equipment, net              |       | **35,932**                            |        | 34,546 |   |
| Wireless   licenses                               |       | **75,796**                            |        | 77,642 |   |
| Goodwill                                          |       | **17,941**                            |        | 17,737 |   |
| Other   intangibles and other assets, net         |       | **2,249**                             |        | 2,102 |   |
| **Total assets**                                  |       | **$**                                 | **145,821** |   | $ | 141,713 |   |
| ** **                                        |       |                                  |        |   |   |
| **Liabilities and Partners’ Capital**        |       |                                  |        |   |   |
| Current   liabilities                             |       |                                  |        |   |   |
| Short-term   debt, including current maturities   |       | **$**                                 | **41**      |   | $ | 1,448 |   |
| Accounts   payable and accrued liabilities        |       | **7,012**                             |        | 7,534 |   |
| Advance   billings                                |       | **2,750**                             |        | 2,550 |   |
| Other   current liabilities                       |       | **337**                               |        | 274 |   |
| **Total current liabilities**                     |       | **10,140**                            |        | 11,806 |   |
|                                              |       |                                  |        |   |   |
| Long-term   debt                                  |       | **5,231**                             |        | 8,665 |   |
| Deferred   tax liabilities, net                   |       | **11,001**                            |        | 10,939 |   |
| Other   non-current liabilities                   |       | **2,139**                             |        | 2,056 |   |
| Partners’   capital                          |       |                                  |        |   |   |
| Capital                                           |       | **114,979**                           |        | 106,119 |   |
| Accumulated   other comprehensive income          |       | **52**                                |        | 84 |   |
| Noncontrolling   interests                        |       | **2,279**                             |        | 2,044 |   |
| **Total Partners’ capital**                  |       | **117,310**                           |        | 108,247 |   |
| **Total liabilities and Partners’ capital**  |       | **$**                                 | **145,821** |   | $ | 141,713 |   |

 

See Notes to Consolidated Financial Statements.

 

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** **

**Consolidated Statements of Cash Flows**

**Cellco Partnership (d/b/a Verizon Wireless)**

 
| ** **                                                                                                  | ** ** | **Years Ended December 31,** | ** ** |
|-------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------|------------|
| **(dollars in millions)**                                                                         | ** ** | **2013**                                    | ** ** | **2012** | ** ** | **2011** | ** ** |
| **Cash Flows from Operating Activities**                                                                    |       |                                        |       |   |   |   |   |
| Net   income                                                                                                |       | **$**                                       | **26,335** |   | $ | 21,175 |   | $ | 16,950 |   |
| Adjustments   to reconcile net income to net cash provided by operating activities:                         |       |                                        |       |   |   |   |   |
| Depreciation   and amortization                                                                             |       | **8,202**                                   |       | 7,960 |   | 7,962 |   |
| Provision   for uncollectible receivables                                                                   |       | **703**                                     |       | 634 |   | 689 |   |
| Provision   for deferred income taxes                                                                       |       | **72**                                      |       | 123 |   | 368 |   |
| Changes   in current assets and liabilities, net of the effects of   acquisition/disposition of businesses: |       |                                        |       |   |   |   |   |
| Receivables                                                                                                 |       | **(1,371**                                  | **)**      | (1,238 | ) | (624 | ) |
| Inventories,   net                                                                                          |       | **54**                                      |       | (137 | ) | 166 |   |
| Prepaid   expenses and other current assets                                                                 |       | **(35**                                     | **)**      | (107 | ) | 124 |   |
| Accounts   payable and accrued liabilities                                                                  |       | **(120**                                    | **)**      | 674 |   | (728 | ) |
| Other   operating activities, net                                                                           |       | **(487**                                    | **)**      | (419 | ) | 371 |   |
| Net   cash provided by operating activities                                                                 |       | **33,353**                                  |       | 28,665 |   | 25,278 |   |
|                                                                                                        |       | ** **                                  |       |   |   |   |   |
| **Cash Flows from Investing Activities**                                                                    |       |                                        |       |   |   |   |   |
| Capital   expenditures (including capitalized software)                                                     |       | **(9,425**                                  | **)**      | (8,857 | ) | (8,973 | ) |
| Acquisitions   of investments and businesses, net of cash acquired                                          |       | **(52**                                     | **)**      | (188 | ) | (144 | ) |
| Acquisitions   of wireless licenses                                                                         |       | **(14**                                     | **)**      | (4,287 | ) | (26 | ) |
| Proceeds   from dispositions of wireless licenses                                                           |       | **2,111**                                   |       | — |   | — |   |
| Other   investing activities, net                                                                           |       | **(873**                                    | **)**      | 843 |   | (490 | ) |
| Net   cash used in investing activities                                                                     |       | **(8,253**                                  | **)**      | (12,489 | ) | (9,633 | ) |
|                                                                                                        |       |                                        |       |   |   |   |   |
| **Cash Flows from Financing Activities**                                                                    |       |                                        |       |   |   |   |   |
| Repayments   of long-term debt and capital lease obligations                                                |       | **(4,960**                                  | **)**      | (1,569 | ) | (4,862 | ) |
| Distributions   to partners                                                                                 |       | **(17,046**                                 | **)**      | (25,681 | ) | (3,082 | ) |
| Other   financing activities, net                                                                           |       | **(443**                                    | **)**      | (328 | ) | (276 | ) |
| Net   cash used in financing activities                                                                     |       | **(22,449**                                 | **)**      | (27,578 | ) | (8,220 | ) |
| Increase   (decrease) in cash and cash equivalents                                                          |       | **2,651**                                   |       | (11,402 | ) | 7,425 |   |
| Cash   and cash equivalents, beginning of year                                                              |       | **1,354**                                   |       | 12,756 |   | 5,331 |   |
| Cash   and cash equivalents, end of year                                                                    |       | **$**                                       | **4,005**  |   | $ | 1,354 |   | $ | 12,756 |   |

 

See Notes to Consolidated Financial Statements.

 

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** **

**Consolidated Statements of Changes in Partners’ Capital**

**Cellco Partnership (d/b/a/ Verizon Wireless)**

 
| ** **                                                        | ** ** | **Years Ended December 31,** | ** **  |
|-------------------------------------------------------------------|------------|---------------------------------------------|-------------|
| **(dollars in millions)**                               | ** ** | **2013**                                    | ** **  | **2012** | ** ** | **2011** | ** ** |
| **Partners’ Capital**                                        |       |                                        |        |   |   |   |   |
| Balance   at beginning of year                                    |       | **$**                                       | **106,119** |   | $ | 100,961 |   | $ | 97,399 |   |
| Net   income attributable to Cellco Partnership                   |       | **25,913**                                  |        | 20,871 |   | 16,670 |   |
| Contributed   capital                                             |       | **(7**                                      | **)**       | (32 | ) | (26 | ) |
| Distributions   declared to partners                              |       | **(17,046**                                 | **)**       | (15,681 | ) | (13,082 | ) |
| Balance   at end of year                                          |       | **114,979**                                 |        | 106,119 |   | 100,961 |   |
|                                                              |       |                                        |        |   |   |   |   |
| **Accumulated Other Comprehensive Income**                        |       |                                        |        |   |   |   |   |
| Balance   at beginning of year                                    |       | **84**                                      |        | 63 |   | 61 |   |
| Unrealized   gain (loss) on cash flow hedges                      |       | **(32**                                     | **)**       | 21 |   | 3 |   |
| Defined   benefit pension and postretirement plans                |       | **—**                                  |        | — |   | (1 | ) |
| Other   comprehensive income (loss)                               |       | **(32**                                     | **)**       | 21 |   | 2 |   |
| Balance   at end of year                                          |       | **52**                                      |        | 84 |   | 63 |   |
| Total   Partners’ Capital Attributable to Cellco Partnership |       | **115,031**                                 |        | 106,203 |   | 101,024 |   |
| ** **                                                        |       |                                        |        |   |   |   |   |
| **Noncontrolling Interests**                                      |       |                                        |        |   |   |   |   |
| Balance   at beginning of year                                    |       | **2,044**                                   |        | 1,952 |   | 1,962 |   |
| Net   income attributable to noncontrolling interests             |       | **422**                                     |        | 304 |   | 280 |   |
| Distributions                                                     |       | **(403**                                    | **)**       | (342 | ) | (280 | ) |
| Other                                                             |       | **216**                                     |        | 130 |   | (10 | ) |
| Balance   at end of year                                          |       | **2,279**                                   |        | 2,044 |   | 1,952 |   |
| **Total Partners’ Capital**                                  |       | **$**                                       | **117,310** |   | $ | 108,247 |   | $ | 102,976 |   |

 

See Notes to Consolidated Financial Statements.

 

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**Notes to Consolidated Financial Statements**

**Cellco Partnership (d/b/a Verizon Wireless)**

 

**1. Description of Business and Summary of Significant Accounting Policies**

 

**Description of Business**

 

Cellco Partnership (the Partnership), a Delaware general partnership doing business as Verizon Wireless, provides wireless communication services across one of the most extensive wireless networks in the United States (U.S.) and has the largest fourth-generation (4G) Long-Term Evolution (LTE) technology and third-generation (3G) Evolution-Data Optimized (EV-DO) networks of any U.S. wireless service provider. The Partnership has one segment and operates domestically only. References to “the Partners” refers to Verizon Communications, and its subsidiaries (Verizon) and Vodafone Group Plc, and its subsidiaries (Vodafone). At December 31, 2013 Verizon owned 55% of the Partnership and Vodafone owned 45% of the Partnership. On February 21, 2014, Verizon acquired Vodafone’s interest in the Partnership and now owns 100% of the Partnership.

 

These consolidated financial statements include transactions between the Partnership and Verizon and Vodafone (Affiliates) for the provision of services and financing pursuant to various agreements (see Notes 5 and 11).

 

**Consolidated Financial Statements and Basis of Presentation**

 

The consolidated financial statements of the Partnership include the accounts of its majority-owned subsidiaries and the partnerships in which the Partnership exercises control. Investments in businesses and partnerships which the Partnership does not control, but has the ability to exercise significant influence over operating and financial policies, are accounted for under the equity method of accounting. Investments and partnerships which the Partnership does not have the ability to exercise significant influence over operating and financial policies are accounted for under the cost method of accounting. Equity and cost method investments are included in Other intangibles and other assets, net in the Partnership’s consolidated balance sheets. All significant intercompany accounts and transactions have been eliminated.

 

The Partnership has reclassified prior year amounts to conform to current year presentation.

 

The Partnership has evaluated subsequent events through February 27, 2014, the date these consolidated financial statements were available to be issued.

 

**Use of Estimates**

 

The Partnership prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates.

 

Examples of significant estimates include: the allowances for doubtful accounts, the recoverability of plant, property and equipment, the recoverability of intangible assets and other long-lived assets, unbilled revenues, fair values of financial instruments, unrecognized tax benefits, valuation allowances on tax assets, accrued expenses, contingencies and allocation of purchase prices in connection with business combinations.

 

**Revenue Recognition**

 

The Partnership offers products and services to its customers through bundled arrangements. These arrangements involve multiple deliverables which may include products, services, or a combination of products and services.

 

The Partnership earns revenue primarily by providing access to and usage of its network. In general, access revenue is billed one month in advance and recognized when earned; the unearned portion is classified in Advance billings in the consolidated balance sheets. Usage revenue is generally billed in arrears and recognized when service is rendered and included in unbilled revenue, within Receivables, net in the consolidated balance sheets. Equipment sales revenue associated with the sale of wireless handsets and accessories is recognized when the products are

 

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delivered to and accepted by the customer, as this is considered to be a separate earnings process from providing wireless services. For agreements involving the resale of third-party services in which the Partnership is considered the primary obligor in the arrangements, the Partnership records revenue gross at the time of sale. For equipment sales, the Partnership generally subsidizes the cost of wireless devices. The amount of this subsidy is generally contingent on the arrangement and terms selected by the customer. In multiple deliverable arrangements which involve the sale of equipment and a service contract, the equipment revenue is recognized up to the amount collected when the wireless device is sold.

 

The Partnership reports taxes imposed by governmental authorities on revenue-producing transactions between the Partnership and its customers on a net basis.

 

**Advertising Costs**

 

Costs for advertising products and services as well as other promotional and sponsorship costs are charged to Selling, general and administrative expense in the periods in which they are incurred (see Note 9).

 

**Vendor Rebates and Discounts**

 

The Partnership recognizes vendor rebates or discounts for purchases of wireless devices from a vendor as a reduction of Cost of equipment when the related wireless devices are sold. Vendor rebates or discounts that have been earned as a result of completing the required performance under the terms of the underlying agreements but for which the wireless devices have not yet been sold are recognized as a reduction of inventory cost. Advertising credits are granted by a vendor to the Partnership as reimbursement of specific, incremental, identifiable advertising costs incurred by the Partnership in selling the vendor’s wireless devices. These advertising credits are restricted based upon a marketing plan agreed to by the vendor and the Partnership, and accordingly, advertising credits received are recorded as a reduction of those advertising costs when recognized in the Partnership’s consolidated statements of income.

 

**Cash and Cash Equivalents**

 

The Partnership considers all highly liquid investments with a maturity of 90 days or less when purchased to be cash equivalents. Cash equivalents are stated at cost, which approximates quoted market value, and includes approximately $3.5 billion and $0.7 billion at December 31, 2013 and 2012, respectively, held in money market funds that are considered cash equivalents.

 

**Inventory**

 

Inventory consists primarily of wireless equipment held for sale, which is carried at the lower of cost (determined using a first-in, first-out method) or market. The Partnership maintained inventory valuation reserves which were not significant as of December 31, 2013 and 2012.

 

**Capitalized Software**

 

Capitalized software consists primarily of direct costs incurred for professional services provided by third parties and compensation costs of employees which relate to software developed for internal use either during the application stage or for upgrades and enhancements that increase functionality. Costs are capitalized and amortized on a straight-line basis over their estimated useful lives. Costs incurred in the preliminary project stage of development and maintenance are expensed as incurred. For a discussion of the Partnership’s impairment policy for capitalized software costs, see “Valuation of Assets” below. Also see Note 3 for additional detail of internal-use non-network software reflected in the Partnership’s consolidated balance sheets.

 

**Plant, Property and Equipment**

 

Plant, property and equipment primarily represents costs incurred to construct and expand capacity and network coverage on Mobile Telephone Switching Offices and cell sites. The cost of plant, property and equipment is depreciated on a straight-line basis over its estimated useful life. Periodic reviews are performed to identify any

 

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category or group of assets within plant, property and equipment where events or circumstances may change the remaining estimated economic life. This principally includes changes in the Partnership’s plans regarding technology upgrades, enhancements, and planned retirements. Changes in these estimates resulted in an increase of $0.4 billion for the year ended December 31, 2011. Major improvements to existing plant and equipment are capitalized. Routine maintenance and repairs that do not extend the life of the plant and equipment are charged to expense as incurred. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the related lease.

 

Upon the sale or retirement of plant, property and equipment, the cost and related accumulated depreciation or amortization is deducted from the plant accounts and any gains or losses on disposition are recognized in income.

 

Interest expense and network engineering costs incurred during the construction phase of the Partnership’s network and real estate properties under development are capitalized as part of plant, property and equipment and recorded as construction in progress until the projects are completed and placed into service.

 

**Valuation of Assets**

 

Long-lived assets, including plant, property and equipment and intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. The impairment loss would be measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset.

 

**Wireless Licenses**

 

The Partnership’s principal intangible assets are licenses, which provide the Partnership with the exclusive right to utilize designated radio frequency spectrum to provide wireless communication services. While licenses are issued for only a fixed time, generally ten years, such licenses are subject to renewal by the Federal Communications Commission (FCC). License renewals have occurred routinely and at nominal costs, which are expensed as incurred. Moreover, the Partnership has determined that there are currently no legal, regulatory, contractual, competitive, economic or other factors that limit the useful life of the Partnership’s wireless licenses. As a result, the wireless licenses are treated as an indefinite lived intangible asset, and are not amortized. The Partnership reevaluates the useful life determination for wireless licenses at least annually to determine whether events and circumstances continue to support an indefinite useful life.

 

The Partnership tests its wireless licenses for potential impairment annually. In 2013, the Partnership performed a qualitative assessment to determine whether it is more likely than not that the fair value of its wireless licenses was less than the carrying amount. As part of the assessment, the Partnership considered several qualitative factors including the business enterprise value of the Partnership, macroeconomic conditions (including changes in interest rates and discount rates), industry and market considerations (including industry revenue and EBITDA (Earnings before interest, taxes, depreciation and amortization) margin projections), the projected financial performance of the Partnership, as well as other factors. Based on our assessment in 2013, we qualitatively concluded that it was more likely than not that the fair value of our wireless licenses significantly exceeded their carrying value and therefore, did not result in an impairment. In 2012, the Partnership’s quantitative assessment consisted of comparing the estimated fair value of the Partnership’s wireless licenses to the aggregated carrying amount as of the test date. Using the quantitative assessment, the Partnership evaluated its licenses on an aggregate basis using a direct value approach. The direct value approach estimates fair value using a discounted cash flow analysis to estimate what a marketplace participant would be willing to pay to purchase the aggregated wireless licenses as of the valuation date. If the fair value of the aggregated wireless licenses is less than the aggregated carrying amount of the licenses, an impairment is recognized. The Partnership’s annual quantitative impairment test for 2012 indicated that the fair value significantly exceeded the carrying value and, therefore, did not result in an impairment. The Partnership evaluated its wireless licenses for potential impairment as of December 15, 2013 and 2012.

 

Interest expense incurred while qualifying activities are performed to ready wireless licenses for their intended use is capitalized as part of wireless licenses. The capitalization period ends when a license is substantially complete and the license is ready for its intended use.

 

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**Goodwill**

 

Goodwill is the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired. Impairment testing for goodwill is performed annually in the fourth fiscal quarter or more frequently if impairment indicators are present. The Partnership has the option to perform a qualitative assessment to determine if the fair value of the entity is less than its carrying value. However, the Partnership may elect to perform an impairment test even if no indications of a potential impairment exist. The impairment test for goodwill uses a two-step approach, which is performed for the Partnership’s one reporting unit. Step one compares the fair value of the reporting unit (calculated using a market approach and/or a discounted cash flow method) to its carrying value. If the carrying value exceeds the fair value, there is a potential impairment and step two must be performed. Step two compares the carrying value of the reporting unit’s goodwill to its implied fair value (i.e., fair value of reporting unit less the fair value of the unit’s assets and liabilities, including identifiable intangible assets). If the implied fair value of goodwill is less than the carrying amount of goodwill, an impairment is recognized. The Partnership completed its goodwill impairment test as of December 15, 2013 and 2012. The Partnership’s annual impairment tests for 2013 and 2012 indicated that the fair value significantly exceeded the carrying value and, therefore, did not result in an impairment.

 

**Fair Value Measurements**

 

Fair value of financial and non-financial assets and liabilities is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows:

 

Level 1 — Quoted prices in active markets for identical assets or liabilities

Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities

Level 3 — No observable pricing inputs in the market

 

Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. The Partnership’s assessment of the significance of a particular input to the fair value measurements requires judgment, and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

 

See Note 4 for further details on the Partnership’s fair value measurements.

 

**Foreign Currency Translation**

 

The functional currency for all of the Partnership’s operations is the U.S. dollar. However, the Partnership has transactions denominated in a currency other than the local currency, principally debt denominated in Euros and British Pounds Sterling. Gains and losses resulting from exchange-rate changes in transactions denominated in a foreign currency are included in earnings.

 

**Derivative Instruments**

 

The Partnership uses derivatives from time to time to manage the Partnership’s exposure to fluctuations in the cash flows of certain transactions. The Partnership measures all derivatives at fair value and recognizes them as either assets or liabilities on its consolidated balance sheets. The Partnership’s derivative instruments are valued primarily using models based on readily observable market parameters for all substantial terms of the Partnership’s derivative contracts and thus are classified as Level 2. Changes in the fair values of derivative instruments not qualifying as hedges or any ineffective portion of hedges are recognized in earnings in the current period. Changes in the fair values of derivative instruments used effectively as fair value hedges are recognized in earnings, along with changes in the fair value of the hedged item. Changes in the fair value of the effective portions of cash flow hedges are reported in Other comprehensive income (loss) and recognized in earnings when the hedged item is recognized in earnings.

 

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**Employee Benefit Plans**

 

The Partnership maintains a defined contribution plan, the Verizon Wireless Savings and Retirement Plan (the Savings and Retirement Plan), for the benefit of its employees. The Savings and Retirement Plan includes both an employee savings and profit sharing component. Under the employee savings component, employees may contribute a percentage of eligible compensation to the Savings and Retirement Plan. Up to the first 6% of an employee’s eligible compensation contributed to the Savings and Retirement Plan is matched 100% by the Partnership. Under the profit sharing component, the Partnership may elect, at the sole discretion of the Human Resources Committee of the Board of Representatives, to contribute an additional amount in the form of a profit sharing contribution to the accounts of eligible employees (see Note 9).

 

**Long-Term Incentive Compensation**

 

The Partnership measures compensation expense for all stock-based compensation awards made to employees and directors based on estimated fair values (see Note 6).

 

**Income Taxes**

 

The Partnership is not a taxable entity for federal income tax purposes. Any federal taxable income or loss is included in the respective partners’ consolidated federal return. Certain states, however, impose taxes at the partnership level and such taxes are the responsibility of the Partnership and are included in the Partnership’s tax provision. The consolidated financial statements also include provisions for federal and state income taxes, prepared on a stand-alone basis, for all corporate entities within the Partnership. Deferred income taxes are recorded using enacted tax law and rates for the years in which the taxes are expected to be paid or refunds received. Deferred income taxes are provided for items when there is a temporary difference in recording such items for financial reporting and income tax reporting.

 

The Partnership uses a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return. The first step is recognition: the Partnership determines whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the Partnership presumes that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. The second step is measurement: a tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in one or more of the following: an increase in a liability for income taxes payable, a reduction of an income tax refund receivable, a reduction in a deferred tax asset, or an increase in a deferred tax liability.

 

The Partnership recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense.

 

**Concentrations**

 

The Partnership relies on local and long-distance telephone companies, some of whom are related parties (see Note 11), and other companies to provide certain communication services. Although management believes alternative telecommunications facilities could be found in a timely manner, any disruption of these services could potentially have an adverse impact on the Partnership’s business, results of operations and financial condition.

 

No single customer receivable is large enough to present a significant financial risk to the Partnership.

 

**Recently Adopted Accounting Standards**

 

During the first quarter of 2013, the Partnership adopted the accounting standard update regarding testing of intangible assets for impairment. This standard update allows companies the option to perform a qualitative

 

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assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not the asset is impaired. The adoption of this standard update did not have an impact on the Partnership’s consolidated financial statements.

 

During the first quarter of 2013, the Partnership adopted the accounting standard update regarding reclassifications out of Accumulated other comprehensive income. This standard update requires companies to report the effect of significant reclassifications out of Accumulated other comprehensive income on the respective line items in the Partnership’s consolidated statements of income if the amount being reclassified is required to be reclassified in its entirety to net income. For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference to other required disclosures that provide additional detail about those amounts. See Note 12 for additional details.

 

During the third quarter of 2013, the Partnership adopted the accounting standard update regarding the ability to use the Federal Funds Effective Swap Rate as a U.S. benchmark interest rate for hedge accounting purposes. Previously the interest rates on direct Treasury obligations of the U.S. government and the London Interbank Offered Rate (LIBOR) were considered to be the only benchmark interest rates. The adoption of this standard update did not have a significant impact on the Partnership’s consolidated financial statements.

 

**Recent Accounting Standards**

 

In July 2013, the accounting standard update relating to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists was issued. The standard update provides that a liability related to an unrecognized tax benefit should be offset against same jurisdiction deferred tax assets for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. The Partnership will adopt this standard update during the first quarter of 2014. The Partnership is currently evaluating the consolidated balance sheet impact related to this standard update.

 

**2. Acquisitions and Divestitures**

 

**Wireless Transaction**

 

On September 2, 2013, Verizon entered into a stock purchase agreement (the Stock Purchase Agreement) with Vodafone and Vodafone 4 Limited (Seller), pursuant to which Verizon agreed to acquire Vodafone’s indirect 45% interest in the Partnership, (and such interest, the Vodafone Interest) for aggregate consideration of approximately $130 billion.

 

On February 21, 2014, pursuant to the terms and subject to the conditions set forth in the Stock Purchase Agreement, Verizon acquired (the Wireless Transaction) from Seller all of the issued and outstanding capital stock (the Transferred Shares) of Vodafone Americas Finance 1 Inc., a subsidiary of Seller (VF1 Inc.), which indirectly through certain subsidiaries (together with VF1 Inc., the Purchased Entities) owned the Vodafone Interest. In consideration for the Transferred Shares, upon completion of the Wireless Transaction, Verizon (i) paid approximately $58.89 billion in cash, (ii) issued approximately $60.15 billion of Verizon’s common stock, par value $0.10 per share (the Stock Consideration), (iii) issued senior unsecured Verizon notes in an aggregate principal amount of $5.0 billion (the Verizon Notes), (iv) sold Verizon’s indirectly owned 23.1% interest in Vodafone Omnitel N.V. (Omnitel, and such interest, the Omnitel Interest), valued at $3.5 billion and (v) provided other consideration of approximately $2.5 billion. As a result of the Wireless Transaction, Verizon issued approximately 1.27 billion shares. The total cash paid to Vodafone and the other costs of the Wireless Transaction, including financing, legal and bank fees, were financed through the incurrence of third-party indebtedness.

 

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**Spectrum License Transactions**

 

Since 2012, the Partnership has entered into several strategic spectrum transactions including:

 

·                       During the third quarter of 2012, after receiving the required regulatory approvals, the Partnership completed the following previously announced transactions in which the Partnership acquired wireless spectrum that will be used to deploy additional 4G LTE capacity:

 

·                       The Partnership acquired Advanced Wireless Services (AWS) spectrum in separate transactions with SpectrumCo, LLC (SpectrumCo) and Cox TMI Wireless, LLC for which it paid an aggregate of $3.9 billion at the time of the closings. The Partnership has also recorded a liability of $0.4 billion related to a three-year service obligation to SpectrumCo’s members pursuant to commercial agreements executed concurrently with the SpectrumCo transaction.

 

·                       The Partnership completed license purchase and exchange transactions with Leap Wireless, Savary Island Wireless, which is majority owned by Leap Wireless, and a subsidiary of T-Mobile USA, Inc. (T-Mobile USA). As a result of these transactions, the Partnership received an aggregate $2.6 billion of AWS and Personal Communication Services (PCS) licenses at fair value and net cash proceeds of $0.2 billion, transferred certain AWS licenses to T-Mobile USA and a 700 megahertz (MHz) lower A block license to Leap Wireless, and recorded an immaterial gain.

 

·                       During the first quarter of 2013, the Partnership completed license exchange transactions with T-Mobile License LLC and Cricket License Company, LLC, a subsidiary of Leap Wireless, to exchange certain AWS licenses. These non-cash exchanges include a number of intra-market swaps that the Partnership expects will enable it to make more efficient use of the AWS band. As a result of these exchanges, the Partnership received an aggregate $0.5 billion of AWS licenses at fair value and recorded an immaterial gain.

 

·                       During the third quarter of 2013, after receiving the required regulatory approvals, the Partnership sold 39 lower 700 MHz B block spectrum licenses to AT&T Inc. (AT&T) in exchange for a payment of $1.9 billion and the transfer by AT&T to the Partnership of AWS (10 MHz) licenses in certain markets in the western United States. The Partnership also sold certain lower 700 MHz B block spectrum licenses to an investment firm for a payment of $0.2 billion. As a result, the Partnership received $0.5 billion of AWS licenses at fair value and the Partnership recorded a pre-tax gain of approximately $0.4 billion in Selling, general and administrative expense on its consolidated statement of income for the year ended December 31, 2013.

 

·                       During the fourth quarter of 2013, the Partnership entered into license exchange agreements with T-Mobile USA to exchange certain AWS and PCS licenses. These non-cash exchanges, which are subject to approval by the FCC and other customary closing conditions, are expected to close in the first half of 2014. The exchange includes a number of swaps that the Partnership expects will result in more efficient use of the AWS and PCS bands. As a result of these agreements, $0.9 billion of Wireless licenses are classified as held for sale and included in Prepaid expenses and other current assets on the Partnership’s consolidated balance sheet at December 31, 2013. Upon completion of the transaction, the Partnership expects to record an immaterial gain.

 

·                       Subsequent to the transaction with T-Mobile USA in the fourth quarter of 2013, on January 6, 2014, the Partnership announced two agreements with T-Mobile USA with respect to its remaining 700 MHz A block spectrum licenses. Under one agreement, the Partnership will sell certain of these licenses to T-Mobile USA in exchange for cash consideration of approximately $2.4 billion, and under the second agreement the Partnership will exchange the remainder of these licenses for AWS and PCS spectrum licenses. These transactions are subject to the approval of the FCC as well as other customary closing conditions. These transactions are expected to close in the middle of 2014.

 

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** **

**Other**

 

During 2013, the Partnership acquired various other wireless licenses and markets for cash consideration that was not significant. Additionally, the Partnership obtained control of previously unconsolidated wireless partnerships, which were previously accounted for under the equity method and are now consolidated, which resulted in an immaterial gain. The Partnership recorded $0.2 billion of goodwill as a result of these transactions.

 

During 2012, the Partnership acquired various other wireless licenses and markets for cash consideration that was not significant and recorded $0.2 billion of goodwill as a result of these transactions.

 

**3. Wireless Licenses, Goodwill and Other Intangibles, Net Wireless Licenses**

 

Changes in the carrying amount of Wireless licenses are as follows:

 
| **(dollars in millions)**         | ** ** | ** ** | ** ** |
|---------------------------------------------|------------|------------|------------|
| Balance   as of January 1, 2012        |       | $          | 73,097     |   |
| Acquisitions   (Note 2)                     |       | 4,544      |       |
| Capitalized   interest on wireless licenses |       | 205        |       |
| Reclassifications,   adjustments and other  |       | (204       | )          |
| Balance   as of December 31, 2012      |       | 77,642     |       |
| Acquisitions   (Note 2)                     |       | **579**    |       |
| Dispositions   (Note 2)                     |       | **(2,195** | **)**      |
| Capitalized   interest on wireless licenses |       | **540**    |       |
| Reclassifications,   adjustments and other  |       | **(770**   | **)**      |
| **Balance as of December 31, 2013**    |       | **$**      | **75,796** |   |

 

Reclassifications, adjustments and other includes $0.9 billion of Wireless licenses that are classified as held for sale and included in Prepaid expenses and other current assets on the Partnership’s consolidated balance sheet at December 31, 2013 as well as the exchanges of wireless licenses in 2013 and 2012. See Note 2 for additional details.

 

At December 31, 2013 and 2012, approximately $7.7 billion and $7.3 billion, respectively, of wireless licenses were under development for commercial service for which the Partnership was capitalizing interest costs.

 

The average remaining renewal period of the Partnership’s wireless license portfolio was 5.1 years as of December 31, 2013. See Note 1 for additional details.

 

**Goodwill**

 

Changes in the carrying amount of Goodwill are as follows:

 
| **(dollars in millions)**   | ** ** | ** ** | ** ** |
|---------------------------------------|------------|------------|------------|
| Balance   at January 1, 2012     |       | $          | 17,528     |   |
| Acquisitions   (Note 2)               |       | 209        |       |
| Balance   at December 31, 2012   |       | 17,737     |       |
| Acquisitions   (Note 2)               |       | **204**    |       |
| **Balance at December 31, 2013** |       | **$**      | **17,941** |   |

 

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**Other Intangibles, net**

 

Other intangibles, net are included in Other intangibles and other assets, net and consist of the following:

 
| ** **                                         | ** ** | **At December 31, 2013** | ** ** | **At December 31, 2012** | ** ** |
|----------------------------------------------------|------------|-----------------------------------------|------------|-----------------------------------------|------------|
| **(dollars in millions)**                | ** ** | **Gross   Amount**                      | ** ** | **Accumulated   Amortization**          | ** ** | **Net   Amount** | ** ** | **Gross   Amount** | ** ** | **Accumulated   Amortization** | ** ** | **Net   Amount** | ** ** |
| Customer   lists (6 to 8 years)                    |       | **$**                                   | **2,232**  |                                    | **$**      | **(1,803** | **)** | **$** | **429** |   | $ | 2,187 |   | $ | (1,550 | ) | $ | 637 |   |
| Non-network   internal-use software (5 to 7 years) |       | **1,897**                               |       | **(802**                                | **)**      | **1,095** |   | 1,462 |   | (589 | ) | 873 |   |
| Other   (2 to 3 years)                             |       | **7**                                   |       | **(1**                                  | **)**      | **6** |   | 26 |   | (21 | ) | 5 |   |
| **Total**                                          |       | **$**                                   | **4,136**  |                                    | **$**      | **(2,606** | **)** | **$** | **1,530** |   | $ | 3,675 |   | $ | (2,160 | ) | $ | 1,515 |   |

 

The amortization expense for other intangible assets was as follows:

 
| **Years** | ** ** | **(dollars in millions)** | ** ** |
|-----------|------------|-------------------------------------|------------|
| **2013**  |       | **$**                               | **476**    |   |
| 2012      |       | 465                                 |       |
| 2011      |       | 513                                 |       |
|           |            |                                     |            |  |

 

Estimated annual amortization expense for other intangible assets is as follows:

 
| **Years** | ** ** | **(dollars in millions)** | ** ** |
|-----------|------------|-------------------------------------|------------|
| 2014      |       | $                                   | 434        |   |
| 2015      |       | 360                                 |       |
| 2016      |       | 279                                 |       |
| 2017      |       | 192                                 |       |
| 2018      |       | 146                                 |       |
|           |            |                                     |            |  |

 

**4. Fair Value Measurements and Financial Instruments**

 

The following table presents the balances of assets measured at fair value on a recurring basis as of December 31, 2013:

 
| **(dollars in millions)**                            | ** ** | **Level 1** | ** ** | **Level 2** | ** ** | **Level 3** | ** ** | **Total** | ** ** |
|----------------------------------------------------------------|------------|------------------|------------|------------------|------------|------------------|------------|-----------|------------|
| **Assets:**                                                    |       |             |       |             |       |             |       |      |       |
| Other   intangibles and other assets, net:                     |       |             |       |             |       |             |       |      |       |
| Derivative   contracts—Cross currency swaps (Non-current) |       | $                | —     |             | $          | 166              |       | $         | —     |   | $ | 166 |   |
|                                                                |            |                  |            |                  |            |                  |            |           |            |  |  |  |  |

 

Derivative contracts are valued using models based on readily observable market parameters for all substantial terms of the Partnership’s derivative contracts and thus are classified within Level 2. The Partnership uses mid-market pricing for fair value measurements of its derivative instruments. The Partnership’s derivative instruments are recorded on a gross basis.

 

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The Partnership recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the fair value hierarchy during 2013.

 

*Fair Value of Short-term and Long-term Debt*

 

The fair value of the Partnership’s debt is determined using various methods, including quoted market prices for identical terms and maturities, which is a Level 1 measurement, as well as quoted prices for similar terms and maturities in inactive markets and future cash flows discounted at current rates, which are Level 2 measurements. The fair value of the Partnership’s short-term and long-term debt, excluding capital leases, was as follows:

 
| ** **                                            | ** ** | **At December 31, 2013** | ** ** | **At December 31, 2012** | ** ** |
|-------------------------------------------------------|------------|-----------------------------------------|------------|-----------------------------------------|------------|
| **(dollars in millions)**                   | ** ** | **Carrying   Value**                    | ** ** | **Fair   Value**                        | ** ** | **Carrying   Value** | ** ** | **Fair   Value** | ** ** |
| Short- and long-term debt, excluding   capital leases |       | **$**                                   | **5,211**  |                                    | **$**      | **6,386** |   | $ | 10,105 |   | $ | 12,235 |   |
|                                                       |            |                                         |            |                                         |            |  |  |  |  |  |  |  |  |

 

**Derivative Instruments**

 

The Partnership has entered into derivative transactions to manage its exposure to fluctuations in foreign currency exchange rates and interest rates. The Partnership employs risk management strategies which may include the use of a variety of derivatives including cross currency swaps agreements. The Partnership does not hold derivatives for trading purposes.

 

*Cross Currency Swaps*

 

The Partnership previously entered into cross currency swaps designated as cash flow hedges to exchange approximately $1.6 billion of British Pound Sterling and Euro-denominated debt into U.S. dollars and to fix its future interest and principal payments in U.S. dollars, as well as to mitigate the impact of foreign currency transaction gains or losses. A portion of the gains and losses recognized in Other comprehensive income (loss) was reclassified to Other income, net to offset the related pretax foreign currency transaction gain or loss on the underlying debt obligations. The fair value of the outstanding swaps was not material at December 31, 2013 or December 31, 2012. During 2013 and 2012, the gains with respect to these swaps were not material.

 

**Concentrations of Credit Risk**

 

Financial instruments that subject us to concentrations of credit risk consist primarily of temporary cash investments, trade receivables and derivative contracts. The Partnership’s policy is to deposit its temporary cash investments with major financial institutions. Counterparties to the Partnership’s derivative contracts are also major financial institutions. The financial institutions have all been accorded high ratings by primary rating agencies. The Partnership limits the dollar amount of contracts entered into with any one financial institution and monitors its counterparties’ credit ratings. The Partnership generally does not give or receive collateral on swap agreements due to its credit rating and those of its counterparties. While the Partnership may be exposed to credit losses due to the nonperformance of its counterparties, the Partnership considers the risk remote and does not expect the settlement of these transactions to have a material effect on its results of operations or financial condition.

 

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**5. Debt**

 

Changes to debt during 2013 are as follows:

 
| **(dollars in millions)**                                | ** ** | **Debt Maturing   within One Year** | ** ** | **Long-term   Debt** | ** ** | **Total**       | ** ** |
|--------------------------------------------------------------------|------------|----------------------------------------------------|------------|----------------------|------------|-----------------|------------|
| Balance   at January 1, 2013                                  |       | **$**                                              | **1,448**  |                 | **$**      | ** 8,665** |       | **$** | **10,113** |   |
| Repayments   of long-term borrowings and capital lease obligations |       | **(1,460**                                         | **)**      | **(3,500**           | **)**      | **(4,960**      | **)**      |
| Other                                                              |       | **53**                                             |       | **66**               |       | **119**         |       |
| **Balance at December 31, 2013**                              |       | **$**                                              | **41**     |                 | **$**      | ** 5,231** |       | **$** | **5,272** |   |

 

Outstanding long-term debt obligations are as follows:

 
| ** **                                                                                   | ** ** | ** **                     | ** ** | ** **        | ** ** | **(dollars in millions)** | ** ** |
|----------------------------------------------------------------------------------------------|------------|--------------------------------|------------|-------------------|------------|-------------------------------------|------------|
| **At December 31,**                                                                | ** ** | **Interest Rates %** | ** ** | **Maturities**    | ** ** | **2013**                            | ** ** | **2012** | ** ** |
| Notes   payable                                                                              |       | **8.5 -   8.88**               |       | **2015 -   2018** |       | **$**                               | **3,931**  |   | $ |  8,635 |   |
| Alltel   assumed notes                                                                       |       | **6.80 -   7.88**              |       | **2016 -   2032** |       | **1,300**                           |       | 1,500 |   |
| Capital   lease obligations (average rate of 4.4% and 1.2% in 2013 and 2012,   respectively) |       |                           |       |              |       | **61**                              |       | 8 |   |
| Unamortized   discount, net of premium                                                       |       |                           |       |              |       | **(20**                             | **)**      | (30 | ) |
| Total   long-term debt, including current maturities                                         |       |                           |       |              |       | **5,272**                           |       | 10,113 |   |
| Less   long-term debt maturing within one year                                               |       |                           |       |              |       | **41**                              |       | 1,448 |   |
| Total   long-term debt                                                                       |       |                           |       |              |       | **$**                               | **5,231**  |   | $ |  8,665 |   |

 

Verizon Wireless Capital LLC, a wholly-owned subsidiary of the Partnership, is a limited liability company formed under the laws of Delaware on December 7, 2001 as a special purpose finance subsidiary to facilitate the offering of debt securities of the Partnership by acting as co-issuer. Other than the financing activities as a co-issuer of the Partnership’s indebtedness, Verizon Wireless Capital LLC has no material assets, operations or revenues. The Partnership is jointly and severally liable with Verizon Wireless Capital LLC for co-issued notes.

 

Discounts, premiums, and capitalized debt issuance costs are amortized using the effective interest method.

 

*2013*

 

During November 2013, $1.25 billion of 7.375% Notes and $0.2 billion of 6.50% Notes matured and were repaid. Also during November 2013, the Partnership redeemed $3.5 billion of 5.55% Notes, due February 1, 2014 at a redemption price of 101% of the principal amount of the notes. Any accrued and unpaid interest was paid to the date of redemption.

 

*2012*

 

During February 2012, $0.8 billion of 5.25% Notes matured and were repaid. During July 2012, $0.8 billion of 7.0% Notes matured and were repaid.

 

*Term Notes Payable to Affiliate*

 

Under the terms of a fixed rate promissory note with Verizon Financial Services LLC (VFSL), a wholly-owned subsidiary of Verizon, the Partnership may borrow, repay and re-borrow up to a maximum principal amount of $0.8 billion. During July 2013, the maturity date of this note was extended to August 1, 2016 and the interest rate decreased from 5.8% to 4.5% per annum. As of December 31, 2013, outstanding borrowings under this note, included within Other current liabilities on the consolidated balance sheet, were immaterial.

 

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* *

*Debt Covenants*

 

As of December 31, 2013, the Partnership is in compliance with all of its debt covenants.

 

*Maturities of Long-Term Debt*

 

Maturities of long-term debt outstanding at December 31, 2013 are as follows:

 
| **Years**  | ** ** | **(dollars in millions)** | ** ** |
|------------|------------|-------------------------------------|------------|
| 2014       |       | $                                   |  41   |   |
| 2015       |       | 699                                 |       |
| 2016       |       | 299                                 |       |
| 2017       |       | 7                                   |       |
| 2018       |       | 3,226                               |       |
| Thereafter |       | 1,000                               |       |
|            |            |                                     |            |  |

 

**6. Long-Term Incentive Plan**

 

*Verizon Wireless Long-Term Incentive Plan (Wireless Plan)*

 

The Wireless Plan provides compensation opportunities to eligible employees and other participating affiliates of the Partnership. The plan provides rewards that are tied to the long-term performance of the Partnership. Under the Wireless Plan, Value Appreciation Rights (VARs) were granted to eligible employees. As of December 31, 2013, all VARs were fully vested. The Partnership has not granted new VARs since 2004.

 

VARs reflect the change in the value of the Partnership, as defined in the Wireless Plan. Similar to stock options, the valuation is determined using a Black-Scholes model. Once VARs become vested, employees can exercise their VARs and receive a payment that is equal to the difference between the VAR price on the date of grant and the VAR price on the date of exercise, less applicable taxes. All outstanding VARs are fully exercisable and have a maximum term of 10 years. All VARs were granted at a price equal to the estimated fair value of the Partnership, as defined in the Wireless Plan, at the date of the grant.

 

The Partnership employs the income approach, a standard valuation technique, to arrive at the fair value of the Partnership on a quarterly basis using publicly available information. The income approach uses future net cash flows discounted at market rates of return to arrive at an estimate of fair value, as defined in the plan.

 

The following table summarizes the assumptions used in the Black-Scholes model for the year ended December 31, 2013:

 
| ** **                 | ** ** | **2013   End of Period** | ** ** |
|----------------------------|------------|------------------------------------|------------|
| Risk-free   rate           |       | **0.11**                           | **%**      |
| Expected   term (in years) |       | **0.12**                           |       |
| Expected   volatility      |       | **43.27**                          | **%**      |

 

The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the measurement date. Expected volatility was based on a blend of the historical and implied volatility of publicly traded peer companies for a period equal to the VARs expected life ending on the measurement date.

 

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For the years ended December 31, 2013, 2012 and 2011, the intrinsic value of VARs exercised during the period was $0.1 billion, respectively.

 

Cash paid to settle VARs for the years ended December 31, 2013, 2012 and 2011 was $0.1 billion, respectively.

 

Awards outstanding at December 31, 2013, 2012 and 2011 under the Wireless Plan are summarized as follows:

 
| **(shares in thousands)**     | ** ** | **VARs ****(a)** | ** ** | **Weighted-Average   Exercise Price   of VARs ****(a)** | ** ** | **Vested   VARs ****(a)** | ** ** |
|-----------------------------------------|------------|-----------------------|------------|------------------------------------------------------------------------|------------|--------------------------------|------------|
| Outstanding,   January 1, 2011     |       | 11,569                |       | $                                                                      | 13.11      |                           | 11,569     |   |
| Exercised                               |       | (3,303                | )          | 14.87                                                                  |       |                           |       |
| Cancelled/Forfeited                     |       | (52                   | )          | 14.74                                                                  |       |                           |       |
| Outstanding,   December 31, 2011   |       | 8,214                 |       | 12.39                                                                  |       | 8,214                          |       |
| Exercised                               |       | (3,427                | )          | 10.30                                                                  |       |                           |       |
| Cancelled/Forfeited                     |       | (21                   | )          | 11.10                                                                  |       |                           |       |
| Outstanding,   December 31, 2012   |       | 4,766                 |       | 13.89                                                                  |       | 4,766                          |       |
| **Exercised**                           |       | **(1,916**            | **)**      | **13.89**                                                              |       |                           |       |
| **Cancelled/Forfeited**                 |       | **(3**                | **)**      | **13.89**                                                              |       |                           |       |
| **Outstanding, December 31, 2013** |       | **2,847**             |       | **$**                                                                  | **13.89**  |                           | **2,847**  |   |

 

----

(a)              The weighted average exercise price is presented in dollars; VARs are presented in units. At December 31, 2013 all outstanding VARs had an exercise price of $13.89 and substantially all of the VARs expire in March 2014.

 

As of December 31, 2013, the aggregate intrinsic value of VARs outstanding and vested was $0.1 billion.

 

*Verizon Communications Inc. Long-Term Incentive Plan*

 

The Verizon Communications Inc. Long-Term Incentive Plan (the Verizon Plan) permits the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance stock units and other awards to Partnership employees. The maximum number of shares available for awards from the Verizon Plan is 119.6 million shares.

 

Restricted Stock Units

 

The Verizon Plan provides for grants of Restricted Stock Units (RSUs) that generally vest at the end of the third year after the grant. The RSUs are classified as equity awards because the RSUs will be paid in Verizon common stock upon vesting. The RSU equity awards are measured using the grant date fair value of Verizon common stock and are not remeasured at the end of each reporting period. Dividend equivalent units are also paid to participants at the time the RSU award is paid, and in the same proportion as the RSU award.

 

The Partnership had approximately 4.1 million and 4.7 million RSUs outstanding under the Verizon Plan as of December 31, 2013 and 2012, respectively.

 

Performance Stock Units

 

The Verizon Plan also provides for grants of Performance Stock Units (PSUs) that generally vest at the end of the third year after the grant. As defined by the Verizon Plan, the Human Resources Committee of the Board of Directors of Verizon determines the number of PSUs a participant earns based on the extent to which the corresponding performance goals have been achieved over the three-year performance cycle. The PSUs are classified as liability awards because the PSU awards are paid in cash upon vesting. The PSU award liability is measured at its fair value at the end of each reporting period and, therefore, will fluctuate based on the price of

 

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Verizon common stock as well as performance relative to the targets. Dividend equivalent units are also paid to participants at the time that the PSU award is determined and paid, and in the same proportion as the PSU award.

 

The Partnership had approximately 6.0 million and 7.0 million PSUs outstanding under the Verizon Plans as of December 31, 2013 and 2012, respectively.

 

As of December 31, 2013, unrecognized compensation expense related to the unvested portion of the Partnership’s RSUs and PSUs was approximately $0.1 billion and is expected to be recognized over a weighted-average period of approximately two years.

 

*Stock-Based Compensation Expense*

 

For each of the years ended December 31, 2013, 2012 and 2011, the Partnership recognized compensation expense for stock based compensation related to VARs, RSUs and PSUs of $0.2 billion, $0.3 billion and $0.2 billion, respectively.

 

**7. Income Taxes**

 

*Provision for Income Taxes*

 

The provision for income taxes consists of the following:

 
| ** **                                  | ** ** | **(dollars in millions)** | ** **   |
|---------------------------------------------|------------|-------------------------------------|--------------|
| **Years Ended December 31,** | ** ** | **2013**                            | ** **   | **2012** | ** ** | **2011** | ** ** |
| Current   tax provision:                    |       |                                |         |   |   |   |   |
| Federal                                     |       | **$**                               | ** 47** |   | $ |  106 |   | $ |  476 |   |
| State   and local                           |       | **31**                              |         | (28 | ) | 103 |   |
|                                        |       | **78**                              |         | 78 |   | 579 |   |
| Deferred   tax provision:                   |       |                                |         |   |   |   |   |
| Federal                                     |       | **60**                              |         | 35 |   | 369 |   |
| State   and local                           |       | **12**                              |         | 88 |   | (1 | ) |
|                                        |       | **72**                              |         | 123 |   | 368 |   |
| Provision   for income taxes                |       | **$**                               | **150**      |   | $ |  201 |   | $ |  947 |   |

 

A reconciliation of the income tax provision computed at the statutory tax rate to the Partnership’s effective tax rate is as follows:

 
| ** **                                                        | ** ** | **(dollars in millions)** | ** **      |
|-------------------------------------------------------------------|------------|-------------------------------------|-----------------|
| **Years Ended December 31,**                       | ** ** | **2013**                            | ** **      | **2012** | ** ** | **2011** | ** ** |
| Income   tax provision at the statutory rate                      |       | **$**                               | ** 9,270** |   | $ |  7,481 |   | $ |  6,264 |   |
| State   and local income taxes, net of U.S. federal benefit       |       | **45**                              |            | 47 |   | 57 |   |
| Other                                                             |       | **(28**                             | **)**           | 3 |   | (7 | ) |
| Partnership   income not subject to federal or state income taxes |       | **(9,137**                          | **)**           | (7,330 | ) | (5,367 | ) |
| Provision   for income tax                                        |       | **$**                               | **150**         |   | $ | 201 |   | $ | 947 |   |

 

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Deferred taxes arise because of differences in the book and tax bases of certain assets and liabilities. Significant components of the Partnership’s deferred taxes are shown in the following table:

 
| ** **                                | ** ** | **(dollars in millions)** | ** ** |
|-------------------------------------------|------------|-------------------------------------|------------|
| **At December 31,**             | ** ** | **2013**                            | ** ** | **2012** | ** ** |
| Deferred   tax assets:                    |       |                                |       |   |   |
| Net   operating loss carryforward         |       | **$**                               | **165**    |   | $ | 122 |   |
| Valuation   allowance                     |       | **(89**                             | **)**      | (55 | ) |
| Other   Total deferred tax assets         |       | **207**                             |       | 134 |   |
|                                      |       | **283**                             |       | 201 |   |
| Deferred   tax liabilities:               |       |                                |       |   |   |
| Intangible   assets                       |       | **9,457**                           |       | 9,355 |   |
| Plant,   property and equipment           |       | **1,407**                           |       | 1,445 |   |
| Other                                     |       | **354**                             |       | 264 |   |
| Total   deferred tax liabilities          |       |                                |       |   |   |
|                                      |       | **11,218**                          |       | 11,064 |   |
|                                      |       |                                |       |   |   |
| Net   deferred tax asset-current(a)  |       | **66**                              |       | 76 |   |
| Net   deferred tax liability-non-current  |       | **$**                               | **11,001** |   | $ | 10,939 |   |

 

----

(a) Included in prepaid expenses and other current assets in the accompanying consolidated balance sheets.

 

At December 31, 2013, the Partnership had state net operating loss carryforwards of $3.6 billion. These net operating loss carryforwards expire at various dates principally from December 31, 2018 through December 31, 2033.

 

*Unrecognized Tax Benefits*

 

A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows:

 
| ** **                                                     | ** ** | **(dollars in millions)** | ** ** |
|----------------------------------------------------------------|------------|-------------------------------------|------------|
| ** **                                                     | ** ** | **2013**                            | ** ** | **2012** | ** ** | **2011** | ** ** |
| Balance   as of January 1                                 |       | **$**                               | **306**    |   | $ | 267 |   | $ |  393 |   |
| Additions   based on tax positions related to the current year |       | **16**                              |       | 13 |   | 10 |   |
| Additions   for tax positions of prior years                   |       | **9**                               |       | 72 |   | 53 |   |
| Reductions   for tax positions of prior years                  |       | **(48**                             | **)**      | (49 | ) | (187 | ) |
| Reductions   due to lapse of applicable statute of limitations |       | **(73**                             | **)**      | — |   | (2 | ) |
| Settlements                                                    |       | **—**                          |       | 3 |   | — |   |
| **Balance as of December 31**                             |       | **$**                               | **210**    |   | $ | 306 |   | $ |  267 |   |

 

Included in the total unrecognized tax benefits balance is $0.1 billion, $0.2 billion and $0.2 billion as of December 31, 2013, 2012 and 2011, respectively, that, if recognized, would favorably affect the effective tax rate. The remaining unrecognized tax benefits relate to temporary items that would not affect the effective tax rate.

 

The after-tax accrual for the payment of interest and penalties in the balance sheet relating to the unrecognized tax benefits reflected above was not significant for the years ended December 31, 2013, 2012 and 2011.

 

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The net after-tax benefits (expenses) related to interest in the provision for income taxes were not significant for the years ended December 31, 2013, 2012 and 2011.

 

The Partnership or its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and local jurisdictions. The Partnership is generally no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2003. The Internal Revenue Service (IRS) is currently examining some of the Partnership’s subsidiaries. As a result of the anticipated resolution of various income tax matters within the next twelve months, the Partnership believes that it is reasonably possible that the unrecognized tax benefits may be adjusted. An estimate of the amount of the change attributable to any such settlement cannot be made until issues are further developed or examinations close.

 

**8. Leases**

 

*As Lessee*

 

The Partnership has entered into operating leases for facilities and equipment used in its operations. Lease contracts contain renewal options that include rent expense adjustments based on the Consumer Price Index as well as annual and end-of-lease term adjustments. Rent expense is recorded on a straight-line basis over the noncancelable lease term which is generally determined to be the initial lease term. Total rent expense under operating leases amounted to $2.0 billion in 2013, $1.8 billion in 2012 and $1.7 billion in 2011.

 

The aggregate future minimum rental commitments under noncancelable operating leases, excluding renewal options that are not reasonably assured for the periods shown at December 31, 2013, are as follows:

 
| **(dollars in millions)   Years** | ** ** | **Operating   Leases** | ** **  |
|---------------------------------------------|------------|------------------------|-------------|
| 2014                                        |       | $                      |  1,689 |   |
| 2015                                        |       | 1,518                  |        |
| 2016                                        |       | 1,290                  |        |
| 2017                                        |       | 1,043                  |        |
| 2018                                        |       | 822                    |        |
| Thereafter                                  |       | 2,974                  |        |
| Total   minimum rental commitments          |       | $                      |  9,336 |   |

 

**9. Supplementary Financial Information**

 

*Supplementary Balance Sheet Information*

 
| ** **                              | ** ** | **At December 31,** | ** ** |
|-----------------------------------------|------------|-------------------------------|------------|
| **(dollars in millions)**     | ** ** | **2013**                      | ** ** | **2012** | ** ** |
| **Receivables, Net:**                   |       |                          |       |   |   |
| Accounts   receivable                   |       | **$**                         | **6,228**  |   | $ | 5,848 |   |
| Other   receivables                     |       | **1,067**                     |       | 864 |   |
| Unbilled   revenue                      |       | **308**                       |       | 295 |   |
|                                    |       | **7,603**                     |       | 7,007 |   |
| Less:   allowance for doubtful accounts |       | **(399**                      | **)**      | (350 | ) |
| *Receivables, net*                      |       | **$**                         | **7,204**  |   | $ | 6,657 |   |

 

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| ** **                              | ** ** | ** **             | ** ** | **(dollars in millions)** | ** **       |
|-----------------------------------------|------------|------------------------|------------|-------------------------------------|------------------|
| **At December 31,**           | ** ** | **Lives (years)** | ** ** | **2013 **                      | ** **       | **2012** | ** ** |
| **Plant, Property and Equipment, Net:** |       |                   |       |                                |             |   |   |
| Land                                    |       | —                 |       | **$**                               | **244**          |   | $ | 244 |   |
| Buildings                               |       | 20-45                  |       | **11,742**                          |             | 10,855 |   |
| Wireless   plant and equipment          |       | 3-15                   |       | **60,550**                          |             | 54,867 |   |
| Furniture,   fixtures and equipment     |       | 3-10                   |       | **3,700**                           |             | 3,603 |   |
| Leasehold   improvements                |       | 5                      |       | **4,728**                           |             | 4,310 |   |
| Construction-in-progress(b)             |       | —                 |       | **2,283**                           |             | 2,572 |   |
|                                    |       |                   |       | **83,247**                          |             | 76,451 |   |
| Less:   accumulated depreciation(c)     |       |                   |       | **(47,315**                         | **)**            | (41,905 | ) |
| *Plant, property and equipment, net*(a) |       |                   |       | **$**                               | ** 35,932** |   | $ |  34,546 |   |

 

----

(a)         Interest costs of $0.1 billion and network engineering costs of $0.5 billion and $0.4 billion were capitalized during the years ended December 31, 2013 and 2012, respectively.

 

(b)         Construction-in-progress includes $0.9 billion and $1.2 billion of accrued but unpaid capital expenditures as of December 31, 2013 and 2012, respectively.

 

(c)          Depreciation of plant, property and equipment was $7.7 billion, $7.5 billion and $7.4 billion, for the years ended December 31, 2013, 2012 and 2011, respectively.

 
| ** **                                                | ** ** | **(dollars in millions)** | ** ** |
|-----------------------------------------------------------|------------|-------------------------------------|------------|
| **At December 31,**                             | ** ** | **2013**                            | ** ** | **2012** | ** ** |
| **Accounts Payable and Accrued Liabilities:**             |       |                                |       |   |   |
| Accounts   payable, accrued interest and accrued expenses |       | **$**                               | **4,176**  |   | $ | 4,538 |   |
| Accrued   payroll and related employee benefits           |       | **1,347**                           |       | 1,385 |   |
| Taxes   payable                                           |       | **651**                             |       | 687 |   |
| Accrued   commissions                                     |       | **838**                             |       | 924 |   |
| *Accounts payable and accrued liabilities*                |       | **$**                               | **7,012**  |   | $ | 7,534 |   |

 

*Supplementary Statements of Income Information*

 
| ** **                                                    | ** ** | **(dollars in millions)** | ** ** |
|---------------------------------------------------------------|------------|-------------------------------------|------------|
| **For the Years Ended December 31,** | ** ** | **2013**                            | ** ** | **2012** | ** ** | **2011** | ** ** |
| **Advertising and Promotional Cost:**                         |       | **$**                               | **1,856**  |   | $ | 1,826 |   | $ | 1,925 |   |
| **Employee Benefit Plans:**                                   |       |                                |       |   |   |   |   |
| Matching   contribution expense                               |       | $                                   | 251        |   | $ | 247 |   | $ | 231 |   |
| Profit   sharing expense                                      |       | 152                                 |       | 60 |   | 82 |   |
| **Interest Expense, Net:**                                    |       |                                |       |   |   |   |   |
| Interest   expense                                            |       | $                                   |  (720 | ) | $ | (776 | ) | $ | (954 | ) |
| Capitalized   interest                                        |       | 655                                 |       | 334 |   | 344 |   |
| *Interest expense, net*                                       |       | $                                   | (65        | ) | $ | (442 | ) | $ | (610 | ) |

 

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* *

*Supplementary Cash Flows Information*

 
| ** **                                                    | ** ** | **(dollars in millions)** | ** **    |
|---------------------------------------------------------------|------------|-------------------------------------|---------------|
| **For the Years Ended December 31,** | ** ** | **2013**                            | ** **    | **2012** | ** ** | **2011** | ** ** |
| Net   cash paid for income taxes                              |       | **$**                               | ** 179** |   | $ |  245 |   | $ |  505 |   |
| Interest   paid, net of amounts capitalized                   |       | **130**                             |          | 464 |   | 610 |   |
|                                                               |            |                                     |               |  |  |  |  |  |  |  |

 

**10. Noncontrolling Interests**

 

Noncontrolling interests in equity of subsidiaries were as follows:

 
| ** **                        | ** ** | **(dollars in millions)** | ** ** |
|-----------------------------------|------------|-------------------------------------|------------|
| **At December 31,**     | ** ** | **2013**                            | ** ** | **2012** | ** ** |
| Verizon   Wireless of the East LP |       | **$**                               | **1,179**  |   | $ | 1,179 |   |
| Cellular   partnerships - various |       | **1,100**                           |       | 865 |   |
| Noncontrolling   interests        |       | **$**                               | **2,279**  |   | $ | 2,044 |   |

 

*Verizon Wireless of the East LP*

 

Verizon Wireless of the East LP is a limited partnership formed in 2002 and is controlled and managed by the Partnership. Verizon held the noncontrolling interest of Verizon Wireless of the East LP at December 31, 2013 and 2012. As per the agreement between the Partnership and Verizon, Verizon has not been allocated any of the profits of Verizon Wireless of the East LP.

 

**11. Other Transactions with Affiliates**

 

In addition to transactions with Affiliates in Note 5, other significant transactions with Affiliates are summarized as follows:

 
| ** **                                                    | ** ** | **(dollars in millions)** | ** ** |
|---------------------------------------------------------------|------------|-------------------------------------|------------|
| **For the Years Ended December 31,** | ** ** | **2013**                            | ** ** | **2012 ** | ** ** | **2011** | ** ** |
| Revenue   related to transactions with affiliated companies   |       | **$**                               | **102**    |   | $ | 83 |   | $ | 87 |   |
| Cost   of service (a)                                         |       | **1,378**                           |       | 1,365 |   | 1,396 |   |
| Selling,   general and administrative expenses (b)            |       | **917**                             |       | 584 |   | 312 |   |
|                                                               |            |                                     |            |  |  |  |  |  |  |  |

 

----

(a)              Affiliate cost of service primarily represents charges for long distance, direct telecommunication and roaming services provided by affiliates.

 

(b)              Affiliate selling, general and administrative expenses include charges from affiliates for services provided, including insurance, leases, office telecommunications, and billing and lockbox services, as well as services billed from Verizon Corporate Services, Verizon Sourcing LLC, Verizon Corporate Resources Group and Verizon Data Solutions for functions performed under service level agreements.

 

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* *

*Other Transactions with Affiliates*

 

Accounts payable and accrued liabilities as of December 31, 2013 and 2012 include $68 million and $92 million, respectively, due to affiliates primarily comprised of costs associated with services provided in the normal course of business and roaming services.

 

*Distributions to Partners*

 

In May 2013, the Board of Representatives of the Partnership declared a distribution to its owners, which was paid in the second quarter of 2013 in proportion to their partnership interests on the payment date, in the aggregate amount of $7.0 billion. As a result, Vodafone received a cash payment of $3.15 billion and the remainder of the distribution was received by Verizon.

 

In November 2012, the Board of Representatives of the Partnership declared a distribution to its owners, which was paid in the fourth quarter of 2012 in proportion to their partnership interests on the payment date, in the aggregate amount of $8.5 billion. As a result, Vodafone received a cash payment of $3.8 billion and the remainder of the distribution was received by Verizon.

 

In July 2011, the Board of Representatives of the Partnership declared a distribution to its owners, which was paid in the first quarter of 2012 in proportion to their partnership interests on the payment date, in the aggregate amount of $10 billion. As a result, Vodafone received a cash payment of $4.5 billion and the remainder of the distribution was received by Verizon.

 

As required under the Partnership Agreement, the Partnership paid aggregate tax distributions of $10.0 billion, $7.2 billion and $3.1 billion to its Partners during the years ended December 31, 2013, 2012 and 2011, respectively. In addition to quarterly tax distributions to its Partners, its Partners have directed the Partnership to make supplemental tax distributions to them, subject to the Partnership’s board of representatives’ right to reconsider these distributions based on significant changes in overall business and financial conditions. During the year ended December 31, 2013, the Partnership made supplemental tax distributions in the aggregate amount of $0.9 billion, which is included in the total distribution paid above.

 

During February 2014, the Partnership paid aggregate tax distributions of $1.8 billion to its Partners.

 

**12. Accumulated Other Comprehensive Income**

 

Comprehensive income consists of net income and other gains and losses affecting Partners’ capital that, under U.S. GAAP, are excluded from net income.

 

**Accumulated Other Comprehensive Income**

 

The changes in the balances of Accumulated other comprehensive income by component are as follows:

 
| **(dollars in millions)**   | ** ** | **Unrealized loss   on cash flow   hedges** | ** ** | **Defined benefit   pension and   postretirement   plans** | ** ** | **Total** | ** ** |
|---------------------------------------|------------|------------------------------------------------------------|------------|----------------------------------------------------------------------|------------|-----------|------------|
| Balance   at January 1, 2013     |       | $                                                          | 80         |                                                                 | $          | 4         |       | 84 |   |
| Other   comprehensive income          |       | **13**                                                     |       | **—**                                                           |       | **13**    |       |
| Amounts   reclassified to net income  |       | **(45**                                                    | **)**      | **—**                                                           |       | **(45**   | **)**      |
| Net   other comprehensive loss        |       | **(32**                                                    | **)**      | **—**                                                           |       | **(32**   | **)**      |
| **Balance at December 31, 2013** |       | **$**                                                      | **48**     |                                                                 | **$**      | **4**     |       | **52** |   |

 

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The amounts presented above in net other comprehensive loss are net of taxes and noncontrolling interests, which are not significant. For the year ended December 31, 2013, all other amounts reclassified to net income in the table above are included in Other income, net on the Partnership’s consolidated statements of income.

 

**13. Commitments and Contingencies**

 

Bell Atlantic, now known as Verizon Communications, and Vodafone entered into an alliance agreement to create a wireless business composed of both companies’ U.S. wireless assets, as amended, which the Partnership refers to as the “Alliance Agreement”. The Alliance Agreement contains a provision, subject to specified limitations, that requires Verizon and Vodafone to indemnify the Partnership for certain contingencies, excluding PrimeCo Personal Communications L.P. contingencies, arising prior to the formation of the Partnership.

 

Where it is determined, in consultation with counsel based on litigation and settlement risks, that a loss is probable and estimable in a given matter, the Partnership establishes an accrual. In none of the currently pending matters is the amount of accrual material. An estimate of the reasonably possible loss or range of loss in excess of the amounts already accrued cannot be made at this time due to various factors typical in contested proceedings, including (1) uncertain damage theories and demands; (2) a less than complete factual record; (3) uncertainty concerning legal theories and their resolution by courts or regulators; and (4) the unpredictable nature of the opposing party and its demands. The Partnership continuously monitors these proceedings as they develop and adjusts any accrual or disclosure as needed. The Partnership does not expect that the ultimate resolution of any pending regulatory or legal matter in future periods will have a material effect on the Partnership’s financial condition, but it could have a material effect on the Partnership’s results of operations for a given reporting period.

 

Verizon has entered into reimbursement agreements with third-party lenders that permit these lenders to issue letters of credit to third parties on behalf of the Partnership and the Partnership’s subsidiaries.

 

The Partnership has several commitments primarily to purchase handsets and peripherals, equipment, software, programming and network services, and marketing activities, which will be used or sold in the ordinary course of business, from a variety of suppliers totaling $15.6 billion. Of this total amount, $13.6 billion is attributable to 2014, $1.0 billion is attributable to 2015 through 2016, $0.5 billion is attributable to 2017 through 2018 and $0.5 billion is attributable to years thereafter. These amounts do not represent the Partnership’s entire anticipated purchases in the future, but represent only those items that are the subject of contractual obligations. The Partnership’s commitments are generally determined based on the noncancelable quantities or termination amounts. Purchases against the Partnership’s commitments for 2013 totaled approximately $9.8 billion. The Partnership also purchases products and services as needed with no firm commitment.

 

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** **

**20-F Disclosure — Description of American Depositary Shares (Item 12D)**

 

**Fees payable by ADR Holders**

 

The Bank of New York Mellon, as depositary, collects its fees for delivery and surrender of ADRs directly from investors depositing shares or surrendering ADRs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors, including in connection with the payment of dividends, by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

 
| **Persons depositing or withdrawing   shares must pay:**                                                                                                                | ** ** | **For:**                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| $5.00 (or less) per 100 ADRs (or portion of 100   ADRs)                                                                                                                                          |       | ·                  Issuance   of ADRs, including issuances resulting from a distribution of shares or   rights or other property

·                  Cancellation   of ADRs for the purpose of withdrawal, including if the deposit agreement   terminates |
|                                                                                                                                                                                             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| $.02 (or less) per ADR (or portion thereof). The   current per ADR fee to be charged for an interim dividend is $0.015 per ADR   and for a final dividend is $0.02 per ADR.                      |       | ·                  Any   cash distribution to ADR registered holders                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| A fee equivalent to the fee that would be payable if   securities distributed to you had been shares and the shares had been   deposited for issuance of ADRs                                    |       | ·                  Distribution   of securities distributed to holders of deposited securities which are   distributed by the depositary to ADR registered holders                                                                                                                                                                                   |
|                                                                                                                                                                                             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Registration or transfer fees                                                                                                                                                                    |       | ·                  Transfer   and registration of shares on our share register to or from the name of the   depositary or its agent when you deposit or withdraw shares                                                                                                                                                                              |
|                                                                                                                                                                                             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Expenses of the depositary                                                                                                                                                                       |       | ·                  Cable,   telex, facsimile transmissions and delivery expenses (when expressly provided   in the deposit agreement)

·                  Converting   foreign currency to US dollars                                                      |
|                                                                                                                                                                                             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Taxes and other governmental charges that the   depositary or the custodian must pay on any ADR or share underlying an ADR,   for example, stock transfer taxes, stamp duty or withholding taxes |       | ·                  As   necessary                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Any charges incurred by the depositary or its agents   for servicing the deposited securities                                                                                                    |       | ·                  As   necessary                                                                                                                                                                                                                                                                                                                    |

 

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**Fees Payable by the Depositary to the Issuer**

 

As set out above, pursuant to the deposit agreement, the depositary may charge up to $0.02 per ADR in respect of dividends paid by us. We have agreed with the depositary that any dividend fee collected by it is paid to us, net of any dividend collection fee charged by it. For the year ended 31 March 2016, we agreed with the depositary that it will charge $0.015 per ADR in respect of any interim dividend and $0.02 per ADR in respect of any final dividend paid during that year.

 

As at 31 March 2016,  (April 1, 2015 through March 31, 2016) we have received approximately $13.1 million arising out of fees charged in respect of dividends paid during the year. We also have an agreement with the depositary that it will absorb any of its out-of-pocket maintenance costs for servicing the holders of the ADRs up to $1,000,000 per calendar year. However, any of the depositary’s out-of-pocket maintenance costs which exceed the $1,000,000 annual aggregate limits will be reimbursed by us.

 

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** **

**Index of Exhibits to the Company’s Annual Report on Form 20-F for the financial year ended March 31, 2016**

 
| 1.1    |   | Articles of Association, as   adopted on June 30, 1999 and including all amendments made on   July 25, 2001, July 26, 2005, July 25, 2006, July 24,   2007, July 29, 2008, July 28, 2009, July 27, 2010 and   January 28, 2014, of the Company (incorporated by reference to   Exhibit 1.1 to the Company’s Annual Report on Form 20-F for the   financial year ended March 31, 2014 (File No. 001-10086)). |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 2.1    |   | Indenture, dated as of   February 10, 2000, between the Company and Citibank, N.A., as Trustee, including   forms of debt securities (incorporated by reference to   Exhibit 4(a) of Post Effective Amendment No. 1 to the   Company’s Registration Statement on Form F-3 (File No. 333-10762),   dated November 24, 2000).                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 2.2    |   | Agreement of Resignation,   Appointment and Acceptance dated as of July 24, 2007, among the Company,   Citibank N.A. and The Bank of New York Mellon (incorporated by reference to   Exhibit 2.2 to the Company’s Annual Report on Form 20-F for the   financial year ended March 31, 2008 (File No. 001-10086)).                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 2.3    |   | Fourteenth Supplemental   Trust Deed dated June 1, 2016 between the Company and The Law Debenture Trust   Corporation p.l.c. further modifying and restating the provisions of the   Trust Deed dated July 16, 1999 relating to a Euro 30,000,000,000 Euro   Medium Term Note Programme.                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 2.4    |   | Trust Deed dated   February 25, 2016 between the Company and The Law Debenture Trust   Corporation p.l.c. in relation to the Group’s £1,440,000,000 1.50 per cent   Subordinated Mandatory Convertible Bonds due 2017.                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 2.5    |   | Trust Deed dated   February 25, 2016 between the Company and The Law Debenture Trust   Corporation p.l.c. in relation to the Group’s £1,440,000,000 2.00 per cent   Subordinated Mandatory Convertible Bonds due 2019.                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.1    |   | Agreement in relation to   the Group’s €3,860,000,000 five year Revolving Credit Facility dated   March 28, 2014 among the Company and various lenders (incorporated by   reference to Exhibit 4.6 to the Company’s Annual Report on   Form 20-F for the financial year ended March 31, 2014 (File   No. 001-10086)).                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.2    |   | Revolving Credit Agreement   with Royal Bank of Canada, effective as of December 15, 2015 in relation   to the Group’s €3,860,000,000 five year Revolving Credit Facility.                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.3    |   | Vodafone Group 1999 Long   Term Stock Incentive Plan (incorporated by reference to Exhibit 4.7 to   the Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2001(File No. 001-10086)).                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.4    |   | Vodafone Group 2005 Global   Incentive Plan (incorporated by reference to Exhibit 4.8 to the   Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2006 (File No. 001-10086)).                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.5    |   | Facility Agreement in   relation to the Group’s US$3,935,000,000 revolving credit facility dated   February 27, 2015 among the Company and various lenders (incorporated by   reference to Exhibit                                                                                                                                                                                                                                                                      |

 

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|   |   | 4.9 to the Company’s Annual   Report on Form 20-F for the financial year ended March 31, 2015   (File No. 001-10086)).                                                                                                                                         |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                               |
| 4.6    |   | Revolving Credit Agreement   with Royal Bank of Canada, effective as of December 15, 2015 and dated   February 27, 2015 in relation to the Group’s US$3,935,000,000 Revolving   Credit Facility.                                                                         |
|   |   |                                                                                                                                                                                                                                                                               |
| 4.7    |   | $1,000,000,000 Facility   Agreement dated September 9, 2015 between the Company and The Bank of   Tokyo-Mitsubishi UFJ, LTD.                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                               |
| 4.8    |   | $1,000,000,000 Facility   Agreement dated November 9, 2015 between the Company and Mizuho Bank   LTD.                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                               |
| 4.9    |   | Subscription Agreement   dated February 19, 2016 among the Company, J.P. Morgan Securities Plc   and Morgan Stanley & Co. International Plc in relation to the   Group’s £1,440,000,000 1.50 per cent Subordinated Mandatory Convertible Bonds   due 2017. |
|   |   |                                                                                                                                                                                                                                                                               |
| 4.10   |   | Subscription Agreement   dated February 19, 2016 among the Company, J.P. Morgan Securities Plc   and Morgan Stanley & Co. International Plc in relation to the   Group’s £1,440,000,000 2.00 per cent Subordinated Mandatory Convertible Bonds   due 2019. |
|   |   |                                                                                                                                                                                                                                                                               |
| 4.11   |   | Letter of Appointment of   Anne Lauvergeon (incorporated by reference to Exhibit 4.22 to the   Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2006 (File No. 001-10086)).                                                  |
|   |   |                                                                                                                                                                                                                                                                               |
| 4.12   |   | Letter of Appointment of   Luc Vandevelde (incorporated by reference to Exhibit 4.22 to the   Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2004 (File No. 001-10086)).                                                   |
|   |   |                                                                                                                                                                                                                                                                               |
| 4.13   |   | Letter of Appointment of   Anthony Watson (incorporated by reference to Exhibit 4.26 to the   Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2006 (File No. 001-10086)).                                                   |
|   |   |                                                                                                                                                                                                                                                                               |
| 4.14   |   | Letter of Appointment of   Philip Yea (incorporated by reference to Exhibit 4.27 to the Company’s   Annual Report on Form 20-F for the financial year ended March 31,   2006 (File No. 001-10086)).                                                       |
|   |   |                                                                                                                                                                                                                                                                               |
| 4.15   |   | Service Agreement of   Vittorio Colao (incorporated by reference to Exhibit 4.22 to the   Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2009 (File No. 001-10086)).                                                       |
|   |   |                                                                                                                                                                                                                                                                               |
| 4.16   |   | Letter of Appointment of   Alan Jebson (incorporated by reference to Exhibit 4.23 to the Company’s   Annual Report on Form 20-F for the financial year ended March 31,   2007 (File No. 001-10086)).                                                      |
|   |   |                                                                                                                                                                                                                                                                               |
| 4.17   |   | Letter of Appointment of   Nick Land (incorporated by reference to Exhibit 4.24 to the Company’s   Annual Report on Form 20-F for the financial year ended March 31,   2007 (File No. 001-10086)).                                                        |
|   |   |                                                                                                                                                                                                                                                                               |
| 4.18   |   | Letter of Appointment of   Samuel Jonah (incorporated by reference to Exhibit 4.26 to the Company’s   Annual Report on Form 20-F for the financial year ended March 31,   2009 (File No. 001-10086)).                                                     |
|   |   |                                                                                                                                                                                                                                                                               |
| 4.19   |   | Service Agreement of   Stephen Pusey (incorporated by reference to Exhibit 4.28 to the   Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2009 (File No. 001-10086)).                                                        |

 

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| 4.20   |   | Letter of Indemnification   for Steve Pusey (incorporated by reference to Exhibit 4.27 to the   Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2010 (File No. 001-10086)).          |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                        |
| 4.21   |   | Letter of Indemnification   for Philip Yea (incorporated by reference to Exhibit 4.29 to the   Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2010 (File No. 001-10086)).           |
|   |   |                                                                                                                                                                                                                                        |
| 4.22   |   | Letter of Indemnification   for Luc Vandevelde (incorporated by reference to Exhibit 4.30 to the   Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2010 (File No. 001-10086)).       |
|   |   |                                                                                                                                                                                                                                        |
| 4.23   |   | Letter of Appointment of   Renee James (incorporated by reference to Exhibit 4.35 to the Company’s   Annual Report on Form 20-F for the financial year ended March 31,   2011 (File No. 001-10086)).               |
|   |   |                                                                                                                                                                                                                                        |
| 4.24   |   | Letter of Appointment of   Gerard Kleisterlee (incorporated by reference to Exhibit 4.36 to the   Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2011 (File No. 001-10086)).        |
|   |   |                                                                                                                                                                                                                                        |
| 4.25   |   | Letter of Appointment of   Omid Kordestani (incorporated by reference to Exhibit 4.28 to the   Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2013 (File No. 001-10086)).           |
|   |   |                                                                                                                                                                                                                                        |
| 4.26   |   | Letter of Appointment of   Valerie Gooding (incorporated by reference to Exhibit 4.30 to the Company’s   Annual Report on Form 20-F for the financial year ended March 31,   2014 (File No. 001-10086)).           |
|   |   |                                                                                                                                                                                                                                        |
| 4.27   |   | Service Agreement of   Nicholas Read (incorporated by reference to Exhibit 4.31 to the   Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2014 (File No. 001-10086)).                 |
|   |   |                                                                                                                                                                                                                                        |
| 4.28   |   | Letter of Appointment of   Sir Crispin Davis (incorporated by reference to Exhibit 4.32 to the   Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2014 (File No. 001-10086)).         |
|   |   |                                                                                                                                                                                                                                        |
| 4.29   |   | Letter of Appointment of   Dame Clara Furse (incorporated by reference to Exhibit 4.33 to the   Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2014 (File No. 001-10086)).          |
|   |   |                                                                                                                                                                                                                                        |
| 4.30   |   | Letter of indemnification   for Nicholas Read (incorporated by reference to Exhibit 4.29   to the Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2015 (File No. 001-10086)).        |
|   |   |                                                                                                                                                                                                                                        |
| 4.31   |   | Letter of appointment for   Dr Matthias Döpfner (incorporated by reference to Exhibit 4.30   to the Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2015 (File No. 001-10086)). |
|   |   |                                                                                                                                                                                                                                        |
| 4.32   |   | Letter of appointment for   David Nish.                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                        |
| 4.33   |   | Stock Purchase Agreement   dated September 2, 2013, by and among Verizon Communications Inc.,   Vodafone Group Plc and Vodafone 4 Limited (incorporated by reference to   Exhibit 4.34 to the                                     |

 

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|   |   | Company’s Annual Report on   Form 20-F for the financial year ended March 31, 2014 (File   No. 001-10086)).                                                                                                                                                                                                                                                                                                            |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.34   |   | First Amendment to Stock   Purchase Agreement dated December 5, 2013 by and among Vodafone Group   Plc, Vodafone 4 Limited and Verizon Communications Inc, amending the terms of   the Stock Purchase Agreement dated September 2, 2013 (incorporated by   reference to Exhibit 4.35 to the Company’s Annual Report on   Form 20-F for the financial year ended March 31, 2014 (File   No. 001-10086)). |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.35   |   | Agreed form of a   Contribution and Transfer Agreement by and among the Company, Liberty Global   Europe Holding B.V., Liberty Global Plc, Vodafone International Holdings B.V.   and Lynx Global Europe II B.V. relating to the contribution and/or transfer   of shares in Ziggio Group Holding B.V. and Vodafone Libertel B.V. to Lynx   Global Europe II B.V. and the formation of the Netherlands joint venture.                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 7.     |   | Unaudited Computation of   Ratio of Earnings to Fixed Charges for the financial years ended   March 31, 2016, 2015, 2014, 2013 and 2012.                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 8.     |   | List of the Company’s   related undertakings (incorporated by reference to Note 33 to the   Consolidated Financial Statements included in this Annual Report on   Form 20-F for the financial year ended March 31, 2016).                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 12.    |   | Rule 13a —   14(a) Certifications.                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 13.    |   | Rule 13a —   14(b) Certifications. These certifications are furnished only and are   not filed as part of the Annual Report on Form 20-F for the financial   year ended March 31, 2016.                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 15.1   |   | Consent letter of   PricewaterhouseCoopers LLP.                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 15.2   |   | Consent letter of Deloitte   LLP, London.                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 15.3   |   | Consent letter of   Deloitte & Touche LLP, New York.                                                                                                                                                                                                                                                                                                                                                                              |

 

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**SIGNATURE**

 

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

 
|                | VODAFONE GROUP PUBLIC   LIMITED COMPANY       |
|---------------------|-----------------------------------------------|
|                | (Registrant)                                  |
|                |                                          |
|                | /s/ R E S Martin                              |
|                | Rosemary E S Martin                           |
|                | Group General Counsel   and Company Secretary |
| Date: June, 10 2016 |                                          |

 

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