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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**

 

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

**For the fiscal year ended: March 31, 2017**

 

**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**

 

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

 

**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 | 26,622,078,509 |
|-------------------------------------------------------|----------------|
| 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

x Yes   o No

 

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.

o Yes   x No

 

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:

x Yes   o No

 

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).

o Yes   o No

 

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

 

| Large accelerated filer x |   | Accelerated filer o |   | Non-accelerated filer o |   | Emerging growth company o |
|---------------------------|--------|---------------------|--------|-------------------------|--------|--------------------------------|

 

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards* provided pursuant to Section 13(a) of the Exchange Act. o

 

*The term ‘‘new or revised financial accounting standard’’ refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

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   Standards as issued   by the International Accounting Standards Board x |   | Other o |
|-----------|--------|-------------------------------------------------------------------------------------------------------------|--------|---------|

 

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

o Item 17   o Item 18

 

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).

o Yes   x No

 

 

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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                                              |
| 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                                                  |
| 7.875%   Notes due February 2030                                                                          |       | 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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Connecting   everybody to live a better today and build a better tomorrow Vodafone Group   Plc Annual Report on Form 20-F 2017

 

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|                | **Vodafone   Group Plc**Annual Report on   Form 20-F 2017

** **                                                                                                                                                                 |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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|                | ** **

**Contents**                                                                                                                                                                                                                   |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|                | The Strategic Report consists of the Overview, Strategy and   Performance sectionson pages 1 to   43 of this Annual Report.                                                                                                           |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                |                                                                                                                                                                                                                                       |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|                | An introduction to the report covering who we are,   the Chairman’s reflections on the year,a description of our   business and an overview of the marketplace in which we operate.

                                            |             | 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   2017 and is dated 9 June 2017. 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’), adopted by the EU and with those parts   of the UK Companies Act 2006 applicable to companies reporting under IFRS,   dated 16 May 2017, as updated or supplemented if necessary. The content of   the Group’s website (www.vodafone.com) or any other website referenced in   this document is not incorporated into this document and should not be   considered to form part of this annual report on Form 20-F. We have included   any website as an inactive textual reference only.

 

 

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. Organic growth is an   alternative performance measure. See “Alternative performance measures” on   page 205 for further details and reconciliations to the respective   closest equivalent GAAP measure. |
| **01**

** **  | Strategic framework                                                                                                                                                                                                                        |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **02**

** **  | Chairman’s statement                                                                                                                                                                                                                  |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **03**

** **  | Our purpose and core programmes                                                                                                                                                                                                            |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **08**

** **  | At a glance                                                                                                                                                                                                                                |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **10**

       | Market overview                                                                                                                                                                                                                            |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                |                                                                                                                                                                                                                                       |
|                |                                                                                                                                                                                                                                       |             |
|  

       |  

A summary of the   changing landscape we operate in and how this has shaped our strategyand financial position. Plus a review of our   performance against our goals and our approach to running a sustainable   business.

  |             |
| **12**

** **  | Chief Executive’s strategic review                                                                                                                                                                                                    | ** **       | **24**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Our people |   |
| **16**

** **  | Chief Financial Officer’s review                                                                                                                                                                                                      | ** **       | **26**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Sustainable business |   |
| **18**

** **  | Our business model                                                                                                                                                                                                                         | ** **       | **28**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Principal risk factors and uncertainties |   |
| **22**

** **  | Key performance indicators                                                                                                                                                                                                                 |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
| ** **          |                                                                                                                                                                                                                                       |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| ** **          |                                                                                                                                                                                                                                       |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|  

       | Commentary on the Group’s operating performance.

                                                                                                                                                                               |             |
| **35**

       | Operating results                                                                                                                                                                                                                          |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| **42**

** **  | Financial position and resources                                                                                                                                                                                                           |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| ** **          |                                                                                                                                                                                                                                       |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
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|                | An explanation of how we are organised, what the Board has   focused on and how it hasperformed, our diversity practices, how we communicate with   our shareholders and how our Directors are rewarded.

                            |             |
| **44**

** **  | Chairman’s governance statement                                                                                                                                                                                                       |             | **56**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Nominations and Governance Committee |   |
| **46**

** **  | Leadership structure                                                                                                                                                                                                                       |             | **57**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Audit and Risk Committee |   |
| **48**

** **  | Board of Directors                                                                                                                                                                                                                         |             | **64**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Communicating with our shareholders |   |
| **50**

** **  | Executive Committee                                                                                                                                                                                                                        |             | **66**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Our US listing requirements |   |
| **52**

** **  | Board activities                                                                                                                                                                                                                           |             | **67**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Directors’ remuneration |   |
| **54**

       | Board evaluation, induction and training                                                                                                                                                                                                   |             | **86**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Directors’ report |   |
|                |                                                                                                                                                                                                                                       |
|  

       | The statutory   financial statements of the Group and the Company and associated audit   reports.

                                                                                                                                   |             |
| **87**

       | Contents                                                                                                                                                                                                                                   |             | **99**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Consolidated financial statements and financial commentary

  |   |
| **88**

       | Directors’ statement of responsibility                                                                                                                                                                                                |             | **182**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | This page is intentionally left blank |   |
| **90**

       | Risk mitigation                                                                                                                                                                                                                            |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| **98**

       | Report of independent registered public accounting firm

                                                                                                                                                                             |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
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       | Find out about our shares, information on our history and   development, regulatory matters impacting ourbusiness and other statutory financial   information.

                                                                      |             |
| **190**

** ** | Shareholder information                                                                                                                                                                                                                    |             | **214**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Form 20-F cross reference guide |   |
| **197**

** ** | History and development                                                                                                                                                                                                                    |             | **217**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Forward-looking statements |   |
| **198**

** ** | Regulation                                                                                                                                                                                                                                 |             | **218**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Definition of terms |   |
| **205**

** ** | Alternative performance measures                                                                                                                                                                                                           |             | **221**

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Selected financial data |   |
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| Exhibit 2.6    | Exhibit 2.7                                                                                                                                                                                                                           | Exhibit 4.7 | Exhibit 4.30                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Exhibit 4.31 | Exhibit 4.32 |   |
| Exhibit 7      | Exhibit 8                                                                                                                                                                                                                             | Exhibit 12  | Exhibit 13                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Exhibit 15.1 |   |
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 Our strategic framework   Vodafone Group Plc Annual Report on Form 20-F 2017 01 Our purpose Our vision   To connect everybody to live a better today and build a better tomorrow A   converged communications leader, a Gigabit Vodafone for the Gigabit Society   We are building a competitive advantage through our core programmes... We are   constantly reinvesting in our core assets to drive growth; see our business   model Network Leadership Page 04 Customer eXperience eXcellence (‘CARE’) Page   05 Page 18 Fit for Growth Page 06 People and Culture – The Vodafone Way Page   07 ...which underpin our strategic growth engines... Data Best mobile experience   Convergence Combining fixed and mobile Enterprise Total communication   solutions Page 13 Page 14 Page 15 ...and are enacted by our responsible   approach to the communities in which we operate. Sustainable business Page 26   Risk management Page 28 Governance Page 44 So that we create value for   society and for shareholders 

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 02 Vodafone Group Plc   Annual Report on Form 20-F 2017 Chairman’s statement Creating value for   society, delivering results for shareholders Vodafone’s purpose is to connect   everybody to live a better today and build a better tomorrow. We believe that   by pursuing this goal in a sustainable and responsible way we will create   long-term value for society and, as a result, for our shareholders. Good   progress in converged communications in Europe Europe remains our single   biggest market and investment area and is at the heart of our “Gigabit   Vodafone” converged communications strategy. Building on the success of   Project Spring we continue to invest in network quality and customer   experience, driving subscriber growth across mobile, broadband and TV. We are   making good progress in our major markets, Germany, Italy and Spain, while in   the UK our priority, for the moment, has to be on getting the basics right   again. The completion of our merger in the Netherlands with Ziggo is another   big step forward for our convergence strategy. In order to enable an adequate   return on the massive investments that will be required to provide Europe   with the infrastructure required for a competitive economy in the age of   digitalisation, a predictable regulatory framework is required that supports   both investment and competition. In this regard we are encouraged by the   European Commission’s (‘EC’) revised European Framework Review for Telecoms.   In particular, the focus on passive infrastructure remedies and co-building   arrangements, which have proven so successful in Spain and Portugal, is   encouraging, as is the proposal to extend spectrum licence terms to at least   25 years. As the negotiations on the revised Framework enter a critical phase,   we need to ensure that these well-balanced proposals are not diluted – both   to avoid future incumbent re-monopolisation risks, and to pave the way for   competitive investment in Europe’s future. Driving consolidation in India;   strengthening leadership in Africa It has been a turbulent year in India. The   launch of free services by a new entrant has disrupted an already   hypercompetitive market and clouded the near and medium-term outlook for the   industry. As a consequence Vodafone decided to stop the IPO process and   instead look for in-market consolidation options. This has resulted in the   announced merger proposal between Vodafone India and Idea Cellular, which   will create a new, more competitive market player with the scale to invest in   India’s digital future, while also capturing substantial synergies. We are   very pleased with our progress in Africa where we have further strengthened   our leadership positions, both at Vodacom in South Africa and Safaricom in   Kenya. Please see Vittorio Colao’s comments on pages 12 to 15 for further   insight into our strategy. Our contribution to society is substantial We are   convinced that over the long-term the success of our business is closely tied   to the success of the communities in which we operate. Consequently, a core part   of our strategy and business model is to ensure that Vodafone’s digital   networks and services act as a catalyst not only for economic growth, but   also for equality and empowerment. Our “sustainable business strategy”   section outlines our approach, including our ambition to connect an   additional 50 million women living in emerging markets by 2026 (see pages 26   and 27), as well as our commitment to operating responsibly. For example, our   report on “Taxation and our total economic contribution to public finances”   highlights our total contribution to governments of €15.6 billion in the 2016   financial year. Our charitable activities are also expanding in scope, as the   Vodafone Foundation leverages our technology and expertise with funding from   external NGOs and other partners to expand its impact. I recommend you take a   look at our website for more information on the activities of our Foundation.   Improving returns on capital remains a key priority We are confident in our   strategic direction, our adjusted EBITDA growth continues to improve and our   adjusted EBIT is also now recovering. But we cannot yet be satisfied by the   returns that we are achieving on the substantial organic and inorganic   investments that the Group has made in recent years. As our CFO Nick Read   explains in his introduction to our business model on page 16, the solution   to this challenge is threefold: continued profitable revenue growth, with   tight cost control; portfolio management to gain sufficient (in-market) scale   to earn attractive long-term returns; and a compensation approach which   focuses more on adjusted EBIT, i.e., the profits after capital investment   costs, and less on adjusted EBITDA, a change which we hope the industry will   follow. During the year the Vodafone share price on a total return basis has   been broadly stable, underperforming the FTSE 100. This partly reflected a   strong recovery by commodity producers and cyclically exposed companies,   which accelerated after the US election results, as well as concerns over   rising competition in the telecoms sector following new entrants in India and   next year in Italy. Overall, the Board remains confident that the Group’s   cash generation, and consequently its return on capital, will continue to   recover. This confidence is reflected in our unchanged intention to grow the   dividend, as exhibited by the 2.0% increase in the dividend to 14.77   eurocents for the year. In concluding, on behalf of the Board I would like to   express our appreciation to Nick Land and Phil Yea, who will not seek re-election   at our Annual General Meeting in July 2017 after more than ten years of   valuable service. I would also like to thank our employees and business   partners for their efforts and contribution to Vodafone’s progress, as well   as our shareholders for their support and confidence. /s/ Gerard Kleisterlee   Gerard Kleisterlee Chairman 

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 Our purpose Vodafone   Group Plc Annual Report on Form 20-F 2017 03 At Vodafone our purpose is to   connect everybody to live a better today and build a better tomorrow We do   this by investing in the digital infrastructure of the future, delivering a   quality service that allows individuals and businesses to connect confidently   anywhere and at any time. Our services enhance the quality of peoples’ lives,   providing benefits to society as well as financial rewards for our   shareholders Ten years of M-Pesa This year we celebrated ten years of M-Pesa,   our pioneering mobile money service, which enables people to securely send,   receive and store money electronically. M-Pesa empowers tens of millions of   people previously excluded from financial services to live a safer, more   productive life. Today, 31 million customers in ten countries rely on our   service, making us the world’s leading mobile money provider, alleviating   financial uncertainty and contributing to achieving the UN Sustainable   Development Goals.

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 04 Vodafone Group Plc Annual Report on Form   20-F 2017 Our purpose (continued) Network Leadership Our goal is to create a   “Gigabit Society” where everyone benefits from ubiquitous and reliable   high-speed connectivity Our partnerships and investment in superior cable,   fibre and mobile networks allow us to deliver better performance everywhere   ENEL – Breaking the gigabit barrier In 2016, we teamed up with ENEL in Italy,   a major electricity company, to establish a leading fibre provider, taking   Italy one step closer to becoming a “Gigabit Society”. In 2016, only 3% of   Italian fixed broadband subscribers were on fibre and in 2015 60% of the   population received less than 30 Mbps. Through our partnership with ENEL,   called Open Fiber, we will be able to deliver gigabit fibre (1,000 Mbps) to   270 cities reaching at least 9.5 million households by 2022. 

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 Vodafone Group Plc Annual Report on Form   20-F 2017 05 Customer eXperience eXcellence We deliver a differentiated   customer experience through CARE Connectivity that is reliable and secure   Always excellent value Rewarding loyalty Easy access to customer support   Raising the bar in customer service with 2,100 new roles across the UK We   will create 2,100 new customer service roles in the UK to deliver an   outstanding level of service and support. This is one of the many steps we   are taking following billing migration issues, which caused disruption to our   UK customers and commercial operations during the year, but are now resolved.

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 06 Vodafone Group Plc Annual Report on Form   20-F 2017 Our purpose (continued) Fit for Growth Using our resources   efficiently makes sound environmental and economic sense That is why we are   exploring new ways of improving our energy efficiency to reduce our emissions   while saving costs Improving the energy efficiency of our networks We ensure   that each new generation of equipment is more energy and cost efficient than   the equipment it replaces. By incorporating more energy efficient technology,   such as free air cooling and solar power solutions whenever we upgrade our   networks, we have reduced our own greenhouse gas emissions by 64% per   petabyte of data carried by our mobile network since 2015. 

 

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 People and Culture – The Vodafone Way Our   people are key to our performance We aim to create a diverse and inclusive   working environment that reflects our customers and our global footprint   ReConnect with your career We want Vodafone to be the best employer for women   by 2025. ReConnect is a leading programme designed to attract talented women   who have left the workplace for several years and would like to return to   work on a full-time or flexible basis. The programme will operate on a global   scale across 26 countries with a target of 1,000 ReConnect recruits within   three years.

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 08 Vodafone Group Plc   Annual Report on Form 20-F 2017 At a glance What we offer We offer a broad   range of communication services. We believe the future lies in providing a   unified experience to our customers combining mobile, fixed and other   services, which we are well positioned to deliver. Our wide range of products   and services 65% Consumer Mobile 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 voice, broadband and   TV We have continued to diversify and expand our fixed services 30%   Enterprise Total communications We offer mobile, fixed and a suite of   converged communication services to support the needs of our enterprise   customers, who range from small businesses to large multinational companies.   Internet of Things (‘IoT’) including voice, broadband and TV offerings.   Financial services and other value added services We provide mobile money   services through our M-Pesa offerings and value added services including   security and insurance products. 5% Other We rent capacity to mobile virtual   network operators (‘MVNOs’). We also offer a variety of our services to   operators outside our footprint through our partner market agreements. Split   of service revenue IoT connections allow machines and other things to   communicate with one another through our network. Our service offerings are   diverse, spanning smart metering, automotive applications and health   solutions. Cloud & Hosting Our Cloud & Hosting portfolio includes a   range of IT solutions for Enterprise customers, spanning co-location, managed   hosting and network connected cloud services. Carrier Services We sell   capacity on our global submarine network and our terrestrial fibre systems.   We also offer international voice, IP transit and secure international lines.   Convergence: Seamlessly integrated connectivity and content Customers’ demand   for bundles of mobile and fixed services is increasing. These converged   offers, which combine mobile, fixed and content services, provide simplicity   and better value for customers. They also increase customer loyalty and   deliver operational efficiencies. We offer a range of converged offers such   as “GigaKombi” in Germany and “Vodafone One” in Spain, integrating fixed,   mobile and TV services. We also offer a comprehensive set of converged   communications solutions to our enterprise customers. 76% Mobile service   revenue 516m Mobile customers1 2016: 493m 24% Fixed service revenue 17.9m   Fixed customers1 2016: 13.4 m 13.8m TV customers1 2016: 9.5m Note: 1 Includes   India, joint ventures (‘JVs’) and associates. 3.8m Converged customers 2016:   3.1m

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 Vodafone Group Plc Annual Report on Form   20-F 2017 09 Where we operate We are one of the world’s largest communication   providers, managing our business across two geographic regions – Europe, and   Africa, Middle East and Asia-Pacific (‘AMAP’). Operations in 26 countries   Europe Albania, Czech Republic1, Germany1, Greece1, Hungary, Ireland1,   Italy1, Malta1, Netherlands1 (joint venture), Portugal1, Romania1, Spain1,   UK1 AMAP Australia (joint venture), Egypt1, Ghana1, India, Kenya (associate),   New Zealand1, Qatar1, Turkey1, Vodacom Group (South Africa, Tanzania,   Democratic Republic of Congo, Mozambique, Lesotho)1 We are the number one or   two mobile operator in most of our country operations and are a rapidly   growing fixed provider. Worldwide service reach 48 partner markets To extend   our reach beyond the companies we own, we have 48 partnership agreements with   local operators. 73 countries with IP-VPN We are among the top five internet   providers and one of the world’s largest operators of submarine cables. 118 countries   with 4G roaming coverage Our subsidiaries We provide mobile services in 23   countries and fixed1 services in 16 of these. India will become a joint   venture upon completion of the agreed merger. Note: 1 Mobile and fixed   broadband markets. Joint ventures and associates We provide services in   Australia, the Netherlands and Kenya, taking our total to 26 markets. We also   part-own the tower company, Indus Towers, in India. Our leading global 4G   roaming footprint serves twice as many destinations as the best local   competitor in most of our markets. Groupservicerevenues Our main markets and   joint ventures Europe 74% AMAP 23% Mobile Fixed Mobile revenue market Fixed   revenue market 4G NGN customers customers share share coverage coverage5   Germany Vodacom €4.4bn (m) (m) (%) (%) (%) (%) €10.0bn UK €6.6bn €43bn Europe   Other AMAP4 AP €5.5bn Other Europe3 Germany 30.7 6.3 33.9 20.6 90 65 UK 17.9   0.2 22.6 4.8 96 88 Italy 23.0 2.2 32.3 6.7 97 43 Spain 14.4 3.2 — 20.06 — 93   65 Italy €5.2bn Other Spain €4.5bn €5.8bn Vodacom Group7 46.7 <0.01 50.9   2.7 76 1 India 209 0.0 22.78 0.0 269 0 (includes partner markets and common   functions)2 Notes: 3% €1.0bn VodafoneZiggo 5.1 3.2 30.6 39.2 100 94 2 Common   functions includes 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. 3 Other Europe including eliminations. 4 Other AMAP including   eliminations. Notes: 5 Fibre or cable networks typically providing high-speed   broadband over 30 Mbps. 6 Due to the converged nature of the Spanish market   only total communications market shares are reported. 7 Data relates to South   Africa. 8 December 2016. 9 Within Vodafone India’s 17 4G circles.

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 10 Vodafone Group Plc   Annual Report on Form 20-F 2017 Market overview Understanding our challenges   and opportunities The fixed and mobile telecommunications market is   constantly evolving with increasing demand for faster data speeds, ongoing   external regulatory and competitive pressures and changing societal   expectations. We operate in a fast-moving market where innovation and scale   are key Importance and speed of change in the telecommunications industry   Telecommunications is an essential service used by over seven billion mobile   customers and 0.9 billion broadband users across the globe. The global mobile   industry generates around €1.65 trillion of revenue. 52% of revenue arises   from traditional voice calls and messaging services. On average, a customer   consumes 203 outgoing minutes per month, which has been largely stable over   the last couple of years. The demand for mobile data services to watch   videos, browse the internet and use various “apps” has accelerated rapidly,   and today 48% of global revenue comes from data, compared to only 22% five   years ago. The number of smartphone users continues to grow rapidly. Today   45% of mobile handsets are smartphones, compared to 11% five years ago. This   is being driven by rising living standards and population growth, combined   with lower airtime and device costs. The fixed telecommunications market   includes calls, broadband and TV packages, generating €0.7 trillion of   revenue annually. The number of voice-only users continues to decline as   customers disconnect their landlines in favour of mobile phones, however, the   take-up of broadband and pay TV services offsets this. According to Ovum,   fixed broadband will be the fastest-growing market, with revenues increasing   at a compound annual rate of 3.1% from 2016 to 2021, ahead of pay TV at 2.5%   and mobile at 1.9%. In broadband markets, an increasing proportion of   customers are upgrading from copper-based ADSL with speeds up to 24 Mbps to   high-speed fibre and cable with speeds up to 1,000 Mbps. We believe that   Gigabit networks direct to homes and businesses form the bedrock of modern   digital communications infrastructure. €1.65tn Value of the mobile and fixed market   in 20161 Why we are well positioned We are one of the largest   telecommunications providers in the world with typically a number 1 or 2   position by market share in mobile in each country we operate in and the   largest NGN footprint in Europe. Growing demand for data and high-speed   networks The telecommunications industry has transformed significantly in the   last 30 years. In the 1990s, mobile phones were mostly cable or fibre today.   These developments bring significant opportunities to drive further revenue   from increased data usage, 69% 4G data traffic of total traffic in 20161 used   for calls on 2G networks, and basic but also require investment to keep   picture messages could be sent at very low speeds of 50–200 Kbps. Today users   can enjoy 4G speeds of up to 800 Mbps for rapid video downloads, with 1 Gbps   speeds already up with technology. These developments are collectively   leading to substantial growth in data traffic. Between 2011 and 2016 mobile   data traffic Global mobile data traffic1 ’000 petabytes (1 petabyte = 1m   gigabytes) 600 500 588 demonstrated. This network technology innovation has   been accompanied by the growing demand for smartphones, which are now used by   63% of Vodafone’s European customers. increased by an average of 75% p.a. and   today 95% of total traffic on mobile networks across the globe is data. 5G,   the next major step in mobile technology, is expected to launch commercially   by 2020, most likely only in dense 400 300 200 100 132 84 204 288 420 Fixed   network development has been equally rapid. In the 1990s most fixed   connections were for landline calls, today the greatest use is broadband   internet usage. Average download speeds have progressed rapidly from around   8–16 Mbps using copper- based technology in 2007 to 1 Gbps using urban areas   in Europe and will enable speeds of up to 1 Gbps combined with extremely   quick reaction times. This will support the development of new applications,   including in the areas of augmented and virtual reality. 1.2 GB Smartphone   average monthly data usage1 2016 2017 2018 2019 2020 2021 Why we are well   positioned We have the best data network in 14 out of the 21 countries we   operate in and we can market fixed services to the most homes in Europe with   next generation fibre or cable with speeds of up to 1 Gbps.

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 Vodafone Group Plc Annual Report on Form   20-F 2017 11 We must also manage external pressures and expectations   Increasing competition The telecommunications industry is highly competitive,   with many alternative providers, giving customers a wide choice of supplier.   In each of our countries of operation, there are typically three or four main   mobile network operators, such as Vodafone, and several resellers that   “wholesale” network services from operators to sell on to their customers.   The high level of competitive intensity has resulted in continued downward   pressure on the price of services, with the average cost per unit of mobile   data falling nearly 40% p. a. over the last three years. 40% Increasing   demand for converged solutions Today, consumers are increasingly taking   bundles of mobile, landline, broadband and TV services. For the consumer this   provides the benefit of simplicity – one provider for multiple services – and   better value. For operators this provides higher customer loyalty as well as   operational efficiencies. The same motivations apply for businesses, which   are increasingly taking advantage of converged services that bring together   communications tools that work across all fixed and mobile end points. Fixed   households with both fixed and mobile services1 % 100 80 60 40 20 In our   fixed markets there is usually one national fixed incumbent (typically the   former state owned operator), one or two cable and satellite companies and   re- sellers that rent network services from the incumbent. In addition, there   are an increasing number of over-the-top (‘OTT’) operators that provide   internet-based apps for content, messaging and voice services. Our enterprise   business also faces competition from OTT and cloud service providers which   offer IT infrastructure as a standardised service on a “pay as you go” model.   Regulatory burden The telecom industry is heavily regulated. Vodafone’s European   businesses are overseen by more than 200 national and regional regulatory   authorities covering areas such as spectrum allocation, roaming charges,   consumer rights, copyright, data protection, cyber security and the wholesale   fees that operators charge each other. While these policies are designed to   protect consumers, for example by championing ever-lower retail prices, they   have historically failed to adequately address the need to encourage operator   investment in the latest technologies. 9% of our European revenue is subject   to regulated roaming and mobile termination rates2 Average reduction in the   price per GB of data over the last three years2 Why we are well positioned   Our substantial investments continue to provide superior network and customer   service levels, supported by a very wide range of mobile and fixed products   and an unrivalled global reach, to deliver a leading customer experience   across the majority of our markets. In June 2017, European regulators will   abolish mobile retail roaming charges, enabling customers to use their phones   abroad at the same price as they do at home. Why we are well positioned We   have launched roaming inclusive plans across all our EU markets well in   advance of regulation and already have a significant portion of our customers   that do not pay extra for EU roaming. Vodafone typically offers twice the   number of 4G roaming destinations to its customers than any other operator.   2012 2013 2014 2015 2016 2017 2018 2019 2020 Germany Italy Netherlands   Changing customer and societal expectations Portugal Spain UK Why we are well   positioned As Europe’s largest broadband company, we are ready for the   growing demand for converged services. Our high-speed data networks in Europe   can reach 315 million people with 4G mobile and 96 million households with   fixed broadband. Notes: 1 The industry data on pages 10 and 11, unless   stated, is from the following sources: Analysys Mason, Cisco, Ericsson and   GSMA. 2 Source: Vodafone data. Today, communication networks underpin every   aspect of society, enabling citizens to increase their knowledge while   providing access to services that can improve health and wellbeing, enhance   skills and increase prosperity. In this context, companies need to ensure   they operate responsibly as they strive to deliver their objectives. There   are areas within the telecommunications industry that are a source of public   concern – 31m people use our mobile money services, which are available in   ten markets2. such as privacy, tax and digital human rights – areas that our   ongoing corporate transparency programmes address directly. Why we are well   positioned As one of the world’s largest communications companies, we are   proud of the role that we play in bringing social benefit to more than half a   billion mobile customers across 26 countries. Page 26 of this report shows   how we are successfully aligning our business objectives with a clear social   purpose to create value and meet customer expectations.

 

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 12 Vodafone Group Plc   Annual Report on Form 20-F 2017 Chief Executive’s strategic review Building a   converged communications leader Our focus on delivering an excellent customer   experience has delivered further improvements in our overall commercial and financial   performance during the year. Review of the year Vodafone’s transformation   into a leading converged operator in our developed markets made further   progress this year, while long- lasting tailwinds from rising smartphone   penetration and data services adoption drove growth in our emerging markets.   This was supported by our strategic differentiators – Network Leadership,   Customer eXperience eXcellence, and outstanding people – together with   improved cost efficiency. Overall, I am pleased to report that the Group’s   commercial and financial performance has further improved, although on a   reported basis this was masked by currency headwinds. Network Leadership:   building a “Gigabit Vodafone” After the large investments made during Project   Spring, this year our capital spending, measured as a percentage of our   revenues, returned to a sustainable “mid-teens” level. Even so, we continued   to record improved mobile network performance relative to smaller competitors   in almost all of our markets. This performance gap is critical, as by   providing a differentiated experience to our customers we can justify a price   premium relative to discounters. We now have the leading or co-leading data   network in 14 out of the 21 markets in which independent tests are available,   and all 21 for voice. We aim to improve our customers’ experience even   further with the introduction of “Gigabit LTE” – also sometimes described as   “4G+” – in the coming years. In addition, we will upgrade our cable and fibre   next-generation networks (which now pass 36 million homes, including the   VodafoneZiggo JV in the Netherlands) to provide gigabit speeds,   differentiating our services from those provided by copper-based incumbents.   Customer eXperience eXcellence: our formula for differentiation Providing an   outstanding customer experience is critical if we are to capitalise fully on   our network advantage. We aim to ensure that all of our customers experience   reliable Connectivity, Always enjoy excellent value, are Rewarded for their   loyalty, and receive Easy access to support when they need it. This ‘CARE’   formula, systematically introduced since 2015 across all of our operations,   is designed to provide our customers with an excellent experience that is   unique to Vodafone. We measure our progress regularly, using the Net Promoter   Score (‘NPS’) methodology. I am very pleased that we have further extended   our advantage during the past year. We are now the leader or co-leader in 19   out of 21 markets, with an average NPS “gap” to the third placed player of 17   points. A year ago, we were a leader or co-leader in just 13 markets, with a   gap of 14 points. In the UK, this is not yet the case; we have recovered a   leadership position in terms of network performance and have significantly   reduced customer complaints, but we still lag the competition in our overall   customer perception. We are confident that our recovery ‘CARE’ plan will   improve the situation in the UK as well. Vodafone-Idea: a new champion of   Digital India The entrance of a new operator in India offering 4G services   for free has created industry turbulence, leading us to take an impairment   charge of €3.7 billion net of tax. We have moved strategically to face the   new context by proposing to merge Vodafone India with Idea Cellular, the   number 3 operator in India, which will create a new market leader with the   scale to invest in India’s digital future, while also capturing an estimated   US$10 billion NPV in synergies. We will jointly control the new combined   company in partnership with Idea’s founding shareholder, the Aditya Birla   Group, a leading Indian-based international conglomerate. We will own 45.1%,   the Adityla Birla Group 26.0% and Idea’s current minority shareholders will   own the remaining 28.9%. We have agreed a mechanism with the Aditya Birla   Group to equalise our shareholdings over time. The transaction is subject to   regulatory approvals and is expected to complete during calendar year 2018.   The new company will maintain Idea’s listing on the BSE/NSE exchanges in   India, providing a public market valuation for this important asset. Improved   commercial and financial results Overall, the investments made both during   and after Project Spring are paying off, and I am pleased to report another   year of improved commercial performance and increased organic revenue and   adjusted EBITDA growth for the Group’s operations in Europe, Africa and the   Middle East. We remain Europe’s fastest growing broadband operator, with 1.2   million broadband net additions during the year, a healthy 1.1 million   increase in contract mobile customers, and a 0.7 million increase in our   converged (fixed plus mobile) customer base. An improved overall customer   experience allowed us to introduce “more-for- more” propositions, in which   customers received greater value for a higher monthly payment. As a result,   consumer contract ARPU stabilised after many years of decline. This good   performance was reflected in European service revenue growth of 0.6%* vs.   -0.6%* last year. All major markets grew during the year, except the UK. In   AMAP, we enjoyed another year of strong growth in customers, usage and local   currency revenues (up 7.7%* in organic terms vs. 8.0%* last year). A stronger   overall organic service revenue performance translated into even faster   organic adjusted EBITDA growth (up 5.8%* vs. 2.3%* last year) thanks to good   progress on cost efficiency, which Nick Read describes on page 16. None of   these achievements would have been possible without the talent and dedication   of our people, supported by the values of speed, simplicity and trust which   we call “The Vodafone Way”. /s/ Vittorio Colao Vittorio Colao Chief Executive   

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 Vodafone Group Plc Annual Report on Form   20-F 2017 13 Data Providing the best mobile data experience Context –   Smartphone penetration is growing rapidly, leading to increasing demand for   mobile data. 63% of our customers have a smartphone in Europe, compared to   59% last year – Data usage is increasingly driven by the demand for   high-definition video, which requires fast download speeds for a great user   experience. Data traffic increased 65% during the year – Users want to use   data without worrying about unexpected costs whether using their mobiles at   home or abroad What we’re aiming for – We’re encouraging more data usage with   our more-for-more initiatives that provide extra data-related benefits for a   small increment to the monthly fee “More-for-more” initiatives to drive usage   and revenue Over the course of last year we introduced a series of   more-for-more offers, which typically offer more data in return for a higher   monthly fee. As an example, in Germany, we recently launched new plans   offering more data and a data rollover facility, providing customers with the   ability to carry over their unused data allowance from the prior month. In   Vodacom, our innovative “micro-bundling” strategy allows customers to   purchase data in affordable hourly, daily or weekly bundles. These offers   typically mean customers generate a lower revenue per – We want our customers   to have the best data experience, so we now provide data download speeds of   at least 3 Mbps – unit of data, but stabilise or increase average revenue per   user. the requirement for high-definition video – for 92% of data sessions in   Europe – We are encouraging our customers to move to 4G, which provides data   speeds up to 10x faster than 3G and lower latency (quick reaction time) for a   better user experience. We now have 75 million 4G customers, up from 47 million   a year ago – We want our customers to use data wherever they want, so our 4G   roaming network now reaches 118 countries – We are preparing for 5G in the   longer term by building more fibre connections to carry more data Group data   traffic growth in 2017 We aim to provide a leading mobile data experience in   all of our markets, in order to capitalise on the huge demand for mobile   internet connectivity from both consumer and enterprise customers, and to   differentiate our service from lower quality discount providers. During the   financial year, demand for data continued to grow very strongly, with over   2,700 petabytes of data carried across our mobile networks (including India,   JVs and associates). This was an absolute increase in traffic this year of   995 petabytes, which was greater than the total traffic carried on the   network last year. Growth was driven by continued adoption of 4G, with 28   million customers added during the year bringing the total base to 75 million   at the end of March. This represented 33% of our active data users. With   bigger touchscreens and faster speeds, the customer experience improves   significantly (particularly for video). As a result, 4G smartphones typically   drive a two to three times increase in data usage compared to 3G. In developing   markets, which typically lack extensive fixed infrastructure, demand for   internet access via mobile is a long-lasting driver of data consumption and   revenue growth. Data users continued to grow during the year, by nine million   to 153 million (including India), although the launch of free services by   Reliance Jio in India dragged on our data customer growth during the second   half. Consequently, the largest driver of data growth was increased usage   levels by data customers. As in developed markets, new technologies drive   higher usage: on average, a 2G customer uses 0.2 GB per month; a 3G customer   0.9 GB; and a 4G customer 1.7 GB. During the coming financial year we will   begin trials of “Gigabit LTE”/4G+ services, which will deliver further   significant gains in data speeds along with lower latency (quick reaction   time). As the new technology will be based on the broad and deep 4G network   built during Project Spring, the incremental cost to achieve these gains is   expected to be relatively % Bigger bundle sizes also contributed to modest.   We are preparing for 5G by building Europe AMAP Group 57 usage growth, as we   successfully introduced 78 “more-for-more” propositions (typically offering   our customers larger data allowances 65 for a higher monthly payment) across   most fibre connections to over 95% of urban sites in Europe. Additional 5G   radio investments will only be made once the technology is mature and the   business case is robust. Figures exclude India and the Netherlands. of our   markets during the year. The success of these initiatives was a key driver of   our 224m improved revenue growth momentum compared to the prior year. of our   customers use data (including India, JVs and associates), 43% of the total   base 

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 14 Vodafone Group Plc Annual Report on Form   20-F 2017 Chief Executive’s strategic review (continued) Convergence   Combining fixed and mobile Context – Customers increasingly want to use   converged services – i.e. bundle fixed and mobile services together under a   single contract – to easily share content between their mobile phone, tablet,   laptop or TV – Access to TV programmes bundled with fixed broadband is an   increasingly important driver of demand for converged services – 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 Vodafone   Spain – leading our transition to converged services To date, the fastest   take up of converged services – bundles of fixed, mobile or TV – has been in   Spain. During the year, we added nearly 250,000 new converged customers   taking us to 2.3 million in total. We have made two important steps to drive   demand – We expect fixed revenue to grow as a percentage of our revenues, driven   by convergence, which should also lead to higher customer loyalty and lower   churn during the year. First, we added to the existing extensive range of TV   content including football, Netflix, and over 120 TV channels, including   launching HBO Spain. Second, we further expanded the number of homes passed   with high-speed fibre to nearly 19 million, representing 65% of households,   by both deploying more fibre and by securing new wholesale arrangements. – We   aim to increase our revenue market share profitably in fixed communications –   We seek to roll out more high-speed broadband services by deploying more   fibre and working with strategic partners. We already reach 96 million   households in Europe, up from 72 million last year – We’re aiming to expand   our TV services, to complement the take up of broadband. We already have TV   services in eight markets (including VodafoneZiggo) Spain – lowering churn   through convergence % of customers that leave us based on the number of   products (mobile, landline, broadband and TV) they buy In developed markets,   the trend towards convergence – the bundling of fixed and mobile services   within a single contract – continues to accelerate, aided by commercial   offers which typically provide either extra value, a financial discount or sometimes   both of these incentives to customers who buy multiple products. Overall, we   view this trend as a substantial growth opportunity for Vodafone. We are an   established leader in mobile and our recent investments have positioned us as   the leading challenger in fixed, with scope to gain significant profitable   revenue market share by cross-selling fixed products to our mobile base.   Additionally, churn rates for customers buying multiple products are   substantially lower – so our success in winning fixed relationships is also   expected to make our mobile base both more secure and more profitable over   time. Our fixed network footprint continues to expand, and we are now able to   reach over 96 million NGN homes in Europe, giving us the largest marketable   reach of any operator. 36 million of these homes are connected by our own   cable or fibre networks Our progress this past year has been strong: we   remained Europe’s fastest growing broadband company, winning 1.2 million new   customers. Our total broadband customer base, including VodafoneZiggo, is now   17.9 million, of which 16.6 million are in Europe. Four million of these   customers are fully converged, with a further two million taking both a fixed   and mobile service from Vodafone, but not yet benefiting from a single bill   and/or a cross-product discount. We are highly focused on converting these   customers onto fully converged bundles. Additionally, in the Netherlands,   just 25% of Ziggo’s fixed customers take a Vodafone mobile product – a   significant cross-selling opportunity for the new joint venture. Succeeding   in convergence also means providing a best-in-class TV experience. This past   year we launched “Vodafone TV”and “Giga TV”, which are best-in-class TV   platforms. We also started our journey towards consolidating our TV   platforms, capturing scale efficiencies. Including VodafoneZiggo, we now have   14 million TV customers, of which eight million pay for advanced digital   services. Mobile only Three products 13 Four products 6 24% 27 (including   VodafoneZiggo in the Netherlands). The remaining homes are mostly reached   through wholesale relationships with the local incumbent operator. We plan to   upgrade our own networks to deliver gigabit speeds over the coming years,   which will further extend the competitive advantage we enjoy compared to   slower copper-based incumbents. We aim to distribute premium content to these   customers, but where possible we prefer to avoid exclusive content deals as   these tend to drive up costs for the industry with no lasting competitive   benefit. of our service revenue comes from fixed services

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 Vodafone Group Plc Annual Report on Form   20-F 2017 15 Enterprise Leading in total communications Context – Seamlessly   integrated connectivity has become a central part of running a business today   – Businesses are seeking secure and reliable mobile and fixed solutions to   support efficient and effective operations – The lines between mobile, fixed   and IT are blurring driving new business opportunities, but also a more   competitive market environment What we’re aiming for – We are building a   comprehensive total communications portfolio, rooted in our core strength in   mobility – We want to maintain our strong mobile market share in enterprise,   which has been earned from our trusted brand, global footprint and service   quality – We aim to increase our market share Providing network connected,   global cloud services Enterprise customers are moving data and applications   to the cloud to become smarter and more agile, reduce costs and optimise   performance. By combining our strengths in fixed connectivity with our Cloud   & Hosting portfolio, we are well placed to meet this demand and can   provide simple, secure IT solutions. During the year, we have expanded our   geographic presence and our cloud services are now live in seven markets   across Europe, Africa, Asia and the USA. Combined with our network of partner   facilities, we can serve businesses on a global scale and offer a consistent   cloud experience across 28 countries. During the year, revenue from Cloud   & Hosting services grew 15%. in fixed enterprise services, capitalising   on our Project Spring investments – Our strategy is focused around three   market segments – small and medium sized enterprises, large and multinational   corporates, and carrier services – We intend to continue to invest in the   growth areas of converged communications, Cloud & Hosting, Internet of   Things, security and fixed connectivity Enterprise service revenue growth* %   Enterprise remains a key driver of our business, representing approximately   30% of revenues. During the year our enterprise revenues continued to grow,   in contrast to leading European peers who experienced a decline in their   business. This outperformance reflects four important differences in our   business composition and strategy compared to a “typical” incumbent operator   position. First, we operate in more international markets than all of our   traditional telecom rivals, and as a result we have a cost advantage compared   to nationally based competitors who are forced to wholesale at a higher cost   in order to provide services outside their home market to multinational   clients. This advantage in terms of our global reach is reflected in the   strong performance of Vodafone Global Enterprise, which grew 3.0%* in the   year. Second, the trend towards convergence represents an important   opportunity for profitable revenue market share gains in fixed services for   enterprise, where our market share is only around 7%. We have now built a   global IP-VPN footprint which is on par with Third, we remain the market   leader in the fast- growing Internet of Things (‘IoT’) segment, which holds   huge future potential, with 54 million devices connected on our IoT platform.   In particular, our performance in the automotive segment remains strong, with   BMW, Porsche and many others relying on our IoT solutions. We launched   narrowband IoT in Spain, and have trials running in several countries. With   seven times the coverage reach of existing GSM-based services and very low   power consumption (devices could last up to ten years with a single AAA   battery), this technology is likely to catalyse a new wave of innovation and   industry growth. Finally, the composition of our revenues is different from   many of our rivals. We have very limited exposure to declining fixed voice   calling, or segments such as the UK public-sector which have been under   pressure from government spending cuts; conversely, we enjoy strong growth in   our emerging markets operations, for example with Vodacom achieving 12%   enterprise growth during the year. It is also important to recognise that   there are challenges ahead. Our core European mobile 2015 2016 2017 Note:   0.01 1.7 2.3 the largest global competitors, reaching 272 Points of Presence   in 73 countries. In addition, we are developing a range of adjacent services   such as Cloud & Hosting and security solutions, to further increase our   share revenues remain under pressure as a result of intense competition, so   it is important that we diversify into fixed and related services. In   addition, we have a number of legacy fixed contracts inherited from the Cable   & Wireless acquisition 1 As reported in 2015 including Vodafone India.   30% of our service revenue is from enterprise customers of customers’   spending. Our early success is reflected in growth of 4.4% in non-mobile   revenues during the year, which in total now account for 29% of our total   enterprise sales. that are not sufficiently profitable, reflecting a large   number of costly legacy networks and associated products. These networks are   being phased out, and customers migrated to modernised solutions, over the   coming years. 

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 16 Vodafone Group Plc   Annual Report on Form 20-F 2017 Chief Financial Officer’s review A focus on   returns The Group is performing strongly, supported by leading network   quality and growing customer advocacy. We continue to deliver good cost   efficiency, supporting the Group’s improving free cash flow profile and   underpinning our dividend. Our business model: leading scale that enables   constant reinvestment in our core assets to drive growth Customers Revenue   Our business model Vodafone has invested €71 billion over the past four years   (including India) in order to strengthen the quality of our assets and   enhance our customers’ experience. This commitment to invest lies at the   heart of our strategy, as it enables a differentiated customer experience,   supporting our leading market share and premium price position. Scale is also   critical, as only a leading or co- leading market position – combined with   Fit for Growth: a second phase of savings identified Fit for Growth is a   comprehensive cost efficiency programme designed to drive operating leverage   and margin expansion without impacting the customer experience. During the   year, we have continued to make good progress, delivering an absolute   reduction in our cost base on an organic basis. This is despite the   significant underlying cost Assets #1 or 2 scale, delivering value to society   and shareholder returns Reinvestment Cash flow highly efficient operations   and talented people – provides us with sufficient cash generation to continue   to invest, while also earning the necessary return for our shareholders. This   virtuous cycle – in which investment drives a differentiated customer   experience, supporting leading scale, which enables ongoing re-investment –   is the key to our inflation created by Project Spring and continued strong   growth in fixed and mobile customers during the year. Areas of significant   cost saving included procurement, shared service centres, improved sales   channel efficiency and standardised network design. This cost focus is   reflected in our improved margin performance, with 15 markets out of 22   growing adjusted Our business plan: leading scale and sustained investments   to provide high-quality services and attract customers, which in turn   provides the funds for reinvestment and attractive shareholder returns. For   more information: Pages 18 and 19 business model (see pages 18 and 19). I am   confident that the investments we have made have repositioned Vodafone for   future profitable growth. However, our returns on capital are below our cost   of capital in several important markets, as is evident from our modest   adjusted EBIT margin of 8.3%. Consequently, I remain focused on three key   activities in order to drive our returns on capital higher in the years   ahead. EBITDA faster than service revenue, driving a 1.2* percentage point   improvement in organic Group adjusted EBITDA margin. Phase two of the Fit for   Growth programme has now been developed and new internal three-year margin   tar gets have been set across the Group. These imply another reduction in   absolute operating costs on an organic basis during the coming financial   year. Substantial investments over the last four years (including India)   Capital expenditure 290,000 new and upgraded base station sites to improve coverage   and quality M&A KDG,Ono,VodafoneZiggoJV, HellasOnline,Cobra acquired   leading fixed and IoT companies to become a fully converged operator Spectrum   and licences1 17 markets have 800/700 spectrum for 4G (vs. 4 in 2013) Note:   €40bn €18bn €13bn Total €71bn 1 Renewals and acquisitions. 

 

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 Vodafone Group Plc Annual Report on Form   20-F 2017 17 Future opportunities include the modernisation of our legacy IT   infrastructure with scalable, low-cost cloud-based solutions and greater use   of digital technologies to reduce the cost of customer interactions.   Portfolio management: India and the Netherlands in focus We continue to   actively manage our portfolio of operating companies. We must either achieve   leading or co-leading scale in a market, or find a path over time to divest   the asset. This approach is critical to ensure that we are allocating our   capital investment towards higher return opportunities. This year, we   completed our joint venture with Liberty Global on 31 December. VodafoneZiggo   has convergence co-leadership along with the incumbent and is thus in an   ideal position to compete, while capturing synergies with a net present value   of €3.5 billion. Currently the mobile market in the Netherlands is highly   competitive, weighing on our growth. However, given future cost synergies and   the opportunities for cross-selling, we remain confident in the mid- term   outlook and expect to receive our share of at least €500 million in cash   returns from the JV during calendar year 2017. In addition, as Vittorio has   outlined, at the end of March we announced our intention to merge our Indian   business with Idea Cellular in India, creating a new market leader with   synergies worth approximately US$10 billion. Under IFRS rules India is   technically treated as a discontinued operation for 2017 and prior financial   years. From an operational perspective, the Group remains highly focused on   the management of the business and committed to its continued success, both   prior to the completion of the merger and thereafter. Given India currently   generates minimal free cash flow for the Group, and has historically required   large spectrum investments, the merger also improves our dividend coverage.   The merger is subject to regulatory approvals and is expected to complete   during calendar 2018. Compensation: a focus on adjusted EBIT We are changing   our compensation structure to align incentives more closely with adjusted   EBIT. Adjusted EBITDA is an important measure of our performance, however it   does not capture the cost of our capital investments. This change will help   to ensure that the company remains highly focused on capital efficiency   moving forwards. Performance against 2017 financial year guidance Based on   guidance foreign exchange rates, adjusted EBITDA for the 2017 financial year   grew organically by 3.4%* to €15.8* billion, consistent with the 3% to 6%   organic growth (implying €15.7 to €16.1 billion) guidance range set in   November 2016 (including India). On the same basis our free cash flow was   €4.3 billion, consistent with our free cash flow guidance of at least €4.0 billion.   Our results are analysed on pages 35 to 41 in more detail. For more   information: Pages 35 to 43 Looking ahead We expect adjusted EBITDA to grow   organically by 4% to 8%; this implies a range of €14.0 to €14.5 billion at   guidance exchange rates. This range excludes Vodafone India, but includes the   benefit of shareholder recharges received by the Group from VodafoneZiggo and   from Vodafone India, as well as an anticipated benefit from the introduction   of handset financing in the UK. Note that shareholder recharges are excluded   from our calculation of organic growth. Excluding Vodafone India, we expect   free cash flow of around €5.0 billion, before the impact of M&A, spectrum   payments and restructuring costs. The Board intends to grow dividends per share   annually. Dividends will be declared in euros and paid in euros, pounds   sterling and US dollars. 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 over the five business days   during the week prior to the payment of the dividend. /s/ Nick Read Nick Read   Chief Financial Officer 15 out of 22 countries growing adjusted EBITDA faster   than service revenue (2012–2015: 6 countries) Adjusted EBITDA margin1 % 2015   2016 2017 Note: 28.3 28.4 29.7 1 2017 includes nine months of Vodafone   Netherlands results. With effect from 1 April 2016, the Group’s presentation   currency was changed from pounds sterling to the euro to better align with   the geographic split of the Group’s operations. Creating a market leader in   India On 20 March 2017, we announced our agreement to combine the operations   of Vodafone India and Idea Cellular. The new company will be jointly   controlled and will become the market leader in India, with almost 400   million customers and 41% revenue market share. It will have the scale to   meet customers’ rapidly accelerating demand for data consumption with a   long-term vision and commitment to bring world-class 4G networks to villages,   towns and cities across India. This is also an opportunity to create value   for shareholders based on delivering synergies with a net present value of   US$10 billion, including potential regulatory dis-synergies. 

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 18 Vodafone Group Plc   Annual Report on Form 20-F 2017 Our business model Delivering value for   society and returns to our shareholders We deliver long-term benefits to   society by providing access to digital services. Our scale enables us to   invest in superior gigabit infrastructure while delivering an excellent   customer experience that drives revenues and cash-flow generation – allowing   us to reinvest and provide attractive shareholder returns. A virtuous   business cycle. Customers Assets #1 or 2 scale, delivering value to society   and shareholder returns Revenue Assets To maximise our returns and ensure we   run a sustainable business we must effectively manage our key resources and   relationships. This means sustaining investment at a sufficient level to   maintain the quality of our assets and ensure we retain our leading scale.   Network Products & services Reinvestment Cash flow Brand To provide   mobile services we primarily acquire spectrum licences in each of our markets   through government run auctions, which we combine with our global network of   base station sites to transmit mobile signals. To provide fixed services we   use a combination of our cable and fibre assets, and wholesale agreements with   other operators. IT infrastructure Our big data/data analytics capabilities;   and IT resources include our 65 data centres, which hold information such as   customers’ details and usage; our customer relationship management systems   and billing services; big data capability and our online customer service   tools. Maximised through our core programmes: Network Leadership Note: 1   Source: Brand Finance, 2017. We provide mobile services for calls, texts,   data and roaming; fixed products for internet access, data networks, calls   and TV; IoT to connect machines to the Internet; Cloud & Hosting for   storing data and applications in the Cloud; and carrier services for other   businesses to transmit information across the globe. Customer relationships   Our distribution channels include around 7,000 own-branded and franchised   stores, online sales and telesales presence for individual customers.   Enterprise customers are also served by our direct sales team of 5,650   people, a network of 5,000 indirect partners and our telesales personnel. Our   digital service channels also include live webchat capability, “My Vodafone”   app and artificial intelligence chatbots. Maximised through our core   programmes: Customer eXperience eXcellence Vodafone is one of the most   recognised and valuable telecoms brands in the world, with an attributed   worth of US$22 billion1, which helps us to retain and attract customers.   People Diversity matters to us. We employ 108,271 people representing 136   nationalities. The 195 members of our senior leadership team comprise 21   nationalities. Maximised through our core programmes: People and Culture   Financial resources Over the last three years we have generated strong free   cash flow and our pro-forma ratio of net debt to adjusted EBITDA at 2.2 times   is below the industry average. Maximised through our core programmes: Fit for   Growth 

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 Vodafone Group Plc Annual Report on Form   20-F 2017 19 Revenue 90% of our revenue is service revenue from customers and   wholesale partners for providing mobile and fixed connectivity. Most of this   is from mobile services, but fixed services are becoming increasingly   important due to our investments in fibre and cable networks and strong   growth in broadband customers. Services are charged either on a contract   basis, typically for a fixed one to two year term, or on a prepaid   (‘pay-as-you-go’) basis. Contract customers may also receive a mobile handset   and the repayment for the handset is included in the monthly fee. The   remainder of our revenue comprises non-service revenue for a variety of items   such as sales of handsets and accessories. 24% Share of service revenue from   fixed services (2016: 23 %) Reinvestment Over the last four years we have   invested €71 billion into the business. This comprises €40 billion to   modernise our mobile and IT networks and deploy fixed fibre networks in   Europe (including Project Spring); €13 billion to secure spectrum for 4G   services, and €18 billion on acquisitions – including cable companies in   Germany and Spain. €71bn Customers We serve a wide range of customers   including 516 million mobile customers, 18 million broadband users and 14   million TV customers. In addition our networks provide 54 million IoT   connections for services such as smart meters or internet in the car. As a   global company we reach many countries. 23% of our mobile customers are from   Europe and the remainder are from emerging markets such as India and Africa.   We serve a variety of enterprise customers including 1,900 multinational   corporates, 90,000 public sector and national companies, and nine million   small and medium sized enterprises. Among our fixed broadband customers, 11   million (including VodafoneZiggo) take high-speed fibre providing download   speeds up to one giga bit per second. 516m Total mobile customers (incl.   India, JVs and associates) (2016: 493m) Free cash flow We have a strong track   record of converting revenues into free cash flows – with some €6.7 billion   generated over the last three years – despite the increased investment in   Project Spring. This reflects the benefits of our local and global scale,   which creates significant efficiencies, supported by our increased efforts to   reduce costs. €6.7bn Delivering value to society and shareholder returns Our   products and services play a central role in the daily lives of more than   half a billion people globally. Our three global transformation goals –   described in our sustainable business strategy on page 26 – aim to deliver   meaningful socio-economic benefit for our customers and wider society and   will be achieved by means of our core long- term business objectives. Our   commitment to enhancing lives and livelihoods – together with our   longstanding commitment to operating responsibly – is key to creating a   sustainable business and is therefore integral to our duty to maximise   returns to our shareholders. The ongoing cash generated from operations allows   us to sustain generous shareholder returns while also investing in the future   prosperity of the business. Our shareholders regard the dividend as an   important element of that return and that is why we have increased the   dividend per share every year for more than 17 years. In the 2016 calendar   year Vodafone was the 5th largest dividend payer in the FTSE 100. €3.7bn   Reinvested in the last four years, including India More on our investment   focus in the CFO section: Page 16 Free cash flows generated in the last three   years, including India Dividends to shareholders (2016: €4.1bn) Dividends in   sterling (2017: £3.1bn, 2016: £3.0bn) 1.9 Tonnes of greenhouse gas emissions   saved per tonne generated (2016: 1.7) 

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 20 Vodafone Group Plc Annual Report on Form   20-F 2017 Our business model (continued) How we are building competitive   advantage through our core programmes We aim to outpace our competitors by using   our unique skills and assets to provide a world-class communications service.   Network Leadership Investing in our infrastructure Over the year we invested   €7.7 billion in network and IT infrastructure, which has enabled us to   further expand our reliability, data speeds, coverage and customer service.   According to independent tests conducted by agencies in 21 markets (including   India), we are either first or second in terms of data network quality in 14   markets. 92% of our customers’ data usage in Europe is at speeds sufficient   to watch high definition video and our dropped call rate of just 0.37% in   Europe means we provide a reliable voice connection. Our high speed fixed   broadband networks, including VodafoneZiggo, reach 36 million households with   our own cable or fibre and a further 60 million through wholesale deals,   enabling us to reach 59% of the European population. 92% Customer eXperience   eXcellence (‘CXX’) Improving customer experience We are building on our   Network Leadership to deliver an outstanding and differentiated user   experience through our Customer eXperience eXcellence programme – our core   marketing strategy for brand and service differentiation. This comprises four   key areas, which we summarise by the acronym CARE. – Connectivity that is   reliable and secure – Always excellent value to ensure we remain competitive   – Reward loyalty to incentivise long-term customer relationships, and – Easy   access to customer service contacts. A key CXX performance measure is the Net   Promoter score (‘NPS’). The average NPS gap to the third placed operator   reached 17 percentage points, representing a three point improvement   year-on-year. 4G coverage in Europe (2016: 87%) 96m Homes reached with next   generation fibre or cable in Europe (including VodafoneZiggo) (2016: 72m) The   best network We have the best or co-best mobile data networks in 14 out of 21   markets as measured by independent assessors. 18 Markets have tailored reward   programmes (2016: 11) 16.2% Consumer contract churn (2016: 17.1%) The best   customer experience We have the best or co-best consumer net promoter score   ranking in 19 out of 21 markets.

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 Fit for Growth People and Culture Managing   our financial resources Fit for Growth is a comprehensive cost efficiency   programme to generate the funds to sustain future growth. This is based on   external benchmarking analysis to determine the cost saving opportunity   within each local market, as well as Group programmes where our global scale   can provide a competitive advantage. During the year, we continued to make   significant cost savings in several areas. These included centralising   procurement, utilising shared services, investment in direct sales channels   so new customers reach us via branded rather than more expensive third party   channels, standardisation of network and IT platforms and zero based   budgeting initiatives. These savings have supported the 1.2 percentage point   improvement in organic Group adjusted EBITDA margin during the year. 55% My   Vodafone App penetration (2016: 36%) 77% of procurement centralised, which   provides efficiencies due to our scale (2016: 74%) Investment in online and   digital channels has led to a 9% reduction in mobile customers calling our   customer service centres over the last two years. Being a great place to work   Our people are behind every aspect of our strategy, so it is important that   we attract, develop and retain exceptional people. We also want our employees   to act in The Vodafone Way – by operating with speed, simplicity and trust1.   Therefore, we have initiated three people programmes. First, initiatives   focused on female employees to support our goal of building a diverse and   inclusive organisation. These include our global maternity policy,   introducing a global minimum maternity standard and our ReConnect initiative   to bring women back into the workforce after a career break. Second, our   enhanced CARE training initiative to ensure front line employees act with   empathy for our customers and take ownership to solve their problems. To date   43,000 employees and third parties have completed the training. Third,   incorporating digital technology to improve our hiring process, career   development tools and the workplace experience. 1 Learn more about The   Vodafone Way on page 24. 81 Employee engagement index (including India)   (2016: 79) 26% of the senior leadership team are women (including India)   (2016: 24%) Developing our people 81% of employees feel that they can learn   the skills and knowledge to do their jobs well. 

 

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 22 Vodafone Group Plc   Annual Report on Form 20-F 2017 Key performance indicators Monitoring   progress and performance We measure our success by tracking key performance   indicators that reflect our strategic programmes and growth drivers. This   allows the business and major stakeholders to analyse and judge our   performance. Changes to KPIs this year We have updated our KPIs to measure   more accurately the impact of our core programmes on our strategic,   operational and financial performance. To reflect our efficiency ambitions as   part of the Fit for Growth programme we have added our goal to achieve higher   organic adjusted EBITDA growth compared to service revenue growth. We have   removed European average smartphone data usage as a separate KPI, as its   impact is captured by the growth in 4G customers, which we view as an   important driver fuelling overall data Core programmes Network Leadership 4G   Europe coverage1 % Ubiquitous 4G coverage across Europe was one of our main   Project Spring objectives, providing customers with a better experience to   stimulate data usage and improve monetisation opportunities. We achieved our   goal of over 90% coverage across Europe, reaching 92%, including   VodafoneZiggo, this year. Achieved Customer eXperience eXcellence Consumer   mobile net promoter score1,2 Number of markets with NPS leadership or   co-leadership, out of 21 markets We use NPS to measure the extent to which   our customers would recommend us to friends and family. Our goal is to be NPS   leader in all our markets. We continued to make good progress this year, but   further improvements are needed, particularly in the UK. More work to do   usage. We have also removed our employee engagement KPI as our performance is   now comparable to our peers. New KPIs – Adjusted EBITDA growth > service   revenue growth 2015 2016 2017 Fit for Growth 72 2015 11 87 2016 13 92 2017 19   People and Culture K PIs removed – Employee engagement – European average   smartphone data usage Grow adjusted EBITDA faster than service revenue,   improving margins out of 22 markets Diversity: Women in senior management   (including the senior leadership team)1,2 % We established multi-year margin   improvement tar gets for all markets and aim to grow organic adjusted EBITDA   faster than service revenue. Our tar get is to achieve this in all 22 of our   controlled operations (excluding India, JVs and associates). Diversity   increases the range and breadth of skills in our business and increased   female representation across our senior management is one measure of this. We   aim to increase this proportion every year. We made further progress this   year. More work to do Achieved Notes: 1 Includes Netherlands. 2 Includes   India. 2015 2016 2017 10 2015 23 13 2016 24 15 2017 25 Financial performance   This has been a solid year of execution for the Group delivering commercial   momentum with sustained underlying ,growth. With the recovery of European   revenues and the continued strong growth in our African and Middle East   operations, we met our financial guidance and increased our dividend per share   Organic service revenue growth % Growth in revenue demonstrates our ability   to increase our customer base with stable or rising ARPU. Our goal is to   continue to grow our service revenue. We met this goal again this year.   Achieved Organic adjusted EBITDA growth % Growth in adjusted EBITDA supports   our free cash flow which helps fund investment and shareholder returns. Our   adjusted EBITDA grew organically by 5.8% this year. On a guidance basis,   which includes India, it grew 3.4%, consistent with our guidance of 3% to 6%   organic growth. Achieved by 2% to 14.77 eurocents. More information on   financial performance: Pages 35 and 41 2015 2016 2017 -3.2 1.1 1.9 2015 2016   2017 -8.3 2.3 5.8

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 Vodafone Group Plc Annual Report on Form   20-F 2017 23 Strategic growth engines Data Enterprise 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. While these 4G customers1,2 million To monetise our 4G investments, we   aim to migrate and attract new customers onto our 4G network. We have   significantly expanded our 4G customer base and as a result data usage has   increased by 65% over the last year. In Europe, the average smartphone user   now consumes 1.7 GB of data each month. Achieved Fixed as a percentage of   enterprise service revenue % Our core European mobile enterprise services   continue to face challenging market conditions reflected in declining unit   prices for connectivity services. Therefore, we are seeking to diversify into   fixed and related enterprise services to offset these pressures. Achieved   KPIs continued to show improvement, this year’s Group annual bonus was lower   than last year’s as overall performance was slightly below our internal tar gets.   More on rewards and performance in the Remuneration Report: Pages 67 to 86   2015 2016 2017 20.7 46.8 74.7 2015 26 2016 28 2017 29 Convergence Europe   owned NGN coverage1 million homes passed To meet the growing demand for fixed   and converged services we aim to continually increase our NGN reach. We now   have the largest NGN footprint in Europe, comprising 36 million homes passed   by our own cable and fibre and a further 60 million via wholesale access and   partnerships. Fixed broadband customers1,2 million We aim to grow our fixed   broadband customer base continuously. During the year, we added 1.5 million   new customers, taking the total base to 17.9 million (including 3.2 million   from VodafoneZiggo). Within this we added 0.7 million converged customers,   i.e. those taking both a fixed and mobile integrated service. n Of which,   consumer Achieved Achieved converged customers 2015 2016 2017 25 2015 29 2016   36 2017 N/A 3.1 3.8 12.0 13.4 17.9 Free cash flow € billion Cash generation   is key to delivering strong shareholder returns. We delivered €4.1 billion of   free cash flow in 2017. On a guidance basis, which includes India, our free   cash flow was €4.3 billion, consistent with our guidance of at least €4.0   billion. n reported Dividend per share eurocents The ordinary dividend   continues to be a key component of shareholder return. We intend to increase   the dividend per share annually. This year we increased the dividend per   share by 2%. In line with our move to reporting our results in euros, our   dividends are now declared in euros. Achieved 2015 2016 2017 1.3 1.7 n   guidance basis 4.1 4.3 Achieved 2015 2016 2017 14.19 14.48 14.77

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 24 Vodafone Group Plc   Annual Report on Form 20-F 2017 Our people The people behind our business Our   people are behind every aspect of our strategy and are committed to   delivering superior network performance and providing a great customer   experience. A diverse and inclusive organisation This year we employed an   average of 108,2711 people with 136 nationalities as well as over 24,485   contractors. Our senior leadership team includes 21 nationalities, bringing   together a diverse set of experiences and opinions to help us achieve our   goals and better understand the needs of our customers. Our commitment to   diversity and inclusion begins at the top, with clear leadership from the   Vodafone Group Plc Board and is embedded at every level of every business   through The Vodafone Way, the Code of Conduct and our Business Principles.   Living The Vodafone Way The Vodafone Way underpins our culture and sets out   the type of organisation we want to be. At the centre of The Vodafone Way is   a focus on three core principles: speed, simplicity and trust. We want our   people to respond swiftly and effectively to challenges and opportunities,   especially those that affect our customers. We want them to do so while   avoiding unnecessary bureaucracy and costly and cumbersome internal processes.   People and Culture And we want all of our business activities and decisions   to be informed by an understanding that earning and retaining the trust of   our customers, our employees and all other stakeholders must be integral to   everything we do. Doing what’s right We recognise that ethical conduct is   just as important as high performance and that failure to operate ethically   will impact our business. Our “Code of Conduct” outlines the behaviours we   expect from every single person working for and with Vodafone. Our “Business   Principles” are the foundation of how we do business and set out the values   we want everyone who works for or with Vodafone to respect. Together, these   elements ensure we protect Vodafone’s reputation, our people and our assets. Further   details can be found on The Vodafone Way, Code of Conduct and our Business   Principles at vodafone.com/governance. Focusing on our customers Over the   last year, we have focused on improving customer experience through a new   Vodafone Way of CARE training initiative. The core of the programme ensures   front line staff act with empathy for customers, take ownership to solve   their problem and for team leaders to coach performance. So far, more than   39,000 contact centre agents and team leads have completed the training, as   well as over 4,000 retail store managers and advisers. Training our senior   leaders has also been key and all leadership teams participated in a Customer   Experience Leadership programme; a two-day workshop focused on listening to   customers and understanding external best practices. This is all part of our   approach to ensure the needs of our customers are understood and everyone   leads by putting the customer first. Attracting and developing great people   This year, we invested more than €80 million in employee training and   development. Those programmes take many forms, from structured learning and   formal training through to coaching and mentoring. Our “Discover” programme   for graduates accelerates the careers of high performing graduates, with over   890 people recruited onto this programme during the year. After the   programme, a number of “Discovers” join our international programme,   “Columbus”, with the purpose of building leadership skills Code of conduct   The Vodafone Way Vodafone culture Business principles through a challenging   two-year assignment outside their home country. These programmes are   acknowledged and welcomed by our employees. In the 2016–17 Global People   Survey, 81% of employees surveyed said that they benefited from opportunities   to learn the skills they needed to do their jobs well, a one percentage point   increase in responses to the same question in the survey in the previous   year. We also look for ways to innovate and digitalise our recruitment and   selection process to attract the best people. This year, we worked with   HireVue to design a new end-to-end graduate experience embedding psychometric   assessments into a video interview platform for a unified, world-class   candidate experience. Note: 1 Includes India.

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 Vodafone Group Plc Annual Report on Form   20-F 2017 25 Employees by location1 % Other 31.8% India 21.0% Spain 4.7%   Italy 5.9% Vodacom 7.0% Germany 13.8% UK 15.8% Digital workplace training and   development – the Vodafone University During the year, we launched a range of   new digital collaboration tools as well as digital learning resources   supporting a truly digital workspace. One of these initiatives is the Vodafone   University, accessible to all employees at any time on any device. The   Vodafone University brings together our specialist and professional courses   covering areas such as sales and marketing, leadership, technology and   customer service. Vodafone University programmes have been developed with the   support of leading academic institutions including the London Business   School, Harvard University and Imperial College and are Average number of   employees1,2 number also accredited by external training providers. 2015 2016   2017 101,443 107,667 108,271 HireVue has enabled us to reduce average time to   hire from 23 to 11 days and to reach out more effectively to younger   recruits. We have robust policies and processes in place to manage risks and   if incidents occur we work hard to identify and address their root causes.   Employee engagement1 index Recognising performance Our focus in the year has   been on our top five 2015 2016 2017 77 79 We reward people based on their   performance, potential and contribution to our success. 81 safety risks (more   information on health and safety on our company website) and we work with our   people and our suppliers to ensure This year, to drive simplification,   empower our line managers, and encourage more future- focused and developmental   conversations expectations and risks are understood and preventive actions   are in place. E mployee turnover rate1 % between employees and line managers   Improving employee wellbeing has also been 2015 2016 2 017 Nationalities in   top senior leadership roles1 2015 2016 2017 18 we trialled a move away from   our previous 19 performance dialogue rating system. The simplified system was   piloted with our 18 senior management team and, if deemed successful, will be   rolled out globally in the near future. We continue to benchmark roles   regularly to ensure competitive and fair remuneration 24 in every country in   which we operate. We 24 also offer competitive retirement and other 21   benefit provisions. Global short-term incentive plans are offered to a large   percentage of employees and global long-term incentive a key area of focus.   This year we launched our fourth annual Global Wellbeing Challenge on World   Heart Day in October 2016. 4,027 employees took part in a wide range of   exercise activities. Together, they covered a total of 302,096 miles –   equivalent to going 12 times around the world, to the moon and a quarter of   the way back – over 56,000 miles more than last year. Increasing employee   engagement Every year, all our employees are invited ender of employees1 % plans   are offered to our senior managers. Our arrangements are subject to company   and individual performance measures. 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. Female 37% Notes:   1 Includes India. Male 63% Creating a safe place to work We want everyone   working with Vodafone to return home safely every day. Despite all of our   efforts, we deeply regret to report 11 recordable fatalities during the year.   Traffic accidents in emerging markets The 2016–17 survey demonstrated that   87% of employees who responded are proud to work for Vodafone, one point   higher than in 2015–16. Our overall Engagement Index score – demonstrating   our employees’ willingness to recommend Vodafone as an employer and their   desire to continue 2 Employee numbers are shown on a full time employee   basis. A statutory view is provided on page 154. continue to be our main area   of exposure. working with us – rose by two points to 81%.

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 26 Vodafone Group Plc   Annual Report on Form 20-F 2017 Sustainable business Sustainable business   Mobile and digital technologies play a powerful role in today’s societies and   in building “a better tomorrow”, improving lives and livelihoods and creating   new business opportunities and industries. A new strategic approach Our   businesses play an integral role in the daily lives of our 516 million mobile   customers and are a vital part of the national infrastructure upon which the   economies of our 26 countries of operation depend. Our sustainable business   strategy is founded on Vodafone’s long- standing commitment to responsible behaviour   in everything we do. At the centre of that strategy, launched in 2016, is our   intention to work towards three significant global transformation goals. Each   goal has the potential to deliver meaningful socio- economic benefits for our   customers and for wider society. Importantly, each goal has been derived   from, and will be achieved by means of, our core long-term business   objectives. Our three transformation goals are: – women’s empowerment: we are   strongly committed to diversity and inclusion and have set ourselves the   ambition of becoming the world’s best employer for women by 2025. We also   intend to bring the benefits of mobile – enabling access to education,   healthcare and mobile money services – to an additional 50 million female   customers in emerging markets, including women in some of the world’s poorest   communities; – energy innovation: our focus is to optimise energy efficiency   in, and reduce greenhouse gas emissions from, our own activities. At the same   time, we are working to help our customers to reduce their greenhouse gas   emissions by two tonnes for every tonne we generate from our own operations;   and Our sustainable business strategy includes a significant focus on   corporate transparency, with particular emphasis on four areas that are the   source of greatest public debate and concern. – Taxation and total economic   contribution. Our voluntary tax transparency report – the first of its kind   in our industry – includes detailed disclosures on a country-by-country   actual cash paid basis. – Digital rights and freedoms. Our transparency   disclosures on matters related to digital human rights include our approach   and principles on law enforcement agency access to private communications,   freedom of expression, censorship and the digital rights of the child. –   Supply chain integrity and safety. Our disclosures related to our sourcing   and supply chain reflect the Group’s drive to ensure responsible and ethical   behaviour among our suppliers and sub-suppliers and ensure safety in our   operations. – Mobile, masts and health. We provide objective and accessible   information to address public concerns regarding electromagnetic fields from   mobile phones and base stations and explain our approach to compliance with   international standards across all of our operating companies on our   corporate website (vodafone.com/mmh). Our sustainable business strategy   Purpose What we do matters but so does how we work. Our strategy covers the   principles and practice that ensure we operate with integrity at all times   and remain committed to the highest standards of ethical behaviour. Energy   innovation and greenhouse gas emissions All businesses, big and small, have a   critical role to play in helping to reduce greenhouse gas (‘GHG’) emissions   in order to limit global temperature rises to well below 2oC. The   communications industry as a whole requires significant amounts of energy –   in the form of electricity (and diesel for back-up generators) – to transmit   vast amounts of data from billions of people, devices and machines. During the   year, we began to develop a new global energy strategy intended to bring   about a significant increase in the efficiency of our own operations, coupled   with a focus on increasing the adoption of lower-carbon and renewable energy   sources. Our networks account for most of the energy consumed in our   businesses and are the main source of our GHG emissions. Customer demand for   data increases every year. This in turn increases the amount of energy we   need. However, our focus on energy efficiency – working with our equipment   suppliers – means that the rate of growth in our power requirements is much   lower than the rate of growth in demand for data. – youth skills and jobs: we   intend to apply our expertise in digital technologies to help young adults   enhance their skills and secure employment as industries and We connect   everybody to live a better today and build a better tomorrow Transformation   companies embrace digital ways of working. We also intend to increase   opportunities for young people to gain work experience within our businesses.   Women’s empowerment Transparency Energy innovation Youth skills and jobs   Taxation and total economic contribution Supply chain integrity and safety   Mobile, masts and health Digital rights and freedoms Principles and practice 

 

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 Vodafone Group Plc Annual Report on Form   20-F 2017 27 During 2017, our total greenhouse gas emissions were the same as   the previous year, at 2.59 million tonnes of CO2e (carbon dioxide equivalent)   of which India accounts for 0.52 million tonnes CO2e despite an increase in   the size of our network in response to customer data demand. We continued to   improve our overall energy efficiency profile during the year and achieved a   37% reduction in the volume of GHG emissions produced per petabyte (‘PB’) of   data carried to reach an average of 1,140 tonnes CO2e per PB – the best   performance recorded to date. Our efforts to reduce our GHG emissions are   only one aspect of our Energy Innovation goal. In parallel, we continue to   innovate to help our customers minimise their energy needs, particularly   through the development of IoT services, devices and processes that use   network intelligence to optimise performance and minimise energy use – a   field in which we are a world leader. Greenhouse gas (‘GHG’) emissions m   illion tonnes of CO2e Our goal is to help our customers reduce their CO2e   emissions by two tonnes for every one tonne of emissions from our own   operations by March 2018. We are well on track to meet that goal: as of the   end of March 2017, we were helping our customers to save 1.9 tonnes of CO2e   for every tonne of CO2e we generated through our own activities. Human Rights   Communications technologies play an important role in underpinning human   rights, enabling citizens to share information, communicate and learn. Some   of our most salient human rights risks relate to the citizen’s right to   privacy and freedom of expression. Our Digital Rights and Freedoms Reporting   Centre (available on vodafone.com) sets out our policies and principles   regarding a range of these issues. In March 2017, Vodafone became a Board   member of the Global Network Initiative (‘GNI’), a multi-stakeholder body   bringing together communications and technology companies, civil society,   academics and investors who share a commitment to privacy and freedom We are   also fully mindful that other forms of human rights and other risks can arise   within our own businesses and supply chain, including labour risks, unsafe   workplace conditions, environmental degradation and bribery and corruption.   Our 2017 Sustainable Business Report (vodafone.com/sustainability/report2017)   sets out our progress against our global transformation goals and details our   approach to mitigating the risks referred to above. We have also published a   Slavery and Human Trafficking Statement and a Conflict Minerals Report, in   line with our statutory reporting requirements. 2015 0.36 2016 0.40 2017 0.40   2.13 2.49 2.19 2.59 2.19 2.59 of expression. 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 sources from invoices, purchasing requisitions, direct data measurement   and estimations. Carbon emissions calculated in line with GHG Protocol   standards. Scope 2 emissions are reported using the market-based methodology.   For full methodology see our Sustainable Business Report 2017. GHG emissions   per petabyte of data carried by our mobile networks tonnes of CO2e 2015 2016   2017 Note: 1,140 1,820 3,120 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 our operational control are included in   our GHG emissions totals. Ratio of GHG emission savings for customers to our   own GHG footprint Business Women Connect in Tanzania In Sub-Saharan Africa,   access to financial services can be extremely challenging 2015 2016 2017 2018   Note: Target 1.4 1.7 1.9 2.0 and women often find it harder than men to   access land, equipment and other assets that would enhance their capacity to   grow their businesses and improve their livelihoods. Our programme in   Tanzania, Business Women Connect (‘BWC’), uses our mobile money services,   M-Pesa and M-Pawa, to help women micro-business owners increase revenue and   access loans via their mobile. BWC was launched in 2016 Figures include all   data carried by our mobile networks. Emissions savings for customers have   been calculated based on GeSI’s ICT Enablement Methodology. All data includes   our operation in India (see our Sustainable Business Report   vodafone.com/sustainability/report2017). in a partnership between   TechnoServe, Vodacom, ExxonMobil Foundation, the World Bank and the Centre   for Global Development. Since its launch, the programme has trained nearly   3,000 women in the use of M-Pawa while nearly 2,000 participants have also   received business skills training.

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 28 Vodafone Group Plc   Annual Report on Form 20-F 2017 Principal risk factors and uncertainties   Identifying our risks We have a global framework for identifying and managing   risk within our defined tolerance levels, in relation to both our operations   and strategy. The framework has been designed to provide the Executive   Committee and Board with a clear line of sight over risk and to enable   informed decision making.

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 Vodafone Group Plc Annual Report on Form   20-F 2017 29 Assurance and oversight of risks In order to provide the   Executive Committee, Audit & Risk Committee, and Board with a clear view   of our principal risks, we apply a model of co-ordinated assurance. Our Risk,   Compliance and Internal Audit communities work together on planning,   executing and reporting assurance activities to ensure that there is adequate   coverage across the control environment with a robust level of independent   testing. Information gathered through our co-ordinated assurance process is   provided to the relevant committees to help drive Our principal risks We   undertake a two stage process to identify our principal risks. All local   markets and entities identify their priority risks which are consolidated   into a Group-wide view. We then conduct interviews with over 40 senior   leaders to gain their insights. The results of both exercises are   consolidated to produce our principal risks, as reported here. Key changes in   the year Our risk profile remains stable relative to last year, with the   following key changes: – The two technology risks are now considered   separately, as the causes for these are different (now risks 5 & 7). –   The Customer eXperience eXcellence (‘CXX’) risk now focuses on digital capability   (risk 8). – The adverse political measures risk now includes upcoming 5G   auctions (risk 3). informed decision making. It also helps senior management   to understand our overall risk profile, current levels of control and the   culture of our business. Principal risks 11 1 4 2 3 6 5 9 8 7 10 Low   Likelihood High 1 Cyber threat and information security External or internal   attack resulting in service unavailability or data breach 2 Market disruption   Disruptive technology, changes in competitor business models, lack of agility   3 Adverse political and regulatory measures Excessive pricing of 5G licences,   tax authority challenges, changing national politics 4 Failure to converge   and integrate acquisitions Incumbent re-monopolisation, failure to access critical   content, inability to integrate acquisitions 5 IT transformation failure IT   transformation failures impacting NPS 6 Unstable economic conditions/   inadequate liquidity Global financial crisis reducing consumer spending and   ability to refinance 7 Technology failure Failure of critical IT, fixed or   mobile assets causing service disruption 8 Failure to deliver on digital   transformation and CXX Failure to create a differentiated, digital customer   experience 9 Non-compliance with legal and regulatory requirements   Non-compliance with laws, regulations, network licence requirements 10   Failure to deliver major Enterprise contracts profitably Failure to meet   commitments and/or deliver at appropriate profitability levels 11 EMF health   related risks EMF found to pose health risks causing reduction in mobile   usage or litigation

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 30 Vodafone Group Plc Annual Report on Form   20-F 2017 Risk management (continued) Cyber threat and information security   What is the risk? A successful cyber-attack or internal event could result in   us not being able to deliver services to our customers and/or failing to   protect their data. Market disruption What is the risk? We face increased   competition from a variety of new technology providers, new market entrants,   evolving customer needs and competitor consolidation. We must be able to keep   pace with new technology and to compete in changing markets. Adverse   political and regulatory measures What is the risk? We operate under licence   in most markets and face regular changes in regulation, law and operating   environments. Significant adverse changes, for example to tax laws, spectrum   pricing or an unfavourable regulatory landscape for multi-national companies,   could impact our ability to do business in our preferred manner. Failure to   converge and integrate acquisitions What is the risk? We face competition in   key markets from providers who have the ability to sell converged services on   their existing infrastructure, with regulation that often fails to deliver a   level playing field across fixed and content markets. IT transformation   failure What is the risk? As we undertake major IT change programmes in a   number of markets, there is a risk that these projects disrupt services or do   not provide the benefits that they should in a timely manner. Unstable   economic conditions/inadequate liquidity 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 a global crisis   results 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 and cash flow.

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 Vodafone Group Plc Annual Report on Form   20-F 2017 31 Key to strategic programmes: Network Leadership Customer   eXperience eXcellence Fit for Growth People and Culture Executive Committee   risk owners: Johan Wibergh and Matthew Kirk Risk category: Operational Link   to strategic programmes: Executive Committee risk owner: Serpil Timuray Risk   category: Strategic Link to strategic programmes: Executive Committee risk   owners: Nick Read and Matthew Kirk Risk category: Financial Link to strategic   programmes: Executive Committee risk owner: Serpil Timuray Risk category:   Strategic Link to strategic programmes: Executive Committee risk owner: Johan   Wibergh Risk category: Operational Link to strategic programmes: Executive   Committee risk owner: Nick Read Risk category: Financial Link to strategic   programmes:

 

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 32 Vodafone Group Plc Annual Report on Form   20-F 2017 Risk management (continued) Technology failure 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 the impact on our customers   is avoided or minimised. Failure to deliver on digital transformation and CXX   What is the risk? Failure to deliver a digital, differentiated and superior   experience to our customers in store, online and by phone, could diminish our   brand and reputation. To do this we need to be agile with strong digital   capabilities. Non-compliance with legal and regulatory requirements What is   the risk? Vodafone must comply with a multitude of local and international   laws as well as more specific regulation. These include licence requirements,   customer registration, data privacy, anti-money laundering, competition law,   anti-bribery law and economic sanctions. Failure to deliver major Enterprise   contracts profitably What is the risk? If we do not understand the needs of   our Enterprise customers and contract on the correct basis to account for the   complexity of requirements, we will not be able to profitably deliver   services. Electro-magnetic fields related health risks What is the risk?   Electro-magnetic signals emitted by mobile devices and base stations may be   found to pose health risks, with potential impacts including: changes to   national legislation, a reduction in mobile phone usage or litigation.

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 Vodafone Group Plc Annual Report on Form   20-F 2017 33 Key to strategic programmes: Network Leadership Customer   eXperience eXcellence Fit for Growth People and Culture Executive Committee   risk owner: Johan Wibergh Risk category: Operational Link to strategic   programmes: Executive Committee risk owner: Serpil Timuray Risk category:   Operational Link to strategic programmes: Executive Committee risk owners:   Rosemary Martin and Matthew Kirk Risk category: Legal and Regulatory Link to   strategic programmes: Executive Committee risk owner: Brian Humphries Risk   category: Operational Link to strategic programmes: Executive Committee risk   owner: Matthew Kirk Risk category: Operational Link to strategic programmes: 

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 34 Vodafone Group Plc Annual Report on Form   20-F 2017 Risk management (continued) Risk management in action Brexit   implications The Board continues to keep the possible implications of Brexit   for Vodafone’s operations under review. A cross-functional team, led by two   Executive Committee members, has identified ways in which Brexit might affect   the Group’s operations. Despite the Article 50 Notice having been served,   there remains insufficient information about the likely terms of the post-   Brexit arrangements between the UK and the EU, as well as about any possible   transitional arrangements, to draw any conclusions about the probable impact.   Although we are a UK headquartered company, a large majority of our customers   are in other countries, accounting for most of our revenue and cash flow.   Each of our national operating companies is a standalone business,   incorporated and licensed in the jurisdiction in which it operates, and able   to adapt to a wide range of local developments. As such, our ability to provide   services to our customers in the countries in which we operate, inside or   outside the EU, is very unlikely to be affected by Brexit. We are not a major   international trading company, and do not use passporting for any of our   major services or processes. Depending on the arrangements agreed between the   UK and the EU, two issues that could directly affect our operations, in both   cases potentially causing us to incur additional cost, are: – creation of a   data frontier between the UK and the EU: the inability to move data freely   between the UK and EU countries might cause us to have to move some technical   facilities, and affect future network design. – inability to access the   talent we need to run a multinational Group operation from the UK: increased   controls over or restrictions to our ability to employ leading talent from   non-UK markets could cause us to have to adjust our operating model to ensure   that we attract and retain the best people for the roles we have. A further,   indirect, issue that could affect our future performance would arise if the   Brexit process caused significant revisions to macro- economic performance in   our major European markets including the UK, thus affecting the economic   climate in which we operate, and in turn impacting the performance of the   operating companies in those markets. Long-Term Viability Statement In   accordance with the UK Corporate Governance Code, the Directors have assessed   the prospects of the Group over a period significantly longer than 12 months   from the approval of the financial statements. The Board has concluded that   the most relevant time period for this assessment should be three years to   align with the Group’s normal business forecasting cycle and the long-range   plan to 31 March 2020, as well as taking into consideration the pace of   ongoing change in the telecoms industry. The assessment for this three year   period includes consideration of the forecast cash flows and obligations of   Vodafone India. The plans and projections prepared as part of this forecasting   cycle include the Group’s cash flows, committed and required funding and   other key financial ratios. They were drawn up on the basis that debt   refinance will be available in all plausible market conditions and that there   will be no material changes to the business structure over the review period.   As of 31 March 2017, the Group had sources of liquidity (primarily comprised   of certain cash and cash equivalent balances) and available facilities, of   €18.8 billion, which includes undrawn Revolving Credit Facilities expiring in   FY2020/21. The Risk Management Framework on page 28 outlines the approach the   Board has taken to identifying and managing risk. In making this statement,   the Board carried out a robust assessment of the principal risks facing the   Group, detailed on pages 30 to 33, including those that would threaten its   business model, future performance, solvency or liquidity. Against this   background, the output of the long-range plan has been used to perform   central debt profile and cash headroom analysis, including a review of   sensitivity to “business as usual” risks to revenue and profit growth. In   addition, severe but plausible scenarios in the event of each of the   principal risks materialising individually and where multiple risks occur in   parallel, were also tested. This combined scenario included the impact of   failing to execute key elements of our strategy and respond to market   disruption resulting in a significant loss of market share to converged and   OTT players. This was considered together with a major cyber-attack and a   subsequent General Data Protection Regulation fine, as well as the macro   political uncertainty resulting in restricted access to capital markets and   devaluation of emerging market currencies. To assess viability, the headroom   position under these scenarios has been calculated using the cash and   facilities available to the Group. The assessment took into account the   availability and likely effectiveness of the mitigating actions that could be   taken to reduce the impact of the identified underlying risks. The headroom   remained positive in all scenarios tested. Having considered the principal   risks that the Group may face, the Directors consider that this   stress-testing based assessment of the Group’s prospects is reasonable in the   circumstances, taking into account the inherent uncertainty involved.   Although this review has considered severe but plausible scenarios relevant   to the Group, any such review cannot consider all risks which may occur,   therefore an overall view of the total level of risk required to impede our   viability was also considered. The cash and available facilities at year end,   along with the mitigating actions available to reduce cash outgoings,   provides a sufficient level of headroom. Based on the results of their analysis,   the Directors confirm that they have a reasonable expectation that the Group   will be able to continue in operation and meet its liabilities as they fall   due over the three year period ending 31 March 2020.

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 Operating results   Vodafone Group Plc Annual Report on Form 20-F 2017 35 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. Amounts   presented for the 2016 financial year have been restated into euros following   the change in the Group’s presentation currency and include the results of   Vodafone India as discontinued operations following the agreement to combine   it with Idea Cellular. Group1,2 Europe €m AMAP €m Other3 €m Eliminations €m   2017 €m 2016 €m % change Reported Organic* Revenue 34,550 11,773 1,390 (82)   47,631 49,810 (4.4) 1.2 Service revenue 31,975 9,956 1,138 (82) 42,987 44,618   (3.7) 1.9 Other revenue 2,575 1,817 252 – 4,644 5,192 Adjusted EBITDA 10,283   3,854 12 – 14,149 14,155 – 5.8 Depreciation and amortisation (8,344) (1,829)   (6) – (10,179) (10,386) Adjusted EBIT 1,939 2,025 6 – 3,970 3,769 5.3 7.0   Share of result in associates and joint ventures (49) 213 – – 164 60 Adjusted   operating profit 1,890 2,238 6 – 4,134 3,829 8.0 11.8 Adjustments for:   Impairment loss – (569) Restructuring costs (415) (316) Amortisation of   acquired customer bases and brand intangible assets (1,046) (1,338) Other   income/(expense)4 1,052 (286) Operating profit 3,725 1,320 Non-operating   income and expense (1) (3) Net financing costs (932) (1,507) Income tax   expense (4,764) (4,937) Loss for the financial year from continuing   operations (1,972) (5,127) (Loss)/profit for the financial year from   discontinued operations (4,107) 5 Loss for the financial year (6,079) (5,122)   Notes: 1 With effect from 1 April 2016, the Group’s presentation currency was   changed from pounds sterling to the euro to better align with the geographic   split of the Group’s operations. The results for the year ended 31 March 2016   have been restated into euros and include the results of Vodafone India as   discontinued operations following the agreement to combine it with Idea   Cellular. Group revenue and service revenue includes the results of Europe,   AMAP, Other (which includes the results of partner markets) and eliminations.   2017 results reflect average foreign exchange rates of €1:£0.84, €1:INR   73.58, €1:ZAR 15.43, €1:TRY 3.51 and €1: EGP 13.60. 2 Service revenue,   adjusted EBIT, adjusted EBITDA and adjusted operating profit are alternative   performance measures which are non-GAAP measures that are presented to   provide readers with additional financial information that is regularly   reviewed by management and should not be viewed in isolation or as an   alternative to the equivalent GAAP measure. See “Alternative performance   measures” on page 205 for reconciliations to the closest respective   equivalent GAAP measure and “Definition of terms” on page 218 for further   details. 3 The “Other” segment primarily represents the results of   shareholder recharges received from Vodafone Netherlands, VodafoneZiggo and   Vodafone India, partner markets and the net result of unallocated central   Group costs. 4 Includes a €1.3 billion gain (2016: €nil) on the formation of   the VodafoneZiggo joint venture in the Netherlands. Revenue Group revenue   decreased 4.4% to €47.6 billion and service revenue decreased by 3.7% to   €43.0 billion. In Europe, organic service revenue increased 0.6%* and in   AMAP, organic service revenue increased by 7.7%*. Further details on the   performance of these regions is set out below. 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. Organic growth   is an alternative performance measure. See “Alternative performance measures”   on page 205 for further details and reconciliations to the respective closest   equivalent GAAP measure. Adjusted EBITDA Group adjusted EBITDA remained   stable at €14.1 billion, with organic growth in Europe and AMAP more than   offset by foreign exchange movements and M&A and other activity. The   Group’s adjusted EBITDA margin improved by 1.3 percentage points to 29.7%. On   an organic basis, adjusted EBITDA rose 5.8%* and the Group’s adjusted EBITDA   margin increased by 1.2* percentage points driven by organic margin   improvements in both Europe and AMAP. Adjusted EBIT Adjusted EBIT increased   by 5.3% to €4.0 billion as adjusted EBITDA growth outpaced the increase in depreciation   and amortisation. On an organic basis adjusted EBIT increased by 7.0%* for   the year.

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 36 Vodafone Group Plc Annual Report on Form   20-F 2017 Operating results (continued) Operating profit Adjusted operating   profit excludes certain income and expenses that we have identified   separately to allow their effect on the results of the Net financing costs   2017 €m Restated 2016 €m Group to be assessed (see page 205). 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 current   year in respect of the Group’s continuing operations (2016: €569 million in   Romania). Further detail is provided in note 4 to the Group’s consolidated   financial statements. Restructuring costs of €415 million (2016: €316   million) primarily reflect discrete cost efficiency actions taken during the   year in Germany and the UK. Amortisation of intangible assets in relation to   customer bases and brands are recognised under accounting rules after we   acquire businesses and decreased to €1,046 million (2016: €1,338 million) due   to the acquisitions of KDG, Vodafone Italy and Ono. Including the above   items, operating profit increased by €2.4 billion to €3.7 billion, due to a   €1.3 billion gain on the formation of the VodafoneZiggo joint venture in the   Netherlands which for accounting purposes was characterised as a part   disposal of the Group’s interest in Vodafone Netherlands, €0.5 billion lower   depreciation and amortisation charges, partially as a result of the treatment   of our Netherlands operation as an asset held for sale during the year and   the €0.6 billion impairment charge recognised in the year ended 31 March   2016. Investment income 474 539 Financing costs (1,406) (2,046) Net financing   costs (932) (1,507) Analysed as: Net financing costs before settlement of   outstanding tax issues (979) (630) Interest expense relating to settlement of   outstanding tax issues (47) (19) (1,026) (649) Mark-to-market gains/(losses)   66 (285) Foreign exchange1 28 (573) Net financing costs (932) (1,507) Note: 1   Comprises foreign exchange rate differences reflected in the income statement   in relation to certain sterling balances in 2017 and primarily in relation to   certain euro intercompany balances in 2016. Net financing costs decreased by   38% primarily driven by a reduction in mark-to-market losses and lower   foreign exchange rate differences due to the Group’s reduced exposed to   foreign exchange movements on certain euro intercompany balances subsequent   to its functional currency change in the year ended 31 March 2017. Net   financing costs before settlement of outstanding tax issues increased as the   Group’s average gross debt was higher during the year resulting in higher   financing costs. Taxation 2017 €m Restated 2016 €m Income tax expense (4,764)   (4,937) Profit/(loss) before tax 2,792 (190) Effective tax rate 171% -2,598%   The Group’s statutory effective tax rate for the year ended 31 March 2017 was   171% compared to -2,598% for the last financial year. The effective tax rate   for both years include the following items: a reduction in our Luxembourg   deferred tax assets of €2,651 million following a reduction in the Luxembourg   corporate tax rate to 26.0%; deferred tax on the use of Luxembourg losses of   €369 million (2016: €541 million); and a decrease in the deferred tax asset   of €1,275 million (2016: €4,228 million) arising from a revaluation of   investments based upon the local GAAP financial statements and tax returns,   partially offset by a reduction in the deferred tax asset as a result of   lower interest rates.

 

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 Vodafone Group Plc Annual Report on Form   20-F 2017 37 Earnings per share Adjusted earnings per share, which excludes   the results of Vodafone India which are now included in discontinued   operations, was 8.04 eurocents, an increase of 17.0% year-on-year, as higher   adjusted operating profit and lower net financing costs more than offset the   increase in the number of shares following the issuance of mandatory   convertible bonds in February 2016 which are classified as equity after   taking into account the cost of future coupon payments. Basic loss per share   was 22.51 eurocents (2016: loss per share of 20.25 eurocents) as the €1.3   billion gain on the formation of the VodafoneZiggo joint venture in the   Netherlands was offset by impairment charges of €3.7 billion, net of tax,   recognised during the year in discontinued operations and the changes in   deferred tax on losses, as described above, both of which have been excluded   from adjusted earnings per share. 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 Restated Loss attributable to   owners 2017 €m 2016 €m total gross revenues attributable to the arrangements   mentioned above for the financial year ended 31 March 2017 were €471,000. of   the parent (6,297) (5,405) Adjustments: Impairment loss – 569 Amortisation of   acquired customer base and brand intangible assets 1,046 1,338 Restructuring   costs 415 316 Other income and expense (1,052) 286 Non-operating income and   expense 1 3 Investment income and financing costs 70 574 480 3,086 Taxation   3,975 4,183 India1 4,107 (5) Non-controlling interests (16) (25) Adjusted   profit attributable to owners of the parent 2,249 1,834 HiWEB partnership In   October 2016, Vodafone announced a non-equity agreement with Dodeh Gostar ASR   Novin under the HiWEB brand. HiWEB is a non-government-owned Iranian internet   company and together with Vodafone, the company HiWEB plans to roll out,   modernise and expand the telecommunications network and improve fixed and   mobile services. Gross revenues arising from this agreement during the   financial year ended 31 March 2017, were €1.5m. EPEG Project During the   financial year ended 31 March 2017, Vodafone Global Network Limited (VGN)   continued to be 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 Weighted average number of shares Millions Millions   owning and being responsible for the segment from the Ukrainian border with   Russia to Frankfurt, Germany. No transactions took place outstanding – basic   27,971 26,692 during the financial year ended 31 March 2017 for which   Vodafone was due any revenues. Vodafone purchased capacity on the high   Earnings per share: eurocents eurocents speed cable network from one of the   consortium partners during the fiscal year ended 31 March 2017. Under the   terms of the arrangement, Basic loss per share (22.51)c (20.25)c Adjusted   earnings per share from continuing operations 8.04c 6.87c Note: 1 India is   classified as discontinued operations and includes the operating results,   financing and tax charges of Vodafone India, as well as impairment charges of   €3,675 million, net of tax, recognised during the year. €646,500 is now due   to TIC. The debt arising will be settled through the netting off against   other TIC transactions. Intellectual Property Vodafone, through one of its   subsidiaries, also makes some insignificant payments to Iran in order to   register and renew certain domain names, register and renew certain   trademarks, and protect its brand globally. The costs of registering and   renewing domain names for the fiscal year ended 2017 was approximately €260,   of which €72.52 has been paid and €187.48 is expected to be invoiced.   Vodafone pays these fees to IRNIC (the Domain Registry at the Institute for   Studies in Theoretical Physics and Mathematics) via a Jordanian agent   Abu-Ghazaleh Intellectual Property (‘AGIP’) and the Iranian law firm, Ali   Laghaee & Associates Inc. International. During the fiscal year ended 31   March 2017 Vodafone, through one of its subsidiaries, also made payments of:   – €269.53 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. – Vodafone continues to maintain Iranian trademarks in Iran but no   renewal fees were due to the Iranian trademarks office during the fiscal year   ended 31 March 2017.

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 38 Vodafone Group Plc Annual Report on Form   20-F 2017 Operating results (continued) Europe Year ended 31 March 2017   Germany €m Italy €m UK Spain €m €m Other Europe €m Eliminations €m Europe €m   Restated 2016 €m % change Reported Organic* Revenue 10,600 6,101 6,925 4,973   6,128 (177) 34,550 36,462 (5.2) (0.4) Service revenue 10,006 5,247 6,632   4,507 5,756 (173) 31,975 33,381 (4.2) 0.6 Other revenue 594 854 293 466 372   (4) 2,575 3,081 Adjusted EBITDA 3,617 2,229 1,212 1,360 1,865 – 10,283 10,485   (1.9) 3.1 Adjusted operating profit 568 948 (542) 180 736 – 1,890 1,927 (1.9)   (5.0) Adjusted EBITDA margin 34.1% 36.5% 17.5% 27.3% 30.4% 29.8% 28.8%   Revenue decreased by 5.2%. Foreign exchange movements contributed a 2.8   percentage point negative impact and M&A and other activity contributed a   2.0 percentage point negative impact. On an organic basis, service revenue   increased by 0.6%*, reflecting customer growth in mobile and fixed line   (‘fixed’) and stabilising contract ARPU across all our major markets, more   than offsetting the regulatory headwinds. Ex-regulation, service revenue   growth was 1.6%*. Adjusted EBITDA decreased 1.9%, including a 2.9 percentage   point negative impact from M&A and other activity and a 2.1 percentage   point negative impact from foreign exchange movements. On an organic basis,   adjusted EBITDA increased 3.1%*, driven by tight cost control through our   “Fit for Growth” programme. Other activity Mobile service revenue grew 0.1%*   (Q3: flat*, Q4: -0.4%*) as a higher customer base was offset by regulatory   headwinds. Excluding regulation (including the MTR cut from 1 December and   the decline in roaming revenues), mobile service revenue grew 1.6%* (Q3:   1.1%*, Q4: 1.8%*). Aided by “more-for-more” propositions and successful “Giga   moves” campaigns, consumer mobile contract ARPU returned to growth in Q4,   while contract net additions accelerated in the second half (Q4: 123,000 Q3:   61,000) supported by a reduction in churn and higher activity in direct   channels. The Enterprise mobile market remained competitive, however ARPU   declines moderated throughout the year. Our 4G customer base surpassed 10   million by the period end, as we reached 90% 4G population coverage. Fixed   service revenues increased 4.8%* (Q3: 4.8%*, Q4 3.7%*) driven by strong   broadband customer growth, with 433,000 net customer Reported change %   (including M&A) pps Foreign exchange pps Organic* change % additions (Q4:   123,000), of which 320,000 were on cable and the remainder on DSL. Our   “GigaKombi” convergence offer, launched in the R evenue – Europe (5.2) 2.0   2.8 (0.4) Service revenue Germany 1.9 – – 1.9 Italy 2.3 – – 2.3 UK (17.0) 1.4   12.3 (3.3) Spain 0.9 – – 0.9 Other Europe (6.1) 8.4 (0.1) 2.2 Europe (4.2)   1.8 3.0 0.6 Adjusted EBITDA Germany 4.5 – – 4.5 Italy 10.6 – – 10.6 UK (31.0)   5.1 10.1 (15.8) Spain 8.8 – – 8.8 Other Europe (6.8) 10.1 (0.1) 3.2 Europe   (1.9) 2.9 2.1 3.1 Europe adjusted =operating profit (1.9) (2.4) (0.7) (5.0)   Germany Service revenue grew 1.9%* for the year (Q3: 1.8%*, Q4: 1.2%*) driven   by customer growth in both mobile and fixed and stabilising mobile contract   ARPU, which more than offset regulatory drags. The slowdown in the final   quarter reflected the full impact of the mobile and fixed termination cuts,   (a 1.3 percentage point year-on-year headwind), as well as the lapping of an   accounting reclassification in fixed in the prior financial year. summer last   year, continues to gain traction, reaching 357,000 accounts by year end. We   also launched our “GigaTV” advanced digital TV service in February 2017, and   our TV customer base reached 7.7 million at the end of the period. Following   upgrades to our superior coax-fibre cable network during the year, we now   offer 400 Mbps speeds to almost 6 million households (out of our total NGN   footprint of 12.6 million). Adjusted EBITDA grew 4.5%* with the adjusted   EBITDA margin improving by 1.5 percentage points to 34.1%. Margin expansion   was driven by revenue growth, our focus on more profitable direct channels   and a reduction of underlying operating costs. This was supported by   exceeding our full year cost and capex target synergies of €300 million from   the integration of Kabel Deutschland. Adjusted EBITDA growth accelerated to   6.0%* in H2, as commercial costs stabilised following an increase in H1.   Italy Service revenue grew 2.3%* for the year (Q3: 3.0%*, Q4: 2.8%*)   supported by mobile and fixed ARPU growth and an acceleration in consumer   fixed performance. Mobile service revenue grew 1.5%* (Q3: 1.4%*, Q4: 1.4%*)   driven by ARPU growth in prepaid following changes to our tariff plans and   improved data monetisation through targeted “more-for-more” offers. In Q4,   the prepaid pricing environment became increasingly competitive, particularly   in the below-the-line channels, however customer losses moderated somewhat   compared to Q3. As at 31 March 2017 we had reached over 97% population   coverage on our 4G network and had 9.0 million 4G customers, adding 2.5   million customers within the year.

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 Vodafone Group Plc Annual Report on Form   20-F 2017 39 Fixed service revenue was up 6.8%* (Q3: 11.9%*, Q4: 10.2%*)   driven by strong customer growth and ARPU improvement across all segments   during the second half of the financial year. We added 224,000 broadband   customers (Q3: 70,000, Q4: 75,000) during the year, and in total we now have   2.2 million broadband customers of which 0.7 million are on fibre. We also   launched our advanced digital “Vodafone TV” proposition in March 2017, which   is gaining good early traction. Adjusted EBITDA grew significantly faster   than revenues at 10.6%*, with a 3.0 percentage point improvement in adjusted   EBITDA margin to 36.5%. This was driven by a strong revenue performance and   tight cost control, with absolute declines in both customer and operating   costs during the year. UK Our UK operational performance was disrupted during   the year by mistakes made during the implementation of a new billing system   in the final calendar quarter of 2015. We have now resolved these challenges,   with billing accuracy improving to 99.9% and customer service levels now   above those achieved prior to the implementation of the new system. In the   fourth quarter we delivered our best ever network performance, which is   reflected in our ranking as the best voice provider and the co-leader for   data in the latest independent P3 test. Our financial performance lagged   behind this operational recovery. Service revenue declined 3.3%* (Q3: -3.2%*,   Q4: -4.8%*) reflecting the impact of operational challenges, increased   competition in Enterprise and lower roaming revenues. The slowdown in the   final quarter mainly reflected a strong prior year comparator in carrier   services and Enterprise. Mobile service revenue declined 3.3%* (Q3: -3.9%*,   Q4: -3.9%*) as a result of higher churn, an increase in the SIM only mix   driving lower ARPU, increased competition in Enterprise and lower roaming and   MVNO revenues. Improved operational performance contributed to lower contract   churn rates and growth in branded contract customers during the final   quarter. We have 9.5 million 4G customers at the end of the period, with 4G   coverage at 96% (Ofcom definition: 98%). Fixed service revenue declined 3.4%*   (Q3: -0.9%*, Q4: -7.5%*). Excluding carrier service revenue, fixed service   revenue declined 2.5%* in Q4, reflecting a strong comparator together with   the ongoing effect of two large contract losses during the year as we   balanced our growth objectives with a focus on customer profitability. We   continued to gain good momentum in consumer broadband with 216,000 customers   by the end of the period (Q4: 33,000 net additions), of which 163,000 are   consumer customers. Adjusted EBITDA declined 15.8%* excluding the benefit of   one-off settlements with other network operators in the prior year, with a 3.3   percentage point decline in adjusted EBITDA margin. The decline was driven by   lower revenues, increased costs as a result of sterling weakness post Brexit,   regulatory headwinds and reallocation of costs across Vodafone Group. These   headwinds were partially offset by a reduction in underlying operating costs.   Excluding the reallocation of central costs, sterling weakness and one-off   settlements, adjusted EBITDA declined at a high-single digit rate both for   the year and in H2. Spain Service revenue grew 0.9%* (Q3: 0.8%*, Q4: 1.3%*).   Excluding the impact of handset financing, service revenue grew by 4.0%* in   the year (Q3: 4.1%*, Q4: 3.8%*). This performance improvement was driven by   our strong commercial momentum in mobile and fixed, supported by our “more-for-more”   propositions at the start of the year. We maintained our leadership in both   consumer and enterprise NPS, widening the gap versus our competitors during   the year. Vodafone One, our fully integrated fixed, mobile and TV service,   reached 2.4 million customers at the end of the period, up from 1.5 million a   year ago. Our commercial momentum has remained strong throughout the year   with 337,000 mobile contract net additions (Q3: 97,000, Q4: 96,000) and   209,000 fixed broadband net additions (Q3: 93,000, Q4: 75,000). Our fixed   performance accelerated in the second half of the year as we focused on cross   selling services to our mobile base. Our TV base reached 1.3 million (246,000   net additions during the year), reflecting the improvement in our content   packages. Our market-leading 4G coverage reached 93% at the end of the period   and we now have 7.6 million 4G customers. In March 2017, we reached a   commercial wholesale agreement with Telefónica to access its fibre network in   both regulated and deregulated areas, which expands our NGN footprint to 18.7   million homes passed (almost 65% population coverage), of which 10.2 million   are on our own network. Adjusted EBITDA grew 8.8%*, and adjusted EBITDA   margin improved by 2.1 percentage points to 27.3%. This improvement was   driven by service revenue growth, lower mobile handset subsidies and a lower   operating cost base; these more than offset sharply higher content costs.   Other Europe Service revenue grew by 2.2%* (Q3: 1.8%*, Q4: 1.3%*), with all   of the larger markets growing in Q4 (excluding the MTR impact in Ireland).   Adjusted EBITDA grew 3.2%* and adjusted EBITDA margin improved by 0.1   percentage points, reflecting good cost control. In Ireland, service revenue   was flat* for the year but grew 2.0% excluding MTRs (Q4: -1.2%*, 2.3% ex.   MTRs) supported by ongoing fixed customer growth. Portugal service revenue   grew 1.7%* (Q4: 2.2%*), with strong fixed customer growth as our FTTH   roll-out reached 2.7 million homes, which was partially offset by mobile   service revenue declines (which moderated throughout the year). In Greece,   service revenue grew 0.5%* (Q4: 0.2%*) driven by growth in consumer fixed   service revenue. VodafoneZiggo The joint venture between Vodafone Netherlands   and Ziggo (VodafoneZiggo, in which Vodafone owns a 50% stake) was formed on   31 December 2016. Note that VodafoneZiggo’s quarterly reports for credit   investors are published on a US GAAP basis, whereas Vodafone Group reports   the results of the joint venture on an IFRS basis. VodafoneZiggo experienced   a decline in local currency revenue of 2% in Q4. The decline in local   currency mobile service revenue (Q4: -7%) reflected increasing competition,   particularly in the SoHo segment. Cable subscription revenues stabilised in   Q4, as increased ARPU offset a decline in the customer base, and in the B2B   segment (mid and large- sized enterprises) revenues grew 1%, supported by   mobile growth. Excluding the impact of the divestment of Vodafone “Thuis”, we   added 16,000 postpaid mobile customers in the quarter, supported by our   successful promotional campaign. We also added 11,000 broadband RGU additions   in the quarter, with significantly fewer video subscriber losses (an outflow   of 18,500 RGUs) compared to the prior year. Adjusted EBITDA in local currency   declined by 6% in Q4, as lower revenues and higher mobile acquisition and   content costs were only partially offset by underlying cost reductions.   During the quarter, Vodafone received €76 million in dividends from the joint   venture and €14 million in interest payments on the shareholder loan.

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 40 Vodafone Group Plc Annual Report on Form   20-F 2017 Operating results (continued) Africa, Middle East and Asia-Pacific   Year ended 31 March 2017 Vodacom €m Other AMAP €m Eliminations €m AMAP €m   Restated 2016 €m % change Reported Organic* Revenue 5,294 6,479 – 11,773   11,891 (1.0) 7.4 Service revenue 4,447 5,509 – 9,956 10,043 (0.9) 7.7 Other   revenue 847 970 – 1,817 1,848 Adjusted EBITDA 2,063 1,791 – 3,854 3,706 4.0   13.2 Adjusted operating profit 1,381 857 – 2,238 1,941 15.3 25.2 Adjusted   EBITDA margin 39.0% 27.6% 32.7% 31.2% Revenue decreased 1.0%, with strong   organic growth offset by an 8.6 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   7.7%* driven by strong commercial momentum in South Africa, Turkey and Egypt.   Adjusted EBITDA increased 4.0%, including a 9.2 percentage point adverse   impact from foreign exchange movements. On an organic basis, adjusted EBITDA   grew 13.2%*, driven by service revenue growth and a continued focus on cost   control and efficiencies to offset inflationary pressures. Other activity   Vodacom Vodacom Group service revenue increased 4.1%* (Q3: 4.0%*, Q4: 3.8%*),   supported by strong customer additions, data usage and enterprise growth in South   Africa. Vodacom’s International operations were impacted by a change in   customer registration requirements in the prior year, which slowed customer   growth during the period. In South Africa service revenue grew 5.6%* (Q3:   5.6%*, Q4: 5.6%*), with continued strong customer growth in both the prepaid   and contract base supported by our effective segmentation strategy. We added   3.2 million prepaid mobile customers (Q4: 1.2 million) in the year and   contract churn remained at historically low levels. Data revenue growth   remained strong at 20% for the year, supported by growth in active data   Reported change % (including M&A) pps Foreign exchange pps Organic*   change % customers (19.5 million), data bundle sales (almost 500 million sold   during the year, up 45%), and higher usage. Voice revenue fell by 3.7%*,   Revenue – AMAP (1.0) (0.2) 8.6 7.4 Service revenue Vodacom 0.6 – 3.5 4.1 O   ther AMAP (2.0) – 12.8 10.8 A MAP (0.9) – 8.6 7.7 Adjusted EBITDA Vodacom 1.7   – 3.2 4.9 Other AMAP 6.7 – 18.0 24.7 A MAP 4.0 – 9.2 13.2 AMAP adjusted   operating profit 15.3 – 9.9 25.2 with the pace of decline slowing in the   final quarter due to the success of our personalised voice bundle strategy on   our “Just 4 You” platform. Our market-leading network has now reached 76% 4G   coverage (up from 58% in the prior year), and we have 6.0 million 4G   customers. Vodacom’s international operations outside South Africa, which now   represent 22.5% of Vodacom Group service revenue, grew 2.3%* (Q3: 1.9%*, Q4:   0.5%*) supported by commercial actions such as the introduction of “Just 4   You” personalised offers across all markets. Commercial momentum stabilised   towards the end of the year as we began to lap the changes in customer   registration requirements in Tanzania, the DRC and Mozambique, while   political and economic disruptions adversely impacted the DRC’s performance.   M-Pesa customers totalled 10 million in Q4 (up from 6.8 million the prior   year). Vodacom Group adjusted EBITDA grew 4.9%*, with a 0.9 percentage point   adjusted EBITDA margin improvement to 39.0%. In South Africa, margin   improvement was supported by a subsidy shift towards data enabled devices,   improved channel efficiencies, rationalisation of offices and network cost   savings. International margins declined modestly as revenue growth was lower   than underlying cost inflation. Other AMAP Service revenue grew by 10.8%*   (Q3: 10.5%*, Q4: 9.8%*), with strong local currency growth in Turkey, Egypt   and Ghana. Service revenue in Turkey was up 16.0%* (Q3: 15.0%*, Q4: 13.9%*),   supported by good growth in consumer contract, strong fixed customer momentum   and a robust performance in Enterprise. Adjusted EBITDA grew 29.9%*, with an   adjusted EBITDA margin improvement of 2.5 percentage points to 21.2% driven   by lower commercial spend and improved operating cost control. Egypt service   revenue grew by 15.6%* (Q3: 19.6%*, Q4: 22.8%*) as rising data penetration   drove higher ARPU. Adjusted EBITDA grew 22.7%*, with a 2.6 percentage point   adjusted EBITDA margin improvement to 44.4% as revenue growth and cost   discipline more than offset high inflationary pressures. 

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 Vodafone Group Plc Annual Report on Form   20-F 2017 41 In New Zealand, service revenue was up 0.8%* (Q3: flat*, Q4:   0.3%*) with strong fixed performance and mobile customer growth across both   consumer and Enterprise. In February 2017, the New Zealand Commerce   Commission (‘NZCC’) did not approve the proposed merger with Sky Network   Television. We are reviewing the reasoning of the NZCC and have reserved the   right to appeal the decision. Associates and joint ventures Safaricom,   Vodafone’s 40% associate, which is the number one mobile operator in Kenya,   achieved local currency service revenue growth of 14.8% for the year and   local currency adjusted EBITDA growth of 24.6% (20.6% excluding a current   year benefit), driven by data and M-Pesa. 40 out of 47 targeted regions   (counties) now have 4G coverage. During the year the Group received €214   million in dividends from Safaricom. Vodafone Hutchison Australia (‘VHA’), in   which Vodafone owns a 50% stake, continued to perform solidly in a   competitive environment. VHA continued to grow service revenue (excluding   MTRs), driven by growth in our contract customer base and ARPU. Local   currency adjusted EBITDA grew 19.0%, driven by an increase in underlying   revenue and strong commercial cost discipline. Indus Towers, the Indian   towers company in which Vodafone has a 42% interest, will be excluded from   the perimeter of the Idea merger. Indus achieved local currency revenue   growth of 6.2% and adjusted EBITDA growth of 0.3% for the year. Indus owned   122,730 towers as at 31 March 2017, with a tenancy ratio of 2.35x. Our share   of Indus’ adjusted EBITDA for the year was €410 million and its contribution   to Vodafone Group adjusted operating profit was €98 million. During the year   the Group received €126 million in dividends from Indus Towers. India1 On 20   March 2017, Vodafone announced an agreement to combine its subsidiary,   Vodafone India (excluding its 42% stake in Indus Towers), with Idea Cellular.   The transaction is subject to regulatory approvals and is expected to close   during calendar 2018. The combined company will be jointly controlled by   Vodafone and the Aditya Birla Group. Vodafone India has been classified as   discontinued operations for Group reporting purposes. From an operational   perspective, the Group remains highly focused on the management of the   business and committed to its success, both prior to the completion of the   merger and thereafter. The results of Vodafone India are detailed below. With   effect from 1 April 2016, the Group changed the reporting of certain dealer   commissions in India. Annual and quarterly organic growth rates for the year   ended 31 March 2017 of Vodafone India have been amended to exclude the impact   of this change, which had no effect on earnings or cash flows. Service   revenue declined 0.7%* (Q3: -1.9%*, Q4: -11.5%*) as a result of heightened   competitive pressure following free services offered by the new entrant   during the second half of the year. The slowdown in Q4, as expected, was due   to the ongoing impact of free services, which dragged on data and voice   pricing, compounded by the leap year benefit in the prior period. However, we   grew our overall customer base during the year and retained our high value   customers. Data browsing revenue declined by 16%* in Q4 compared to +0.6%* in   Q3. Our active data customer base returned to growth in the quarter,   increasing to 66.9 million (Q3: 65.0 million), mainly reflecting a 2.7   million increase in our 3G/4G customer base to 37.7 million (adding 10   million customers in the year). Unit prices declined 38% year-on-year (Q3:   -11%), although this helped to stimulate 40% growth in monthly data usage per   3G/4G customer to 636 MB (Q3: 505 MB). Voice revenue declined 13%* in Q4 (Q3:   -3.0%*) as the benefit of higher incoming volumes and a larger customer base   was offset by a 22% year-on-year decline in voice prices as the market moved   to unlimited voice propositions. Total mobile customers increased 4.4 million   in the quarter, giving a closing customer base of 209 million. Following the   Indian spectrum auction in October, we now offer 4G services in 18 circles,   up from 9 circles prior to the auction. These circles cover around 92% of   service revenues and 96% of our data revenues. Adjusted EBITDA declined   10.5%*, with a 2.2 percentage point deterioration in adjusted EBITDA margin   to 27.3%. This reflected lower revenues in the second half of the year and   higher costs as a result of 4G network expansion, partially offset by lower   intra circle roaming fees and an underlying reduction in operating costs. In   the first half of the 2017 financial year, the Group recorded a non- cash   impairment of €6.4 billion (€5.0 billion net of tax), relating to our Indian   business. This was driven by lower projected cash flows within our business   plan as a result of increased competition in the market. Impairment testing   at 31 March 2017, following the announcement of the merger of Vodafone India   with Idea Cellular, gave rise to a partial reversal of that impairment. As a   result, the impairment charge for the 2017 2016 % change year reduced to €4.5   billion (€3.7 billion net of tax). €m €m Reported Organic* Revenue 5,853   6,161 (5.0) Service revenue 5,834 6,135 (4.9) (0.7) Other revenue 19 26   Direct costs (1,583) (1,835) Customer costs (313) (287) Operating expenses   (2,361) (2,224) Adjusted EBITDA 1,596 1,815 (12.1) (10.5) Depreciation and   amortisation (1,116) (1,276) Adjusted operating profit 480 539 (10.9)   Adjustments for: Impairment loss2 (4,515) – Other (136) (116) Operating   (loss)/profit) (4,171) 423 Adjusted EBITDA margin 27.3% 29.5% Notes: 1 The   results of Vodafone India are classified as discontinued operations in   accordance with IFRS. 2 Year ended 31 March 2017 includes a gross impairment   charge of €4.5 billion (2016: €nil) recorded in respect of the Group’s   investment in India, which together with the recognition of an associated   €0.8 billion deferred tax asset, led to an overall €3.7 billion reduction in   the carrying value of Vodafone India. Notes: References to “Q4” are to the   quarter ended 31 March 2017 unless otherwise stated. References to “Q3” are   to the quarter ended 31 December 2016 unless otherwise stated. References to   the “second half of the year” or “H2” are to the six months ended 31 March   2017 unless otherwise stated. References to the “year” or “financial year”   are to the financial year ended 31 March 2017 and references to the “prior   financial year” are to the financial year ended 31 March 2016 unless   otherwise stated. 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. Organic growth, adjusted EBITDA, adjusted operating   profit, adjusted EBITDA margin and adjusted profit attributable to owners of   the parent are alternative performance measures. Alternative performance   measures are non-GAAP measures that are presented to provide readers with   additional financial information that is regularly reviewed by management and   should not be viewed in isolation or as an alternative to the equivalent GAAP   measure. See “Alternative performance measures” on page 205 for further   details and reconciliations to the respective closest equivalent GAAP   measure.

 

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 42 Vodafone Group Plc   Annual Report on Form 20-F 2017 Financial position and resources Consolidated   statement of financial position The consolidated statement of financial   position is set out on page 100. Details on the major movements of both our   assets and liabilities in the year are set out below: Contractual obligations   and commitments A summary of our principal contractual financial obligations   and commitments is shown below. Payments due by period €m Assets Goodwill and   other intangible assets Goodwill and other intangible assets decreased by   €12.4 billion to €46.2 billion. The decrease primarily arose as a result of   €9.8 billion of assets relating to India which were transferred to assets   held for sale (see below). Other movements comprise €2.6 billion of   additions, including €0.4 billion for spectrum additions, primarily in Egypt,   plus €2.2 billion of software additions which were partly offset by €4.8   billion of amortisation and €0.4 billion of unfavourable foreign exchange   movements. Property, plant and equipment Property, plant and equipment   decreased by €5.3 billion to €30.2 billion, principally due to €5.4 billion   of additions driven by continued investment in the Group’s networks, offset   by unfavourable foreign exchange movements of €0.7 billion, €6.3 billion of   depreciation charges and €3.7 billion transferred to assets held for sale   (see below). Other non-current assets Other non-current assets decreased by   €3.9 billion to €35.5 billion, mainly due to €4.0 billion decrease in   deferred tax assets largely due to the reduction of tax losses in Luxembourg   (see note 6 for further details) and a €1.2 billion reduction in other   investments following the repayment of US$2.5 billion of loan notes issued by   Verizon Communications Inc., partly offset by a €2.7 billion increase in   investment in associates and joint ventures following the creation of the   VodafoneZiggo joint venture in the Netherlands during the year. Current   assets Current assets decreased by €6.4 billion to €25.5 billion which   includes a €4.1 billion decrease in cash and cash equivalents, €1.3 billion   reduction in taxation recoverable and a €1.7 billion decrease in trade and   other receivables. Assets and liabilities held for sale Assets and   liabilities held for sale at 31 March 2017 of €17.2 billion and €11.8 billion   respectively, relate to our operations in India following the agreement to   combined with Idea Cellular. Amounts at 31 March 2016 related to our   operations in the Netherlands, which were combined with those of Liberty   Global Plc to form VodafoneZiggo, a 50:50 joint venture, on 31 December 2016.   Total equity and liabilities Total equity Total equity decreased by €11.4   billion to €73.7 billion largely due to €4.1 billion of dividends paid to   equity shareholders and non- controlling interests and the total   comprehensive loss for the year of €7.4 billion. Non-current liabilities   Non-current liabilities decreased by €3.1 billion to €38.6 billion, primarily   due to a €2.5 billion decrease in long-term borrowings. Current liabilities   Current liabilities decreased by €11.2 billion to €30.6 billion mainly due to   a €8.2 billion decrease in short-term borrowings and a €3.1 billion decrease   in trade and other payables. Trade payables at 31 March 2017 were equivalent   to 45 days (2016 restated: 42 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 commitments1 Total   < 1 year 1–3 years 3–5 years >5 years Borrowings2 56,615 14,127 8,589   8,769 24,130 Operating lease commitments3 9,429 2,522 2,623 1,591 2,693   Capital commitments3,4 2,140 1,715 330 71 24 Purchase commitments5 7,280   4,727 1,601 490 462 Total 75,464 23,091 13,143 10,921 27,309 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 147) and obligations   to pay dividends to non-controlling shareholders (see “Dividends from   associates and to non-controlling shareholders” on page 147). 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. 2 See   note 21 “Borrowings”. 3 See note 29 “Commitments”. 4 Primarily related to   spectrum and network infrastructure. 5 Primarily related to device purchase   obligations. Dividends Dividends will continue to 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 over the five business days during the   week prior to the payment of the dividend. In May 2016, the Board determined   that future dividend growth would be calculated from the level of 14.48 eurocents   per share for the year ended 31 March 2016 (six months ended 30 September   2015: 4.65 eurocents per share), which is equivalent to the total dividend   payout of 11.45 pence for the year ended 31 March 2016 (six months ended 30   September 2015: 3.68 pence) at the 31 March 2016 foreign exchange conversion   rate of £:€1.2647. The Board is recommending a final dividend per share of   10.03 eurocents, representing a 2% increase over the prior financial year’s   final dividend per share based on the 31 March 2016 foreign exchange   conversion rate of £1:€1.2647. The ex-dividend date for the final dividend is   8 June 2017 for ordinary shareholders, the record date is 9 June 2017 and the   dividend is payable on 4 August 2017. Dividend payments on ordinary shares   will be paid directly into a nominated bank or building society account.

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 Vodafone Group Plc Annual Report on Form   20-F 2017 43 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 “Identifying our risks” on pages 28 to 34. 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 page 206. A reconciliation   of adjusted EBITDA to the respective closest equivalent GAAP measure,   operating profit, is provided in note 2 “Segmental analysis” to the   consolidated financial statements. The reconciliation to net debt is shown   below. Operating free cash flow Operating free cash flow increased €2.4   billion as stable adjusted EBITDA and working capital outflows predominantly   relating to the final payments for Project Spring were offset by lower   capital additions, which decreased by €2.9 billion to €7.7 billion following   the completion of the Project Spring investment programme last financial   year. Capital additions Capital additions were 16.1% of Group revenues, at   the top-end of the Group’s “mid-teens” guidance range for capital intensity   as a percentage of revenues, reflecting increased success-based capex as a   result of strong customer growth. Free cash flow Free cash flow was €4.1   billion, an increase of €2.8 billion from the prior year, driven by higher   operating free cash flow, lower interest paid and higher dividends from Indus   Towers, Safaricom and VodafoneZiggo. Licence and spectrum payments Licence   and spectrum payments include amounts relating to the purchase of spectrum in   Germany of €0.1 billion and €0.3 billion in Egypt (2016: €1.9 billion in   Germany, €0.8 billion in Turkey, €0.2 billion in Italy and €0.1 billion in   the UK). Restated1 2017 €m 2016 €m Acquisitions and disposals Adjusted EBITDA   14,149 14,155 Capital additions2 (7,675) (10,561) Working capital (984) (704)   Disposal of property, plant and equipment 43 164 Other 94 154 Operating free   cash flow3 5,627 3,208 Taxation (761) (738) Dividends received from   associates and investments 433 92 Dividends paid to non-controlling   shareholders in subsidiaries (413) (309) Interest received and paid (830)   (982) Free cash flow3 4,056 1,271 Licence and spectrum payments (474) (3,182)   Acquisitions and disposals 460 (130) Equity dividends paid (3,714) (4,088)   Convertible issue – 3,548 Foreign exchange (1,372) 262 Other4 (1,324) (1,428)   Net debt increase (2,368) (3,747) Opening net debt (28,801) (25,054) Closing   net debt3 (31,169) (28,801) Vodafone India net debt (8,114) Closing net debt   (statutory basis) (36,915) Notes: 1 Cash flows and funding for the year ended   31 March 2016 excludes the cash flows, funding and net debt of Vodafone   India. 2 Capital additions include the purchase of property, plant and equipment   and intangible assets, other than licence and spectrum, during the year. 3   Operating free cash flow and free cash flow for the year ended 31 March 2017   excludes €266 million (2016: €252 million) of restructuring costs. Operating   free cash flow and free cash flow are alternative performance measures which   are non-GAAP measures that are presented to provide readers with additional   financial information that is regularly reviewed by management and should not   be viewed in isolation or as an alternative to the equivalent GAAP measure.   See “Alternative performance measures” on page 205 for reconciliations to the   closest respective equivalent GAAP measure and “Definition of terms” on page   218 for further details. 4 Other cash flows for the year ended 31 March 2017   include €2,366 million (2016: €nil) received from the repayment of US$2.5   billion of loan notes issued by Verizon Communications Inc. and €3,571   million (2016: €1,162 million) from a capital injection Acquisitions and   disposals include €0.6 billion of proceeds following the merger of Vodafone   Netherlands and Ziggo during the year. Convertible issue Last year, we   received €3.5 billion of proceeds from the issue of £2.9 billion of mandatory   convertible bonds in February 2016. Foreign exchange A foreign exchange loss   of €1.4 billion was recognised on net debt as a result of the adverse   translation impact of closing foreign exchange rates, mainly due to movements   in the pound sterling, US dollar and South African rand against the euro. Net   debt Closing net debt at 31 March 2017 of €31.2 billion (2016: €28.8 billion)   excludes net debt of Vodafone India, which is instead included in assets and   liabilities held for sale on the consolidated statement of financial   position. In addition, net debt excludes £2.8 billion of mandatory   convertible bonds issued in February 2016, which are classified as equity   after taking into account the cost of future coupon payments. The Group now   holds US$2.5 billion of Verizon loan notes and €1.0 billion of shareholder   loans to VodafoneZiggo, both of which are not included within net debt. Net   debt includes includes liabilities of €1.8 billion (2016: €1.8 billion)   relating to minority holdings in KDG and certain bonds which are reported at   an amount €2.0 billion higher than their euro-equivalent cash redemption   value as a result of hedge accounting under IFRS. This year’s report contains   the Strategic Report on pages 1 to 43, 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. into Vodafone India. /s/ Vittorio Colao Vittorio   Colao Chief Executive /s/ Nick Read Nick Read Chief Financial Officer 16 May   2017 

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 44 Vodafone Group Plc   Annual Report on Form 20-F 2017 Chairman’s governance statement Committed to   the highest standards of governance Integrity and accountability are at the   heart of everything we do and are integral to creating long-term value for   our shareholders. We are in full compliance with the 2014 UK Corporate   Governance Code. Board highlights of the year As a Board we try to spend   quality time on those aspects of governance that contribute most to the   success of the Company; the development of a strategy with an attractive   value creation potential, having the right people and processes for its   successful implementation, monitoring progress against plan and managing risk   in an ever more volatile external environment. The Board held its annual strategy   meeting and a Board meeting in Rome, providing an opportunity for the   Directors to meet our Italian colleagues, customers and other stakeholders.   During the year several aspects of the strategy were explored in further   detail through strategy “deep dives”. The rapidly evolving competitive   situation in India was a recurring item on the Board’s agenda, eventually   resulting in the Board’s approval of the proposed merger of Vodafone India   and Idea Cellular, announced in March 2017. The Board also supported and   approved the creation of VodafoneZiggo, a joint venture in the Netherlands   established to deliver converged consumer services and a further illustration   of the execution of our convergence and enterprise strategy. The Board paid a   special visit to our UK local business, with detailed discussions focused on   performance and trends in our UK consumer and enterprise base, customer   services operations and network operations. Board engagement with operations   is also an important aspect of our focus on talent development and succession   planning. More detail of these meetings and other topics on the Board’s   agenda can be found on pages 52 and 53. Contents Culture and governance The   Board is committed to ensuring there is a strong and effective system of   corporate governance in place to support the successful execution of   Vodafone’s strategy. During the period under review (and as of the date of   publication of this report) we have fully complied with the provisions and   applied the main principles of the 2014 UK Corporate Governance Code. We   intend to be in full compliance with the 2016 UK Corporate Governance Code   which will apply to us in our 2017–18 financial year. Good governance and a   commitment to operating with integrity is central to our culture, at all levels   and in all parts of our business. The environment in which we operate evolves   continuously, shaped by emerging trends in consumer behaviours and   expectations, shifts in regulatory and legal requirements and changing   attitudes towards the role of large companies in society. Our internal   culture evolves accordingly as we seek to ensure that the way in which we   work conforms to our many stakeholders’ highest expectations. Everyone who   works with us is required to comply with our Business Principles (the values   we respect) and our Code of Conduct (the behaviours we expect) at all times,   reinforced through what we call The Vodafone Way, which sets out the type of   organisation we want to be. An overview of The Vodafone Way, our Business   Principles and our Code of Conduct can be found on pages 24 and 25. The Board   and Executive Committee are critical in setting the tone of the organisation   and play a key role in embedding our culture throughout the Group, in order   to ensure that Vodafone’s reputation is protected effectively. More   information on our culture can be found on page 46. The success of our   business is dependent on the Board taking decisions for the benefit of its   members as a whole and in doing so having regard for all its stakeholders:   its employees, its suppliers, customers and the wider community and   environment. This is consistent with the Group’s core and sustainable   business objectives. It is always rewarding to see instances of our   governance being recognised externally. I was delighted that Vodafone was the   winner 44 Chairman’s governance statement 46 Leadership structure 48 Board of   Directors 50 Executive Committee 52 Board activities 54 Board evaluation,   induction and training 56 Nominations and Governance Committee 57 Audit and   Risk Committee 64 Communicating with our shareholders 66 Our US listing   requirements 6=7 Directors’ remuneration 86 Directors’ report of the Best   Audit Disclosure award at the ICSA: The Governance Institute Awards 2016. We   will always strive to ensure that our governance processes are in line with   latest best practice and that our approach to disclosure is clear and   transparent. Board changes and diversity In January 2017, we announced the   appointment of Maria Amparo Moraleda Martinez as a Non-Executive Director   with effect from 1 June 2017. Amparo is an international business leader with   an engineering We comply with the corporate governance statement requirements   pursuant to the FCA’s Disclosure Guidance 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 190 to 196. background and IT and technology expertise. She will be   a valuable addition to the Board and will become a member of the Audit and   Risk Committee.

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 Vodafone Group Plc Annual Report on Form   20-F 2017 45 In this section... Transactions in India and the Netherlands The   Board approved the intended merger of Vodafone India and Idea Cellular and   the creation of VodafoneZiggo in the Netherlands. For more information: Pages   52 and 53 In March we announced that Nick Land and Phil Yea will not seek   re-election at our Annual General Meeting in July 2017 after more than ten   years of service. On behalf of the Board, I would like to express our thanks   and appreciation to Nick and Phil for their valuable contributions. Details   of the resulting changes to the Board and its Committees are detailed in the   Nominations and Governance Committee Report on page 56. The Board believes   that diversity, both in the boardroom and throughout the organisation, is key   to our success. I am pleased to report that 25% of our Board roles are   currently held by women; furthermore, after the AGM in July 2017, this   percentage will rise to 36%. We are also looking at measures to increase   diversity on the boards of our subsidiary businesses in local markets.   Details of our commitment to increase the number of women throughout our   organisation can be found on page 21. Board meeting in Italy The Board went   to Rome in October for a Board meeting and annual strategy meeting. For more   information: Page 52 The Board’s review of the UK business The Board visited   our UK business with focused discussions on Customer eXperience eXcellence   and technology. For more information: Pages 52 and 53 Listening to our   shareholders Effective communication with our shareholders is fundamental to   our success. We strive to communicate our strategy and activities clearly to   all our shareholders. We also welcome active engagement with all of our   shareholders to answer their questions and receive their feedback. Further   details of our approach to shareholder engagement can be found on pages 64   and 65. Shareholders will vote this year on the adoption of our remuneration   policy. That vote, which is binding, is in line with the requirement that the   policy receives shareholder approval at least every three years. The full   remuneration policy is set out on pages 71 to 76. Objectives for the year   ahead Alignment with the UK Corporate Governance Code We have structured this   year’s report in the following way, based upon the principles set out in the   UK Corporate Governance Code. Leadership The Board has clear divisions of   responsibility and is collectively responsible for the long-term success of   Vodafone. For more information: Pages 46 to 51 Effectiveness We evaluate the balance   of experience, skills, knowledge and independence of the Board to ensure we   are effective. For more information: Pages 52 to 56 Your Board remains   committed to ensuring the highest standards of corporate governance across   the Group in all aspects of the delivery of our strategy. I am confident that   the Directors and our senior leaders understand fully that how we work is as   important as what we achieve and that, throughout the organisation as a   whole, there is a rigorous focus on the importance of compliance and   integrity when meeting the challenges, and seizing the opportunities, over   the year ahead. /s/ Gerard Kleisterlee Gerard Kleisterlee Chairman 16 May   2017 Accountability We present a fair, balanced and understandable assessment   of Vodafone’s position and prospects. Our decisions are discussed within the   context of the risks involved. For more information: Pages 57 to 63 Relations   with shareholders Strong relationships with our shareholders are crucial for   the successful execution of our strategy. For more information: Pages 64 and   65 Remuneration Director remuneration is set to promote the long-term success   of Vodafone. For more information: Pages 67 to 85

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 46 Vodafone Group Plc   Annual Report on Form 20-F 2017 Leadership Leadership structure Creating the   right culture through our governance framework The Board is responsible for   maintaining a strong and effective governance system throughout the Group.   How the Board operates The Board is collectively responsible for the   oversight and success of our business. There is a clear division of   responsibilities between the Chairman, who was independent on appointment,   and the Chief Executive. The Board held seven scheduled meetings during the   year and additional meetings were held as required. The meetings are   structured to allow open discussion. At each Board meeting, the Chairman also   met with the Non-Executive Directors without the Executives present.   Information on the matters considered at the Board meetings are set out on   pages 52 and 53. All of our Directors attended all Board meetings and their   respective Committee meetings during the financial year. No apologies for   absence were received. Culture: setting the tone from the top The Board   recognises that a healthy corporate culture is fundamental to our business   purpose and strategy. Vodafone’s culture is defined through The Vodafone Way,   our Business Principles and the Code of Conduct. Together these set out what   we expect from our employees and how we expect business to be carried out. By   embedding The Vodafone Way into our processes, we strive for a culture of   speed, simplicity and trust. Our culture is not static and has evolved over   time, reflecting the changing environment we operate in. Our Code of Conduct,   which includes details of our Business Principles and The Vodafone Way, can   be found on our website, vodafone.com/ governance. Our leaders have a   critical role in setting the tone of our organisation and championing the   behaviours we expect to see. The Executive Committee led campaigns and   engagement throughout the year to highlight our values, beliefs and business   approach to health and safety, business integrity, The Vodafone Way, Customer   eXperience eXcellence, diversity and inclusion. Various indicators are used   to monitor and provide insight into our culture, including employee   engagement, health, safety and wellbeing measures and diversity indicators.   The state of our culture is assessed through compliance reviews, internal   audit and formal and informal channels for employees to speak up and we   ensure action is taken to address behaviour that falls short of our   expectations. The Board Responsible for the overall conduct of the Group’s   business including our long-term success; setting our values, standards and   strategic objectives; reviewing our performance; and ensuring a successful   dialogue with our shareholders. The Matters Reserved for the Board were last   reviewed in March 2017 and can be found on our website   vodafone.com/governance. Board Committees Delegated to by the Board and   responsible for maintaining effective governance in the following areas: audit   and risk, remuneration, Board composition, succession planning and corporate   governance. Full details of the Committees’ responsibilities are detailed on   the following page and in the Committee reports. The Committees’ terms of   reference can be found on our website vodafone.com/governance. Executive   Committee and other committees Responsible for implementing strategic   objectives and realising competitive business performance in line with   established risk management frameworks, compliance policies, internal control   systems and reporting requirements. “It’s about doing things our way with   strong beliefs and values built into the way we manage the business. These   beliefs drive business decision making and that means driving customer   excellence.” Vittorio Colao Chief Executive

 

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Senior   Independent Director Provides a sounding board to the Chair and appraises his   performance Acts as intermediary for other Directors if needed Available to   respond to shareholder concerns when contact through the normal channels is   inappropriate Executive Committee Focuses on strategy implementation,   financial and competitive performance, commercial and technological   developments, succession planning and organisational development   Non-Executive Directors Contribute to developing our strategy Scrutinise and   constructively challenge the performance of management in the execution of   our strategy Disclosure Committee Oversees the accuracy and timeliness of Group   disclosures and approves controls and procedures in relation to the public   disclosure of financial information Chief Executive Leads the business,   implements strategy and chairs the Executive Committee Chief Financial   Officer Responsible for the preparation and integrity of our financial   reporting Risk and Compliance Committee Assists the Executive Committee to   fulfil its accountabilities with regard to risk management and policy   compliance Chairman Leads the Board, sets the agenda and promotes a culture of   open debate between Executive and Non-Executive Directors Regularly   meets with the Chief Executive and other senior management to stay informed   Ensures effective communication with our shareholders Audit and Risk   Committee Reviews the integrity, adequacy and effectiveness of the Group’s   system of internal control, including the risk management framework and   related compliance activities Nominations and Governance Committee Evaluates   Board composition and ensures Board diversity and a balance of skills Reviews   Executive succession plans to maintain continuity of skilled resource   Oversees matters relating to corporate governance Remuneration Committee   Sets, reviews and recommends the policy on remuneration of the Chairman,   Executives and senior management team Monitors the implementation of the   remuneration policy Audit and Risk: Pages 57 to 63 Remuneration: Page 67   Nominations and Governance: Page 56 Vodafone Group Plc Annual Report on Form   20-F 2017 47 Overview Strategy Performance Governance Financials Additional   information

 

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Leadership Board of Directors Vodafone Group Plc Annual Report   48 on Form 20-F 2017 Gerard Kleisterlee Chairman – Independent on appointment   Tenure: 6 years Nationality: Dutch Skills and experience: Gerard has   extensive experience of senior leadership of global businesses in 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: –– Royal Dutch Shell, non-executive director and member   of the audit committee –– ASML, chairman of supervisory board Renee James   Non-Executive Director Tenure: 6 years Nationality: American 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. She is currently an operating Executive with the Carlyle   Group. 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: –– The National   Security Telecommunications Advisory Committee, chairman –– Carlyle Group,   operating executive ––Oracle Corporation, non-executive director –– Citigroup   Inc., non-executive director Sir Crispin Davis Non-Executive Director   Tenure: 2 years Nationality: British Skills and experience: Sir Crispin has   broad-ranging experience as a business leader within 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 services to publishing and   information. He brings a strong commercial perspective to Board discussions.   Other current appointments: ––Hasbro, non-executive director ––Oxford   University, trustee and member of the university board –– CVC Capital   Partners, adviser Vittorio Colao Chief Executive – Executive Director Tenure:   10 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 industry and is   widely recognised as an outstanding leader in the telecoms sector. Vittorio   became a member of the Board in October 2006 and was appointed Chief   Executive in July 2008. Other current appointments: –– European Round Table   of Industrialists, vice chairman ––Unilever PLC, non-executive director Nick   Read Chief Financial Officer – Executive Director Tenure: 3 years   Nationality: British Skills and experience: As Group Chief Financial Officer,   Nick combines strong commercial and operational leadership with a detailed   understanding of the industry and its challenges and opportunities. Nick has   wideranging experience in senior finance roles both at Vodafone and other   multinational companies including United Business Media plc and Federal   Express Worldwide. Other current appointments: None Valerie Gooding cbe   Non-Executive Director Tenure: 3 years Nationality: British 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: –– TUI AG, non-executive director –– English National   Ballet, trustee –– Royal Botanical Gardens, Kew, trustee –– Lawn Tennis   Association Trust, chairman Experienced, effective and diverse leadership Our   business is led by our Board of Directors. Biographical details of the   Directors and senior management as at 16 May 2017 are as follows (with   further information available at vodafone.com/board). Dr Mathias Döpfner   Non-Executive Director Tenure: 2 years Nationality: German Skills and   experience: Mathias brings wide-ranging experience within the global digital   media industry to the Board. 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: –– Axel Springer SE, chairman and chief executive   officer –– Time Warner and Warner Music Group, member of the board of   directors –– Business Insider Inc., chairman of the board of directors ––   American Academy, American Jewish Committee and the European Publishers   Council, holds honorary offices –– St John’s College, University of   Cambridge, member Dame Clara Furse Non-Executive Director Tenure: 2   years Nationality: British and Canadian Skills and experience: Dame Clara   brings to the Board a deep understanding of international capital markets,   regulation, service industries and business transformation developed from her   previous roles as chief executive officer 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:   ––HSBC UK, non-executive chairman –– Amadeus IT Group SA, non-executive   director N A R A R R N

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 49 Overview Strategy Performance   Governance Financials Additional information Board analysis (Non-Executive Directors)   Areas of experience Board analysis Nationality David Nish 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 offer   of Standard Life plc and chief financial officer of Scottish Power plc. Other   current appointments: ––HSBC Holdings Plc, non-executive director –– London   Stock Exchange Group Plc, non-executive director ––UK Green Investment   Bank Plc, non-executive director –– Zurich Insurance Group, board   member –– Council of the Institute of Chartered Accountants of Scotland,   member Phil Yea Senior Independent Director Tenure: 11 years Nationality:   British Skills and experience: Phil’s experience as chief financial officer   of Diageo plc and in the private equity industry at Investcorp and 3i Group   plc, together with knowledge of the Vodafone Group, makes him a valued member   of the Board. Phil will be stepping down from the Vodafone Board in July   2017. Other current appointments: –– Aberdeen Asian Smaller Companies   Investment Trust PLC, non-executive director –– The Francis Crick Institute,   director of the trustee board –– Computacenter PLC, non-executive   director ––Marshall of Cambridge (Holdings) Ltd, non-executive director   ––Greene King plc, chairman Nick Land Non-Executive Director Tenure: 10   years Nationality: British Skills and experience: After a career spanning 36   years at Ernst & Young 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. Nick will be stepping down from the Vodafone Board in   July 2017. Other current appointments: –– Financial Reporting Council,   non-executive director –– The Vodafone Foundation, chairman of the   board of trustees –– Thames Water Utilities Ltd, non-executive director   ––Dentons UKMEA LLP, adviser Samuel Jonah kbe Non-Executive Director   Tenure: 8 years Nationality: Ghanaian Skills and experience: Samuel brings   experience of business operations in emerging markets, particularly Africa.   Previously executive president of AngloGold Ashanti Ltd, he provides an   international, commercial perspective to Board discussions. Other current   appointments: ––Global Advisory Council of Bank of America, member ––   President of Togo, adviser –– Iron Mineral Beneficiation Services,   non-executive chairman –– Jonah Capital (Pty) Limited, executive   chairman ––Hollard (formerly Metropolitan) Insurance Company Limited,   chairman –– The Investment Climate Facility, member of trustee board R A A   Key to Committee membership: A Audit and Risk N Nominations and Governance R   Remuneration Red background denotes Committee Chairman Board analysis Tenure   Board analysis Gender 0–3 years 56% Female 25% Male 75% Telecoms 2 Technology   3 Canadian/British 1 Consumer goods 3 Emerging markets 1 Dutch 1 Ghanaian 1   British 6 German 1 American 1 Italian 1 4–6 years 11% 7+ years 33%   (Non-Executive Directors) Finance 4 Media 2 N A Services 1

 

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Executive Committee Vodafone Group Plc Annual Report 50 on Form   20-F 2017 Serpil Timuray Chief Commercial Operations and Strategy Officer   Tenure: <1 year Nationality: Turkish Responsibilities: Serpil is   responsible for Vodafone’s global commercial operations and strategy, as well   as innovation and transformation projects, including the Customer eXperience   eXcellence global programme. Previous roles include: –– Vodafone, Regional   Chief Executive Officer – Africa, Middle East and Asia-Pacific Region (AMAP)   (2013–2016) –– Vodafone Turkey, Chief Executive Officer (2009–2013) ––Danone   Turkey, chief executive officer (2002–2008), marketing director with   additional sales director role (1999–2002) –– Procter & Gamble Turkey,   various marketing roles including executive committee member (1991–1999)   Membership The Committee includes the Executive Directors and the senior   managers as detailed below. Tenure refers to length of service in role.   Committee Meetings The Committee meets 11 times a year and typical agenda   items include: –– strategy; –– substantial business developments and   projects; –– Chief Executive’s update on the business and the business   environment; –– updates on business performance; –– Group function heads’   updates; –– talent; –– presentations on various topics, for example, from the   Group Financial Controlling and Operations Director, the Group Audit Director   and the Group Risk and Compliance Director; and –– competitor performance   analysis. Ronald Schellekens Group Human Resources Director Tenure: 8 years   Nationality: Dutch Responsibilities: Ronald is responsible 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: –– Royal Dutch Shell,   HR executive vice president (2003–2008) –– PepsiCo, senior vice president   (1994–2003) –– AT&T Network Systems, various human resources roles   (1986–1994) 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 and talent pipeline. 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. Matthew Kirk Group External Affairs Director Tenure: 8 years   Nationality: British 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. He is also responsible for security,   and for the Vodafone Foundation, of which he is a Trustee. At the end of   July, he will be standing down from the Executive Committee and Joakim Reiter   will replace him as a member of the Executive Committee and as Group External   Affairs Director. Previous roles include: –– British Ambassador to Finland   (2002–2006) ––Member of the British Diplomatic Service (20+ years) Rosemary   Martin Group General Counsel and Company Secretary Tenure: 7 years   Nationality: British Responsibilities: Rosemary is responsible for managing   Vodafone’s legal risk and for providing legal and company secretariat   services to the Group. Previous roles include: –– Practical Law Company,   chief executive officer (2008) –– Reuters Group Plc, various governance roles   including group general counsel and company secretary (1997–2008) –– Rowe   & Maw, partner (1990–1997) Vittorio Colao Chief Executive See page 48.   Responsibilities: Vittorio leads the Executive Committee which is responsible   for the definition, development and implementation of Vodafone’s strategy and   policies. His role also involves managing the overall performance and   organisation, as well as the operational and regulatory aspects within the   Vodafone Group and reporting to the Board on them. Previous roles include: ––   Various roles within the Vodafone Group including Deputy Chief Executive,   Chief Executive, Europe, Chief Executive, Vodafone Italy (1994–2004)   (2006–2008) –– RCS MediaGroup, chief executive (2004–2006) Nick Read Chief   Financial Officer See page 48. Responsibilities: Nick is responsible for the   overall financial performance of the Group, including financial planning,   managing financial risks and overseeing the reporting of financial   information in accordance with regulatory requirements. This includes   accountability for finance, capital structure, tax, treasury, internal audit   and M&A activities. Previous roles include: –– Various senior Vodafone   roles including Regional Chief Executive AMAP and Chief Executive, Vodafone   UK (2002–2014) –– Various senior finance roles in United Business Media plc,   Fedex and Dixons Stores Group (1988–2002)

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 51 Overview Strategy Performance   Governance Financials Additional information Aldo Bisio Chief Executive   Officer – Vodafone Italy Tenure: 3 years Nationality: Italian Responsibilities:   Aldo is responsible for: ––Defining Vodafone strategy in Italy in accordance   with Group strategy and operating models; –– Executing the strategic vision   into commercial plans; and –– Ensuring delivery against key performance   indicators. Previous roles include: –– Ariston Thermo Group, chief executive   officer/managing director (2008–2013) ––McKinsey & Company, senior   partner (2007–2008) –– RCS Quotidiani, managing director (2004–2006)   ––McKinsey & Company, a number of positions in strategic consultancy   focusing on telecommunications and media industries (1992–2004) Vivek   Badrinath Regional Chief Executive Officer – Africa, Middle East and Asia-   Pacific Region (AMAP) Tenure: <1 year Nationality: French   Responsibilities: Vivek oversees Vodafone’s operations in the Vodacom Group,   India, Australia, Egypt, Ghana, Kenya, Qatar, New Zealand and Turkey. This   includes: ––Defining Vodafone strategy in these local markets in accordance   with Group strategy and operating models; –– Executing the strategic vision   into commercial plans; and –– Ensuring delivery against key performance   indicators. Previous roles include: –– AccorHotels, deputy chief executive   (2014–2016) ––Orange, deputy chief executive (2013–2014) Dr Hannes   Ametsreiter Chief Executive Officer – Vodafone Germany Tenure: 1 year   Nationality: Austrian Responsibilities: Hannes is responsible for: ––Defining   Vodafone strategy in Germany in accordance with Group strategy and operating   models; –– Positioning Vodafone Germany as a gigabit company, strengthening   its role as Germany’s leading TV provider and integrated player; –– Ensuring   execution of strategic vision into commercial plans and delivery against   KPIs; and –– Shaping Vodafone’s leadership role in digital technologies.   Previous roles include: –– Telekom Austria, group chief executive officer   (2009–2015) –– A1 Telekom, chief executive officer (2009) ––Mobilkom   Austria/Telekom Austria, chief marketing officer (2001–2009) António Coimbra   Chief Executive Officer – Vodafone Spain Tenure: 4 years Nationality:   Portuguese Responsibilities: António is responsible for: ––Defining Vodafone   strategy in Spain in accordance with Group strategy and operating models; ––   Executing the strategic vision into commercial plans; and –– Ensuring   delivery against key performance indicators. Previous roles include: ––   Vodafone Portugal, Chief Executive Officer (2009–2012), Executive Committee   member (1995–2009), Marketing and Sales Director (1992–1995) –– Apritel –   Telco Association (on behalf of Vodafone Portugal), president (2005–2007) ––   Vodafone Japan, Chief Marketing Officer (2004) ––Olivetti Portugal, marketing   manager (1991–1992) Ahmed Essam Chief Executive Officer – Europe Cluster   Tenure: <1 year Nationality: Egyptian Responsibilities: Ahmed oversees   Vodafone’s operations in the Netherlands, Portugal, Ireland, Greece, Romania,   Czech Republic, Hungary, Albania and Malta. This includes: ––Defining   Vodafone strategy in these local markets in accordance with Group strategy   and operating models; –– Executing the strategic vision into commercial   plans; and –– Ensuring delivery against key performance indicators. Previous   roles include: –– Vodafone Egypt, Chief Executive Officer (2014–2016) ––   Vodafone Group, Group Commercial Director (2012–2014) –– Vodafone Egypt, variety   of roles including customer care and consumer business unit director   (1999–2012) Brian Humphries Group Enterprise Director Tenure: <1 year   Nationality: Irish Responsibilities: Brian manages and leads Vodafone’s   growing Global Enterprise business which provides total communications   solutions to businesses. His responsibilities include Vodafone’s strategy and   execution in the Enterprise market worldwide. He manages a portfolio which   includes: Vodafone Global Enterprise, Vodafone Carrier Services, Internet of   Things, Cloud & Hosting Services, Enterprise Marketing and Sales   Operations as well as Enterprise Products and Operations and Operations and   Enterprise Security Services. Previous roles include: ––Dell,EMC, president,   enterprise solutions (2013–2017) ––Hewlett-Packard, variety of roles   including senior vice president, emerging markets (2002–2013) Johan Wibergh   Group Technology Officer Tenure: 2 years Nationality: Swedish   Responsibilities: Johan is responsible for leading Vodafone’s global   technology organisation. His role is integral to developing Vodafone’s   convergence strategy on a global scale. Previous roles include: –– Ericsson,   various roles including executive VP (1996–2015) Nick Jeffery Chief Executive   Officer – Vodafone UK Tenure: <1 year Nationality: British   Responsibilities: Nick is responsible for: ––Defining Vodafone’s strategy in   the UK in accordance with Group strategy and operating models; –– Executing   the strategic vision into commercial plans; and –– Ensuring delivery against   key performance indicators. Previous roles include: –– Vodafone Group   Enterprise, Chief Executive Officer (2013–2016) –– Cable & Wireless   Worldwide, chief executive officer (2012–2013) –– Vodafone Global Enterprise,   chief executive officer (2006–2012)

 

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Effectiveness Board activities What the Board did this year   Board activities are structured to develop the Group’s strategy and to enable   the Board to support executive management on the delivery of the Group’s   strategy within a transparent governance framework. Network Leadership   Customer eXperience eXcellence Fit for Growth People and Culture   Presentations from senior management, including the Group Technology   Director, on the following topics: –– convergence risks and opportunities; ––   developments in data analytics; –– our mobile network performance; and –– the   implementation of our technology plan. Visit to the Group Technology hub and   network operating centre in the UK including an overview of the current   technology development A deep dive session on network and technology at   Vodafone’s UK campus Regular updates from senior management on the progress   of our Customer eXperience eXcellence programme, including details of the   initiatives implemented in local markets to improve the customer experience   and the relevant NPS Visits to Vodafone stores to gain an insight into the   service customers receive A deep dive session on customer service at   Vodafone’s UK campus 2017/18 budget and long-range plan 5+7 full year outlook   Business development opportunities HR updates concerning talent capability,   succession planning, pensions, culture and diversity Annual diversity policy   Semi-annual health and safety report Presentation on effective organisation   The Board’s discussions throughout the year focused on our strategic core   programmes: Network Leadership, Customer eXperience eXcellence, Fit for   Growth and People and Culture. The Board also regularly discussed governance,   risk and reputation management and financial performance. The table below   sets out a non-exhaustive list of the key areas of focus for the Board’s   activities and topics discussed during the year. 52 Vodafone Group Plc Annual   Report on Form 20-F 2017 Governance in action Board meeting in Italy The   Directors went to Rome in October 2016 for a Board and annual strategy   meeting which gave the Directors the opportunity to discuss the Group’s   strategic direction, to consider regular Board topics, to receive in-depth   presentations on Vodafone Italy’s business and to meet with the Vodafone   Italy executive team. The Board also met customers, suppliers, politicians   and other stakeholders of our Italian business, providing our Directors with   better insight into our Italian company and the environment in which it   operates. Governance in action Board approved the creation of the joint   venture in the Netherlands In December 2016, the Board approved the 50:50   joint venture between Vodafone Netherlands and Liberty Global. The joint   venture operates under both the Vodafone and Ziggo brands (VodafoneZiggo) and   created a nationwide integrated communications provider combining the   fibrerich broadband network of Ziggo with Vodafone’s nationwide 4G mobile   coverage. In addition, the new combined management team will rapidly bring to   market converged propositions for Dutch consumers, enterprises and the public   sector.

 

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Performance   Governance Risk and regulatory Local market deep dives At every Board meeting   discussed the Chief Executive’s report on performance of operations Regular   review of the Chief Financial Officer’s report on financial performance   Quarterly market metrics Full year preliminary results, Annual Report, notice   of AGM and final dividend recommendation Half-yearly results and interim   dividend recommendation Presentation on the Market Abuse Regulation Modern   Slavery Act disclosure requirements Annual Director share dealing training   Matters Reserved for the Board Committees’ terms of reference Delegations of   authority Board effectiveness review Annual compliance and risk reports and   year end assessment of internal control systems Presentation on security and cyber   security risk Risk tolerance and risk management plans Implications of Brexit   Semi-annual material litigation report Semi-annual electromagnetic field   (EMF) report Presentations from the Group External Affairs Director   Presentations on various Vodafone markets including: –– Germany; –– Spain; ––   Turkey; –– Vodacom; –– the UK; –– European Cluster; –– AMAP; and ––   Enterprise. Transformation initiatives in the AMAP region Spectrum auctions   in Italy and India Vodafone Group Plc Annual Report on Form 20-F 2017 53   Overview Strategy Performance Governance Financials Additional information   Governance in action Board approved merger in India The Board oversaw and   approved the proposed merger of Vodafone India and Idea Cellular in March   this year. The merger will create a new market leader to participate in   India’s digital future. In approving the merger, the Board took into   consideration the current market environment in India which has changed   significantly in the past year and the projected synergies from the intended   merger. Governance in action UK review: focus on customer excellence and   technology The Board visited the Vodafone UK and Group Technology hub for   Technology Enterprise Services and IT. As part of this review, the Board   received a demonstration of the monitoring of business-critical fixed   networks which Vodafone manages for its customers. Deep-dive sessions focused   on the UK Enterprise business, network and technology, customer service and   the consumer business. The customer service session reviewed the actions   being taken to restore customer service satisfaction.

 

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Effectiveness Board evaluation, induction and training Board development   The Chairman is responsible for ensuring that all Non-Executive Directors   receive ongoing training and development. Our Non-Executive Directors are   conscious of the need to keep themselves properly briefed and informed about   current issues. Topics covered at sessions attended by our Directors during   the year were consumer, customer service, network and share dealing rules.   Specific and tailored updates, delivered by the Group Financial Controlling   and Operations Director, were also provided to the members of our Audit and   Risk Committee during the year covering key themes surrounding financial and   narrative reporting, and accounting and auditing standards. The Board also   received reports from the Group General Counsel and Company Secretary on current   legal and governance issues. 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 2017 financial year. The Group General Counsel and   Company Secretary also: –– assists the Chairman by organising induction and   training programmes and ensuring that all Directors have full and timely   access to all relevant information; –– ensures that the correct Board   procedures are followed; and –– advises the Board on corporate governance   matters. The removal of the Group General Counsel and Company Secretary is a   matter for the Board as a whole. Board evaluation 2017 Board effectiveness   review 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. Each   Director completed a confidential online questionnaire, designed by Lintstock   and the Group General Counsel and Company Secretary. Each Board Committee   undertook a specific self-assessment questionnaire. The Audit and Risk   Committee assessment also included input from the external auditor and relevant   senior management. The Chairman then held one-toone interviews with each of   the Directors to discuss the reports. The Chairman reviewed the Directors’   contributions and the Senior Independent Director led the review of the   performance of the Chairman. Lintstock prepared a report based on the   completed questionnaires for the Chairman and the chairman of each of the   Board Committees. The chairman of each Board Committee gave feedback on the   evaluation of their Committee to their Committees and to the Board at its   meeting in March 2017. The Chairman discussed Lintstock’s report with the   Nominations and Governance Committee and with the Board at its meeting in   March 2017. This year’s process In accordance with our three-year cycle,   Board effectiveness is reviewed by an external performance evaluation every   three years, and will be externally conducted again in 2019. An internal   performance evaluation was carried out this year, with the assistance of   Lintstock Limited (‘Lintstock’), a London-based corporate advisory firm,   which has no other connection with Vodafone. Stage 1: Comprehensive   questionnaire Stage 2: One-on-one interviews Stage 3: Evaluation Stage 4:   Reporting and discussion with the Chairman and the Board 54 Vodafone Group   Plc Annual Report on Form 20-F 2017

 

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Governance in   action Maria Amparo Moraleda Martinez’s appointment During the year the   Committee recognised that it would be valuable for a Non-Executive   Director to be appointed who had IT and technology expertise as well as   experience as an international business leader. The Committee worked with   Russell Reynolds Associates, an executive search consultancy, to identify   suitable candidates. Amparo will join the Board as a Non-Executive Director   with effect from 1 June 2017. Amparo is a high calibre international business   leader who brings to the Board extensive engineering, IT and technology   expertise developed from her previous roles as chief operating officer of the   international division of Iberdrola and president of IBM Southern Europe.   Amparo’s other current appointments: –– Airbus Group SE, non-executive   director –– CaixaBank, non-executive director –– Solvay SA, non-executive   director Board review insights 2015–16 –– Recommendation: review the Board   induction and development programme to focus on strategically significant   areas Action taken in 2016–17: the induction programme for new Directors was   refreshed and sessions were arranged for Directors to learn more about the   Company’s strategic priorities and significant risks including cyber threats,   convergence, network quality, content, customer experience initiatives and   Enterprise business developments including the growth of Internet of Things   business. –– Recommendation: increase transparency around Board and executive   succession plans Action taken in 2016–17: the Chairman discussed Board   succession plans and the profile to be sought in new Board appointments with   the Directors and kept the Board informed of progress during the process to   appoint a new Non-Executive Director. Executive succession plans were   discussed by the Nominations and Governance Committee and the outcomes of the   discussion were shared with the Board. –– Recommendation: clarify   expectations on an overall strategic framework Action taken in 2016–17: in   addition to the Board’s regular reviews on performance of individual   operating companies, the Board discussed Group-wide strategic themes during   the course of the year in Board meetings and in the annual strategy meeting.   –– Recommendation: create more opportunities for Board members to spend   informal time together Action taken in 2016–17: the Directors dined together   on the eve of each Board meeting, sometimes with senior executives as guests.   The meetings at Vodafone Italy and Vodafone UK also provided occasions for   the Directors to spend informal time together. Conclusions from the 2016–17   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 from this year’s review included: –– Although the Board’s   composition was rated highly, it was agreed that adding further financial   expertise would be beneficial, particularly in view of the impending   retirement of Nick Land and Phil Yea from the Board. –– The Directors should   continue to build their knowledge and understanding of the Company’s   Enterprise business and its content assets. In addition, more time should be   spent on digital matters. –– The balance between focus on organic growth and   on portfolio management needs to be carefully managed. –– More opportunities   should be provided for the Directors to take part in site visits and   one-to-one interactions with members of the executive team. The Board will   address these recommendations during the 2018 financial year and will report   on progress in our 2018 Annual Report. Vodafone Group Plc Annual Report on   Form 20-F 2017 55 Overview Strategy Performance Governance Financials   Additional information

 

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Effectiveness Nominations and Governance Committee 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. Responsibilities: –– Assessing the composition of   the Board and making recommendations on appointments to the Board and senior   executive succession planning; –– Overseeing the performance evaluation of   the Board, its Committees and individual Directors; and –– Overseeing all   matters relating to corporate governance, bringing any issues to the   attention of the Board. The Committee met four times during the year and each   meeting had full attendance. The terms of reference of the Committee are   available on vodafone.com/governance. Chairman Gerard Kleisterlee Chairman of   the Board Members Valerie Gooding Phil Yea The Committee continues its work   of ensuring the Board composition is right and that our governance is   effective. Any conflicts identified are considered and, as appropriate,   authorised by the Board. A register of authorised conflicts is maintained   which is reviewed periodically. The Committee reviewed the independence of   all the Non-Executive Directors. All Non-Executive Directors are   considered independent and their contributions continue to be effective. They   have all submitted themselves for re-election at the 2017 AGM with the   exception of Phil Yea and Nick Land. Amparo Moraleda will be elected for the   first time in accordance with our Articles of Association. The Executive   Directors’ service contracts and Non-Executive Directors’ appointment letters   are available for inspection at our registered office and at our AGM. Board   evaluation The Committee oversaw the internal evaluation of the Board and   Committees. A description of the evaluation is set out on page 54. 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 and belief. Currently, 25% of our Board   roles are held by women and our ambition over the coming years is to increase   that proportion further, which is supported by our Board diversity policy.   Following Amparo Moraleda’s appointment on 1 June 2017, 31% of our Board   roles will be held by women; this will increase further after the AGM with   36% of our Board being women. Our Board diversity statistics can be found on   page 49. Diversity extends beyond the boardroom. The Board supports   management in its efforts to build a diverse organisation. Vodafone has   recently launched the ReConnect programme which aims to bring talented women   back into the workplace after a career break and to increase the number of   women in management roles. Further details are set out on pages 7 and 21 and   on the Vodafone website. 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 those developments on Vodafone. /s/ Gerard Kleisterlee Gerard Kleisterlee   On behalf of the Nominations and Governance Committee 16 May 2017 Committee   meetings 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. Changes to the Board and Committees As announced on 31 January   2017, Maria Amparo Moraleda Martinez will join the Board as a Non-Executive   Director on 1 June 2017. Further details are on page 55. As announced on 23   March 2017, Nick Land and Phil Yea will not seek re-election at the 2017 AGM   after more than ten years of service. The following changes to the   composition of the Board and Committees will be made with effect from 28 July   2017: –– Valerie Gooding will be appointed as Senior Independent Director; ––   David Nish will be appointed Chairman of the Audit and Risk Committee; –– Renee   James and Sir Crispin Davis will become members of the Nominations and   Governance Committee; and –– Amparo Moraleda will become a member of the   Audit and Risk Committee. Assessment of the independence of the   Non-Executive Directors The Committee and the Board are satisfied that   the external commitments of its Chairman and other Non-Executive Directors   (set out on pages 48 and 49) do not conflict with their duties and   commitments as Directors of the Company. Our Directors must: –– report any   changes to their commitments to the Board; –– notify the Company of actual or   potential conflicts or a change in circumstances relating to an existing   authorisation; and –– complete an annual conflicts questionnaire. 56 Vodafone   Group Plc Annual Report on Form 20-F 2017

 

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Accountability Audit and Risk Committee 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. 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 oversight of the: –– appropriateness of the Group’s external   financial reporting; –– relationship with, and performance of, the external   auditor; –– Group’s system of internal control, including risk management   framework and the work of the internal audit function; and –– Group’s system   of compliance activities. The Committee met six times during the year and   each meeting had full attendance. The terms of reference of the Committee are   available on vodafone.com/governance. The Committee continued to oversee the   Group’s financial reporting, financial control and risk management and   compliance processes, with areas of particular focus this year including the   preparations for the future implementation of IFRS 15 and IFRS 16, both of   which will have a significant impact on the Group, a number of accounting,   reporting and valuation judgements in relation to the agreements to form new   joint ventures in the Netherlands and India as well as deep dives into a   range of technology, commercial and market risks. Membership, relevant skills   and experience On 23 March 2017, the Group announced that both myself and   Phil Yea would not seek re-election at the Company’s annual general meeting   in July 2017 after more than ten years of service. As a result, with effect   from 28 July 2017, David Nish will be appointed Chairman of the Audit and   Risk Committee and Maria Amparo Moraleda Martinez will become a member of the   Audit and Risk Committee. The Committee was conscious of the need for a   strong knowledge transfer process and efficient succession planning and as a   result, David Nish was appointed as an additional Committee member on 1   January 2016, allowing him to take an active role in the Committee’s   activities in the year. David was appointed after a rigorous process to   ensure the Committee will continue to have the necessary financial   experience, commercial expertise and capital markets skills required to meet   its responsibilities and provide an effective level of challenge to   management. Similarly, Amparo brings her international business experience,   engineering background and IT and technology expertise to the role and will   be a valuable addition to the Committee. Full biographies of the Committee   members are set out on pages 48 and 49. All the members of the Committee are   Non-Executive Directors of the Company and 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 for 2017.   David Nish will assume this role upon my retirement. In order to ensure that   the Committee continues to have experience and knowledge relevant to the   sector in which the Company operates, all of the Non-Executive Directors of   the Company receive ongoing training and development as detailed in the section   on Board evaluation, induction and training on pages 54 and 55. In addition,   every three years the Board appoints an external organisation to perform an   independent review of the Committee to evaluate its performance. The last   independent review was performed in March 2016 which concluded that the Board   members considered the Committee to be thorough and fully effective in   meeting its objectives. How the Committee operates The Committee met six   times during the year, five times under its standard schedule of meetings   plus an additional meeting in October 2016 to cover a specific external   auditor independence matter as detailed later in this report. Two of the   standard meetings are timed for September and March in each year so that the   Committee can assess in advance the issues likely to effect the Group’s   half-year and year end reporting. The meetings in October and May conclude   this work and play a key role in the approval of the Group’s external   financial results. The meeting in January has a focus on risk and compliance   related matters. 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, with the Board receiving copies of the Committee   minutes. 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 Controlling and   Operations 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. Chairman and financial expert Nick Land Independent Non-Executive   Director Members Sir Crispin Davis Dame Clara Furse David Nish Phil Yea   Vodafone Group Plc Annual Report on Form 20-F 2017 57 Overview Strategy   Performance Governance Financials Additional information

 

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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: –– the quality and acceptability of   accounting policies and practices; –– material areas in which significant   judgements have been applied or where significant issues have been discussed   with the external auditor; –– providing advice to the Board on the form and   basis underlying the long-term viability statement; –– 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 and the European Securities and Marketing   Association Guidelines on Alternative Performance Measures; –– any   correspondence from regulators in relation to our financial reporting; and ––   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. 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 2017   Annual Report. 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. The Committee received   regular reports from management on the programmes for the adoption of 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 for the years ending 31 March 2019 and 2020 respectively. Our   disclosures on pages 107 and 108 include further qualitative detail on the   impact of these two accounting standards. The Committee’s work in relation to   the oversight of these programmes is set out below. Regulators and our   financial reporting There has been no correspondence from regulators,   including the FRC’s Corporate Reporting Review team, in relation to our   financial reporting during the 2017 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 “business model reporting” and   “digital future – data”. In addition, the Committee continued to support the   Group’s broader commitment to corporate transparency which this year saw the   publication of the Group’s award-winning report into its “Taxation and total   economic contribution to public finances” report. Now in its fifth year, the   report remains the most comprehensive publication of its kind in the   telecommunications and technology sectors covering tax strategy and detailed   analysis of taxes paid around the world. Significant judgements and issues   The significant areas of focus considered and actions taken by the Committee   in relation to the 2017 Annual Report, which have been extended to reflect   the Group’s change in presentation currency from sterling to the euro from 1   April 2016, are outlined below. We have discussed these with the external   auditor during the year. 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 newly introduced systems and changing pricing models.   PricewaterhouseCoopers LLP shared its approach to the audit of revenue in   their detailed audit plan, which identified the primary 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 confirmed with management that the basis of revenue   accounting remained unchanged from prior years with PricewaterhouseCoopers   LLP. As a result, the Committee was satisfied with the appropriateness of the   revenue recognised in the financial statements. Accountability Audit and Risk   Committee (continued) 58 Vodafone Group Plc Annual Report on Form 20-F 2017

 

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Significant   judgements and issues Matter considered Action 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 2017, the Group had recognised a €23.5 billion   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 2016 and May 2017   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 Committee received reporting from it on these matters. 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 year end. Consequently, the Committee was satisfied   with the approach adopted in the financial statements by management for each   matter. Impairment testing This is an area of focus for the Committee given   the materiality of the Group’s goodwill balances (€26.8 billion at 31 March   2017) and the inherent subjectivity in impairment testing. The judgements in   relation to impairment testing continue to relate primarily to the   assumptions underlying the calculation of the value in use of the Group’s   businesses, being the achievability of the longterm business plans and the   macroeconomic and related modelling assumptions underlying the valuation   process. As at 31 March 2017, these judgements were extended to include the   assessment of the fair value of Vodafone India. During the year, a new   entrant in India launched free trial services for an extended period and   commercial price plans at a significant discount to prevailing market   pricing, resulting in competitive responses from other operators. This   created a high degree of uncertainty over a range of commercial planning   assumptions including future pricing, profitability and market structure,   resulting in a wide range of potential outcomes which the Committee had to   consider in assessing management’s view of future business performance and   cash flows for impairment valuation purposes at both 30 September 2016 and 31   March 2017. A net of tax impairment charge of €3.7 billion was recorded in   respect of the Group’s investment in Vodafone India for the year ended 31   March 2017. See note 4 “Impairment losses” for detail. The Committee received   detailed reporting from management and challenged the appropriateness of the   assumptions made, including: –– the consistent application of management’s   methodology; –– the achievability of the business plans; –– assumptions in   relation to terminal growth in the businesses at the end of the plan period;   and –– discount rates. This remains an area of audit focus and   PricewaterhouseCoopers LLP provided detailed reporting on these matters to   the Committee, including sensitivity testing. As a result, the Committee was   satisfied with both the appropriateness of the analysis performed by   management 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 legal and management 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 2016 and May 2017 on management’s   assessment of the most significant claims. As this is an area of audit focus,   PricewaterhouseCoopers LLP also reviews these claims and relevant legal   advice received by the Group, 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. Vodafone Group Plc Annual Report on   Form 20-F 2017 59 Overview Strategy Performance Governance Financials   Additional information

 

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Accountability   Audit and Risk Committee (continued) Significant judgements and issues Matter   considered Action Significant one-off transactions The Committee reviewed the   accounting and reporting implications of the merger of Vodafone’s and Liberty   Global’s operating businesses in the Netherlands and the agreement to combine   Vodafone India with Idea Cellular into a new joint venture. The latter   resulted in Vodafone India being accounted for as a discontinued operation at   31 March 2017. See note 7 “Discontinued operations and assets held for   resale” and note 28 “Acquisitions and disposals” for further detail.   Management outlined the key accounting and disclosure impacts in relation to   these transactions. The Committee also received detailed reporting from   PricewaterhouseCoopers LLP on their assessment of the accounting and   disclosures made by management in the financial statements. After having   reviewed these reports and the financial statements, the Committee concluded   that it was satisfied with the accounting and disclosures made in the Annual   Report. 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. Following the prior year   implementation of a suite of standard controls over the Group’s core   financial processes, there have been no significant changes to the Group’s   key business controls. 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 of these key business and IT controls and they reported to   the Committee the results of their audit testing in these areas. As a result,   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. Change in presentation currency Following the   change in the Company’s functional currency and the Group’s presentation currency   from sterling to the euro with effect from 1 April 2016, the Group has   performed a full historic retranslation of the Group’s results. See note 1   “Basis of preparation” for further detail. Management outlined the key   accounting and disclosure impacts in relation to the changes in both the   Company’s functional currency and the Group’s presentation currency. The   Committee also received detailed reporting from PricewaterhouseCoopers LLP,   at both the half-year and the year end, on their assessment of the accounting   and disclosures made by management in respect of the change in functional and   presentational currency. After having reviewed these reports and the   disclosures in the financial statements, the Committee concluded that it was   satisfied with the accounting and disclosure for each of these matters. 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 ongoing 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, systems integration, the methodology in   which the standard would be adopted and programme resourcing. The   implementation programme continued to progress satisfactorily during the   year, with the accounting systems build being finalised and tested and new   business and IT controls being designed and rolled out. Markets are expected   to go-live across the Group in a phased approach starting from March 2017.   Similar reporting was given to the Committee in relation to the Group’s   implementation of IFRS 16 “Leases”, which will be adopted in the financial   year ending 31 March 2020. Brexit The Committee discussed a number of issues   arising from the UK’s vote to leave the European Union in June 2016,   including consideration of the impact on our principal risks, as set out on   pages 28 to 34, and the consideration of potential tax impacts in conjunction   with the Group’s tax risk mitigation strategy, further details of which are   included in Note 6 “Taxation”. 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. 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The processes   and controls that underpin our consideration include ensuring that: –– all   contributors are fully briefed on the fair, balanced and understandable   requirement; –– a dedicated and experienced core team is responsible for the   coordination of content submissions, verification, detailed review and   challenge; –– senior management confirms that the content in respect of their   areas of responsibility is considered to be fair, balanced and   understandable; –– the Disclosure Committee reviews and assesses the Annual   Report as a whole; and –– the Committee receives an early draft of the Annual   Report to enable timely review and comment. This year, following guidance   issued by the European Securities and Markets Authority, the Committee’s   assessment was extended to cover the use and disclosure of alternative   performance measures (or “non-GAAP” measures) to ensure that they were   clearly explained, defined and labelled, disclosed separately from reported   GAAP metrics, not given undue prominence compared to reported IFRS measures   and were reconciled to the nearest GAAP financial metric. In addition, the   Committee also considered the financial reporting responsibilities of the   Directors under section 172 of the Companies Act 2006 to promote the success   of the Company for the benefit of its members as a whole as well as meeting   the needs of wider society. 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 As part of   the Committee’s responsibility to provide advice to the Board on the form and   basis underlying the long-term viability statement as set out on page 34, the   Committee reviewed the process and assessment of the Group’s prospects made   by management, including: –– the review period and alignment with the Group’s   internal longterm forecasts; –– 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; ––   the modelling of the financial impact of certain of the Group’s principal   risks materialising using severe but plausible scenarios; and –– ensuring   clear and enhanced disclosures in the Annual Report as to why the assessment   period selected was appropriate to the Group, what qualifications and   assumptions were made and how the underlying analysis was performed,   consistent with recent FRC pronouncements. –– Management also sought   independent external advice on best practice to ensure appropriate compliance   with the requirements of the 2014 UK Corporate Governance Code. 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,   negotiating and approving the statutory audit fee, the scope of the statutory   audit and approval of the appointment of the lead audit engagement partner.   Auditor appointment PricewaterhouseCoopers LLP were appointed as the Group’s   external auditor in July 2014 following an audit tender and, whilst the Group   has no current retendering plans, in accordance with the UK implementation of   the EU Audit Regulation and Directive or the Competition & Markets   Authority Order on the Statutory Audit Market, 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,   Andrew Kemp, who was appointed in July 2014, will be required to step down   following the completion of the 2019 audit. 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 2018, 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 2017.   Audit risk At the start of the audit cycle for the 2017 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. For the 2017 financial   year, the key risks identified were as follows; –– Taxation matters,   including recognition and recoverability of deferred tax assets in Luxembourg   and Germany and a provisioning claim for withholding tax in India. ––   Carrying value of goodwill. –– Provisions and contingent liabilities. ––   Revenue recognition including accuracy of revenue recorded given the   complexity of systems and fraud. –– Management override of internal controls.   –– Accounting for significant one-off transactions. –– Capitalisation and   asset lives. –– Change in the Group’s presentation currency. The key audit   risks for the 2017 financial year, are unchanged from the 2016 financial year   except for the addition of a new risk arising from the change in the Group’s   presentation currency from sterling to the euro. 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. Vodafone Group Plc Annual Report on Form 20-F 2017 61   Overview Strategy Performance Governance Financials Additional information

 

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Accountability   Audit and Risk Committee (continued) 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 and feedback, 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 2016. In addition, the FRC’s Audit Quality Review team reviewed   PricewaterhouseCoopers LLP’s audit of the Group’s financial statements for   the year ended 31 March 2016 as part of their 2016 annual inspection of audit   firms. This concluded that their work was of a high standard at both a Group   and component level, identifying only minor issues arising, all of which were   addressed in the audit firm’s proposed action plan. Based on these reviews,   the Committee concluded that there had been appropriate focus and challenge   by PricewaterhouseCoopers LLP on the primary areas of the audit and that they   had applied robust challenge and scepticism throughout the audit.   Consequently, as noted above, the Committee has recommended to the Board that   they be reappointed at the annual general meeting in July 2017. 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’). During the year, we were notified   by our lead audit partner that a company, for which a number of   PricewaterhouseCoopers LLP partners were acting as administrators, was   considering litigation against the Group. The Committee, in consultation with   the Group’s legal advisors, reviewed the implications on   PricewaterhouseCoopers LLP’s audit independence from the roles played by   PricewaterhouseCoopers LLP’s partners as administrators and   PricewaterhouseCoopers LLP as the Group’s statutory auditor in the context of   relevant regulations and ethical standards. Further, the Committee consulted   with the UK Financial Reporting Council and a number of institutional   investors. To address any potential threat to their audit independence,   PricewaterhouseCoopers LLP put in place a number of safeguards including   ensuring both the administration and audit teams were physically separate and   had no interactions, that working papers and other highly confidential   material were separately stored with highly restricted access and that the   lead group engagement partner would be solely responsible for the audit   implications of the potential litigation. In response, we requested that both   PricewaterhouseCoopers LLP’s Compliance Department and its independent   non-executives provide oversight of the effectiveness of the safeguards put   in place and they reported to the Committee on these safeguards on a regular   basis. PricewaterhouseCoopers confirmed to the Committee that these   safeguards had been put in place, were being monitored internally and   operated effectively throughout the relevant period. The Committee concluded   that this position was not prohibited and PricewaterhouseCoopers LLP remained   independent for the purposes of the audit throughout this period. Audit fees   For the 2017 financial year, the Committee considered the ongoing fee   proposal included as part of the audit tender in 2014, negotiated audit scope   changes 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 €16 million for   statutory audit services. This included €1 million in respect of advance   audit procedures in respect of the forthcoming implementation of IFRS 15   “Revenue from Contracts with Customers”. Non-audit fees 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 preapproved that   PricewaterhouseCoopers LLP can be engaged by management, subject to the   policies set out above, and subject to a €60,000 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. In   addition, the Committee assessed the impact of revised UK regulation   including the prohibition of the auditor playing any part in management or   decision making and expected regulations 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 was amended to reflect these additional restrictions   during the 2017 financial year for implementation in the 2018 financial year.   Non-audit fees were €4.0 million of which €3.5 million was for services where   there was no legal alternative and €0.5 million for services where there was   no practical alternative supplier. Non-audit fees represented 22% of audit   fees for the 2017 financial year (2016: 11%, 2015: 33%) with the increase in   the current year mainly due to €1.1 million of fees relating to a potential   initial public offering (‘IPO’) of Vodafone India that was being considered   prior to the agreement to combine the business with Idea Cellular. Further   details of the fees paid for audit and non-audit services to   PricewaterhouseCoopers LLP 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 28 to 34 and a range of mitigations for risks as set out on pages 90 to   95 and our review included reports from the Group Risk and Compliance   Director, with whom I met regularly during the year, 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. Vodafone Group Plc   Annual Report 62 on Form 20-F 2017

 

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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 2017 financial year, the areas reviewed included: ––   technology failure, including a review of the Group’s technology resilience   risk management plan, policy compliance across both the Group’s mobile and   fixed networks, cyber-threat resiliency and user access management; –– tax   risk mitigation strategy, including proactive engagement with key   stakeholders, external publication of the updated “Tax Risk Management   Policy” to meet new UK legislative requirements and internal policies to   manage tax fraud risks; –– unstable economic conditions and the impact on the   Group’s treasury operations including the setting of debt maturities,   fixed/floating interest rate mix and counterparty credit risk; –– the impact   on the framework for risk and compliance in Vodafone India following changes   in competition driven by the new market entrant and the demonetisation   introduced by the Indian Government in November 2016; –– the integration of   Vodafone Netherlands and Ziggo into the merged 50:50 joint venture and the   transition to common governance standards; –– a review of the monitoring work   being done to assess the impact of the referendum vote that Britain should   leave the EU; and –– a review of PricewaterhouseCoopers’ data security and   confidentiality arrangements. 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. Last year,   these controls were enhanced through the application of a co-ordinated   assurance approach which provides a framework that allows a comprehensive   assessment of the assurance and compliance activities for the Group’s   significant risks. 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 2017 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   also met regularly with the Group Audit Director, which has been of   particular importance following the appointment of a new Group Audit Director   this year, to set annual objectives, monitor performance against these   objectives, discuss the team’s activities and any significant issues arising   from their work. Following an independent assessment of the function’s   effectiveness in 2015, and the increasing pace of change of the business,   initiatives are continuing to be implemented to evolve and strengthen   Internal Audit’s effectiveness. 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: ––   financial control governance; –– changes to the section 404 programme,   including scoping and the results of work performed; and –– the evolution of   the wider control environment in response to ongoing business developments.   The scope of the Group’s section 404 compliance activities in 2017 was   broadly stable compared to the 2016 financial year. The external auditor   reported the status of their work in each of their reports to the Committee.   Compliance activities The Committee is responsible for the oversight of the   Group’s compliance programme and held a number of deep dive sessions on   compliance-related matters in the year. These focused on: –– the   organisational model for managing fraud including the use of shared services   to enhance preventative controls and increase the use of big data and   advanced analytics to detect trends earlier, the types of fraud most commonly   detected and the level of fraud within the Enterprise business; –– 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 review of the new EU General Data Protection Regulation, likely to take   effect from May 2018, including the areas of potential impact for the Group;   and –– 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. /s/ Nick Land   Nick Land On behalf of the Audit and Risk Committee 16 May 2017 Vodafone   Group Plc Annual Report on Form 20-F 2017 63 Overview Strategy Performance   Governance Financials Additional information

 

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Communicating with our shareholders May June July August   Roadshows in: –– London; –– Edinburgh; –– Boston; –– Toronto; –– New York;   and –– Paris. Roadshows in: –– Amsterdam; –– Milan; –– Frankfurt; –– Madrid;   –– San Francisco; and –– Los Angeles. Investor conferences in London at: ––   Merrill Lynch; and –– JP Morgan Cazenove. in Switzerland at: –– Berenberg.   Chairman roadshow to top investors Investor meetings in: –– Germany; ––   Spain; –– Italy; and –– Turkey. Annual general meeting Roadshows in: –– Hong   Kong; and –– Singapore. Our investor calendar Set out here is a calendar of   our investor events throughout the year. Relations with shareholders 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 Deutsche Bank (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. Institutional investor meetings We hold   meetings with major institutional investors, individual shareholder groups   and financial analysts to discuss the business performance and strategy. These   are attended by the appropriate mix of Directors and senior management,   including our Chairman, Chief Executive, Executive Committee members, senior   leaders and the Investor Relations team. Institutional investors also meet   with the Chairman to discuss matters of governance. What our shareholders   have asked us this year Common topics raised by our institutional and   individual shareholders include: –– 5G investment and business cost; –– cash   flow, capital expenditure, debt and dividend cover; –– fixed broadband and TV   strategy; –– performance outlook; –– network differentiation; –– shareholder   returns; –– regulation in Europe and emerging markets; –– spectrum renewal   costs; –– VodafoneZiggo JV; –– Vodafone India and Idea Cellular merger; and   –– administration of shareholding. Listening to our shareholders We are   committed to communicating our strategy and activities to all our   shareholders and listening to their questions and feedback. 64 Vodafone Group   Plc Annual Report on Form 20-F 2017

 

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Dividend   payments For the financial year and beyond, dividends are declared in euros   and paid in euros and pounds sterling and for ADR holders US dollars,   aligning our shareholder returns with the primary currency in which we   generate free cash flow. The foreign exchange rate at which dividends   declared in euros are converted into pounds sterling and US dollars is   calculated based on the average exchange rate over the five business days   during the week prior to the payment of the dividend. Annual general meeting   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. Representatives from investor relations and customer   services are available after the meeting to answer any additional questions   shareholders may have. September November December January March Investor   conferences in London at: –– Credit Suisse; –– Deutsche Bank; and ––   Bernstein. in New York at: –– Goldman Sachs. Roadshows in: –– Helsinki; ––   Copenhagen; and –– Stockholm. Germany open office Roadshows in: –– London; ––   Switzerland; –– Boston; –– Frankfurt; –– New York; –– Amsterdam; and ––   Paris. Chairman’s meeting with retail shareholders Investor conference in   Spain at Morgan Stanley Roadshows in: –– Edinburgh; –– Sydney; and –– Cape   Town. Investor conference in London at Berenberg Roadshows in: –– Los   Angeles; and –– San Francisco. Investor meetings in: –– Spain; and. –– Italy.   Roadshows in: –– Helsinki; –– Copenhagen; and –– Stockholm. Investor   conference in London at: –– Citi. in Miami at: –– Deutsche Bank. Vodafone   Group Plc Annual Report on Form 20-F 2017 65 Overview Strategy 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: Board   member independence Different tests of independence for Board members are   applied under the 2014 UK Corporate Governance Code (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 advisors. –– Our Nominations and Governance Committee is chaired   by the Chairman of the Board and its other members are independent   Non-Executive Directors. –– Our Remuneration Committee is composed entirely   of independent Non-Executive Directors. –– 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. –– 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. –– 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. –– 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. –– 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. 66 Vodafone Group Plc Annual Report on   Form 20-F 2017

 

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Remuneration Directors’ remuneration   Letter from the Remuneration Committee Chairman Dear Shareholder On behalf of   the Board, I present our 2017 Directors’ Remuneration Report. This report   sets out our proposed policy which, if approved at our 2017 AGM, will take   effect immediately from the date of this meeting. The report also sets out   how our current policy was implemented during the year. Current policy – a   successful implementation Our current policy has received continued support   since its approval at the 2014 AGM, with the Annual Report on Remuneration   receiving a vote in favour of 97% in each of the last two years. The   Committee believes that the effectiveness of the current policy reflects a   commitment to our principles of: –– ensuring our remuneration policy, and the   manner in which it is implemented, drives the behaviours that support our   strategy and business objectives; –– 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;   –– 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; and –– offering competitive and fair   rates of pay and benefits. It is both due to this continued support and its   ongoing appropriateness that the Committee maintained the current policy for   its full three year life. Aligning remuneration arrangements with strategic   priorities The importance of aligning our remuneration arrangements with our   strategic priorities continued to play a crucial role in the Committee’s   decision-making during the year. In terms of financial measures, cash flow   continues to remain the key financial metric in the industry in which we   operate – this is currently reflected through the presence of this measure in   both our shortterm and long-term incentive plan. As we work towards our   vision – a converged communications leader – a Gigabit Vodafone for the   Gigabit Society – ensuring that our business has the required resources to   invest in these new opportunities remains critical to future success. Through   the proposed change to the structure of our long-term incentive, as outlined   further below, we therefore seek to ensure the weighting of this metric is   further enhanced. From a strategic perspective we aim to deliver superior   returns to our shareholders by differentiating our business through the   provision of superior customer service. This strategic vision continues to   influence our business both internally and externally as we seek to build on   the early successes generated through our Customer eXperience eXcellence   programme. As such, the 40% weighting on customer appreciation KPIs that was   used in 2017 will continue to apply during 2018. This will ensure that a   significant part of our executives’ short-term reward is linked to how our   customers judge our performance. It is the Committee’s view that our reward   arrangements best support our business effectiveness by only delivering above   target payouts when this is justified through company performance. This is   reflected through the stretching and robust variable incentive target-setting   process undertaken by the Committee on an annual basis which has delivered   variable levels of payout. Key objective: To assess and make recommendations   to the Board on the policies for executive remuneration and reward packages   for the individual Executive Directors. Responsibilities: –– 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; –– determining   the total remuneration packages for these individuals including any   compensation on termination of office; –– operating within recognised   principles of good governance; and –– preparing an Annual Report on   Directors’ remuneration. The Committee met five times during the year and each   meeting had full attendance. The terms of reference of the Committee are   available on vodafone.com/governance. Remuneration Committee The Committee   continued to ensure that decisions made during the year reflected our   principles, company performance and external considerations. In addition, the   Committee adopted an early timetable of shareholder engagement in respect of   the policy review. Chairman Valerie Gooding Independent Non-Executive   Director Members Dr Mathias Döpfner Renee James Samuel Jonah Vodafone Group   Plc Annual Report on Form 20-F 2017 67 Overview Strategy Performance   Governance Financials Additional information Contents of the Remuneration   Report Remuneration Policy The remuneration policy table Chairman and   Non-Executive Directors’ remuneration Page 71 Page 72 Page 76 Annual Report   on Remuneration Remuneration Committee 2017 remuneration 2018 remuneration   Further remuneration information Page 77 Page 77 Page 78 Page 84 Page 85

 

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During this   year’s shareholder consultation a number of investors acknowledged that the   Committee has a track record of setting stretching targets and ensuring that   payments are in line with performance – the average payout over the last   three years, including the year under review, for the GSTIP and GLTI has been   54% and 22% of maximum respectively. This is a principle that will continue   to apply in 2018 and beyond. Finally, our effectiveness as a business is   built on long-term sustainable performance. In an industry with an   ever-changing technological landscape it is vital that our reward   arrangements encourage long-term strategic thinking and growth, rather than   short-term profit-taking. It is for this reason that the majority of our   proposed reward policy continues to be weighted towards the Global Long Term   Incentive Plan whilst TSR remains a key performance measure in ensuring our   final payouts accurately reflect the shareholder experience over this period.   The year ahead In addition to the policy changes outlined below, the 2018   annual bonus will see adjusted EBITDA replaced with adjusted EBIT as one of   the three financial performance conditions to reflect an increased focus on   both capital discipline and expenditure. Such a change is within the terms of   the current policy and as such no wording changes to the GSTIP section of the   Policy Report are proposed. Annual bonus weightings will also remain   unchanged for 2018. In respect of long-term incentives the revised GLTI   structure, subject to approval at our 2017 AGM, will be used for the 2018   GLTI awards to the Executive Directors (which will be awarded in the 2017   calendar year). Full details of the remuneration arrangements for our   executive directors for the year ahead are outlined on pages 84 and 85 of the   Annual Report on Remuneration. Remuneration outcomes – performance in 2017   Business performance during the year reflected the implementation of a number   of key strategic programmes across our markets, including the capital   investment made under Project Spring which has provided the platform   necessary to work towards our vision of being a converged communications   leader. Other core programmes in operation during the year included our Fit   for Growth strategy which aims to reduce costs and make the organisation more   effective – yielding both environmental and financial benefits for the   business. The business also remained focused on our Customer eXperience   eXcellence programme during the year which aims to continually improve our   customer service to ensure full advantage can be taken of the improvements we   are making to our network. Remuneration outcomes for performance in 2017   reflect the progress made across all of these fronts whilst also reflecting the   fact that in order to achieve our vision there remains work to be done.   Annual bonus performance conditions for the year under review remained   unchanged from 2016, with 60% of opportunity based on financial measures and   40% on strategic measures. Financial measures comprised service revenue,   adjusted EBITDA and adjusted free cash flow (all equally weighted) whilst the   strategic element was based on customer appreciation KPIs. During the year,   service revenue and adjusted EBITDA performance were below target whilst   performance under the adjusted free cash flow and customer appreciation KPIs   measures were in line with target. The combined performance under all of   these measures during the year resulted in an overall payout of 47.3% of   maximum. As in previous years the annual bonus targets for the year under   review are disclosed in our Annual Report on Remuneration. Following on from   our decision to improve disclosure last year by detailing the full target   ranges used under the financial measures, the Committee has again sought to   further improve transparency by disclosing additional detail on performance   against the customer appreciation KPIs metrics. The final outcome under this   strategic element is based on a weighted average of performance across all of   our markets utilising a range of metrics. Despite the difficulty in   condensing such a variety of outputs, it is recognised that greater insight   into outcomes under this measure is desired by shareholders. The Committee   has therefore sought to provide details in a manner which is both succinct   and useful to our stakeholders. Further details are provided on pages 78 and   79. The 2015 Global Long-Term Incentive award was subject to free cash flow   and TSR performance as measured over a three year period ending 31 March   2017. The free cash flow measure finished just above target performance   during this period whilst TSR performance was below the median of TSR   comparator group resulting in no uplift being applied to the free cash flow   outcome. Overall payout for the award was therefore 43.5% of maximum.   Shareholder consultation – constructive, timely engagement Notwithstanding   the support received for the current arrangements, the Committee recognises   that the regulatory requirement to resubmit the Policy Report presents a   natural point at which to incorporate any shareholder feedback and   appropriate best practice features that have emerged during the last three   years. This is why the Committee committed to an early timetable of   shareholder engagement in respect of the policy review. In doing so, the   Committee sought to ensure that shareholder views and comments were fully   considered as part of the review, with enough time scheduled to allow for a   two way dialogue. I can report that the consultation facilitated a high level   of response from investors, which allowed the Committee to clearly explain   the proposals and ensure that all feedback was properly considered across a   number of scheduled Committee meetings. Proposed policy – evolution, not   revolution The proposed changes reflected in our Policy Report, and outlined   in detail on the summary page at the end of this letter, do not seek a   complete overhaul of our current arrangements. Instead, the changes reflect   our stakeholders’ wishes for the simplification of the current arrangements   in a manner which retains the core qualities and principles that have   underpinned our reward strategy in recent years. This is exemplified through   the proposed simplification of the GLTI plan via the removal of the   co-investment element and the simplification of the interplay of performance   conditions under the payout matrix. Both of these proposed changes tackle   features of the current arrangements which a number of shareholders have   flagged as being overly complex, and are coupled with other best practice   changes including an increase in shareholding guidelines and the introduction   of clawback. Remuneration Directors’ remuneration (continued) Vodafone Group   Plc Annual Report 68 on Form 20-F 2017 

 

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Improving how   we encourage share ownership Importantly, in proposing to remove the   co-investment element as a way of simplifying the GLTI, the Committee has   also sought to ensure that the revised arrangements continue to replicate the   share ownership effect of co-investment by re-establishing market leading   shareholding guidelines (500% of salary for the Chief Executive and 400% of   salary for other Executive Directors). This ensures that the revised   arrangements provide a streamlined GLTI whilst also supporting clear and   stretching ownership requirements. In order to reflect the importance of   shareholding guidelines both during employment but also in the period post-employment,   the increased guidelines will apply until all long-term incentives have   vested. This will ensure that our executives continue to share in the   shareholder experience of any decisions made before departure but which may   have implications after departure. If this requirement is not met, then the   Committee will have the ability to lapse any unvested GLTI awards.   Furthermore, underpinning this change in how we encourage share ownership is   an expectation that executives who have not met their new, higher   shareholding guideline will increase their holding by 100% of salary each   year until this is reached. If this expectation is not met, the Committee   will have the discretion to reduce an individual’s next target GLTI grant by   up to 100% of salary. As Chairman of the Committee I would like to reassure   shareholders that were these circumstances to apply, such discretion will be   used in all but exceptional cases. Simplifying the payout matrix It was made   clear during both this and previous consultations that our shareholders would   prefer to see the current payout matrix replaced with a simpler additive   structure where all performance metrics are assessed independently of each   other. The Committee has listened to shareholders on this point and   recognises that the more traditional schedule allows for a clearer and   simpler communication of both expected and actual performance. Such a change   is therefore reflected in the revised Policy Report. The revised payout   matrix has also been designed to ensure that the GLTI plan is more weighted   towards adjusted FCF performance – a key strategic measure for our business.   This is reflected through a proposed 2/3 weighting to this measure with the   other 1/3 weighted towards the same relative TSR measure used under the current   arrangements. Also in line with shareholder preferences, a further proposed   revision is the reduction in the size of awards payable at threshold for all   Executive Directors. Other matters considered In order to align with market   practice a key change proposed by the Committee is the introduction of   clawback to all incentive plans. These arrangements will complement the malus   arrangements already in place and deliver on the Committee’s promise to   introduce clawback at the next point at which the Policy Report was up for   approval. A potential change that was considered during the consultation was   the introduction of annual bonus deferral. Following consultation with   shareholders, the Committee determined that the objectives of bonus deferral   were already being met through other features of the proposed arrangements –   namely the heavy weighting of packages towards our long-term incentive which   already has deferral built in, and the proposed increase in shareholding   guidelines. The Committee will however continue to monitor this area of   practice and ensure that shareholders remain satisfied with the levels of   deferral and share ownership built into the arrangements elsewhere. Pay in   the wider context The Committee is fully aware of the attention that executive   pay has received in the wider market in recent years. The importance of   ensuring that pay remains appropriate in light of individual and business   performance continues to remain central to the Committee’s   decision-making. As in previous years the Committee will continue to   ensure that incentive payouts are not excessive and any salary increases   remain appropriate. During the year the Committee agreed a salary increase of   1.5% for the Chief Financial Officer (effective 1 July 2018), however the   Chief Executive’s salary will, at his request, remain unchanged. This will be   the third year in a row, and the fifth time in the last six years, in which   the Chief Executive’s salary will not have increased. The salary review was   taken in the context of a budgeted increase of 1.5% in the UK for this year,   with the wider Executive Committee being maintained in line with local market   budgets as explained later in this report. The Committee recognises the   importance of engagement with both internal and external stakeholders and   will continue to ensure that such engagement plays a central role in future   remuneration developments. At an employee level our people survey remains a   key tool in this respect, with the high participation and engagement rate   facilitating direct communication between the business and our colleagues   Conclusion I would like to sign-off this letter by thanking our shareholders   for the continued engagement and support that has been demonstrated during   the year. In a climate where executive remuneration and the processes   governing these arrangements is increasingly met with scepticism, the   Committee welcomed the way shareholders engaged actively and constructively   during this year’s consultation. The Committee values the strong   relationships that have been built with stakeholders through years of active   and timely engagement and will continue to work hard to ensure this remains   the case in future years. The Policy Report presented on the following pages   is the result of an early, informative and engaging consultation and, as   Chairman of the Committee, I will endeavour to ensure this appreciation of   the importance of stakeholder engagement continues to be a pillar of future   Committee activity. /s/ Valerie Gooding Valerie Gooding Chairman of the   Remuneration Committee 16 May 2017 Vodafone Group Plc Annual Report on Form   20-F 2017 69 Overview Strategy Performance Governance Financials Additional   information

 

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Remuneration   Directors’ remuneration (continued) Summary of proposed changes to the Policy   Report In line with the rationale outlined in the Letter from the   Remuneration Committee Chairman, it is proposed to: Shareholding guidelines   –– Increase shareholding guidelines to 500% of salary for the Chief Executive   and 400% of salary for other Executive Directors. –– Introduce discretion to   reduce long-term incentive grant levels for Directors who have not met their   guideline nor increased their shareholding by 100% of salary during the year.   –– Introduce a post-employment condition whereby Directors must continue to   meet their guideline until all long-term incentives have vested. If this   requirement is not met, then any unvested GLTI awards will normally be   forfeited. Global Long-Term Incentive Plan –– Remove the co-investment   element of the GLTI to simplify the plan structure. –– Replace the current   vesting matrix with a simplified model whereby both measures operate   independently. –– Rebalance the weightings of the performance measures to 2/3   in favour of adjusted FCF and 1/3 in favour of relative TSR. –– Reduce   threshold opportunity from 118.75% to 103.5% of salary for the Chief   Executive and from 105% to 94.5% of salary for other Executive Directors.   This equates to reducing threshold vesting from 20% to 18% of maximum   opportunity. –– As a result of rebalancing the vesting schedule, maximum   opportunity for the Chief Executive will also be reduced from 593.75% to 575%   of salary and target opportunity will be reduced from 237.5% to 230% of   salary. This is to ensure payout curves remain the same across all   participants. Introduction of clawback –– Trigger events will constitute   material misstatement of performance, material miscalculation of performance   condition outcomes and gross misconduct. –– The provisions will apply to all   future GLTI awards and bonus payments, and the application period for the   provisions will be up to three years after the payment of any bonus award,   and up to two years after the vesting of any GLTI. 70 Vodafone Group Plc   Annual Report on Form 20-F 2017 Total target remuneration at a glance – 2017   compared to 2018 The below table illustrates the arrangements in place during   the year under review (2017) compared to those which, subject to the approval   of our proposed remuneration policy, will be in place for 2018. 2017 (y/e 31   March 2017) 2018 (y/e 31 March 2018) Base salary Effective 1 July 2016: Chief   Executive: £1,150,000 (0.0% increase). Chief Financial Officer: £714,000   (0.0% increase). Effective 1 July 2017: Chief Executive: £1,150,000 (no   increase). Chief Financial Officer: £725,000 (1.5% increase). Benefits Travel   related benefits and private medical cover. Travel related benefits and   private medical cover. Pension Pension contribution of 24% of salary for all   Executive Directors. Pension contribution of 24% of salary for all Executive   Directors. GSTIP Opportunity (% of salary): Target: 100% Maximum: 200%   Measures: Service revenue (20%), adjusted EBITDA (20%), adjusted FCF (20%),   and customer appreciation KPIs (40%). Opportunity (% of salary): Target: 100%   Maximum: 200% Measures: Service revenue (20%), adjusted EBIT (20%), adjusted   FCF (20%), and customer appreciation KPIs (40%). GLTI Opportunity (% of   salary): Target: Chief Executive – 237.5% Other Executive Directors – 210%   Maximum: Chief Executive – 594% Other Executive Directors – 525% Measures:   Adjusted free cash flow and TSR vesting matrix. Opportunity (% of salary):   Target: Chief Executive – 230% Other Executive Directors – 210% Maximum:   Chief Executive – 575% Other Executive Directors – 525% Measures: Adjusted   free cash flow (2/3 of total award) and TSR (1/3 of total award). Total   target remuneration Chief Executive – £5.4m Chief Financial Officer – £3.2m   Chief Executive – £5.2m Chief Financial Officer – £3.2m Shareholding   guidelines Chief Executive – 400% of salary Chief Financial Officer – 300% of   salary Chief Executive – 500% of salary Chief Financial Officer – 400% of   salary Include post-employment holding requirements.

 

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Remuneration   Policy 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, including an indication of   the potential future value of this package for each of the Executive   Directors, and the policy applied to the Chairman and Non-Executive   Directors. We will be seeking shareholder approval for our Remuneration   Policy at the 2017 AGM and we intend to implement at that point. A summary   and explanation of the proposed changes to the current remuneration policy is   provided on pages 67 to 70. Subject to approval, we will review our policy   each year to ensure that it continues to support our company strategy and 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 67 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 and a number of key governance stakeholders   to comment on remuneration at Vodafone and to provide feedback on the   proposed changes to the current policy which was approved at the 2014 AGM. A   number of meetings between shareholders and the Remuneration Committee   Chairman took place during this consultation period. Further details of this   consultation are provided on pages 67 to 69 whilst a summary of the proposed   changes to our current policy, which are incorporated in this revised   Remuneration Policy section, is provided on page 70. Listening to and   consulting with our employees is very important. This can take different   forms in different markets but always includes our annual people survey which   attracts very high levels of participation and engagement. We do not consult   directly 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   74. 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 customer appreciation KPIs 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   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 has the discretion to   use either malus or clawback as it sees appropriate. In the case of malus,   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. In the case of   clawback, the Committee may recover bonus amounts that have been paid up to   three years after the relevant payment date, or recover share awards that   have vested up to two years after the relevant vesting date. The key trigger   events for the use of the clawback arrangements include material misstatement   of performance, material miscalculation of performance condition outcomes,   and gross misconduct. Subject to approval of this Remuneration Policy, the   clawback arrangements will be applicable to all future bonus amounts paid, or   share awards granted, following the 2017 AGM. Vodafone Group Plc Annual   Report on Form 20-F 2017 71 Overview Strategy Performance Governance   Financials Additional information

 

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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 Base salary –– To attract and retain the best   talent. –– Salaries are usually reviewed annually and fixed for 12 months   commencing 1 July. Decision is influenced by: –– level of skill, experience   and scope of responsibilities of individual; –– business performance,   scarcity of talent, economic climate and market conditions; –– increases   elsewhere within the Group; and –– external comparator groups (which are used   for reference purposes only) made up of companies of similar size and   complexity to Vodafone. Pension –– To remain competitive within the   marketplace. –– Executive Directors may choose to participate in the defined   contribution pension scheme or to receive a cash allowance in lieu of   pension. Benefits –– To aid retention and remain competitive within the   marketplace. –– Travel related benefits. This may include (but is not limited   to) company car or cash allowance, fuel and access to a driver where   appropriate. –– Private medical, death and disability insurance and annual   health checks. –– 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. –– Legal fees if appropriate. –– Other benefits are also offered   in line with the benefits offered to other employees for example, our   all-employee share plan, mobile phone discounts, maternity/paternity   benefits, sick leave, paid holiday, etc. Annual Bonus – Global Short- Term   Incentive Plan (‘GSTIP’) –– To drive behaviour and communicate the key   priorities for the year. –– To motivate employees and incentivise delivery of   performance over the one year operating cycle. –– The financial metrics are   designed to both drive our growth strategies whilst also focusing on   improving operating efficiencies. The strategic measures aim to ensure a   great customer experience remains at the heart of what we do. –– Bonus levels   and the appropriateness of measures and weightings are reviewed annually to   ensure they continue to support our strategy. –– Performance over the   financial year is measured against stretching financial and non-financial   performance targets set at the start of the financial year. –– 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’)   –– To motivate and incentivise delivery of sustained performance over the   long term. –– To support and encourage greater shareholder alignment through   a high level of personal share ownership. –– 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. –– Award   levels and the framework for determining vesting are reviewed annually to   ensure they continue to support our strategy. –– Long-term incentive awards   consist of performance shares which are granted each year. –– All awards vest   not less than three years after the award based on Group operational and   external performance. –– Dividend equivalents are paid in cash after the   vesting date. Remuneration Directors’ remuneration (continued) 72 Vodafone   Group Plc Annual Report on Form 20-F 2017

 

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Opportunity   Performance metrics –– 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. –– The pension contribution or cash payment is equal to   24% of annual gross salary. None. –– Benefits will be provided in line with   appropriate levels indicated by local market practice in the country of   employment. –– 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. –– Bonuses   can range from 0–200% of base salary, with 100% paid for on-target   performance. Maximum is only paid out for exceptional performance. ––   Performance over each financial year is measured against stretching targets   set at the beginning of the year. –– 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) customer appreciation KPIs such as net promoter score and brand   consideration. –– The target award level is 230% of base salary for the Chief   Executive and 210% for other Executive Directors. –– Minimum vesting is 0% of   the target award level, threshold vesting is 45% of the target award level,   and maximum vesting is 250% of the target award level. –– Maximum long-term   incentive face value at award of 575% of base salary for the Chief Executive   and 525% for others Executive Directors. –– The Committee has the discretion   to reduce long-term incentive grant levels for directors who have neither met   their shareholding guideline nor increased their shareholding by 100% of   salary during the year. –– The awards that vest accrue cash dividend   equivalents over the three year vesting period. –– 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. –– Performance is measured against   stretching targets set at the beginning of the performance period. –– Vesting   is determined based on the following measures: –– adjusted free cash flow as   our operational performance measure; and –– relative TSR against a peer group   of companies as our external performance measure. –– Measures will normally   be weighted 2/3 to adjusted free cash flow and 1/3 to relative TSR. Vodafone   Group Plc Annual Report on Form 20-F 2017 73 Overview Strategy Performance   Governance Financials Additional information

 

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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 and/or prior to the approval and   implementation of this policy. For the avoidance of doubt this includes   payments in respect of any award granted under the previous remuneration   policy. 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 “2017 award”   was made in the financial year ending 31 March 2017. The awards are usually   made in the first half of the financial year (the 2017 award was made in June   2016). The extent to which awards vest depends on two performance conditions:   ––underlying operational performance as measured by adjusted free cash flow;   and ––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 the award subject to this performance   element are shown in the table below (with linear interpolation between   points): Performance Vesting percentage (% of FCF element) Below threshold 0%   Threshold 18% Target 40% Maximum 100% 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 TSR vesting levels as a   percentage of the award subject to this performance element are shown in the   table below (with linear interpolation between points): Vesting percentage (%   of TSR element) Below median 0% Median 18% Percentage outperformance of the   peer group median equivalent to 65th percentile 40% Percentage outperformance   of the peer group median equivalent to 80th percentile 100% In order to   determine the percentages for the equivalent outperformance levels above   median, the Remuneration Committee seeks independent external advice.   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 Committee are essentially the same as for the Executive Directors   with some minor differences, for example smaller levels of share awards and   local or regional performance conditions where appropriate. The remuneration   for the next level of management, our senior leadership team, again follows   the same principles with 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 conditional share awards   without performance conditions. Remuneration Directors’ remuneration   (continued) 74 Vodafone Group Plc Annual Report on Form 20-F 2017

 

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Estimates of   total future potential remuneration from 2018 pay packages The tables below   provide estimates of the potential future remuneration for each of the   Executive Directors based on the remuneration opportunity to be granted in   the 2018 financial year. 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 2017. Benefits are valued   using the figures in the total remuneration for the 2017 financial year table   on page 78 (of the 2017 report). Pensions are valued by applying cash   allowance rate of 24% of base salary at 1 July 2017. Base (£’000) Benefits   (£’000) Pension (£’000) Total fixed (£’000) Chief Executive 1,150 27 276   1,453 Chief Financial Officer 725 29 174 928 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 230% of base salary   for the Chief Executive and 210% for the Chief Financial Officer. 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 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 10,000 12,000 8,000 6,000 4,000 2,000 0 Fixed £1,453 On target   £5,248 Maximum £10,366 £’000 28% 22% 14% 22% 64% 50% ¢ Salary and benefits ¢   Annual bonus ¢ Long-term incentive Nick Read, Chief Financial Officer 10,000   12,000 8,000 6,000 4,000 2,000 0 Fixed On target Maximum £’000 ¢ Salary and   benefits ¢ Annual bonus ¢ Long-term incentive £928 £3,176 £6,184 29% 23% 48%   15% 23% 62% 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 72 and 73) 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 575% 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. 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. Vodafone Group Plc Annual Report on Form   20-F 2017 75 Overview Strategy Performance Governance Financials Additional   information

 

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Remuneration   Policy (continued) 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 compensation for   loss of office in service contracts –– 12 months’ notice from the Company to   the Executive Director. –– Up to 12 months’ base salary (in line with the   notice period). Notice period payments will either be made as normal (if the   executive continues to work during the notice period or is on gardening   leave) or they will be made as monthly payments in lieu of notice (subject to   mitigation if alternative employment is obtained). Treatment of annual bonus   (‘GSTIP’) on termination under plan rules –– The annual bonus will be   pro-rated for the period of service during the financial year and will   reflect the extent to which Company performance has been achieved. –– 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 long-term incentive awards (‘GLTI’) on   termination under plan rules –– An Executive Director’s award will vest in   accordance with the terms of the plan and satisfaction of performance   conditions measured at the normal completion of the performance period, with   the award pro-rated for the proportion of the vesting period that had elapsed   at the date of cessation of employment. –– The Remuneration Committee has   discretion to vary the level of vesting as deemed appropriate, and in   particular to determine that awards should not vest for reasons which may   include, at their absolute discretion, departure in case of poor performance,   departure without the agreement of the Board, or detrimental competitive   activity. Pension and benefits –– Generally pension and benefit provisions   will continue to apply until the termination date. –– 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. –– 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 –– 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. Allowances –– 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 –– Non-Executive Directors do not participate in any incentive plans.   Benefits –– 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. Remuneration Directors’ remuneration (continued) 76 Vodafone Group   Plc Annual Report on Form 20-F 2017

 

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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 2017 financial year. The Committee is comprised to exercise independent   judgement and consists only of the following independent Non-Executive   Directors: Chairman: Valerie Gooding Committee members: Dr Mathias Döpfner,   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. Adviser Appointed by Services provided to   the Committee Fees for services provided to the Committee £’0001 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. 60 Reward and   benefits consultancy; provision of benchmark data; pension administration;   and insurance consultancy services. Note: 1 Fees are determined on a time   spent basis. 2016 annual general meeting – Remuneration Report voting results   At the 2016 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   17,640,195,555 96.92 560,164,876 3.08 18,200,360,431 492,289,893 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 five formal meetings and two formal conference calls 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 2016 –– 2016 annual bonus achievement and 2017 targets and ranges   –– 2013 long-term incentive award vesting and 2017 targets and ranges –– 2016   Directors’ Remuneration Report July 2016 –– 2017 long-term incentive awards   –– Large local market CEO remuneration November 2016 –– Review of   Remuneration Policy –– Shareholder communication materials –– Corporate   governance matters January 2017 –– 2017 annual bonus framework –– Shareholder   consultation update March 2017 –– 2017 reward packages for the Executive   Committee –– Chairman and Non-Executive Director fee levels –– Shareholder   consultation update –– 2017 Directors’ Remuneration Report –– Committee’s   Terms of Reference –– Risk assessment Vodafone Group Plc Annual Report on   Form 20-F 2017 77 Overview Strategy Performance Governance Financials   Additional information

 

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Annual Report on   Remuneration (continued) 2017 remuneration In this section we summarise the   pay packages awarded to our Executive Directors for performance in the 2017   financial year versus 2016. 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 2017 as a result of the performance through the three year period ended   at the completion of our financial year on 31 March 2017. 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 of long-term incentives awards under the   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. Total remuneration for the 2017 financial year   Vittorio Colao Nick Read 2017 £’000 2016 £’000 2017 £’000 2016 £’000   Salary/fees 1,150 1,150 710 694 Taxable benefits1 27 32 29 26 Annual bonus:   GSTIP (see below for further detail) 1,087 1,342 675 817 Total long-term   incentive: 3,477 2,383 1,860 1,393 GLTI vesting during the year2 2,964 2,056   1,586 842 Cash in lieu of GLTI dividends3 513 327 274 134 GLTR vesting during   the year – – – 380 GLTR dividend equivalent shares – – – 37 Cash in lieu of   pension 276 316 171 191 Other4 1 1 1 1 Total 6,018 5,224 3,446 3,122 Notes: 1   Taxable benefits include amounts in respect of: – Private healthcare (2017:   Vittorio Colao £3,091, Nick Read £2,079; 2016: Vittorio Colao £1,946, Nick   Read£1,946); – Cash car allowance £19,200 p.a.; and – Travel (2017: Vittorio   Colao £4,812, Nick Read £7,933; 2016: Vittorio Colao £10,764, Nick Read   £4,546). 2 The value shown in the 2016 column is the award which vested on 26   June 2016 and is valued using the execution share price on 27 June 2016 of   211.87. The value shown in the 2017 column is the award which vests on 26   June 2017 and is valued using an average of closing share price over the last   quarter of the 2017 financial year of 203.24 pence. 3 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 2017 relates to the award which vests on 26 June   2017. 4 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. 2017 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 2017 of 94.5% of target. 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. Performance   measure Payout at target performance 100% Payout at maximum performance 200%   Actual payout % Threshold performance level €bn Target performance level €bn   Maximum performance level €bn Actual performance level1 €bn Service revenue   20% 40% 17.7% 47.8 50.3 52.8 50.0 Adjusted EBITDA2 20% 40% 17.1% 14.9 16.0   17.1 15.8 Adjusted free cash flow 20% 40% 20.1% 3.2 4.0 4.9 4.0 Customer   appreciation KPIs 40% 80% 39.6% See below for further details Total annual   bonus payout level 100% 200% 94.5% Notes: 1 These figures are adjusted to   include the removal of the impact of M&A, foreign exchange movements and   any changes in accounting treatment. 2 Adjusted EBITDA, previously referred   to as EBITDA in prior year reports. During the year under review, service   revenue performance was slightly below budget which was mainly due to below   target performance in our UK, India and Carrier Services businesses. Adjusted   EBITDA result was also slightly below target performance with the UK business   off-setting above target performance in Europe and India off-setting positive   performance in the AMAP region. With regards to adjusted free cash flow,   overall performance was on target with below target results in the Europe and   AMAP regions being offset by positive cash management at a Group level.   Customer appreciation KPIs An assessment of performance under the customer   appreciation KPIs measure was conducted on a market by market basis. Each   market was assessed against a number of different metrics which included: ––   Net promoter score for both Consumer and Enterprise business units –– Brand   consideration for Enterprise and both Consumer user and Consumer non-user ––   Churn, revenue market share and ARPU Remuneration Directors’ remuneration   (continued) 78 Vodafone Group Plc Annual Report on Form 20-F 2017

 

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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 from our local markets which is collected and   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 other relevant   customer factors such as churn, customer growth and service levels are   considered. The aggregated performance for the regions and the Group are   calculated on a revenue-weighted average to give an overall achievement.   Performance this year under this measure is as follows; Customer appreciation   KPIs Achievement Europe 89.5% AMAP 119.5% Group 99.1% The achievement   percentage for Europe reflects strong performance in Italy, where we remain   the Consumer NPS leader, as well as in Spain where not only did we remain the   Consumer NPS leader but we also now lead the brand consideration for non user   consumers. This strong performance however is offset by poor performance in   the UK where further improvement is required on the customer experience. The   achievement percentage for AMAP reflects strong performance in several   markets, specifically Egypt, South Africa and Ghana. Egypt are leaders in   both Consumer and Enterprise NPS and continue to maintain their number 1   position in brand consideration for both Consumer and Enterprise, while South   Africa continue to lead in both Consumer NPS and brand consideration. 2017   annual bonus (‘GSTIP’) amounts Base salary £’000 Target bonus % of base   salary 2017 payout % of target Actual payment £’000 Vittorio Colao 1,150 100%   94.5% 1,087 Nick Read 714 100% 94.5% 675 Long-term incentive (‘GLTI’) award   vesting in June 2017 The 2015 long-term incentive (‘GLTI’) awards which were   made in June 2014 will vest at 43.5% of maximum (108.9% of target) in June   2017. The performance conditions for the three year period ending in the 2017   financial year are as follows: TSR outperformance Adjusted free cash flow   measure £bn 0% (Up to median) 5% (65th percentile equivalent) 10% (80th   percentile equivalent) Below threshold <3.4 0% 0% 0% Threshold 3.4 50%   100% 125% Target 5.1 75% 150% 200% Maximum 6.8 125% 187.5% 250% TSR peer   group Bharti Orange BT Group Telecom Italia Deutsche Telekom Telefónica MTN   The adjusted free cash flow for the three year period ended on 31 March 2017   was £5.7 billion. This compares with a target of £5.1 billion and a maximum   of £6.8 billion. The chart to the right shows that our TSR performance   against our peer group for the same period resulted in below median   performance. Using the combined payout matrix above, this performance   resulted in a payout of 108.9% of target. The combined vesting percentages   are applied to the target number of shares granted as shown below. 2015 GLTI   award: TSR performance (growth in the value of a hypothetical US$100 holding   over the performance period, six-month averaging) 140 130 110 120 100 90 80   70 03/14 09/14 03/15 09/15 03/16 09/16 03/17 Vodafone Group Median of peer   group Outperformance of median of 9% p.a. 100 106 117 113 92 94 133 101 118   133 113 92 98 122 92 81 107 78 115 2015 GLTI performance share awards vesting   in June 2017 Maximum number of shares Target number of shares Adjusted free   cash flow performance payout % of target TSR multiplier Overall vesting % of   target Number of shares vesting Value of shares vesting (’000) Vittorio Colao   3,350,011 1,340,004 108.9% 1.00 times 108.9% 1,458,594 £2,964 Nick Read   1,792,668 717,067 108.9% 1.00 times 108.9% 780,527 £1,586 These share awards   will vest on 26 June 2017. 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 measure is undertaken by Willis Towers Watson. Details of   how the plan works can be found in the Policy Report that was approved at the   2014 AGM. Vodafone Group Plc Annual Report on Form 20-F 2017 79 Overview   Strategy Performance Governance Financials Additional information

 

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Annual Report   on Remuneration (continued) Long-term incentive (‘GLTI’) awarded during the   year The performance conditions for the 2017 long-term incentive awards made   in June 2016 are a combination of adjusted free cash flow and TSR performance   as follows: TSR outperformance Adjusted free cash flow measure £bn1 0.0% (Up   to median) 4.5% (65th percentile equivalent) 9.0% (80th percentile   equivalent) Below threshold <9.95 0% 0% 0% Threshold 9.95 50% 75% 100%   Target 11.80 100% 150% 200% Maximum 13.65 125% 187.5% 250% TSR peer group   Bharti Orange BT Group Telecom Italia Deutsche Telekom Telefónica MTN Note: 1   In line with the decision to change the Group’s reporting currency to euros   from pounds sterling, as outlined in last year’s report, 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 conditional shares granted. 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: 2017 GLTI   performance share awards made in June 2016 Number of shares awarded Face   value of shares awarded1 Proportion of maximum award vesting at minimum   performance Performance period end Target vesting level (40% of max) Maximum   vesting level Target vesting level Maximum vesting level Vittorio Colao   1,231,575 3,078,938 £2,670,055 £6,675,138 1/5th 31 Mar 2019 Nick Read 572,849   1,432,123 £1,241,937 £3,104,843 1/5th 31 Mar 2019 Note: 1 Face value   calculated based on the share price at the date of grant of 216.8 pence.   Dividend equivalents on the shares that vest are paid in cash after the   vesting date. Outstanding awards The award structure for awards made in the   2016 and 2017 financial years (vesting in June/September 2018 and June 2019   respectively) is as set out below. These awards vest subject to a combined   vesting matrix as follows (illustrated as a percentage of target with linear   interpolation between points): TSR outperformance Adjusted free cash flow   measure Up to Median 65th percentile equivalent 80th percentile equivalent   Below threshold 0% 0% 0% Threshold 50% 75% 100% Target 100% 150% 200% Maximum   125% 187.5% 250% Further details on the matrix structure used for the 2016   and 2017 awards can be found in the Annual Report on Remuneration of the   relevant year. All-employee share plans During the year, the Executive   Directors were 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 82. 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. Following a review of the UK all-employee plans it was decided   that with effect from 1 April 2017 such offerings should be solely provided   through an enhanced Sharesave programme. The new arrangements bring our UK   all-employee plans more closely in line with market practice, help to reduce   our costs and provide a simpler share plan offering for our UK employees.   Remuneration Directors’ remuneration (continued) Vodafone Group Plc Annual   Report 80 on Form 20-F 2017

 

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Pensions The   Executive Directors received a cash allowance of 24% of base salary during   the 2017 financial year. 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 £233,011 (2016:   £130,806) into defined contribution pension schemes. Alignment to shareholder   interests Both 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 2017 of 206.37 pence. At 31 March 2017 Goal as a % of   salary Current % of salary held % of goal achieved Number of shares Value of   shareholding Date for goal to be achieved Vittorio Colao 400% 2,049% 512%   11,420,608 £23.6m July 2012 Nick Read 300% 548% 183% 1,896,820 £3.9m April   2019 As outlined in the Letter from the Remuneration Committee Chairman, and   subject to shareholder approval of the revised Remuneration Policy, the   shareholding guidelines will be increased to 500% of salary for the Chief   Executive and 400% of salary for other Executive Directors with effect from   the 2017 AGM. The revised guidelines will also include a post-employment   condition whereby the Executive Directors will be required to continue to   meet their guideline until all long-term incentives have vested. If this   condition is not met, then any unvested GLTI awards will normally be   forfeited Collectively the Executive Committee including the Executive   Directors own more than 21 million Vodafone shares, with a value of over   £45.3 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. At 31 March 2017 Share plans Share options Total number of   interests in shares Unvested GLTI shares (with performance conditions) SAYE   (unvested without performance conditions) Executive Directors Vittorio Colao   20,898,320 9,468,105 9,607 Nick Read 6,726,821 4,814,758 15,243 Total   27,625,141 14,282,863 24,850 The total number of interests in shares includes   interests of connected persons, unvested share awards and share options. At   31 March 2017 Total number of interests in shares Non-Executive Directors Sir   Crispin Davis 34,500 Dr Mathias Döpfner 11,500 Dame Clara Furse 25,000   Valerie Gooding 28,970 Renee James 27,272 Samuel Jonah 30,190 Gerard   Kleisterlee 107,078 Nick Land 42,090 David Nish 74,137 Phil Yea 33,408 At 16   May 2017 and during the period from 1 April 2017 to 16 May 2017, 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   2017, members of the Group’s Executive Committee at 31 March 2017 had an   aggregate beneficial interest in 8,678,718 ordinary shares of the Company. At   16 May 2017 the Directors had an aggregate beneficial interest in 13,731,573   ordinary shares of the Company and the Executive Committee members had an   aggregate beneficial interest in 8,679,088 ordinary shares of the Company,   which includes awards made under the Vodafone Share Incentive Plan after 31   March 2017. 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. The Directors’ total number of interests in shares did not   change during the period from 1 April 2017 to 16 May 2017. Vodafone Group Plc   Annual Report on Form 20-F 2017 81 Overview Strategy Performance Governance   Financials Additional information

 

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Annual Report   on Remuneration (continued) 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: GLTI performance share awards 2015   award Awarded: June 2014 Performance period ending: March 2017 Vesting date:   June 2017 Share price at grant: 189.9 pence 2016 award Awarded: June 2015 and   September 2015 Performance period ending: March 2018 Vesting date: June 2018   Share price at grant: 239.4 pence and 207.2 pence 2017 award Awarded: June   2016 Performance period ending: March 2019 Vesting date: June 2019 Share   price at grant: 216.8 pence Vittorio Colao 3,350,011 3,039,156 3,078,938 Nick   Read 1,792,668 1,589,967 1,432,123 For details of the performance conditions   for the 2016 and 2017 awards please see page 80. Details of the 2015 award   are available on page 79. Share options The following information summarises   the Executive Directors’ options under the Vodafone Group 2008 Sharesave Plan   (‘SAYE’) and the Vodafone Group Incentive Plan (‘GIP’). 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. Grant date   At 1 April 2016 or date of appointment Options granted during the 2017   financial year Options exercised during the 2017 financial year Options   lapsed during the 2017 financial year Options held at 31 March 2017 Option   price Date from which exercisable Expiry date Market price on exercise Gain   on exercise Number of shares Number of shares Number of shares Number of   shares Number of shares Pence1 Pence Vittorio Colao SAYE Jul 2014 9,607 – – –   9,607 156.13 Sep 2019 Feb 2020 – – Total 9,607 9,607 Nick Read GIP2 Jul 2007   927,443 – 927,443 – – 167.80 Jul 2010 Jul 2017 235.30 £626,030 SAYE Jul 2012   10,389 – – – 10,389 144.37 Sep 2017 Feb 2018 – – SAYE Mar 2017 4,854 4,854   154.51 Apr 2022 Sep 2022 – – Total 937,832 15,243 Notes: 1 The closing trade   share price on 31 March 2017 was 208.10 pence. The highest trade share price   during the year was 239.70 pence and the lowest price was 190.50 pence. 2 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. At 16 May 2017 there had been no change to the Directors’   interests in share options from 31 March 2017. Other than those individuals   included in the table above, at 16 May 2017 members of the Group’s Executive   Committee held options for 54,654 ordinary shares at prices ranging from   154.5 pence to 189.2 pence per ordinary share, with a weighted average   exercise price of 164.1 pence per ordinary share exercisable at dates ranging   from 1 September 2017 to 1 April 2022. Hannes Ametsreiter, Aldo Bisio,   António Coimbra, Ahmed Essam, Ronald Schellekens and Serpil Timuray held no   options at 16 May 2017. Loss of office payments Other than amounts already   disclosed in prior year reports, no loss of office payments were made during   the year. Payments to past Directors During the 2017 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 £9,813 (2016: £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. During the year ended 31 March 2017, Vittorio Colao served as a   non-executive director on the boards of Unilever N.V. and Unilever PLC.   Vittorio retained fees of £43,870 in respect of this role. Remuneration   Directors’ remuneration (continued) Vodafone Group Plc Annual Report 82 on   Form 20-F 2017

 

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Assessing pay   and performance In the table below we summarise the Chief Executive’s single   figure remuneration over the past eight 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 an eight 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 79 and not this chart.   Eight-year historical TSR performance (growth in the value of a hypothetical   €100 holding over eight years) 325 275 175 225 125 75 100 137 155 170 168 190   167 215 193 267 227 285 287 322 279 310 245 Vodafone Group STOXX Europe 600   Index 03/09 03/10 03/11 03/12 03/13 03/14 03/15 03/16 03/17 Financial year   remuneration for Chief Executive (Vittorio Colao) 20101 2011 2012 2013 2014   2015 2016 2017 Single figure of total remuneration £’000 3,350 7,022 15,767   11,099 8,014 2,810 5,224 6,018 Annual variable element (actual award versus   maximum opportunity) 64% 62% 47% 33% 44% 56% 58% 47% Long-term incentive   (vesting versus maximum opportunity) 25% 31% 100% 57% 37% 0% 23% 44% Note: 1   The single figure reflects share awards which were granted in 2006 and 2007,   prior to his appointment to Chief Executive in 2008. 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 2016 and 2017 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 2016 (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 2016 to 2017 Item Chief Executive: Vittorio   Colao Other Vodafone Group employees employed in the UK Base salary 0.0% 5.0%   Taxable benefits -15.6% 0.4% Annual bonus -19.0% -6.7% Relative spend on pay   The chart below shows both the dividends distributed in the year and the   total cost of remuneration in the Group. Relative importance of spend on pay   5,000 4,000 6,000 3,000 2,000 1,000 0 €m 4,233 5,519 5,804 3,709 2016 2017   2016 2017 Distributed by way of dividends Overall expenditure on remuneration   for all employees For more details on dividends and expenditure on   remuneration for all employees, please see pages 125 and 154 respectively.   Vodafone Group Plc Annual Report on Form 20-F 2017 83 Overview Strategy   Performance Governance Financials Additional information

 

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Annual Report   on Remuneration (continued) 2017 remuneration for the Chairman and   Non-Executive Directors Salary/fees Benefits1 Total 2017 £’000 2016 £’000   2017 £’000 2016 £’000 2017 £’000 2016 £’000 Chairman Gerard Kleisterlee 625   625 87 77 712 702 Senior Independent Director Phil Yea 140 128 2 1 142 129   Non-Executive Directors Sir Crispin Davis 115 115 10 – 125 115 Dr Mathias   Döpfner 115 115 10 1 125 116 Dame Clara Furse 115 115 13 – 128 115 Valerie   Gooding 140 132 12 6 152 138 Renee James2 139 133 11 10 150 143 Samuel Jonah2   145 151 9 17 154 168 Nick Land 140 140 3 1 143 141 David Nish (appointed 1   January 2016) 115 29 13 7 128 36 Former Non-Executive Directors Luc   Vandevelde (retired 28 July 2015) – 53 – 19 – 72 Total 1,789 1,736 170 139   1,959 1,875 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. 2018 remuneration Details of how the remuneration policy will   be implemented for the 2018 financial year are set out below. 2018 base   salaries As part of the 2017 review, the Remuneration Committee considered   business performance, salary increases for other UK employees and external   market information. In respect of external market information, the Committee   looked at the following two peer groups: 1) Euro Top peer group: Top 25   European general industry companies by market capitalisation, excluding   financial services companies, as well as a select group of telecommunications   companies in the Top 100 that are also members of our TSR peer group. 2) FTSE   30: Top 30 FTSE listed companies by market capitalisation, excluding   financial services companies. The Committee decided to increase the salary of   the Chief Financial Officer by 1.5% 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 1.6% – this   compares to a budget of 1.5% which is based on an average of the relevant   local market budget for each Executive Committee member. The annual salaries   for 2018 (effective 1 July 2017) are as follows: –– Chief Executive: Vittorio   Colao £1,150,000; and –– Chief Financial Officer: Nick Read £725,000. 2018   annual bonus (‘GSTIP’) Following the Committee’s annual review of the GSTIP   framework, and as outlined on pages 68 and 70, the Committee decided that the   adjusted EBITDA measure used in previous years should be replaced with an   adjusted EBIT measure to reflect an increased focus on both capital   discipline and expenditure. The performance measures and weightings for 2018   are outlined below. –– service revenue (20%); –– adjusted EBIT (20%); –– adjusted   free cash flow (20%); and –– customer appreciation KPIs (40%). This includes   an assessment of net promoter score (‘NPS’) and brand consideration measures.   The assessment of NPS and brand consideration metrics utilises data collected   in our local markets which is validated for quality and consistency by   independent third party agencies. Further details on how this data is   collated and how the individual metrics used to measure customer appreciation   KPIs are defined is provided on pages 78 and 79. Due to the potential impact   on our commercial interests, annual bonus targets are considered commercially   sensitive and therefore will be disclosed in the 2018 Remuneration Report   following the completion of the financial year. Remuneration Directors’   remuneration (continued) 84 Vodafone Group Plc Annual Report on Form 20-F   2017

 

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Long-term   incentive (‘GLTI’) awards for 2018 Subject to the approval of the   Remuneration Policy at the 2017 AGM, awards for 2018 will be made in line   with the arrangements described in our policy on pages 72 to 74. Vesting of   the 2018 award will be subject to the performance of adjusted free cash flow   (2/3 of total award) and TSR (1/3 of total award). The details for the 2018   award targets are provided in the table below (with linear interpolation   between points). Following the annual review of the performance measures   which included a review of analysis provided by the Committee’s external   advisers, the Committee decided that for the 2018 award the TSR   outperformance range should be increased from 4.5% at target and 9.0% at   maximum to 5.0% and 10.0% respectively. The Committee also determined it   appropriate to keep the same peer group constituents as used for the 2017   award, but to also include Royal KPN and Liberty Global in the 2018 peer   group. Adjusted FCF Performance (2/3 of total award) Adjusted FCF performance   (€bn) Vesting percentage (% of FCF element) Below threshold <14.75 0%   Threshold 14.75 18% Target 16.60 40% Maximum 18.45 100% TSR Performance (1/3   of total award) TSR outperformance Vesting percentage (% of TSR element)   Below threshold Below median 0% Threshold Median 18% Target 5.0% (65th   percentile equivalent) 40% Maximum 10.0% (80th percentile equivalent) 100%   TSR peer group Bharti BT Group Deutsche Telekom Liberty Global MTN Orange   Royal KPN Telecom Italia Telefónica 2018 remuneration for the Chairman and   Non-Executive Directors For the 2017 review, the fees for our Chairman and   non-executives have been benchmarked against the FTSE 30 (excluding financial   services companies). Following the review it was agreed that no changes would   be made to the current fee levels which are outlined in the table below.   Position/role Fee payable £’000 From 1 April 2017 Chairman1 625 Non-Executive   Director 115 Additional fee for Senior Independent Director 25 Additional fee   for Chairmanship of Audit and Risk and Remuneration Committees 25 Note: 1 The   Chairman’s fee also includes the fee for the Chairmanship of the Nominations   and Governance Committee. For 2018, 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 2.9% of   the Company’s share capital at 31 March 2017 (2.8% at 31 March 2016), whilst   from all-employee share awards it is approximately 0.3% (0.5% at 31 March   2016). This gives a total dilution of 3.2% (3.3% at 31 March 2016). 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 16 May 2017 Vodafone Group Plc Annual Report on Form 20-F 2017 85   Overview Strategy 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 2017. 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 Guidance & 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 88 and 89 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 UK Corporate Governance Code (the   ‘Code’) is set out in the “Directors’ statement of responsibility” on page   89. System of risk management and internal control The Board is responsible   for maintaining a risk management and internal control system and for   managing principal risks faced by the Group. 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. This is   described in more detail in the Audit and Risk Committee report on pages 57   to 63. 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 (which can   be found on pages 29 to 34). 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 our internal control and   risk management arrangements in relation to the financial reporting process   is set out on pages 44 to 85. The information required by DTR 7.2.6R can be   found in the “Shareholder information” section on pages 190 to 196. A   description of the composition and operation of the Board and its Committees   is set out on pages 44 to 85. Strategic Report The Strategic Report is set   out on pages 1 to 43 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 2017 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, Phil Yea and David   Nish. 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 77 to 85. 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 56. 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 190 to 196. Change of   control Details of change of control provisions in the Company’s revolving   credit facilities are set out on page 144. 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 75 and 76. 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 2017 are set out on pages 23 and   42 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 26 and 27. 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 Vodafone is an inclusive employer and diversity is   important to us. We give full and fair consideration to applications for   employment by disabled persons and the continued employment of anyone   incurring a disability whilst employed by us. Training, career development   and promotion opportunities are equally applied for all our employees,   regardless of disability. Our disclosures relating to the employment of women   in senior management roles, employee engagement and policies are set out on   pages 7, 21, 24 and 25. By Order of the Board /s/ Rosemary Martin Rosemary   Martin Group General Counsel and Company Secretary 16 May 2017 Vodafone Group   Plc Annual Report 86 on Form 20-F 2017

 

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Contents Vodafone Group Plc Annual Report on Form 20-F 2017 87   Overview Strategy Performance Governance Financials Additional information   Reporting our financial performance... Focus on clear, effective and concise   reporting We continue to review the format of our consolidated financial   statements with the aim of making them clearer and easier to follow. This   year we have added the following highlights to help you navigate to the   information that is important to you. India impairment We include details of   the €4.5 billion impairment charge recorded in respect of the Group’s   investment in India in note 4 “Impairment losses”, which together with the   recognition of an associated €0.8 billion deferred tax asset, led to an   overall €3.7 billion reduction in the carrying value of Vodafone India. For   more information: Pages 113 to 116 Tax reporting We continue to enhance our   best practice reporting of the Group’s tax affairs to include how the tax   charge arises, expected future tax charges and details of tax assets held in   different jurisdictions as detailed in note 6 “Taxation”. For more information:   Pages 118 to 122 Alternative performance measures This year, we have further   clarified where we have used alternative performance measures, including   their usage and reconciliation to the closest respective equivalent GAAP   measure and their definitions. For more information: Pages 205 to 213 Future   adoption of IFRS 9, IFRS 15 and IFRS 16 We have updated the disclosures in   note 1 “Basis of preparation” relating to the timetable and potential impact   of the future adoption of IFRS 9 “Financial Instruments”, IFRS 15 “Revenue   from Contracts with Customers” and IFRS 16 “Leases”. For more information:   Pages 107 and 108 88 Directors’ statement of responsibility 90 Risk   mitigation 96 This page is intentionally left blank 97 This page is   intentionally left blank 98 Report of independent registered public   accounting firm 99 Consolidated financial statements: 99 Consolidated income   statement 99 Consolidated statement of comprehensive income 100 Consolidated   statement of financial position 101 Consolidated statement of changes in   equity 102 Consolidated statement of cash flows 103 Notes to the consolidated   financial statements: 103 1. Basis of preparation Income statement 109 2.   Segmental analysis 112 3. Operating profit 113 4. Impairment losses 117 5.   Investment income and financing costs 118 6. Taxation 123 7. Discontinued   operations and assets held for sale 125 8. Earnings per share 125 9. Equity   dividends Financial position 126 10. Intangible assets 128 11. Property,   plant and equipment 130 12. Investments in associates and joint arrangements   133 13. Other investments 134 14. Inventory 135 15. Trade and other   receivables 136 16. Trade and other payables 137 17. Provisions 138 18.   Called up share capital Cash flows 139 19. Reconciliation of net cash flow   from operating activities 139 20. Cash and cash equivalents 140 21.   Borrowings 144 22. Liquidity and capital resources 148 23. Capital and   financial risk management Employee remuneration 153 24. Directors and key   management compensation 154 25. Employees 155 26. Post employment benefits   159 27. Share-based payments Additional disclosures 161 28. Acquisitions and   disposals 162 29. Commitments 163 30. Contingent liabilities and legal   proceedings 167 31. Related party transactions 167 32. Subsequent events 168   33. Related undertakings 176 34. Subsidiaries exempt from audit 177 Other   unaudited financial information: 177 Prior year operating results 182 This   page is intentionally left blank 183 This page is intentionally left blank   184 This page is intentionally left blank 185 This page is intentionally left   blank 186 This page is intentionally left blank 187 This page is   intentionally left blank 188 This page is intentionally left blank 189 This   page is intentionally left blank A-1 Subsequent events Reporting in euro   currency With effect from 1 April 2016, the Group’s presentation currency was   changed from pounds sterling to the euro to better align with the geographic   split of the Group’s operations as detailed in note 1 “Basis of preparation”.   Prior year results have been restated accordingly. For more information:   Pages 103 to 106 Vodafone India Following the announcement on 20 March 2017   that we had agreed to combine Vodafone India with Idea Cellular to form a   joint controlled company, the results of Vodafone India became discontinued   operations and its assets and liabilities held for sale. For more   information: Pages 123 and 124

 

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Directors’ statement of responsibility Vodafone Group Plc Annual   Report 88 on Form 20-F 2017 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: –– select suitable   accounting policies and apply them consistently; –– make judgements and   estimates that are reasonable and prudent; –– present information, including   accounting policies, in a manner that provides relevant, reliable, comparable   and understandable information; –– 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’); –– state for the   Company’s financial statements whether applicable UK accounting standards   have been followed; and –– prepare the financial statements on a going   concern basis unless it is inappropriate to presume that the Company and the   Group will continue in business. The Directors are responsible for keeping   proper accounting records which disclose with reasonable accuracy at any time   the financial position of the Company and 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 48 and 49   confirm that, to the best of their knowledge: –– 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; –– 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 –– 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 and carried out a   robust assessment of the principal risks and uncertainties that it faces. The   Directors confirm that they have carried out a robust assessment of the   principal risks of the Group. The Directors are also responsible under   section 172 of the Companies Act 2006 to promote the success of the Company   for the benefit of its members as a whole and in doing so have regard for the   needs of wider society and stakeholders, including customers, consistent with   the Group’s core and sustainable business objectives. 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. 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. 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.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 89 Overview Strategy Performance   Governance Financials Additional information 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 43. A range of mitigations for risks faced by the Group are   included on pages 90 to 95. 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. 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: –– free cash flow forecasts, with the   first three months’ inputs being sourced directly from the operating   companies (analysed on a daily basis), with information beyond this taken from   the latest forecast/budget cycle; –– bond and other debt maturities; and ––   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: –– pertain to the   maintenance of records that, in reasonable detail, accurately and fairly   reflect transactions and dispositions of assets; –– 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 –– 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. 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   2017 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 2017.   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 2017 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 98. By Order   of the Board /s/ Rosemary Martin Rosemary Martin Group General Counsel and   Company Secretary 16 May 2017

 

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Risk mitigation Vodafone Group Plc Annual Report 90 on Form 20-F   2017 Our risk management framework Our external operating environment is   subject to constant and sometimes rapid change. We must be able to respond to   this change, take appropriate levels of risk to protect our market position   and take advantage of opportunities. Equally, failure to manage risk could   have an adverse impact on the achievement of our strategic goals. To   understand our risk profile and align it with our objectives and decision   making processes, we operate a global framework that ensures we identify   risk, set tolerance levels and consistently manage risk across our business.   This also allows us to consolidate our view on risk looking across all local   markets, functions and specialist areas. This line of sight gives management   the information they need to make the right decisions for our business.   Identify –– Risks identified in each Vodafone local market and entity ––   Strategic risk reviews with senior leadership –– Group principal risks   reviewed and agreed by Executive Committee and the Board Measure –– Risk   tolerance set by Executive Committee and the Board for all principal risks ––   Consolidation and escalation across the Group using standardised scoring and   categorisation Manage –– Controls set to manage the risk within tolerance and   ownership defined –– Risk action plans created to manage risks within   tolerance Monitor –– Co-ordinated assurance across the “three lines of   defence”1 assesses the effectiveness of the controls Report –– Inform   Executive Committee and the Board on how effectively risks are being managed   –– Risk management information used to inform strategy, capex and resourcing   decisions Assurance Oversight First line of defence Second line of defence   Third line of defence1 Group Audit & Risk Committee Note: 1 A term used   to describe a 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 with the business operations, the second line of defence has   oversight over the first line of defence (e.g. risk management) and the third   line of defence are the independent assurance providers (e.g. Internal   Audit). Group Risk & Compliance Committee Local Audit & Risk   Committee Identify Measure Monitor Manage Report Mitigations for risks faced   by the Group include:

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 91 Overview Strategy Performance   Governance Financials Additional information Strengthening our framework We   constantly strive to improve risk management and have made the following   enhancements over the last 12 months: –– A consistent reporting and oversight   methodology has been extended across all local markets and entities. –– We   have increased our engagement with risk owners to improve monitoring of key   risks, actions and indicators. –– We have invested in a global risk tool,   which allows us to standardise the data stored on all risks and to share   information across the Group. –– We have worked to develop our risk community   through best practice sharing, training and our annual Global Risk Forum.

 

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Vodafone Group   Plc Annual Report 92 on Form 20-F 2017 Risk mitigation (continued) What is   the impact? Failing to protect our customer information and service   availability could have major customer, financial, reputational and   regulatory impact in all markets in which we operate. What is our target   tolerance position? We aim for a secure digital future for our customers.   Security underpins our commitment to protecting our customers with reliable   connections and keeping their data safe. This corresponds to strong   preventative, detective and responsive controls to minimise the risk of a   successful attack. What is the impact? Our market position and revenues could   be damaged by failing to provide the services that our customers want at a   fair price. What is our target tolerance position? We aim for a fair and   competitive environment in all of our markets, and adopt strategies to   deliver this through the use of innovative products, services and pricing   models. We also work with regulators and governments to ensure a fair and   competitive environment. What is the impact? If the cost of operations were to   significantly increase, directly or indirectly, this would impact our   profitability and returns to shareholders. What is our target tolerance   position? We seek actively to engage with governments and tax authorities to   encourage good working relationships and to help shape potential impacts of   legislative change on the Group. We look for spectrum auctions to be fair for   all participants both in terms of ability to access auctions and pricing of   spectrum. What is the impact? If we fail to deliver converged services,   either through not being able to access infrastructure or content at a   reasonable price, or through ineffective integration of acquired fixed   assets, this could lead to higher customer churn and/or significant downward   pressure on prices. What is our target tolerance position? We seek a   sustainable competitive position to protect our mobile market share and grow   our fixed broadband and TV activities in markets with increasing convergence.   What is the impact? A significant implementation and migration failure could   result in a major impact on our customers, revenues, costs and reputation.   What is our target tolerance position? We seek successful IT transformation   initiatives as the vehicle for delivering a great customer experience,   high-quality reliable systems, improving our time to market and enabling   best-in-class digital capabilities. Cyber threat and information security   Market disruption Adverse political and regulatory measures Failure to   converge and integrate acquisitions IT transformation failure What is the   impact? The potential for another global financial crisis may lead to further   economic instability and subsequent reductions in corporate and consumer   spending or an impact on capital markets that could restrict our refinancing   requirements. What is our target tolerance position? We take a conservative   approach to financial risks which reflects our diverse business. We carefully   manage our liquidity and access to capital markets to limit our exposure to   unstable economic conditions. Unstable economic conditions/inadequate   liquidity

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 93 Overview Strategy Performance   Governance Financials Additional information How do we manage it? We have a   risk based security strategy that is delivered by a leading cyber defence   team who implement customer-focused security controls centrally and in local   markets, and we have embarked on a continuous improvement programme to   mitigate the changing threats we face. Key risk indicators We monitor   multiple trends including: –– Privileged user access levels –– Confirmed   security incidents –– Critical vulnerabilities Changes since last report   Organisations in all sectors are targeted by an increasing volume and   sophistication of cyber attacks. We have continued to: improve our cyber   defences; upgrade our internal controls; and to educate our people, suppliers   and customers on how to protect our customers’ information and   communications, networks and assets. How do we manage it? We aim to offer a   superior customer experience and continually improve our offering through a   wide set of innovative products and services, including fixed and mobile   content, IoT and voice over LTE. We monitor the competitor landscape in all   markets, and react appropriately; working to make sure each market has a fair   and competitive environment. Key risk indicators –– Trends in competitor   behaviour and new technologies –– Level of customers actively using our new   products and services Changes since last report This risk has increased due   to a growing use of OTT voice apps, changing competitor business models and   new entrants in some of our markets. In the case of new competitors, we have   responded by changing our approach such as entering into a joint venture in   India, to ensure that we remain in the best possible position to compete. How   do we manage it? We maintain constructive but robust engagement with 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. We   plan our approach to spectrum auctions to ensure we achieve fair access at   sustainable prices. Key risk indicators We monitor: –– Public sentiment,   changes to laws and regulations, number and value of disputes across the   Group –– Benchmarking of spectrum cost between countries Changes since last   report This risk has increased due to the evolution of national politics,   which could have an impact on multinational companies, the potential for   government spectrum auctions to push pricing for 5G beyond reasonable levels,   and increasing instability in some of our markets. How do we manage it? We   actively look for opportunities, in all markets, to provide services beyond   mobile through organic investment, acquisitions, partnerships, or joint   ventures. We carefully manage the integration of acquired businesses and   joint ventures through the alignment of policies, processes and systems to   ensure maximum benefit is delivered. Key risk indicators We track various   metrics around: –– Achievement of synergies –– Next Generation Network   (‘NGN’) reach –– Available assets –– Number of converged accounts Changes   since last report This risk has decreased overall due to successful merger   activities, improved access to assets and an increased number of converged   customers. However, we need to continue to focus on ensuring our mobile and   fixed customer bases are fully converged, and that we successfully integrate   and manage our acquired assets. How do we manage it? We use a standardised   programme methodology across all major IT transformation programmes to ensure   a high-quality start up process and increase the certainty of the outcome. We   ensure careful testing of all new developments, particularly customer-facing   solutions, prior to go-live. Key risk indicators We consider trends in:   –– Customer disruption –– Unplanned spend –– Return on capital employed   Changes since last report We have launched a new global approach to IT   transformation programmes. The process was designed to ensure that lessons   learnt from previous transformation projects are fed into new projects to   encourage consistency and strengthen governance. Executive Committee risk   owners: Johan Wibergh and Matthew Kirk Risk movement: Stable Risk category:   Operational Link to strategic programmes: Executive Committee risk owner:   Serpil Timuray Risk movement: Increased Risk category: Strategic Link to   strategic programmes: Executive Committee risk owners: Nick Read and Matthew   Kirk Risk movement: Increased Risk category: Financial Link to strategic   programmes: Executive Committee risk owner: Serpil Timuray Risk movement:   Decreased Risk category: Strategic Link to strategic programmes: Executive   Committee risk owner: Johan Wibergh Risk movement: Stable Risk category:   Operational Link to strategic programmes: How do we manage it? We maintain   access to long and short-term capital markets through diversified sources of   funding. We forecast with contingencies in our business plans to cater for   negative operational impacts that could occur from a variety of drivers   including the impact from lower economic growth than is generally expected.   Key risk indicators –– Current credit rating –– Average life and cost of debt   –– Currency and interest rate exposures –– Monitoring of economic and   financial market drivers Changes since last report We have taken action to   increase the average life of our bond debt and interest rate fixing, thereby   respectively reducing our refinancing risk and interest rate risk to material   inflationary impacts. Executive Committee risk owner: Nick Read Risk movement:   Stable Risk category: Financial Link to strategic programmes: Network   Leadership Customer eXperience eXcellence Fit for Growth Key to strategic   programmes: People and Culture

 

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Vodafone Group   Plc Annual Report 94 on Form 20-F 2017 Electro-magnetic fields related health   risks Risk mitigation (continued) What is the impact? Major incidents caused   by suppliers, natural disasters or an extreme technology failure, although   rare, could result in the complete loss of a key technology site causing   severe impact on our customers, revenues and reputation. What is our target   tolerance position? Our customer promise is based on reliable availability of   our network, therefore the recovery of critical mobile, fixed and IT services   must be fast and robust. What is the impact? This risk is relevant to all our   markets, in both our consumer and Enterprise businesses. Failure to deliver   on our digital and customer experience objectives could result in lack of   differentiation leading to increased customer churn and eventual loss of   market share. What is our target tolerance position? The Customer eXperience   eXcellence (‘CXX’) programme is designed to ensure the customer is always at   the heart of everything we do. We have a customer experience framework and   facilitate best practice sharing and support to local markets. What is the   impact? Non-compliance with legislation or regulatory requirements could lead   to reputational damage, financial penalties and/or suspension of our licence   to operate. What is our target tolerance position? We seek to comply with all   applicable laws and regulations in all of our markets. We seek to process   personal data honestly, ethically, with integrity, and always consistent with   applicable laws and our values. What is the impact? Failure to deliver these   Enterprise services profitably may lead to a reduction in our expected   revenue and could impact our credibility to deliver on large, complex deals.   What is our target tolerance position? We pursue, win and deliver new   Enterprise business profitably. We deliver against the commitments made to   the customer and will manage change throughout. We deliver the best customer   experience at every interaction with Vodafone. Technology failure Failure to   deliver on digital transformation and CXX Non-compliance with legal and   regulatory requirements Failure to deliver major Enterprise contracts   profitably What is the impact? 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. What is our target tolerance position? Vodafone   does not want to expose anyone to EMF levels above those mandated by   regulators. We comply with national standards, where existing, and with our   own EMF policy, based on international science guidelines. Our vision is to   lead within the industry in responding to public concern about mobiles, masts   and health.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 95 Overview Strategy Performance Governance   Financials Additional information How do we manage it? Unique recovery   targets are set for critical sites to limit the impact of service outages. A   global policy supports these targets with minimum controls to ensure   effective resilience. We monitor the lifespan of critical assets and maintain   back up where necessary. Key risk indicators –– Number of critical sites able   to meet the recovery targets –– Levels of incidents/near misses Changes since   last report This risk is considered stable as we continue to implement   improvements to the resilience capabilities of our critical mobile, fixed and   IT sites. How do we manage it? We have central and local CXX teams in place.   Minimum standards and implementation plans for CXX have been developed for   each local market. We link our senior leaders’ remuneration to customer   appreciation KPIs. Benchmarking is underway on digital capabilities in each   market. Key risk indicators –– Measurement of NPS –– Implementation and   monitoring of minimum CXX standards Changes since last report This risk has   been expanded to include a focus on delivering a differentiated digital   experience for our customers. For this reason, the risk is considered   increased, despite the continued success of our CXX programme. How do we   manage it? We have subject matter experts in legal and regulatory teams at a   local and global level, and a robust policy compliance framework. We train   our employees in “Doing what’s right”, our training and awareness programme   which sets our ethical culture across the organisation and ensures employees   understand their role in ensuring compliance. Key risk indicators –– Results   of the annual compliance testing programme –– Number of Speak Up cases in   each market –– Changes to applicable legal and regulatory requirements   Changes since last report With mature compliance programmes in place, this   risk remains stable. We actively seek to improve these programmes and this   year will see a focus on ensuring compliance with the EU General Data   Protection Regulation. How do we manage it? We manage the commercial and   reputational risks through strict new product development, deal governance,   customer solution delivery and service management processes. Key risk   indicators We track trends in: –– NPS –– Revenue and major contract profitability   –– Order completion rates –– Cumulative deal risk Changes since last report   Due to the successful implementation of a number of process improvements,   this risk has decreased. We have improved deal governance and now have   stronger in-life contractual management processes. Executive Committee risk   owner: Johan Wibergh Risk movement: Stable Risk category: Operational Link to   strategic programmes: Executive Committee risk owner: Serpil Timuray Risk   movement: Increased Risk category: Operational Link to strategic programmes:   Executive Committee risk owners: Rosemary Martin and Matthew Kirk Risk   movement: Stable Risk category: Legal and Regulatory Link to strategic   programmes: Executive Committee risk owner: Brian Humphries Risk movement:   Decreased Risk category: Operational Link to strategic programmes: How do we   manage it? Our Group EMF Board manages potential risks through cross sector   initiatives and oversees a global programme to respond to public concern. We   monitor scientific developments and engage with relevant bodies to support   the delivery and transparent communication of the scientific research agenda   set by the World Health Organization. Key risk indicators We monitor: ––   Scientific research –– International standards and guidelines –– Public perception   –– Compliance with EMF policies Changes since last report There are no   material changes to the risk. Executive Committee risk owner: Matthew Kirk   Risk movement: Stable Risk category: Operational Link to strategic   programmes: Network Leadership Customer eXperience eXcellence Fit for Growth   People and Culture Key to strategic programmes:

 

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Report of independent registered public accounting firm Vodafone   Group Plc Annual Report 98 on Form 20-F 2017 To 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   of Vodafone Group Plc and its subsidiaries (‘the Company’) at 31 March 2017   and 31 March 2016, and the results of their operations and their cash flows   for each of the three years ended 31 March 2017 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 2017, 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 audits. 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 opinions. As discussed in Note 1 to the consolidated   financial statements, the Company changed its presentation currency with   effect from 1 April 2016. 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. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP   London, United Kingdom 16 May 2017

 

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Consolidated financial statements and financial commentary Vodafone   Group Plc Annual Report on Form 20-F 2017 99 Overview Strategy Performance   Governance Financials Additional information Consolidated income statement   for the years ended 31 March 2017 Restated1 2016 Restated1 2015 Note €m €m €m   Revenue 2 47,631 49,810 48,385 Cost of sales (34,576) (36,713) (35,073) Gross   profit 13,055 13,097 13,312 Selling and distribution expenses (4,349) (4,603)   (4,181) Administrative expenses (6,080) (6,379) (6,834) Share of results of   equity accounted associates and joint ventures 47 60 (78) Impairment losses 4   – (569) – Other income/(expense) 3 1,052 (286) (146) Operating profit 3 3,725   1,320 2,073 Non-operating expense (1) (3) (23) Investment income 5 474 539   1,083 Financing costs 5 (1,406) (2,046) (1,399) Profit/(loss) before taxation   2,792 (190) 1,734 Income tax (expense)/credit 6 (4,764) (4,937) 6,071   (Loss)/profit for the financial year from continuing operations (1,972)   (5,127) 7,805 (Loss)/profit for the financial year from discontinued   operations 7 (4,107) 5 (328) (Loss)/profit for the financial year (6,079)   (5,122) 7,477 Attributable to: – Owners of the parent (6,297) (5,405) 7,279 –   Non-controlling interests2 218 283 198 (Loss)/profit for the financial year   (6,079) (5,122) 7,477 (Loss)/earnings per share From continuing operations: –   Basic (7.83)c (20.27)c 28.72c – Diluted (7.83)c (20.27)c 28.57c Total Group:   – Basic 8 (22.51)c (20.25)c 27.48c – Diluted 8 (22.51)c (20.25)c 27.33c   Notes: 1 See note 1 “Basis of preparation”. 2 Profit attributable to   non-controlling interests solely derives from continuing operations.   Consolidated statement of comprehensive income for the years ended 31 March   2017 Restated1 2016 Restated1 2015 Note €m €m €m (Loss)/profit for the   financial year (6,079) (5,122) 7,477 Other comprehensive income: Items that   may be reclassified to the income statement in subsequent years:   Gains/(losses) on revaluation of available-for-sale investments, net of tax 2   (3) 5 Foreign exchange translation differences, net of tax (1,201) (3,030)   3,681 Foreign exchange losses/(gains) transferred to the income statement –   282 (1) Fair value losses/(gains) transferred to the income statement 4 –   (11) Other, net of tax 110 56 6 Total items that may be reclassified to the   income statement in subsequent years (1,085) (2,695) 3,680 Items that will   not be reclassified to the income statement in subsequent years: Net   actuarial (losses)/gains on defined benefit pension schemes, net of tax 26   (272) 174 (291) Total items that will not be reclassified to the income   statement in subsequent years (272) 174 (291) Other comprehensive   (expense)/income (1,357) (2,521) 3,389 Total comprehensive (expense)/income   for the year (7,436) (7,643) 10,866 Attributable to: – Owners of the parent   (7,535) (7,579) 10,272 – Non-controlling interests 99 (64) 594 (7,436)   (7,643) 10,866 Note: 1 See note 1 “Basis of preparation”. Further details on   items in the consolidated statement of comprehensive income can be found in   the consolidated statement of changes in equity on page 101.

 

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Vodafone Group   Plc Annual Report 100 on Form 20-F 2017 Consolidated statement of financial position   at 31 March 31 March 2017 Restated1 31 March 2016 Restated1 1 April 2015 Note   €m €m €m Non-current assets Goodwill 10 26,808 28,238 30,524 Other intangible   assets 10 19,412 30,326 28,989 Property, plant and equipment 11 30,204 35,515   36,806 Investments in associates and joint ventures 12 3,138 479 652 Other   investments 13 3,459 4,631 5,197 Deferred tax assets 6 24,300 28,306 32,991   Post employment benefits 26 57 224 234 Trade and other receivables 15 4,569   5,793 6,729 111,947 133,512 142,122 Current assets Inventory 14 576 716 667   Taxation recoverable 150 1,402 795 Trade and other receivables 15 9,861   11,561 11,141 Other investments 13 6,120 5,337 5,333 Cash and cash   equivalents 20 8,835 12,922 9,521 25,542 31,938 27,457 Assets held for sale 7   17,195 3,657 – Total assets 154,684 169,107 169,579 Equity Called up share   capital 18 4,796 4,796 5,246 Additional paid-in capital 151,808 151,694   161,801 Treasury shares (8,610) (8,777) (9,747) Accumulated losses (105,851)   (95,683) (85,882) Accumulated other comprehensive income 30,057 31,295 20,092   Total attributable to owners of the parent 72,200 83,325 91,510   Non-controlling interests 1,525 1,817 2,207 Put options over non-controlling   interests (6) (6) (9) Total non-controlling interests 1,519 1,811 2,198 Total   equity 73,719 85,136 93,708 Non-current liabilities Long-term borrowings 21   34,523 37,089 31,039 Deferred tax liabilities 6 535 564 824 Post employment   benefits 26 651 565 784 Provisions 17 1,130 1,619 1,497 Trade and other   payables 16 1,737 1,899 1,748 38,576 41,736 35,892 Current liabilities   Short-term borrowings 21 12,051 20,260 17,463 Taxation liabilities 661 683   828 Provisions 17 1,049 958 1,061 Trade and other payables 16 16,834 19,896   20,627 30,595 41,797 39,979 Liabilities held for sale 7 11,794 438 – Total   equity and liabilities 154,684 169,107 169,579 Note: 1 See note 1 “Basis of   preparation”. The consolidated financial statements on pages 99 to 176 were   approved by the Board of Directors and authorised for issue on 16 May 2017   and were signed on its behalf by: /s/ Vittorio Colao /s/ Nick Read Vittorio   Colao Nick Read Chief Executive Chief Financial Officer

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 101 Overview Strategy Performance   Governance Financials Additional information Consolidated statement of   changes in equity for the years ended 31 March Other comprehensive income   Equity Additional share- Non- Share paid-in Treasury Retained Currency   Pensions Investment Revaluation holders’ controlling Total capital2 capital3   shares losses reserve4 reserve reserve5 surplus6 Other7 funds interests   equity €m €m €m €m €m €m €m €m €m €m €m €m 1 April 2014 restated1 4,592   141,718 (8,703) (88,383) 35,892 (713) 59 1,227 45 85,734 1,187 86,921 Issue   or reissue of shares – 2 180 (159) – – – – – 23 – 23 Share-based payments8 –   119 – – – – – – – 119 – 119 Transactions with non-controlling interests in   subsidiaries – – – (916) – – – – – (916) 742 (174) Dividends – – – (3,712) –   – – – – (3,712) (326) (4,038) Comprehensive income – – – 7,279 3,284 (291)   (6) – 6 10,272 594 10,866 Profit – – – 7,279 – – – – – 7,279 198 7,477 OCI –   before tax – – – – 2,992 (369) 5 – 14 2,642 399 3,041 OCI – taxes – – – – 293   78 – – (8) 363 (3) 360 Transfer to the income statement – – – – (1) – (11) –   – (12) – (12) Other9 654 19,962 (1,224) 9 (19,411) – – – – (10) 1 (9) 31   March 2015 restated1 5,246 161,801 (9,747) (85,882) 19,765 (1,004) 53 1,227   51 91,510 2,198 93,708 Issue or reissue of shares – 2 147 (131) – – – – – 18   – 18 Share-based payments8 – 161 – – – – – – – 161 – 161 Issue of mandatory   convertible bonds10 – 3,480 – – – – – – – 3,480 – 3,480 Transactions with   non-controlling interests in subsidiaries – – – (44) – – – – – (44) (19) (63)   Dividends – – – (4,233) – – – – – (4,233) (332) (4,565) Comprehensive expense   – – – (5,405) (2,401) 174 (3) – 56 (7,579) (64) (7,643) (Loss)/profit – – –   (5,405) – – – – – (5,405) 283 (5,122) OCI – before tax – – – – (2,535) 216   (4) – 75 (2,248) (343) (2,591) OCI – taxes – – – – (148) (42) 1 – (19) (208)   (4) (212) Transfer to the income statement – – – – 282 – – – – 282 – 282   Other9 (450) (13,750) 823 12 13,377 – – – – 12 28 40 31 March 2016 restated1   4,796 151,694 (8,777) (95,683) 30,741 (830) 50 1,227 107 83,325 1,811 85,136   Issue or reissue of shares – 2 167 (150) – – – – – 19 – 19 Share-based   payments8 – 112 – – – – – – – 112 – 112 Transactions with non-controlling   interests in subsidiaries – – – (12) – – – – – (12) 17 5 Dividends – – –   (3,709) – – – – – (3,709) (410) (4,119) Comprehensive expense – – – (6,297)   (1,082) (272) 6 – 110 (7,535) 99 (7,436) (Loss)/profit – – – (6,297) – – – –   – (6,297) 218 (6,079) OCI – before tax – – – – (1,096) (274) 2 – 156 (1,212)   (121) (1,333) OCI – taxes – – – – 14 2 – – (46) (30) 2 (28) Transfer to the   income statement – – – – – – 4 – – 4 – 4 Other – – – – – – – – – – 2 2 31   March 2017 4,796 151,808 (8,610) (105,851) 29,659 (1,102) 56 1,227 217 72,200   1,519 73,719 Notes: 1 See note 1 “Basis of preparation”. 2 See note 18   “Called up share capital”. 3 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. 4   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. 5 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. 6 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. 7 Includes the   impact of the Group’s cash flow hedges with €787 million net gain deferred to   other comprehensive income during the year (2016: €337 million net gain;   2015: €768 million net gain) and €654 million net gain (2016: €294 million   net gain; 2015: €821 million net gain) recycled to the income statement. 8   Includes €9 million tax credit (2016: €5 million credit; 2015: €9 million   credit). 9 Includes amounts relating to foreign translation differences   arising on the retranslation of reserves due to the change in the Group’s   presentation currency. 10 Includes the equity component of mandatory   convertible bonds which were compound instruments issued in the year ended 31   March 2016.

 

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102 Vodafone   Group Plc Annual Report on Form 20-F 2017 Consolidated statement of cash   flows for the years ended 31 March 2017 Restated1 2016 Restated1 2015 Note €m   €m €m Inflow from operating activities 19 14,223 14,336 12,668 Cash flows   from investing activities Purchase of interests in subsidiaries, net of cash   acquired 28 (28) (57) (3,906) Purchase of interests in associates and joint   ventures 28 499 (3) (107) Purchase of intangible assets 10 (2,576) (5,618)   (2,813) Purchase of property, plant and equipment 11 (6,285) (8,265) (7,324)   Purchase of investments 13 (2,219) (106) (258) Disposal of interests in   subsidiaries, net of cash disposed 2 – – Disposal of interests in associates   and joint ventures 4 – 29 Disposal of property, plant and equipment 11 43 164   191 Disposal of investments 3,597 1,888 1,107 Dividends received from   associates and joint ventures 433 92 732 Interest received 434 342 288 Cash   flows from discontinued operations (2,327) (2,308) (1,173) Outflow from   investing activities (8,423) (13,871) (13,234) Cash flows from financing   activities Issue of ordinary share capital and reissue of treasury shares 18   25 25 31 Net movement in short-term borrowings 1,293 (11) 5,578 Proceeds from   issue of long-term borrowings 7,326 9,157 2,992 Repayment of borrowings   (9,267) (3,784) (5,008) Issue of subordinated mandatory convertible bonds –   3,480 – Equity dividends paid 9 (3,714) (4,188) (3,758) Dividends paid to   non-controlling shareholders in subsidiaries (413) (309) (310) Other   transactions with non-controlling shareholders in subsidiaries 5 (67) (867)   Other movements in loans with associates and joint ventures 70 (31) (68)   Interest paid (1,264) (1,324) (1,556) Cash flows from discontinued operations   (3,157) 1,134 (196) (Outflow)/inflow from financing activities (9,096) 4,082   (3,162) Net cash (outflow)/inflow (3,296) 4,547 (3,728) Cash and cash   equivalents at beginning of the financial year 20 12,911 9,492 12,245   Exchange (loss)/gain on cash and cash equivalents (313) (1,128) 975 Cash and   cash equivalents at end of the financial year 20 9,302 12,911 9,492 Note: 1   See note 1 “Basis of preparation”. 

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 Notes to the consolidated financial   statements Vodafone Group Plc Annual Report on Form 20-F 2017 103 1. Basis of   preparation This section describes the critical accounting judgements and   estimates 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. With effect from 1 April 2016, the Group’s   presentation currency changed from sterling to the euro to better align with   the geographic split of the Group’s operations and the Group reclassified   €580 million from goodwill to investments in associates and joint ventures in   respect of Indus Towers within the consolidated statement of financial   position to align with the Group’s cash-generating unit classifications.   Prior periods, including the amounts presented for the years ended 31 March   2016 and 31 March 2015, together with all disclosed alternative performance   measures, have been restated into euros using closing rates at the relevant   balance sheet date for assets, liabilities, share capital, share premium and   other capital reserves and the income statement has been restated at the   average rate for the comparative period or the spot rate for significant   transactions. The results of Vodafone India are presented in results from   discontinued operations in the current and prior periods and its assets and   liabilities reported in assets and liabilities held for sale, respectively,   at 31 March 2017. 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 judgements and estimates 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, estimates   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 Group uses in-house tax experts when assessing uncertain   tax positions and seeks the advice of external professional advisors where   appropriate. Provisions are recognised for uncertain tax positions when the   Group has a present obligation as a result of a past event and management   judge that it is probable that there will be a future outflow of economic   benefits from the Group. Provisions are measured using management’s estimate of   the most likely outcome. The final resolution of uncertain tax positions 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.

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 104 Vodafone Group Plc Annual Report on Form   20-F 2017 Notes to the consolidated financial statements (continued) 1. Basis   of preparation (continued) 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 management judge that 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. The estimated   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 estimates 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 €117,775 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, which may require the use of judgement. 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. The determination of gains or   losses arising from the contribution or sale of a subsidiary as part of the   formation of a joint arrangement requires management to make significant   estimates to determine the present value of future cash flows to be generated   by the joint arrangement in order to determine the fair value of non-cash   consideration received. 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.

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 Vodafone Group Plc Annual Report on Form   20-F 2017 105 Capitalised software For computer software, the estimated   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 19.5% (2016: 21.0%) 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.   Post employment benefits Management uses estimates when determining the   Group’s liabilities and expenses arising for defined benefit pension schemes.   Management is required to estimate the 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 estimates are required to determine 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 estimates to be made in respect of highly uncertain matters   including management’s expectations of: – growth in adjusted EBITDA,   calculated as adjusted operating profit before depreciation and amortisation;   – timing and amount of future capital expenditure, licence and spectrum   payments; – long-term growth rates; and – 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: – the nominal GDP growth rates for the country of operation;   and – 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: – the nominal GDP growth rates for the country of   operation; and – 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. For discontinued   operations, impairment testing requires management to determine whether the   carrying value of the discontinued operation can be supported by the fair   value less costs to sell. Where not observable in a quoted market, management   have determined fair value less costs to sell by reference to the outcomes   from the application of a number of potential valuation techniques,   determined from inputs other than quoted prices that are observable for the   asset or liability, either directly or indirectly.

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 106 Vodafone Group Plc Annual Report on Form   20-F 2017 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 euro, which   became the Company’s functional currency on 1 April 2016 as the primary   currency in which the Company’s financing activities and investment returns are   denominated. 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. Similarly, with effect from 1 April 2016, the   Group’s presentation currency was changed from sterling to euro to better   align with the geographic split of the Group’s operations. Amounts presented   for the years ended 31 March 2016 and 31 March 2015 have been translated into   euros using closing rates at the relevant balance sheet date for amounts   recorded in the consolidated statement of financial position and consolidated   statement of changes in equity and average rates for the relevant year for   amounts reported in the consolidated income statement, consolidated statement   of comprehensive income and consolidated statement of cash flows. The change   of presentation and functional currency has not changed either the Group’s or   the 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 the consolidated statement of comprehensive income. 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 the consolidated statement of   comprehensive income. Share capital, share premium and other capital reserves   are initially recorded at the functional currency rate prevailing at the date   of the transaction and are not retranslated. For the purpose of presenting   consolidated financial statements, the assets and liabilities of entities   with a functional currency other than euro are expressed in euro 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 other comprehensive   income. On disposal of a foreign entity, the cumulative amount previously   recognised in the consolidated statement of comprehensive income 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   2017 is €637 million (31 March 2016: €1,141 million loss; 2015: €261 million   gain). The net gains and net losses are recorded within operating profit   (2017: €133 million charge; 2016: €24 million credit; 2015: €8 million   charge), other income and expense and non-operating income and expense (2017:   €nil; 2016: €282 million charge; 2015: €1 million credit), investment and   financing income (2017: €505 million charge; 2016: €872 million charge; 2015:   €263 million credit) and income tax expense (2017: €1 million credit; 2016:   €11 million charge; 2015: €5 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 2016 On 1 April 2016 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: – Amendments to IAS 1 “Disclosure Initiative”;   – Amendments to IAS 16 and IAS 38 “Clarification of Acceptable Methods of   Depreciation and Amortisation”; Amendments to IFRS 11 “Accounting for   Acquisitions of Interests in Joint Operations”; and – “Improvements to IFRS:   2012-2014 cycle”.

 

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 Vodafone Group Plc Annual Report on Form   20-F 2017 107 New accounting pronouncements to be adopted on 1 April 2017 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 2017 and which have not yet been endorsed by the EU: –   Amendments to IAS 12 “Recognition of Deferred Tax Assets for Unrealised   Losses”; – Amendments to IAS 7 “Disclosure Initiative”; which requires   additional disclosures of changes in liabilities arising from financing   activities; and – Amendments to IFRS 12 “Disclosure of Interests in other   entities” (part of “Improvements to IFRS 2014-2016 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 2017.   New accounting pronouncements to be adopted on or after 1 April 2018 The   following pronouncements which are potentially relevant to the Group have   been issued by the IASB are effective for annual periods beginning on 1   January 2018 and which have not yet been endorsed by the EU: – Amendments to   IFRS 2 “Classification and Measurement of Share-based Payment Transactions”;   – Amendments to IFRS 4 “Applying IFRS 9 Financial Instruments with IFRS 4   Insurance Contracts”; – Amendment to IAS 28 “Investments in Associates and   Joint Ventures” (part of “Improvements to IFRS 2014-2016 Cycle”); and – IFRIC   22 “Foreign Currency Transactions and Advance Consideration”. 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 2018. In   addition, the Group will adopt the following standards, which have been   issued by the IASB: – On 1 April 2018 the Group will adopt IFRS 15 “Revenue   from Contracts with Customers” and IFRS 9 “Financial Instruments” which are   effective for accounting periods on or after 1 January 2018 and which have   been endorsed by the EU. – On 1 April 2019 the Group will adopt IFRS 16   “Leases”, which has not yet been endorsed by the EU and is effective for   accounting periods beginning on or before 1 January 2019. IFRS 9, IFRS 15 and   IFRS 16 are significant new standards, the impacts of which on the Group’s   financial reporting are currently being assessed. IFRS 9 “Financial   Instruments” IFRS 9 “Financial Instruments” was issued in July 2014 to   replace IAS 39 “Financial Instruments: Recognition and Measurement” and has   been endorsed by the EU. The standard is effective for accounting periods   beginning on or after 1 January 2018 and will be adopted by the Group on 1   April 2018. IFRS 9 will impact the classification and measurement of the   Group’s financial instruments and will require certain additional   disclosures. The primary changes relate to the assessment of hedging   arrangements and provisioning for potential future credit losses on financial   assets; the Group is continuing to analyse the impact of these changes which   are not currently considered likely to have any major impact on the Group’s   current accounting treatment or hedging activities. IFRS 15 “Revenue from   Contracts with Customers” IFRS 15 “Revenue from Contracts with Customers”,   which has been endorsed by the EU, was issued in May 2014 and subsequent   amendments, “Clarifications to IFRS 15”, which have not yet been endorsed by   the EU, were issued in April 2016. IFRS 15, as amended, is effective for   accounting periods beginning on or after 1 January 2018. IFRS 15 sets out the   requirements for recognising revenue and costs from contracts with customers   and includes extensive disclosure requirements; it will have a material   impact on the Group’s reporting of revenue and costs as follows: – IFRS 15   will require the Group to identify deliverables in contracts with customers   that qualify as separate “performance obligations”. The performance   obligations identified will depend on the nature of individual customer   contracts, but might typically be identified for mobile handsets, other   equipment provided to customers and for services provided to customers such   as mobile and fixed line communications services. 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. Revenue will then be recognised either at a point in time or over time   when the respective performance obligations in a contract are delivered to   the customer. Stand-alone selling prices will be based on observable sales   prices; however, where stand-alone selling prices are not directly   observable, estimates of stand-alone selling prices will be required which   will maximise the use of observable inputs – 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 at   contract inception, when control of the device typically passes to the customer,   will increase and revenue subsequently recognised as services are delivered   during the contract period will reduce. Where additional up-front unbilled   revenue is recorded for the sale of devices, this will be reflected in the   consolidated statement of financial position as a contract asset.

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 108 Vodafone Group Plc Annual Report on Form   20-F 2017 Notes to the consolidated financial statements (continued) 1. Basis   of preparation (continued) – Under IFRS 15, certain incremental costs   incurred in acquiring a contract with a customer will be deferred on the   consolidated statement of financial position 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. – Certain costs incurred in fulfilling customer contracts will   be deferred on the consolidated statement of financial position 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   impact of the changes above on the Group’s reportable segments will depend   largely on the extent to which customers receive discounted goods or   services, such as mobile handsets, when they enter into airtime service   agreements with the Group in the relevant markets. The combined impact of the   changes is expected to increase the gross profit, or reduce the gross loss,   recorded at inception on many customer contracts; in such cases, this will   typically reduce the gross profit reported during the remainder of the   contract; however, these timing differences will not impact the total gross   profit reported for a customer contract over the contract term. The   transactions impacted by IFRS 15 are high in volume, value and complexity,   therefore the Group is continuing to assess the impact of these and other   accounting changes that will arise under IFRS 15 and cannot reasonably   estimate the impact; 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. The Group expects to be in a position to estimate the impact of IFRS 15   early in the first quarter of the year commencing 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 will   reflect the cumulative impact of IFRS 15 in equity on the date of adoption.   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 and will be adopted by the Group on 1 April 2019. 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 in many respects to existing   IAS 17 accounting for finance leases, but will be substantively different to   existing accounting for operating leases where rental charges are currently   recognised on a 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 and is not expected to have a material impact for   the Group. The Group is assessing the impact of the accounting changes that   will arise under IFRS 16; however, the following changes to lessee accounting   will have a material impact as follows: – Right-of-use assets will be   recorded for assets that are leased by the Group; currently no lease assets   are included on the Group’s consolidated statement of financial position for   operating leases. – Liabilities will be recorded for future lease payments in   the Group’s consolidated statement of financial position for the “reasonably   certain” period of the lease, which may include future lease periods for   which the Group has extension options. Currently liabilities are generally   not recorded for future operating lease payments, which are disclosed as   commitments. The amount of lease liabilities will not equal the lease   commitments reported on 31 March 2019, but may not be dissimilar. – Lease   expenses will be for depreciation of right-of-use assets and interest on   lease liabilities; interest will typically be higher in the early stages of a   lease and reduce over the term. Currently operating lease rentals are   expensed on a straight-line basis over the lease term within operating   expenses. – Operating lease cash flows are currently included within   operating cash flows in the consolidated statement of cash flows; under IFRS   16 these will be recorded as cash flows from financing activities reflecting   the repayment of lease liabilities (borrowings) and related interest. A high   volume of transactions will be impacted by IFRS 16 and material judgements   are required in identifying and accounting for leases. Therefore, the Group   is continuing to assess the impact of these and other accounting changes that   will arise under IFRS 16 and cannot reasonably estimate the impact; however,   the changes highlighted above will have a material impact on the consolidated   income statement, consolidated statement of financial position and   consolidated statement of cash flows after the Group’s adoption on 1 April   2019. When IFRS 16 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 16 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 16 on each line item in the financial statements in the reporting   period. Depending on the adoption method that is utilised, certain practical   expedients may be applied on adoption. The Group has not yet determined which   adoption method will be adopted or which expedients will be applied on   adoption.

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 Vodafone Group Plc Annual Report on Form   20-F 2017 109 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. The segmental revenue and profit of   India are included in discontinued operations for all years reported and   segmental assets and cash flows are included in assets and liabilities held   for sale at 31 March 2017. See note 7 “Discontinued operations and assets   held for resale” for details. 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 any related excess 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: –   the Group receives an identifiable benefit in exchange for the cash incentive   that is separable from sales transactions to that intermediary; and – 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.

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 110 Vodafone Group Plc Annual Report on Form   20-F 2017 Notes to the consolidated financial statements (continued) 2.   Segmental analysis (continued) Segmental revenue and profit 31 March 2017   Segment Intra-region Regional Inter-region Group Adjusted revenue revenue   revenue revenue revenue EBITDA €m €m €m €m €m €m Germany 10,600 (32) 10,568   (21) 10,547 3,617 Italy 6,101 (30) 6,071 (1) 6,070 2,229 UK 6,925 (23) 6,902   (6) 6,896 1,212 Spain 4,973 (37) 4,936 (1) 4,935 1,360 Other Europe 6,128   (55) 6,073 (5) 6,068 1,865 Europe 34,727 (177) 34,550 (34) 34,516 10,283   Vodacom 5,294 – 5,294 – 5,294 2,063 Other AMAP 6,479 – 6,479 (14) 6,465 1,791   AMAP 11,773 – 11,773 (14) 11,759 3,854 Common Functions 1,390 – 1,390 (34) 1,356   12 Group 47,890 (177) 47,713 (82) 47,631 14,149 31 March 2016 restated   Germany 10,626 (36) 10,590 (9) 10,581 3,462 Italy 6,008 (22) 5,986 (1) 5,985   2,015 UK 8,428 (18) 8,410 (9) 8,401 1,756 Spain 4,959 (27) 4,932 (2) 4,930   1,250 Other Europe 6,599 (55) 6,544 (4) 6,540 2,002 Europe 36,620 (158)   36,462 (25) 36,437 10,485 Vodacom1 5,325 – 5,325 – 5,325 2,028 Other AMAP   6,566 – 6,566 (20) 6,546 1,678 AMAP 11,891 – 11,891 (20) 11,871 3,706 Common   Functions 1,567 – 1,567 (65) 1,502 (36) Group 50,078 (158) 49,920 (110)   49,810 14,155 31 March 2015 restated Germany 10,677 (22) 10,655 (27) 10,628   3,390 Italy 5,844 (16) 5,828 (1) 5,827 1,956 UK 7,916 (16) 7,900 (3) 7,897   1,724 Spain 4,615 (23) 4,592 (2) 4,590 1,003 Other Europe 6,360 (39) 6,321   (2) 6,319 2,004 Europe 35,412 (116) 35,296 (35) 35,261 10,077 Vodacom 5,539 –   5,539 – 5,539 1,949 Other AMAP 6,061 – 6,061 (14) 6,047 1,635 AMAP 11,600 –   11,600 (14) 11,586 3,584 Common Functions 1,595 – 1,595 (57) 1,538 41 Group   48,607 (116) 48,491 (106) 48,385 13,702 Note: 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 the year ended 31   March 2015 is not material. Total revenue recorded in respect of the sale of   goods for the year ended 31 March 2017 was €4,029 million (2016: €4,472   million, 2015: €4,101 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 is shown overleaf. For a   reconciliation of operating profit to profit for the financial year, see the   consolidated income statement on page 99.

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 Vodafone Group Plc Annual Report on Form   20-F 2017 111 2017 Restated 2016 Restated 2015 €m €m €m Adjusted EBITDA   14,149 14,155 13,702 Depreciation, amortisation and loss on disposal of fixed   assets (10,179) (10,386) (9,584) Share of results in equity accounted   associates and joint ventures 164 60 (78) Adjusted operating profit 4,134   3,829 4,040 Impairment losses – (569) – Restructuring costs (415) (316) (204)   Amortisation of acquired customer based and brand intangible assets (1,046)   (1,338) (1,617) Other income/(expense) 1,052 (286) (146) Operating profit   3,725 1,320 2,073 Segmental assets and cash flow 31 March 2017 Other   Depreciation Restated Non-current Capital expenditure on and Operating   assets1 expenditure2 intangible assets amortisation Impairment loss free cash   flow3 €m €m €m €m €m €m Germany 26,694 1,671 – 3,320 – 1,749 Italy 9,157 793   2 1,603 – 1,161 UK 8,210 950 – 1,768 – 57 Spain 11,035 746 – 1,378 – 344   Other Europe 7,574 878 38 1,088 – 619 Europe 62,670 5,038 40 9,157 – 3,930   India – – – – – – Vodacom 6,039 736 2 738 – 1,347 Other AMAP 5,778 795 317   1,153 – 947 AMAP 11,817 1,531 319 1,891 – 2,294 Common Functions 1,937 915 –   38 – (597) Group 76,424 7,484 359 11,086 – 5,627 31 March 2016 restated   Germany 28,210 2,362 2,081 3,330 – 866 Italy 9,799 1,516 232 1,668 – 496 UK   9,496 1,210 141 1,902 – 334 Spain 11,569 1,178 491 1,446 – (149) Other Europe   7,568 1,372 8 1,371 (569) 546 Europe 66,642 7,638 2,953 9,717 (569) 2,093   India 13,474 1,102 3,751 – – – Vodacom 5,290 847 23 725 – 1,071 Other AMAP   6,806 1,173 814 1,170 – 503 AMAP 25,570 3,122 4,588 1,895 – 1,574 Common   Functions 1,867 901 – 85 – (459) Group 94,079 11,661 7,541 11,697 (569) 3,208   31 March 2015 restated Germany 27,008 2,559 4 3,275 – 1,282 Italy 9,599 1,428   120 1,698 – 708 UK 10,735 1,271 19 1,743 – 251 Spain 11,282 1,110 1 1,220 –   (45) Other Europe 11,327 1,391 245 1,298 – 696 Europe 69,951 7,759 389 9,234   – 2,892 India 11,241 1,144 177 – – – Vodacom 6,520 960 3 723 – 1,002 Other   AMAP 6,799 1,182 43 1,147 – 531 AMAP 24,560 3,286 223 1,870 – 1,533 Common   Functions 1,808 809 2 4 – (993) Group 96,319 11,854 614 11,108 – 3,432 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 206. 

 

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Vodafone Group   Plc Annual Report 112 on Form 20-F 2017 Notes to the consolidated financial   statements (continued) 3. Operating profit Detailed below are the key amounts   recognised in arriving at our operating profit 2017 Restated 2016 Restated   2015 €m €m €m Net foreign exchange losses/(gains)1 133 (24) 8 Depreciation of   property, plant and equipment (note 11): Owned assets 6,253 6,333 5,754   Leased assets 12 45 25 Amortisation of intangible assets (note 10) 4,821   5,319 5,329 Impairment of goodwill in subsidiaries, associates and joint   arrangements (note 4) – 569 – Staff costs (note 25) 5,519 5,804 5,171   Operating lease rentals payable 3,976 2,464 2,376 Loss on disposal of   property, plant and equipment and intangible assets 22 27 93 Own costs   capitalised attributable to the construction or acquisition of property,   plant and equipment (800) (764) (701) Net gain on formation of VodafoneZiggo   (note 28)2 (1,275) – – Notes: 1 Includes €127 million reported in other   income and expense in the consolidated income statement. 2 Reported in other   income and expense in the consolidated income statement. 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 2017 is analysed below.   2017 Restated 2016 Restated 2015 €m €m €m Parent company 2 2 2 Subsidiaries   14 13 13 Audit fees: 16 15 15 Audit-related fees1 4 2 1 Other assurance   services2 – – 1 Tax fees2 – – 3 Non-audit fees: 4 2 5 Total fees 20 17 20   Notes: 1 Relates to fees for statutory and regulatory filings. The increase   in the amount for the year ended 31 March 2017 primarily arose from work on   regulatory filings prepared in anticipation of a potential IPO of Vodafone India   that was under consideration prior to the agreement for the merger of   Vodafone India and Idea Cellular. 2 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. A description of the work performed by the Audit and Risk Committee in   order to safeguard auditor independence when non-audit services are provided   is set out in the Audit and Risk Committee report on pages 57 to 63. 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 113 Overview Strategy Performance   Governance Financials Additional information 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   cashgenerating 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 of disposal 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. 2017 Restated 2016 Restated   2015 Cash-generating unit Reportable segment €m €m €m Romania Other Europe –   569 – – 569 – In addition to the impairment losses above, in the first half   of the 2017 financial year, the Group recorded a non-cash impairment of €6.4   billion, relating to our Indian business. This was driven by lower projected   cash flows within our business plan as a result of increased competition in   the market. Impairment testing at 31 March 2017, following the announcement   of the merger of Vodafone India with Idea Cellular, gave rise to a partial   reversal of that impairment. As a result, the Group recorded an overall   impairment loss of €4,515 million (2016: €nil, 2015: €nil) in respect of the   fair value of Group’s investment in India which, together with the   recognition of an associated €840 million deferred tax assets, led to an   overall €3,675 million reduction in the carrying value of Vodafone India, the   results of which are included discontinued operations. See note 7   “Discontinued operations and assets held for resale” for further details.   Goodwill The remaining carrying value of goodwill at 31 March was as follows:   2017 Restated 2016 €m €m Germany 12,479 12,479 Italy 3,654 3,654 Spain 3,814   3,814 19,947 19,947 Other 6,861 8,291 26,808 28,238 

 

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Vodafone Group   Plc Annual Report 114 on Form 20-F 2017 Notes to the consolidated financial   statements (continued) 4. Impairment losses (continued) Key assumptions used   in the value in use calculations The key assumptions used in determining the   value in use are: Assumption How determined Projected adjusted EBITDA   Projected adjusted EBITDA has been based on past experience adjusted for the   following: –– 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; –– 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 –– 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.   Projected 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.   Projected 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: –– the nominal GDP rates for the country of   operation; and –– 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   2017 As a discontinued operation, Vodafone India has been valued at fair   value less costs to sell. Vodafone India’s fair value less costs to sell is   not observable in a quoted market and accordingly it has been determined with   reference to the outcomes from the application of a number of potential   valuation techniques, which are considered to result in a “level 2”   valuation1. As such significant judgement is required and involves the use of   estimates. The two bases of valuation which were given the strongest   weighting in the overall assessment of fair value are set out below. Fair   value has been assessed to be €14.0 billion. See note 7 “Discontinued   operations and assets held for resale” for further details. –– The contracted   cash price for the sale of a portion of the entity to the Aditya Birla Group   as part of the planned disposal of Vodafone India, adjusted for the agreed   level of debt which is an observable price relating to Vodafone India; and ––   The share price of Idea Cellular prior to the announcement of the plan to dispose   of Vodafone India and participate with Idea Cellular in the planned jointly   controlled entity, adjusted for transaction specific factors. Idea Cellular   equity shares are the primary component of the consideration for Vodafone   India to be received by the Group, and the value of the Idea Cellular shares   has been adjusted to reflect 50% of the estimated cost synergies that   management expects to be realised by the jointly controlled entity. A 10%   increase or reduction in the expected cost synergies included in this   determination of fair value would result in a €220 million increase or   reduction, respectively, in the fair value less costs to sell of Vodafone   India calculated using this approach. Note: 1 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.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 115 Overview Strategy Performance   Governance Financials Additional information The table below shows key   assumptions used in the value in use calculations. Assumptions used in value   in use calculation Germany Spain Italy Romania % % % % Pre-tax adjusted   discount rate 8.4 9.7 10.3 9.0 Long-term growth rate 0.5 1.5 1.0 1.0   Projected adjusted EBITDA1 3.0 7.9 (0.8) 0.1 Projected capital expenditure2   14.9–16.5 14.3–15.8 12.7–14.2 12.6–15.9 Notes: 1 Projected 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   Projected 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 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 amount of   the Group’s operations in Germany, Spain and Romania exceed their carrying   values by €3.5 billion, €1.0 billion and €0.2 billion respectively. The   changes in the following table to assumptions used in the impairment review   would, in isolation, lead to an impairment loss being recognised for the year   ended 31 March 2017: Change required for carrying value to equal recoverable   amount Germany Spain Romania pps pps pps Pre-tax risk adjusted discount rate   0.9 0.6 1.5 Long-term growth rate (1.0) (0.7) (1.7) Projected adjusted   EBITDA1 (1.6) (1.1) (1.9) Projected capital expenditure2 7.6 4.4 7.1 Notes: 1   Projected 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 Projected 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. The carrying values for Vodafone   UK, Portugal, Ireland and Czech Republic include goodwill arising from their   acquisition by the Group and/ or the purchase of operating licences or   spectrum rights. While the recoverable amounts for these operating companies   are not materially greater than their carrying value, each has a lower risk   of giving rise to impairment that would be material to the Group given their   relative size or the composition of their carrying value. The changes in the   following table to assumptions used in the impairment review would have, in   isolation, led to an impairment loss being recognised in the year ended 31   March 2017. Change required for carrying value to equal recoverable amount UK   Ireland Portugal Czech Republic pps pps pps pps Pre-tax risk adjusted   discount rate 0.5 0.8 0.6 2.1 Long-term growth rate (0.6) (0.9) (0.6) (2.4)   Projected adjusted EBITDA1 (0.8) (1.2) (0.9) (2.8) Projected capital   expenditure2 3.2 4.3 3.9 12.0 Notes: 1 Projected 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 Projected   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 2016 During the year ended 31 March 2016   impairment charges of €569 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 €0.9 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 Projected adjusted EBITDA1 (0.3) 3.1 8.8 Projected   capital expenditure2 11.5–18.8 14.5–15.6 11.2–19.7 Notes: 1 Projected   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 Projected 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. 

 

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Vodafone Group   Plc Annual Report 116 on Form 20-F 2017 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 €2.0 billion and €1.0 billion respectively.   Change required for carrying value to equal the recoverable amount Germany   Spain pps pps Pre-tax risk adjusted discount rate 0.5 0.6 Long-term growth   rate (0.5) (0.8) Projected adjusted EBITDA1 (0.9) (1.2) Projected 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 Decrease by 2pps €bn €bn   Pre-tax adjusted discount rate (0.2) 0.3 Long-term growth rate 0.3 (0.2)   Projected adjusted EBITDA1 0.2 (0.2) Projected capital expenditure2 (0.1) 0.1   Notes: 1 Projected 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 Projected 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 Projected adjusted EBITDA1 3.2 0.8 11.0   Projected capital expenditure2 11.6–21.7 12.5 –25.6 11.5 –23.3 Notes: 1   Projected 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 Projected 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 €3.1 billion, €1.8 billion and €0.5   billion respectively. The changes in the following table to assumptions used   in the impairment review would have, in isolation, led to an impairment loss   being recognised for the year ended 31 March 2015: Change required for   carrying value to equal the recoverable amount Germany Italy Spain pps pps   pps Pre-tax risk adjusted discount rate 0.8 1.6 0.3 Long-term growth rate   (0.9) (1.8) (0.3) Projected adjusted EBITDA1 (7.3) (7.5) (2.6) Projected   capital expenditure2 2.1 2.9 0.7 Notes: 1 Projected 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 Projected   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.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 117 Overview Strategy Performance   Governance Financials Additional information 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. 2017 Restated 2016 Restated 2015 €m €m €m Investment   income: Available-for-sale investments: Dividends received – 1 – Loans and   receivables at amortised cost 426 529 433 Fair value through the income   statement (held for trading) 20 9 36 Other1,2 28 – 614 474 539 1,083   Financing costs: Items in hedge relationships: Other loans 170 224 286   Interest rate and cross-currency interest rate swaps (235) (127) (143) Fair   value hedging instrument 22 (140) (537) Fair value of hedged item (16) 166   487 Other financial liabilities held at amortised cost: Bank loans and   overdrafts 419 284 518 Bonds and other loans2 1,243 926 849 Interest   charge/(credit) on settlement of tax issues3 47 19 (1) Equity put rights and   similar arrangements4 – – 12 Fair value through the income statement (held   for trading): Derivatives – forward starting swaps and futures (244) 121 (72)   Other1 – 573 – 1,406 2,046 1,399 Net financing costs 932 1,507 316 Notes: 1   Amounts for 2017 include net foreign exchange gain of €136 million (2016:   €573 million loss; 2015: €614 million gain) arising from net foreign exchange   movements on certain intercompany balances. 2 Amounts for 2017 include net   foreign exchange losses of €641 million (2016: €299 million; 2015: €351 million).   3 Amounts for 2017 include an increase (2016: increase, 2017: decrease) in   provision for potential interest on tax issues. 4 Includes amounts in   relation to the Group’s arrangements with its non-controlling interests. 

 

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Vodafone Group   Plc Annual Report 118 on Form 20-F 2017 Notes to the consolidated financial   statements (continued) 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 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 2017 Restated 2016 Restated 2015 €m €m €m United Kingdom corporation   tax expense/(income): Current year1 27 (129) – Adjustments in respect of   prior years (3) 53 15 24 (76) 15 Overseas current tax expense/(income):   Current year 961 812 937 Adjustments in respect of prior years (35) 21 (220)   926 833 717 Total current tax expense 950 757 732 Deferred tax on origination   and reversal of temporary differences: United Kingdom deferred tax (16) (32)   (53) Overseas deferred tax 3,830 4,212 (6,750) Total deferred tax   expense/(income) 3,814 4,180 (6,803) Total income tax expense/(income)2 4,764   4,937 (6,071) Notes: 1 The 2016 credit 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 €10.3 billion of spectrum payments to the UK Government in 2000 and 2013.   

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 119 Overview Strategy Performance   Governance Financials Additional information Tax on discontinued operations   2017 Restated 2016 Restated 2015 €m €m €m Tax (credit)/charge on profit from   ordinary activities of discontinued operations1 (973) (514) 26 Tax charge   relating to the gain on discontinuance 95 – – Total tax (credit)/charge on   discontinued operations (878) (514) 26 Note: 1 Includes €840 million relating   to the impairment of Vodafone India in the year. Tax charged/(credited)   directly to other comprehensive income 2017 Restated 2016 Restated 2015 €m €m   €m Current tax (16) (81) 2 Deferred tax 44 293 (362) Total tax   charged/(credited) directly to other comprehensive income 28 212 (360) Tax   credited directly to equity 2017 Restated 2016 Restated 2015 €m €m €m Current   tax – (8) (5) Deferred tax (9) 3 (4) Total tax credited directly to equity   (9) (5) (9) Factors affecting the tax expense for the year The table below   explains the differences between the expected tax expense, being the   aggregate of the Group’s geographical split of profits multiplied by the   relevant local tax rates and the Group’s total tax expense for each year.   2017 Restated 2016 Restated 2015 €m €m €m Continuing profit/(loss) before tax   as shown in the consolidated income statement 2,792 (190) 1,734 Aggregated   expected income tax expense 795 85 517 Impairment losses with no tax effect –   168 – Disposal of Group investments (271) 83 – Effect of taxation of   associates and joint ventures, reported within profit before tax 23 (18) 44   Derecognition/(recognition) of deferred tax assets for losses including   Luxembourg1 1,603 1,288 (4,176) Deferred tax following revaluation of   investments in Luxembourg1 (329) 3,037 (2,659) Previously unrecognised temporary   differences we expect to use in the future (15) – – Previously unrecognised   temporary differences utilised in the year (11) (8) – Current year temporary   differences (including losses) that we currently do not expect to use 139 50   176 Adjustments in respect of prior year tax liabilities (107) (48) (364)   Revaluation of assets for tax purposes (39) – – Impact of tax credits and   irrecoverable taxes 98 (38) 36 Deferred tax on overseas earnings 26 17 49   Effect of current year changes in statutory tax rates on deferred tax   balances 2,755 95 153 Expenses not deductible for tax purposes 97 226 153   Income tax expense/(income) 4,764 4,937 (6,071) Note: 1 See commentary   regarding deferred tax asset recognition in Luxembourg on page 121. 

 

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Vodafone Group   Plc Annual Report 120 on Form 20-F 2017 Notes to the consolidated financial   statements (continued) 6. Taxation (continued) Deferred tax Analysis of movements   in the net deferred tax balance during the year: €m 1 April 2016 restated   27,742 Foreign exchange movements 19 Charged to the income statement   (continuing operations) (3,814) Credited to the income statement   (discontinued operations) 973 Charged directly to OCI (44) Credited directly   to equity 9 Reclassifications (1,202) Arising on acquisition and disposals 82   31 March 2017 23,765 Deferred tax assets and liabilities, before offset of   balances within countries, are as follows: Amount (charged)/ credited in   income statement €m Gross deferred tax asset €m Gross deferred tax liability   €m Less amounts unrecognised €m Net recognised deferred tax (liability)/   asset €m Accelerated tax depreciation 160 1,368 (1,535) (55) (222) Intangible   assets 353 127 (715) 16 (572) Tax losses (4,064) 30,590 – (7,138) 23,452   Deferred tax on overseas earnings (95) – (95) – (95) Other temporary   differences (168) 1,347 (126) (19) 1,202 31 March 2017 (3,814) 33,432 (2,471)   (7,196) 23,765 Deferred tax assets and liabilities are analysed in the   statement of financial position, after offset of balances within countries,   as follows: €m Deferred tax asset 24,300 Deferred tax liability (535) 31   March 2017 23,765 At 31 March 2016, deferred tax assets and liabilities,   before offset of balances within countries, were as follows: Amount Net   credited/ recognised (charged) Gross Gross Less deferred tax in income   deferred deferred tax amounts (liability)/ statement tax asset liability   unrecognised1 asset €m €m €m €m €m Accelerated tax depreciation 211 1,598   (1,652) (47) (101) Intangible assets 405 84 (2,036) 16 (1,936) Tax losses   (4,879) 34,061 – (6,109) 27,952 Deferred tax on overseas earnings (18) – (67)   – (67) Other temporary differences 101 2,294 (124) (276) 1,894 31 March 2016   restated (4,180) 38,037 (3,879) (6,416) 27,742 Note: 1 Other unrecognised   temporary differences include €178 million relating to Minimum Alternative   Tax credits in India, of which €59 million expire within 0–5 years and €119   million expire beyond 6 years. At 31 March 2016 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 28,306   Deferred tax liability (564) 31 March 2016 restated 27,742 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 121 Overview Strategy Performance   Governance Financials Additional information 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). We do not anticipate any significant impact on our future   tax charge, liabilities or assets, as a result of the triggering of Article   50(2) of the Treaty on European Union but cannot rule out the possibility   that, for example, a failure to reach satisfactory arrangements for the UK’s   future relationship with the European Union, could have an impact on such   matters. The Group is routinely subject to audit by tax authorities in the   territories in which it operates and, specifically, in India where these are   usually resolved through the Indian legal system. The Group considers each   issue on its merits and, where appropriate, holds 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. At 31 March 2017, the gross amount and expiry dates of losses   available for carry forward are as follows: Expiring Expiring within beyond 5   years 6 years Unlimited Total €m €m €m €m Losses or tax credits for which a   deferred tax asset is recognised 292 65 97,335 97,692 Losses for which no   deferred tax is recognised 352 1,503 28,556 30,411 644 1,568 125,891 128,103   At 31 March 2016, the gross amount and expiry dates of losses available for   carry forward were as follows: Expiring Expiring within beyond 5 years 6 years   Unlimited Total Restated Restated Restated Restated €m €m €m €m Losses for   which a deferred tax asset is recognised 71 56 104,501 104,628 Losses for   which no deferred tax is recognised 352 64 23,887 24,303 423 120 128,388   128,931 Deferred tax assets on losses in Luxembourg Included in the table   above are losses of €82,634 million (2016: €81,176 million) that have arisen   in Luxembourg companies, principally as a result of revaluations of those   companies’ investments for local GAAP purposes. A deferred tax asset of   €19,632 million (2016: €23,942 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. In December 2016, the Luxembourg government enacted the   previously announced reduction to the corporate tax rate (including municipal   business tax) to 27.1% for the year ended 31 March 2017 and 26.0% for the   year ending 31 March 2018. The impact of this decreased corporate tax rate   has reduced the value of our deferred tax asset by €2,651 million. 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. 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 can be utilised. Based on the current forecasts   the losses will be fully utilised over the next 55 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 four to seven years. During the   current year the Group recognised an additional €329 million (2016: used   €3,037 million) of our deferred tax assets as a result of the revaluation of   investments based upon the local GAAP financial statements, and tax returns   at 31 March 2017. The Group also derecognised a deferred tax asset of €1,603   million related to losses in Luxembourg expected to be used beyond 60 years   due to lower interest rates increasing the length of time over which these   losses would be utilised. 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 can be utilised. €993 million (2016; nil) of the Group’s Luxembourg   losses expire, and no deferred tax asset is recognised as they will expire   before we can use these losses. The remaining losses do not expire. We also   have €9,132 million (2016: €9,132 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.   

 

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Vodafone Group   Plc Annual Report 122 on Form 20-F 2017 Notes to the consolidated financial   statements (continued) 6. Taxation (continued) Deferred tax assets on losses   in Germany The Group has tax losses of €18,139 million (2016: €18,461   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 €2,799   million (2016: €2,858 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 28 to 34). In the period beyond the   five year forecast, we have reviewed the profits inherent in the value in use   calculations, 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   12 years. A 5%–10% change in the forecast profits of the German business would   not significantly alter the utilisation period. Deferred tax assets on losses   in Spain The Group has tax losses of €3,646 million in Spain, predominantly   arising from the Group’s acquisition of Grupo Corporative Ono S.A. in 2015.   and which are available to offset against the related future profits of the   Spanish business. The losses do not expire. A deferred tax asset of €914   million (2016: €851 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 28 to 34). In the period beyond the   five 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 20   to 23 years. The utilisation period has increased from the prior year   reported period (eight to ten years) as a result of a change of law which   limits the use of brought forward losses against current year profits. A   5%–10% change in the forecast profits of the Spanish business would change   the period over which the losses are utilised by one to two years. Other tax   losses The Group has losses amounting to €7,880 million (2016: €8,504   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 €108 million (2016: €486 million) of   unrecognised other temporary differences. The Group holds a deferred tax   liability of €95 million (2016: €67 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 €20,237 million (2016: €22,562 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. 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 123 Overview Strategy Performance   Governance Financials Additional information 7. Discontinued operations and   assets held for sale Following the agreement to combine our Indian operations   with Idea Cellular into a jointly controlled company, in accordance with IFRS   accounting standards, the results of Vodafone India are now included in   discontinued operations. The Group will continue to actively manage these   operations until the transaction completes. Discontinued operations On 20   March 2017, Vodafone announced the agreement to combine its subsidiary,   Vodafone India (excluding its 42% stake in Indus Towers), with Idea Cellular,   which is listed on the Indian Stock Exchanges, with the combined company to   be jointly controlled by Vodafone and the Aditya Birla Group. The results of   these discontinued operations are detailed below. Income statement and   segment analysis of discontinued operations 2017 Restated 2016 Restated 2015   €m €m €m Revenue 5,827 6,120 5,479 Cost of sales (4,504) (4,799) (4,327)   Gross profit 1,323 1,321 1,152 Selling and distribution expenses (276) (264)   (230) Administrative expenses (703) (634) (466) Impairment losses (4,515) – –   Operating (loss)/profit (4,171) 423 456 Financing costs (909) (932) (758)   Loss before taxation (5,080) (509) (302) Income tax credit/(expense)1 973 514   (26) (Loss)/profit for the financial year from discontinued operations   (4,107) 5 (328) (Loss)/earnings per share from discontinued operations 2017   Restated 2016 Restated 2015 eurocents eurocents eurocents – Basic (14.68)c   0.02c (1.24)c – Diluted (14.68)c 0.02c (1.24)c Total comprehensive   (expense)/income for the financial year from discontinued operations 2017   Restated 2016 Restated 2015 €m €m €m Attributable to owners of the parent   (4,107) 5 (328) Note: 1 Year ended 31 March 2015 includes €105 million income   tax expense relating to Vodafone India, offset by €79 million tax credit   relating to the performance of our discontinued US Group, whose principal   asset was its 45% interest in Verizon Wireless, on 21 February 2014.

 

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Vodafone Group   Plc Annual Report 124 on Form 20-F 2017 7. Discontinued operations and assets   held for sale (continued) Assets held for sale Assets and liabilities   relating to our operations in India have been classed as held for sale on the   statement of financial position at 31 March 2017. In addition, assets and   liabilities held for sale at 31 March 2016 comprise the assets and   liabilities of our former operations in the Netherlands, which were combined   with those of Liberty Global plc to form a 50:50 joint venture,   VodafoneZiggo, on 31 December 2016. The relevant assets and liabilities are   detailed in the table below. Assets and liabilities held for sale1 2017   Restated 2016 €m €m Non-current assets Goodwill – 860 Other intangible assets   9,214 1,390 Plant, property and equipment 3,462 1,071 Trade and other   receivables 694 35 Deferred tax assets 1,202 – 14,572 3,356 Current assets   Inventory 1 31 Taxation recoverable 1,311 8 Trade and other receivables 831   244 Cash and cash equivalents 467 18 Other investments 13 – 2,623 301 Total   assets held for sale 17,195 3,657 Non-current liabilities Long-term   borrowings (8,024) – Deferred tax liabilities – (8) Post employment benefits   (15) – Provisions for liabilities and charges (784) (18) Trade and other   payables (39) – (8,862) (26) Current liabilities Short-term borrowings   (1,139) – Provisions for liabilities and charges (25) (5) Trade and other   payables (1,768) (407) (2,932) (412) Total liabilities held for sale (11,794)   (438) Note: 1 Total net debt in India at 31 March 2017 was €8,674 million.   This comprised cash of €467 million, licence payables classified as debt of   €7,143 million and €2,020 million of other borrowings, together with €22   million of derivative financial instruments reported within Trade and other   receivables and Trade and other payables. €499 million of the licence   payables classified as debt have been paid in cash. The cash payment is   reported in the consolidated statement of cash flows as cash flows from   financing activities. Deferred tax assets on losses in India The Group   recognises a deferred tax asset of €1,202 million relating to its Indian   business. This includes a deferred tax asset of €816 million relating to   losses. The deferred tax asset has been recognised as we conclude it is   probable that we will generate taxable profits in the future, against which   we can utilise these losses. The Group has reviewed the latest forecasts for   the Indian business which incorporate the unsystematic risks of operating in   the telecommunications business (see page 114). In the period beyond the five   year forecast, we have reviewed the profits inherent in the valuation of   Indian business, and based on these and our expectations for the Indian   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 ten   years. We do not recognise a deferred tax asset of €352 million in relation   to losses where we currently believe that is not probable these losses will   be utilised in the future. Notes to the consolidated financial statements   (continued) 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 125 Overview Strategy Performance   Governance Financials Additional information 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. 2017 2016 2015 Millions Millions Millions   Weighted average number of shares for basic earnings per share 27,971 26,692   26,489 Effect of dilutive potential shares: restricted shares and share   options – – 140 Weighted average number of shares for diluted earnings per   share 27,971 26,692 26,629 2017 €m Restated 2016 €m Restated 2015 €m   (Loss)/earnings for earnings per share from continuing operations (2,190)   (5,410) 7,607 (Loss)/earnings for earnings per share from discontinued   operations (4,107) 5 (328) (Loss)/earnings for basic and diluted earnings per   share (6,297) (5,405) 7,279 eurocents eurocents eurocents Basic   (loss)/earnings per share (22.51)c (20.25)c 27.48c Diluted (loss)/earnings   per share (22.51)c (20.25)c 27.33c 9. Equity dividends Dividends are one type   of shareholder return, historically paid to our shareholders in February and   August. 2017 Restated 2016 Restated 2015 €m €m €m Declared during the   financial year: 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) 2,447   2,852 2,495 Interim dividend for the year ended 31 March 2017: 4.74 eurocents   per share (2016: 3.68 pence per share, 2015: 3.60 pence per share) 1,262   1,381 1,217 3,709 4,233 3,712 Proposed after the end of the reporting period   and not recognised as a liability: Final dividend for the year ended 31 March   2017: 10.03 eurocents per share (2016: 7.77 pence per share, 2015: 7.62 pence   per share) 2,670 2,447 2,852 

 

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Vodafone Group   Plc Annual Report 126 on Form 20-F 2017 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 annually   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: –– an asset is created that can be separately identified; –– it is   probable that the asset created will generate future economic benefits; and   –– 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.   Estimated useful lives The estimated useful lives of finite lived intangible   assets are as follows: –– Licence and spectrum fees 3–25 years –– Computer   software 3–5 years –– Brands 1–10 years –– Customer bases 2–15 years  

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 127 Overview Strategy Performance   Governance Financials Additional information Licences and Computer Goodwill   spectrum software Other Total €m €m €m €m €m Cost: 1 April 2015 restated   96,188 41,233 14,686 7,887 159,994 Exchange movements (1,358) (2,476) (546)   (475) (4,855) Arising on acquisition 20 – 7 35 62 Additions – 7,536 2,503 14   10,053 Disposals1 – (3,228) (576) (3) (3,807) Transfer of assets held for   sale (860) (2,092) (472) (12) (3,436) Other – – 127 – 127 31 March 2016   restated 93,990 40,973 15,729 7,446 158,138 Transfer of assets held for sale   (3,680) (9,472) (201) (152) (13,505) 90,310 31,501 15,528 7,294 144,633   Exchange movements (90) (1,023) (174) 158 (1,129) Arising on acquisition 1 10   11 5 27 Additions – 359 2,193 3 2,555 Disposal – (72) (499) (30) (601) Other   – – (97) – (97) 31 March 2017 90,221 30,775 16,962 7,430 145,388 Accumulated   impairment losses and amortisation: 1 April 2015 restated 65,664 19,997 9,964   4,856 100,481 Exchange movements (481) (1,058) (391) (425) (2,355)   Amortisation charge for the year2 – 2,330 2,124 1,348 5,802 Disposals1 –   (3,228) (528) (3) (3,759) Transfer of assets held for sale – (913) (265) (9)   (1,187) Impairment losses 569 – – – 569 Other – – 23 – 23 31 March 2016   restated 65,752 17,128 10,927 5,767 99,574 Transfer of assets held for sale   (2,086) (1,334) (160) (152) (3,732) 63,666 15,794 10,767 5,615 95,842   Exchange movements (253) (548) (152) 133 (820) Amortisation charge for the   year – 1,780 2,106 935 4,821 Disposals – (72) (486) (30) (588) Other – – (87)   – (87) 31 March 2017 63,413 16,954 12,148 6,653 99,168 Net book value: 31   March 2016 restated 28,238 23,845 4,802 1,679 58,564 31 March 2017 26,808   13,821 4,814 777 46,220 Notes: 1 Disposals of licences and spectrum comprise   the removal of fully amortised assets that have expired. 2 Includes   amortisation in relation to discontinued operations of €483 million. 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 €nil (2016: €1,422 million)   have been pledged as security against borrowings. The net book value and   expiry dates of the most significant licences are as follows: 2017 Restated   2016 Expiry date €m €m Germany 2020/2025/2033 4,726 5,396 Italy   2018/2021/2029 1,442 1,596 UK 2023/2033 2,818 3,515 Qatar 2028/2029 1,164   1,191 Netherlands 2020/2029/2030 – 1,179 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 202 and 203. 

 

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Vodafone Group   Plc Annual Report 128 on Form 20-F 2017 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 –– Freehold buildings 25–50 years ––   Leasehold premises the term of the lease Equipment, fixtures and fittings ––   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.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 129 Overview Strategy Performance   Governance Financials Additional information Equipment, Land and fixtures   buildings and fittings Total €m €m €m Cost: 1 April 2015 restated 2,309   73,921 76,230 Exchange movements (162) (3,876) (4,038) Additions 179 8,970   9,149 Disposals (50) (2,074) (2,124) Transfer of assets held for sale (3)   (2,237) (2,240) Other 120 (218) (98) 31 March 2016 restated 2,393 74,486   76,879 Reclassification as held for sale (103) (7,445) (7,548) 2,290 67,041   69,331 Exchange movements (42) (1,779) (1,821) Arising on acquisition – 7 7   Additions 104 5,184 5,288 Disposals (94) (2,522) (2,616) Other 8 273 281 31   March 2017 2,266 68,204 70,470 Accumulated depreciation and impairment: 1   April 2015 restated 1,043 38,381 39,424 Exchange movements (59) (1,996)   (2,055) Charge for the year1 177 6,977 7,154 Disposals (35) (1,949) (1,984)   Transfer of assets held for sale (2) (1,165) (1,167) Other 17 (25) (8) 31   March 2016 restated 1,141 40,223 41,364 Reclassification as held for sale   (36) (3,812) (3,848) 1,105 36,411 37,516 Exchange movements (15) (1,087)   (1,102) Charge for the year 139 6,126 6,265 Disposals (89) (2,454) (2,543)   Other 1 129 130 31 March 2017 1,141 39,125 40,266 Net book value: 31 March   2016 restated 1,252 34,263 35,515 31 March 2017 1,125 29,079 30,204 Note: 1   Includes depreciation in relation to discontinued operations of €776 million.   The net book value of land and buildings and equipment, fixtures and fittings   includes €3 million and €608 million respectively (2016: €34 million and €749   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 €10 million and €1,234 million respectively (2016: €33 million and €1,931   million).

 

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Vodafone Group   Plc Annual Report 130 on Form 20-F 2017 Notes to the consolidated financial   statements (continued) 12. Investments in associates and joint arrangements   We hold interests in an associate in Kenya, where we have significant   influence, as well as in a number of joint arrangements in the UK, the   Netherlands, India and Australia, 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. Gains or losses resulting from the   contribution or sale of a subsidiary as part of the formation of a joint   arrangement are recognised in respect of the Group’s entire equity holding in   the subsidiary. 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 where the Group   does 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 postacquisition 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. Name   of joint operation Principal activity Country of incorporation or   registration Percentage1 shareholdings Cornerstone Telecommunications   Infrastructure Limited Network infrastructure UK 50.0 Note: 1 Effective   ownership percentages of Vodafone Group Plc at 31 March 2017 rounded to the   nearest tenth of one percent. 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 131 Overview Strategy Performance   Governance Financials Additional information Joint ventures and associates 2017   Restated1 2016 €m €m Investment in joint ventures 2,689 29 Investment in   associates 449 450 31 March 3,138 479 Note: 1 The Group reclassified €580   million from goodwill to investments in associates and joint ventures   relating to Indus Towers within the consolidated statement of financial   position. Comparatives have been restated accordingly. 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. Name of joint   venture Principal activity Country of incorporation or registration   Percentage1 shareholdings VodafoneZiggo Group Holding B.V. Network operator   Netherlands 50.0 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   2017 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. 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. Investment in joint   ventures (Loss)/profit from continuing operations Other comprehensive income   Total comprehensive (expense)/income 2017 €m Restated 2016 €m Restated 2015   €m 2017 €m Restated 2016 €m Restated 2015 €m 2017 €m Restated 2016 €m   Restated 2015 €m 2017 €m Restated 2016 €m Restated 2015 €m VodafoneZiggo   Group Holding B.V. 2,736 – – (160) – – 2 – – (158) – – Indus Towers Limited   1,032 982 997 98 101 23 – – – 98 101 23 Vodafone Hutchison Australia Pty   Limited (1,156) (1,032) (923) (59) (153) (204) – (1) 2 (59) (154) (202) Other   77 79 124 (14) (39) (12) – – – (14) (39) (12) Total 2,689 29 198 (135) (91)   (193) 2 (1) 2 (133) (92) (191) The summarised financial information for each   of the Group’s material equity accounted joint ventures on a 100% ownership   basis is set out below. VodafoneZiggo Group Holding B.V. Indus Towers Limited   Vodafone Hutchison Australia Pty Limited 2017 €m Restated 2016 €m Restated   2015 €m 2017 €m Restated 2016 €m Restated 2015 €m 2017 €m Restated 2016 €m   Restated 2015 €m Income statement and statement of comprehensive income   Revenue 1,014 – – 2,379 2,277 2,018 2,287 2,354 2,343 Depreciation and   amortisation (764) – – (407) (489) (518) (473) (517) (528) Interest income 23   – – 22 10 36 3 2 2 Interest expense (117) – – (91) (86) (95) (240) (268)   (291) Income tax income/(expense) 105 – – (267) (186) (233) – – –   (Loss)/profit from continuing operations (320) – – 234 240 56 (117) (306)   (408) Other comprehensive income/(expense) 3 – – – – – – (2) 4 Total   comprehensive (expense)/income (317) – – 234 240 56 (117) (308) (404)   Statement of financial position Non-current assets 20,303 – 1,995 1,890 2,317   2,680 Current assets 721 – 326 302 892 500 Non-current liabilities (14,015) –   (545) (656) (1,460) (3,277) Current liabilities (1,538) – (825) (584) (4,301)   (2,194) Equity shareholders’ funds (5,471) – (951) (952) 2,552 2,291 Cash and   cash equivalents within current assets 273 – 29 46 68 156 Non-current   liabilities excluding trade and other payables and provisions (13,668) –   (188) (380) (1,435) (3,203) Current liabilities excluding trade and other   payables and provisions – – (375) (216) (3563) (1,456) The Group received a   dividend in the year to 31 March 2017 of €126 million (2016: €nil; 2015: €166   million) from Indus Towers Limited. 

 

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Vodafone Group   Plc Annual Report 132 on Form 20-F 2017 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. Name of associate   Principal activity Country of incorporation or registration Percentage1   shareholdings Safaricom Limited2,3 Network operator Kenya 40.0 Notes: 1   Effective ownership percentages of Vodafone Group Plc at 31 March 2017   rounded to the nearest tenth of one percent. 2 The Group also holds two   non-voting shares. 3 At 31 March 2017 the fair value of Safaricom Limited was   KES 288 billion (€2,613 million) based on the closing quoted share price on   the Nairobi Stock Exchange. 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. Investment in associates Profit   from continuing operations Other comprehensive expense Total comprehensive income   2017 €m Restated 2016 €m Restated 2015 €m 2017 €m Restated 2016 €m Restated   2015 €m 2017 €m Restated 2016 €m Restated 2015 €m 2017 €m Restated 2016 €m   Restated 2015 €m Total 449 450 454 182 151 113 – – – 182 151 113 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 133 Overview Strategy Performance   Governance Financials Additional information 13. Other investments We hold a   number of other listed and unlisted investments, mainly comprising US$2.5   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. 2017 Restated 2016 €m €m Included within non-current assets:   Equity securities: Listed 3 3 Unlisted 82 104 Debt securities: Public debt   and bonds – 120 Other debt and bonds 3,374 4,404 3,459 4,631 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$2.5 billion (€2,343 million),   (2016: US$5.0 billion (€4,403 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 and €1.0 billion issued by   VodafoneZiggo Holding B.V. The carrying amount of these loan notes   approximates fair value. Current other investments comprise the following:   2017 Restated 2016 €m €m Included within current assets: Debt securities:   Public debt and bonds 2,284 1,123 Other debt and bonds 2,727 3,214 Cash and   other investments held in restricted deposits 1,109 1,.000 6,120 5,337 Public   debt and bonds are classified as held for trading and stated at fair value.   Cash held in restricted deposits is classified as loans and receivables and   includes amounts held in qualifying assets by Group insurance companies to   meet regulatory requirements. Other debt and bonds includes €2,039 million   (2016: €1,223 million) of assets held for trading in managed investment funds   with liquidity of up to 90 days; €506 million (2016: €1,991 million) of   assets held at amortised cost on an effective interest method paid as   collateral on derivative financial instruments and €182 million (2016: €nil)   short-term investments in a fund where the underlying assets are supply chain   receivables. Current public debt and bonds include highly liquid UK   government bonds held for trading of €1,638 million (2016: €833 million)   comprised of gilts €1,172 million (2016: €nil) paid as collateral primarily   on derivative financial instruments and index-linked gilts €466 million   (2016: €833 million). For public debt and bonds, other debt and bonds and   cash held in restricted deposits, the carrying amount approximates fair   value. 

 

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Vodafone Group   Plc Annual Report 134 on Form 20-F 2017 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. 2017 Restated 2016 €m €m Goods held for   resale 576 716 Inventory is reported net of allowances for obsolescence, an   analysis of which is as follows: 2017 Restated 2016 €m €m 1 April (125) (102)   Exchange movements 3 9 Amounts credited/(debited) to the income statement 7   (32) 31 March (115) (125) Cost of sales includes amounts related to inventory   of €6,464 million (2016: €7,379 million; 2015: €7,251 million). 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 135 Overview Strategy Performance   Governance Financials Additional information 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. 2017 Restated 2016 €m €m Included within   non-current assets: Trade receivables 362 471 Amounts owed by associates and   joint ventures 27 122 Other receivables 130 623 Prepayments 378 163   Derivative financial instruments 3,672 4,414 4,569 5,793 Included within   current assets: Trade receivables 4,973 5,566 Amounts owed by associates and   joint ventures 325 219 Other receivables 918 1,207 Prepayments 1,197 1,315   Accrued income 1,838 2,225 Derivative financial instruments 610 1,029 9,861   11,561 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: 2017 Restated 2016 €m €m 1 April 1,385 1,110   Reclassification as held for sale (66) – Exchange movements (94) (141)   Amounts charged to administrative expenses 589 679 Other (396) (263) 31 March   1,418 1,385 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. 2017 Restated 2016   €m €m Included within derivative financial instruments: Fair value through   the income statement (held for trading): Interest rate swaps 2,248 2,564   Cross-currency interest rate swaps 126 298 Options 12 46 Foreign exchange   contracts 103 292 2,489 3,200 Designated hedge relationships: Interest rate   swaps 212 486 Cross-currency interest rate swaps 1,581 1,757 4,282 5,443 

 

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Vodafone Group   Plc Annual Report 136 on Form 20-F 2017 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. 2017 Restated 2016 €m €m Included within non-current liabilities:   Other payables 30 123 Accruals 154 183 Deferred income 204 165 Derivative   financial instruments 1,349 1,428 1,737 1,899 Included within current   liabilities: Trade payables 6,212 7,420 Amounts owed to associates and joint   ventures 14 67 Other taxes and social security payable 1,261 1,315 Other   payables 1,220 961 Accruals 5,683 7,616 Deferred income 1,716 1,967   Derivative financial instruments 728 550 16,834 19,896 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. 2017 Restated 2016 €m €m   Included within derivative financial instruments: Fair value through the   income statement (held for trading): Interest rate swaps 553 1,119   Cross-currency interest rate swaps 944 439 Options 63 81 Foreign exchange   contracts 76 75 1,636 1,714 Designated hedge relationships Interest rate   swaps 61 28 Cross-currency interest rate swaps 380 236 2,077 1,978 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 137 Overview Strategy Performance   Governance Financials Additional information 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   decommissioning. 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 Legal and obligations regulatory Other Total €m €m €m €m 1 April   2015 restated 645 1,154 759 2,558 Exchange movements (26) (88) (27) (141)   Amounts capitalised in the year 40 – – 40 Amounts charged to the income   statement – 231 518 749 Utilised in the year - payments (50) (81) (352)   (483) Amounts released to the income statement (20) (75) (101) (196) Transfer   of liabilities held for sale (18) (1) (3) (22) Other – 75 (3) 72 31 March   2016 restated 571 1,215 791 2,577 Transfer of liabilities held for sale (10)   (642) – (652) Exchange movements (17) (32) (1) (50) Amounts capitalised in   the year 157 – – 157 Amounts charged to the income statement – 148 643 791   Utilised in the year - payments (51) (40) (376) (467) Amounts released   to the income statement (44) (56) (117) (217) Other – 41 (1) 40 31 March 2017   606 634 939 2,179 

 

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Vodafone Group   Plc Annual Report 138 on Form 20-F 2017 17. Provisions (continued) Provisions   have been analysed between current and non-current as follows: 31 March 2017   Asset retirement Legal and obligations regulatory Other Total €m €m €m €m   Current liabilities 10 300 739 1,049 Non-current liabilities 596 334 200   1,130 606 634 939 2,179 31 March 2016 restated Asset retirement Legal and   obligations regulatory Other Total €m €m €m €m Current liabilities 16 306 636   958 Non-current liabilities 555 909 155 1,619 571 1,215 791 2,577 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. 2017 Restated 2016 Number €m Number €m Ordinary shares   allotted, issued and fully paid:1 1 April 28,813,396,008 4,796 28,812,787,098   5,246 Allotted during the year 746,840 – 608,910 – Other movements – – –   (450) 31 March 28,814,142,848 4,796 28,813,396,008 4,796 Note: 1 At 31 March   2017 the Group held 2,192,064,339 (2016: 2,254,825,696) treasury shares with   a nominal value of €365 million (2016: €375 million). The market value of   shares held was €5,348 million (2016: €6,308 million). During the year   62,761,357 (2016: 45,923,317) treasury shares were reissued under Group share   schemes. Allotted during the year Nominal Net value proceeds Number €m €m UK   share awards and option scheme awards – – – US share awards and option scheme   awards 746,840 – 2 Total share awards and option scheme awards 746,840 – 2   Notes to the consolidated financial statements (continued) 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 139 Overview Strategy Performance   Governance Financials Additional information 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. 2017 Restated 2016 Restated 2015 Notes €m €m €m   (Loss)/profit for the financial year (6,079) (5,122) 7,477 Loss/(profit) from   discontinued operations 7 4,107 (5) 328 (Loss)/profit for the financial year   from continuing operations (1,972) (5,127) 7,805 Non-operating expense 1 3 23   Investment income (474) (539) (1,083) Financing costs 1,406 2,046 1,399   Income tax expense/(credit) 6 4,764 4,937 (6,071) Operating profit 3,725 1,320   2,073 Adjustments for: Share-based payments 27 95 154 104 Depreciation and   amortisation 10, 11 11,086 11,697 11,108 Loss on disposal of property, plant   and equipment and intangible assets 3 22 27 93 Share of result of equity   accounted associates and joint ventures 12 (47) (60) 78 Impairment losses 4 –   569 – Other (income)/expense (1,052) 286 146 Decrease/(increase) in inventory   14 117 (144) (76) Decrease/(increase) in trade and other receivables 15 308   (684) (151) (Decrease)/increase in trade and other payables 16 (473) 332   (1,334) Cash generated by operations 13,781 13,497 12,041 Net tax paid (761)   (807) (533) Cash flows from discontinued operations 1,203 1,646 1,160 Net   cash flow from operating activities 14,223 14,336 12,668 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. 2017 Restated 2016 €m €m Cash at bank and in hand   1,856 2,196 Money market funds and bank deposits 6,979 7,311 Repurchase   agreements – 3,415 Cash and cash equivalents as presented in the statement of   financial position 8,835 12,922 Bank overdrafts – (11) Cash and cash   equivalents of discontinued operations 467 – Cash and cash equivalents as   presented in the statement of cash flows 9,302 12,911 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 €1,132 million (2016: €1,624   million) are held in countries with restrictions on remittances but where the   balances could be used to repay subsidiaries’ third party liabilities. 

 

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Vodafone Group   Plc Annual Report 140 on Form 20-F 2017 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   2017 Restated 2016 Short-term Long-term Short-term Long-term borrowings   borrowings Total borrowings borrowings Total €m €m €m €m €m €m Financial   liabilities measured at amortised cost: Bank loans 867 2,741 3,608 2,851   8,799 11,650 Bank overdrafts – – – 11 – 11 Commercial paper 3,648 – 3,648   9,353 – 9,353 Bonds 660 19,345 20,005 521 14,275 14,796 Other liabilities1,2   4,632 305 4,937 5,474 297 5,771 Bonds in designated hedge relationships 2,244   12,132 14,376 2,050 13,718 15,768 12,051 34,523 46,574 20,260 37,089 57,349   Notes: 1 At 31 March 2017 amount includes €2,654 million (2016: €3,588   million) in relation to collateral support agreements. 2 Includes a €1.8   billion (2016: €1.8 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 €46 million (2016:   €34 million) and €34 million (2016: €87 million) 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 at 31   March 2016 include INR629 billion (€8 billion) of loans held by Vodafone   India Limited (‘VIL’) and its subsidiaries (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. See note 7   “Discontinued operations and assets held for sale” for further details. The   fair value and carrying value of the Group’s short-term borrowings are as   follows: Euro equivalent nominal value Fair value Carrying value 2017   Restated 2016 2017 Restated 2016 2017 Restated 2016 €m €m €m €m €m €m   Financial liabilities measured at amortised cost1 9,163 17,374 9,180 17,700   9,147 17,689 Bonds: 647 500 667 505 660 521 4.75% euro 500 million bond due   June 2016 – 500 – 505 – 521 5.375% sterling 600 million bond due December   2017 647 – 667 – 660 – Bonds in designated hedge relationships: 2,244 2,021   2,241 2,070 2,244 2,050 5.625% US dollar 1,300 million bond due February 2017   – 1,142 – 1,188 – 1,172 1.625% US dollar 1,000 million bond due March 2017 –   879 – 882 – 878 1.25% US dollar 1,000 million bond due September 2017 935 –   934 – 934 – 1.5% US dollar 1,400 million bond due February 2018 1,309 – 1,307   – 1,310 – Short-term borrowings 12,054 19,895 12,088 20,275 12,051 20,260   Note: 1 Amounts for 2017 include €46 million in relation to the short -term debt   component of the mandatory convertible bonds. 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 141 Overview Strategy Performance Governance   Financials Additional information The fair value and carrying value of the   Group’s long-term borrowings are as follows: Euro equivalent nominal value   Fair value Carrying value 2017 Restated 2016 2017 Restated 2016 2017 Restated   2016 €m €m €m €m €m €m Financial liabilities measured at amortised cost:   3,108 6,997 3,074 9,182 3,046 9,096 Bank loans 2,803 6,700 2,769 8,885 2,741   8,799 Other liabilities1 305 297 305 297 305 297 Bonds: 18,597 13,541 19,286   14,512 19,345 14,275 5.375% sterling 600 million bond due December 2017 – 694   – 737 – 716 5% euro 750 million bond due June 2018 750 750 795 829 781 780   8.125% sterling 450 million bond due November 2018 528 569 590 663 550 598   Floating rate note euro 1,750 million bond due February 2019 1,750 1,750 1,774   1,767 1,751 1,753 1% euro 1,750 million bond due September 2020 1,750 1,750   1,789 1,773 1,751 1,749 Convertible sterling 600 million bond due November   2020 – 759 – 759 – 699 0.875% euro 750 million bond due November 2020 750 750   764 755 749 748 Floating rate note US dollar 60 million bond due March 2021   56 53 57 53 56 52 1.25% euro 1,250 million bond due August 2021 1,250 1,250   1,291 1,280 1,254 1,246 0.375% euro 1,000 million bond due November 2021 1000   – 992 – 998 – 4.65% euro 1,250 million bond due January 2022 1,250 1,250   1,495 1,507 1,430 1,463 5.375% euro 500 million bond due June 2022 500 500   620 629 629 649 1.75% euro 1,250 million bond due August 2023 1,250 1,250   1,309 1,298 1,258 1,247 0.5% euro 750 million bond due January 2024 750 – 723   – 743 – 1.875% euro 1,000 million bond due September 2025 1,000 1,000 1,051   1,033 1,000 999 5.625% sterling 250 million bond due December 2025 293 316   366 378 384 424 2.2% euro 1,750 million bond due August 2026 1,750 – 1,846 –   1,799 – 1.6% euro 1,000 million bond due July 2031 1,000 – 938 – 1,005 – 5.9%   sterling 450 million bond due November 2032 528 569 693 689 748 818 2.75%   euro 332 million bond due December 2034 332 331 348 362 334 334 3.375%   sterling 800 million bond due August 2049 938 – 859 – 944 – 3% sterling 1,000   million bond due August 2056 1,172 – 986 – 1,181 – Bonds in designated hedge   relationships: 10,863 12,378 11,349 12,923 12,132 13,718 1.25% US dollar   1,000 million bond due September 2017 – 879 – 876 – 878 1.5% US dollar 1,400   million bond due February 2018 – 1,231 – 1,231 – 1,229 4.625% US dollar 500   million bond due July 2018 467 439 483 467 491 475 5.45% US dollar 1,250   million bond due June 2019 1,168 1,098 1,252 1,210 1,256 1,210 Convertible   sterling 600 million bond due November 2020 703 – 686 – 660 – 4.375% US   dollar 500 million bond due March 2021 467 439 497 479 483 459 2.5% US dollar   1,000 million bond due September 2022 935 879 914 878 920 902 2.95% US dollar   1,600 million bond due February 2023 1,496 1,406 1,472 1,391 1,546 1,516 0.375%   Swiss franc 350 million bond due December 2024 327 – 328 – 333 – 3.215%   Norwegian krona 850 million bond due November 2025 93 90 100 99 94 91 2.2%   euro 1,750 million bond due August 2026 – 1,750 – 1,835 – 1,744 3.115%   Norwegian krona 850 million bond due March 2027 93 – 100 – 93 – 0.625% Swiss   franc 175 million bond due March 2027 164 – 164 – 164 – 0% euro 50 million   bond due December 2028 186 186 147 145 150 129 7.875% US dollar 750 million   bond due February 2030 701 659 929 841 1,031 987 0.5% Swiss franc 150 million   bond due September 2031 140 – 133 – 142 – 6.25% US dollar 495 million bond   due November 2032 463 435 542 505 605 575 6.15% US dollar 1,200 million bond   due February 2037 1,122 1,055 1,292 1,185 1,529 1,450 6.15% US dollar 500   million bond due February 2037 467 439 538 493 624 592 4.375% US dollar 1,400   million bond due February 2043 1,309 1,230 1,203 1,121 1,446 1,315 5.35% US   dollar 186 million bond due December 2045 174 163 179 167 176 166 4.6% US   dollar 45 million bond due August 2046 42 – 39 – 42 – 5.35% US dollar 370   million bond due March 2047 346 – 351 – 347 – Long-term borrowings 32,568   32,916 33,709 36,617 34,523 37,089 Note: 1 Amounts for 2017 include €34   million in relation to the long-term debt component of the mandatory   convertible bonds. 

 

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Vodafone Group   Plc Annual Report 142 on Form 20-F 2017 Notes to the consolidated financial   statements (continued) 21. Borrowings (continued) 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”. The Group’s gross   and net debt includes certain bonds which have been designated in hedge   relationships, which are carried at €2.0 billion (2016: €2.1 billion) higher   than their euro equivalent redemption value. In addition, where bonds are issued   in currencies other than euros, the Group has entered into foreign currency   swaps to fix the euro cash outflows on redemption. The impact of these swaps   are not reflected in gross debt and would further reduce the euro equivalent   redemption value of the bonds by €0.9 billion (2016: €1.2 billion). 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 Bank Commercial Other designated hedge loans paper Bonds   liabilities relationships Total €m €m €m €m €m €m Within one year 909 3,660   1,810 4,606 3,142 14,127 In one to two years 1,168 – 2,650 21 1,527 5,366 In   two to three years 721 – 2,080 56 366 3,223 In three to four years 569 –   2,369 22 1,522 4,482 In four to five years – – 3,010 24 1,253 4,287 In more   than five years 350 – 12,029 203 11,548 24,130 3,717 3,660 23,948 4,932   19,358 55,615 Effect of discount/financing rates (109) (12) (3,943) 5 (4,982)   (9,041) 31 March 2017 3,608 3,648 20,005 4,937 14,376 46,574 Within one year   3,091 9,365 889 5,486 1,649 20,480 In one to two years 1,590 – 1,124 72 3,525   6,311 In two to three years 2,022 – 3,391 54 868 6,335 In three to four years   1,640 – 228 18 1,486 3,372 In four to five years 1,399 – 3,539 19 797 5,754   In more than five years 5,964 – 7,356 178 12,319 25,817 15,706 9,365 16,527   5,827 20,644 68,069 Effect of discount/financing rates (4,057) (11) (1,731)   (46) (4,875) (10,720) 31 March 2016 restated 11,649 9,354 14,796 5,781 15,769   57,349 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: 2017 Restated   2016 Payable Receivable Payable Receivable €m €m €m €m Within one year 16,541   16,462 32,870 34,035 In one to two years 4,788 5,201 10,660 10,918 In two to   three years 3,000 3,141 4,815 5,244 In three to four years 1,913 2,038 2,641   2,988 In four to five years 1,567 1,706 2,419 2,592 In more than five years   18,743 22,491 23,841 26,429 46,552 51,039 77,246 82,206 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 €2,282 million   (2016: €1,495 million), leaving a €2,205 million (2016: €3,465 million) net   receivable in relation to financial instruments. This is split €2,077 million   (2016: €1,978 million) within trade and other payables and €4,282 million   (2016: €5,443 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 2017 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. 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 143 Overview Strategy Performance   Governance Financials Additional information The currency split of the   Group’s foreign exchange derivatives (which includes cross-currency interest   rate swaps and foreign exchange swaps) is as follows: 2017 Restated 2016   Payable Receivable Payable Receivable €m €m €m €m Sterling 1,176 6,576 22,625   18,026 Euro 23,167 5,556 14,762 24,496 US dollar 4,246 19,482 9,799 12,872   Japanese yen – – 851 – Other 5,420 4,813 6,814 1,005 34,009 36,427 54,851   56,399 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   €2,008 million (2016: €51 million), leaving a €410 million (2016: €1,599   million) net receivable in relation to foreign exchange financial   instruments. This is split €1,400 million (2016: €750 million) within trade   and other payables and €1,810 million (2016: €2,349 million) within trade and   other receivables. 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: 2017   Restated 2016 €m €m Within one year 68 15 In two to five years 78 63 In more   than five years 160 138 306 216 Interest rate and currency of borrowings is   as follows: Total Floating rate Fixed rate Other borrowings borrowings   borrowings1 borrowings2 Currency €m €m €m €m Sterling 4,552 5 4,547 – Euro   37,420 7,517 28,009 1,894 US dollar 4,449 4,172 277 – Other 153 13 140 – 31   March 2017 46,574 11,707 32,973 1,894 Sterling 3,528 114 3,257 157 Euro   37,814 14,697 21,309 1,808 US dollar 7,122 6,883 239 – Other 8,885 3,011   5,874 – 31 March 2016 restated 57,349 24,705 30,679 1,965 Notes: 1 The   weighted average interest rate for the Group’s sterling denominated fixed   rate borrowings is 2.5% (2016: 4.6%). The weighted average time for which   these rates are fixed is 16.6 years (2016: 6.4 years). The weighted average   interest rate for the Group’s euro denominated fixed rate borrowings is 2.1%   (2016: 2.7%). The weighted average time for which the rates are fixed is 8.4   years (2016: 6.5 years). The weighted average interest rate for the Group’s   US dollar denominated fixed rate borrowings is 0.2% (2016: 3.6%). The   weighted average time for which the rates are fixed is 0.1 years (2016: 2.0   years). The weighted average interest rate for the Group’s other currency   fixed rate borrowings is 8.5% (2016: 9.4%). The weighted average time for   which the rates are fixed is 12.0 years (2016: 6.8 years). 2 At 31 March 2017   other borrowings of €1.9 billion (2016: €2.0 billion) include a €1.8 billion (2016:   €1.8 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   cross-currency and interest rate swaps used to manage the currency and   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.   2017 Restated 2016 Interest rate futures €m Interest rate swaps €m Interest   rate futures €m Interest rate swaps €m Within one year 291 3,125 (3,734)   2,145 In one to two years – 3,000 3,414 1,920 In two to three years – 8,875   2,033 1,807 In three to four years – (1,000) – 7,114 In four to five years –   (3,125) – (1,807) In more than five years2 – 3,300 – (3,049) 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 2026 to March 2047 (2016: March 2021 to March 2022). 

 

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Vodafone Group   Plc Annual Report 144 on Form 20-F 2017 Notes to the consolidated financial   statements (continued) 21. Borrowings (continued) Borrowing facilities   Committed facilities expiry 2017 Restated 2016 Drawn Undrawn Drawn Undrawn €m   €m €m €m Within one year 460 – 1,666 2,297 In one to two years 855 – 878 11   In two to three years 551 502 1,228 9 In three to four years 502 3,861 874   291 In four to five years 568 3,678 837 7,405 In more than five years 380 –   770 354 31 March 3,316 8,041 6,253 10,367 At 31 March 2017 the Group’s most   significant committed facilities comprised two revolving credit facilities   which remained undrawn throughout the year of US$4.0 billion (€3.8 billion)   maturing in three to four years and US$4.1 billion (€3.8 billion) maturing in   three to 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, United Kingdom and   Romanian operations of €2.0 billion in aggregate 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 €31.2 billion at 31 March 2017 and includes liabilities for   amounts payable under the domination agreement in relation to Kabel Deutschland   AG (€1.8 billion). This decreased by €5.7 billion in the year primarily as a   result of the classification of Vodafone India as discontinued operations.   Further information can be found in note 7 “Discontinued operations and   assets held for sale”. Net debt represented 44% of our market capitalisation   at 31 March 2017 compared to 46% at 31 March 2016. Average net debt at month   end accounting dates over the 12-month period ended 31 March 2017 was €33.0   billion and ranged between net debt of €29.9 billion and €37.9 billion. Our   consolidated net debt position at 31 March was as follows: 2017 Restated 2016   €m €m Cash and cash equivalents 8,835 12,922 Short-term borrowings Bonds   (2,904) (2,571) Commercial paper1 (3,648) (9,353) Put options over non-controlling   interests2 (1,837) (1,809) Bank loans (867) (2,851) Other short-term   borrowings3 (2,795) (3,676) (12,051) (20,260) Long-term borrowings Put   options over non-controlling interests – (6) Bonds, loans and other long-term   borrowings4 (34,523) (37,083) (34,523) (37,089) Other financial instruments5   6,570 7,512 Net debt (31,169) (36,915) Notes: 1 At 31 March 2017 US$1,484   million was drawn under the US commercial paper programme and €2,262 million   were drawn under the euro commercial paper programme. 2 Includes a €1.8   billion (2016: €1.8 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. 3 At 31 March 2017 the amount includes   €2,654 million (2016: €3,588 million) in relation to cash received under   collateral support agreements. Amount also includes €46 million (2016: €63   million) in relation to the short-term debt component of the mandatory   convertible bonds maturing on 25 August 2017 and 25 February 2019. 4 At 31   March 2017 the amount includes €34 million (2016: €87 million) in relation to   the long-term debt component of the mandatory convertible bonds maturing on   25 February 2019. 5 Comprises mark-to-market adjustments on derivative   financial instruments which are included as a component of trade and other   receivables €4,282 million (2016: €5,443 million) and trade and other   payables €2,077 million (2016: €1,978 million). Amount also includes €4,365   million (2016: €4,048 million) comprised of short-term investments primarily   in index-linked government bonds and managed investment funds included as a   component of other investments and collateral passed in relation to   derivative financial instruments including put options issued with regards to   the mandatory convertible bonds hedging arrangements. 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 145 Overview Strategy Performance Governance   Financials Additional information At 31 March 2017 we had €8,835 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 2017 were managed investment funds,   money market funds, UK index-linked government bonds 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 2017   amounts external to the Group of €2,262 million were drawn under the euro   commercial paper programme and US$1,484 million (€1,386 million) were drawn   down under the US commercial paper programme, with such funds being provided   by counterparties external to the Group. At 31 March 2016 amounts external to   the Group of €8,907 million and US$38 million (€33 million) were drawn under   the euro commercial paper programme and US$471 million (€413 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 (€3.8 billion) and €4.0 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 2017 the   total amounts in issue under these programmes split by currency were US$12.3   billion, €15.1 billion, £4.2 billion, CHF0.7 billion and NOK1.7 billion. At   31 March 2017 we had bonds outstanding with a nominal value of €32.3 billion.   During the year ended 31 March 2017 bonds with a nominal value equivalent of   €6.0 billion were issued under the euro medium-term note programme. The bonds   issued in the year were: Nominal amount Euro equivalent Date of bond issue   Maturity of bond Programme Currency Millions €m 6 March 2017 22 November 2021   EMTN Euro 1,000 1,000 30 September 2016 30 January 2024 EMTN Euro 750 750 3   June 2016 3 December 2024 EMTN Swiss franc 350 327 1 March 2017 1 March 2027   EMTN Norwegian krona 850 93 15 March 2017 15 March 2027 EMTN Swiss franc 175   164 29 July 2016 29 July 2031 EMTN Euro 1,000 1,000 19 September 2016 19   September 2031 EMTN Swiss franc 150 140 9 August 2016 9 August 2046 EMTN US   dollar 45 42 9 March 2017 9 March 2047 EMTN US dollar 370 346 8 August 2016 9   August 2049 EMTN Pound sterling 800 938 12 August 2016 12 August 2056 EMTN   Pound sterling 1,000 1,172 On 25 February 2016 the Group issued £2.9 billion   (€3.5 billion) of subordinated mandatory convertible bonds issued in two   tranches, with the first £1.4 billion (€1.7 billion) maturing on 25 August   2017 and a further £1.4 billion (€1.7 billion) maturing on 25 February 2019   with coupons of 1.5% and 2.0% respectively. At the initial conversion price   adjusted for dividends declared during the year, of £2.0546, at maturity the   bond will convert to 1,401,732,698 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 (€3.5 billion)   recognised as a component of shareholders’ funds in equity. The fair value of   future coupons of £0.1 billion (€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 101. 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 2,254,825,696 of its own shares during the   year which represented 8.0% of issued share capital at that time. 

 

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Vodafone Group   Plc Annual Report 146 on Form 20-F 2017 Notes to the consolidated financial   statements (continued) 22. Liquidity and capital resources (continued)   Committed facilities In aggregate we have committed facilities of   approximately €11,357 million, of which €8,041 million was undrawn and €3,316   million was drawn at 31 March 2017. The following table summarises the   committed bank facilities available to us at 31 March 2017. 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 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 2022. 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 2022. From March 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 euro, 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$0.1 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 1 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   2 September 2020. This facility was drawn down in full on 4 December 2013. 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 147 Overview Strategy Performance   Governance Additional information Committed bank facilities Amounts drawn   Terms and conditions 2 December 2014 US$0.8 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 16 June 2023. This   facility is fully drawn down on 16 June 2016. 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. 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 2017 Vodafone Egypt had a fully drawn term loan   of US$53 million (€50 million) and undrawn revolving credit facilities of   EGP4 billion (€207 million). Vodacom had fully drawn facilities of US$112   million (€105 million) and facilities of ZAR0.48 billion (€33.3 million) of   which ZAR0.47 billion (€32.8 million) was drawn. Vodafone Ghana had fully   drawn facilities of US$142 million (€133 million) and GHS60 million (€13   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 a 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,   adjusted for dividends declared during the year, on 1,402 million shares.   Sale of trade receivables During the year the Group sold certain trade   receivables to a financial institution. Whilst there are no repurchase   obligations in respect of these receivables, the Group provided a credit   guarantee which would only become payable if default rates were significantly   higher than historical rates. The credit guarantee is not considered   substantive and substantially all risks and rewards associated with the   receivables passed to the purchaser at the date of sale, therefore the   receivables were derecognised. The maximum payable under the guarantees at 31   March 2017 was €360 million. No provision has been made in respect of these   guarantees as the likelihood of a cash outflow has been assessed as remote.

 

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Vodafone Group   Plc Annual Report 148 on Form 20-F 2017 Notes to the consolidated financial   statements (continued) 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   noncontrolling 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: –– hedges of the change of fair value of recognised assets   and liabilities (‘fair value hedges’); or –– hedges of highly probable   forecast transactions or hedges of foreign currency or interest rate risks of   firm commitments (‘cash flow hedges’); or –– 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.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 149 Overview Strategy Performance   Governance Additional information 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. 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: 2017 Restated 2016 €m €m Financial assets: Cash and cash equivalents   (8,835) (12,922) Fair value through the income statement (held for trading)   (6,169) (5,261) Loans and receivables (685) (1,986) Derivative instruments in   designated hedge relationships (1,793) (2,243) Financial liabilities: Fair   value through the income statements (held for trading) 1,636 1,714 Derivative   instruments in designated hedge relationships 441 264 Financial liabilities   held at amortised cost 46,574 57,349 Net debt 31,169 36,915 Equity 73,719   85,136 Capital 104,888 122,051 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 manages   centrally the Group’s funding requirement, net foreign exchange exposure, interest   rate management exposures and counterpart risk arising from investments and   derivatives. 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 of 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:   2017 Restated 2016 €m €m Cash at bank and in hand 1,856 2,196 Repurchase   agreements – 3,415 Cash held in restricted deposits 1,109 1,000 UK government   bonds 466 833 Money market fund investments and bank deposits 6,979 7,311   Derivative financial instruments 4,282 5,443 Other investments – debt and   bonds 7,919 8,027 Trade receivables 5,335 6,037 Other receivables and accrued   income 2,886 4,055 30,832 38,317

 

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150 Vodafone   Group Plc Annual Report on Form 20-F 2017 Notes to the consolidated financial   statements (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 euro 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 also invests   in a fund where the underlying assets are supply chain receivables, the   creditworthiness of which are enhanced by an insurance wrapper as provided by   established insurance companies with a long-term credit rating of at least   A-. The Group invests 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: 2017 Restated 2016 €m €m Sovereign   – 3,415 Supranational – – – 3,415 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: 2017 Restated 2016 €m €m Cash collateral 2,654   3,588 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 2017 €3,322 million (2016: €4,082 million) of   trade receivables were not yet due for payment. Overdue trade receivables   consisted of €789 million (2016: €1,636 million) relating to the Europe   region, and €423 million (2016: €318 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: 2017 Restated 2016 Gross receivables   Less provisions Net receivables Gross receivables Less provisions Net   receivables €m €m €m €m €m €m 30 days or less 730 (27) 703 919 (344) 575   Between 31 and 60 days 125 (23) 102 330 (87) 243 Between 61 and 180 days 648   (258) 390 498 (113) 385 Greater than 180 days 1,423 (1,077) 346 1,401 (650)   751 2,926 (1,385) 1,541 3,148 (1,194) 1,954 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 2017 were €589 million (2016: €679 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.   Liquidity risk At 31 March 2017 the Group had €4.0 billion and US$4.1 billion   syndicated committed undrawn bank facilities which support the US$15 billion   and €8.0 billion commercial paper programme available to the Group. The Group   uses commercial paper and bank facilities to manage short-term liquidity and   manages long-term liquidity by raising funds in the capital markets. The euro   syndicated committed facility has a maturity date of 28 March 2021. The US$ syndicated committed facility has a maturity date of 27 February 2022. Both   facilities have remained undrawn throughout the financial year and since year   end and provide liquidity support.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 151 Overview Strategy Performance   Governance Additional information 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 39 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 2017 amounted to €8,835 million (2016: €12,922 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. The policy also allows euros, US dollars   and sterling to be moved to a fixed rate basis if interest rates are   statistically low. 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 rise in market interest rates for all currencies   in which the Group had borrowings at 31 March 2017 there would be an increase   in profit before tax by approximately €470 million (2016: approximately €29   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. At 31 March 2017 other than USD denominated   liabilities, which are retained in order to hedge foreign exchange movements   arising from our investment in VZ Communication loan notes, substantially all   of our outstanding liabilities are held on a fixed interest rate basis in   accordance with treasury policy. 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 and   sterling, the Group maintains the currency of debt and interest charges in   proportion to its expected future principal cash flows and has a policy to   hedge external foreign exchange risks on transactions denominated in other   currencies above certain de minimis level. At 31 March 2017 19% of net debt   was denominated in currencies other than euro (8% US dollar, 5% South African   rand and 6% other). This allows US dollar, South African rand 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 2017   the Group held financial liabilities in a net investment against the Group’s   South African rand. Sensitivity to foreign exchange movements on the hedging   liabilities, analysed against a strengthening of the South African rand by 18%   would result in a decrease in equity of €493 million which would be fully   offset by foreign exchange movements on the hedged net assets. At 31 March   2016 the Group held financial liabilities in a net investment against the   Group’s consolidated euro net assets. Subsequent to the change in the   Company’s functional currency and the Group’s presentation currency from   sterling to euro with effect from 1 April 2017, the Group’s primary foreign   exchange exposure is to South African rand (2016: euro). 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 is South   African rand. 2017 Restated 2016 €m €m ZAR 18% change (2016: 20%) – Operating   profit1 249 251 Euro no change (2016: 8%) – Operating profit1,2 – 138 Notes:   1 Operating profit before impairment losses and other income and expense. 2   The Group is predominantly exposed to South African rand following the change   in the functional currency from sterling to euro. At 31 March 2017 the Group’s   sensitivity to foreign exchange movements, analysed against a strengthening   of the US dollar by 11% (2016: 8%) on its external US dollar exposure, would   decrease the profit before tax by €100 million (2016: €76 million). Foreign   exchange on certain sterling balances analysed against a 10% strengthening of   sterling would decrease the profit before tax by €262 million (2016: €nil).   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 2017 the Group’s sensitivity to a movement of 7% (2016: 5%) in   its share price would result in an increase or decrease in profit before tax   of approximately €236 million (2016: €182 million).

 

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152 Vodafone   Group Plc Annual Report on Form 20-F 2017 Notes to the consolidated financial   statements (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 2017 €m Restated 2016 €m 2017   €m Restated 2016 €m 2017 €m Restated 2016 €m Financial assets: Fair value   through the income statement – – 4,323 2,466 4,323 2,466 Derivative financial   instruments: Interest rate swaps – – 2,460 3,049 2,460 3,050 Cross-currency   interest rate swaps – – 1,707 2,056 1,707 2,055 Options – – 12 46 12 46   Foreign exchange contracts – – 103 292 103 292 Interest rate futures – – 3 5   3 5 – – 8,608 7,914 8,608 7,914 Financial investments available-for-sale:   Listed equity securities4 3 3 – – 3 3 Unlisted equity securities4 – – 82 104   82 104 3 3 82 104 85 107 3 3 8,690 8,018 8,693 8,021 Financial liabilities:   Derivative financial instruments: Interest rate swaps – – 614 1,147 614 1,147   Cross-currency interest rate swaps – – 1,324 675 1,324 675 Options – – 63 81   63 81 Foreign exchange contracts – – 76 75 76 75 – – 2,077 1,978 2,077 1,978   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 2017 €m Restated 2016 €m 2017 €m Restated 2016 €m   Cash and cash equivalents2 8,835 12,922 8,835 12,922 Cash and other   investments held in restricted deposits2 1,109 1,000 1,109 1,000 Other debt   and bonds3 4,062 6,389 4,062 6,389 14,006 20,311 14,006 20,311 Short-term   borrowings: Bonds4 (2,908) (2,575) (2,904) (2,571) Commercial paper5 (3,648)   (9,353) (3,648) (9,353) Bank loans and other short-term borrowings5 (5,532)   (8,346) (5,499) (8,336) (12,088) (20,274) (12,051) (20,260) Long-term   borrowings: Bonds4 (30,635) (27,435) (31,477) (27,993) Bank loans and other   long-term borrowings5 (3,074) (9,182) (3,046) (9,096) (33,709) (36,617)   (34,523) (37,089) (31,791) (36,580) (32,568) (37,038) Notes: 1 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. 2 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. 3 Other debt and bonds is predominantly   comprised of loan notes from Verizon Communications Inc. (see note 13 “Other   investments”), collateral paid on derivative financial instruments and short   term investments in funds where the underlying assets are supply chain receivables.   4 The Group’s bonds are held at amortised cost with fair values available   from market observable prices. 5 Commercial paper and other bank loans are   held at amortised cost with fair values calculated from market observable   data where appropriate.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 153 Overview Strategy Performance   Governance Additional information 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 2017 Related amounts not set off in the balance sheet   Gross amount €m Amount set off €m Amounts presented in balance sheet €m Right   of set off with derivative counterparties €m Cash collateral €m Net amount €m   Derivative financial assets 4,282 – 4,282 (1,505) (2,654) 123 Derivative   financial liabilities (2,077) – (2,077) 1,505 384 (188) Total 2,205 – 2,205 –   (2,270) (65) At 31 March 2016 restated Related amounts not set off in the   balance sheet Gross amount €m Amount set off €m Amounts presented in balance   sheet €m Right of set off with derivative counterparties €m Cash collateral   €m Net amount €m Derivative financial assets 5,443 – 5,443 (1,538) (3,588)   317 Derivative financial liabilities (1,978) – (1,978) 1,538 139 (301) Total   3,465 – 3,465 – (3,449) 16 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. 24. 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: 2017 Restated 2016 Restated 2015 €m €m €m Salaries and fees   4 5 5 Incentive schemes1 2 4 4 Other benefits2 1 1 1 7 10 10 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 2017 by one Director who served during the year was €0.7   million (2016: one Director, €0.2 million; 2015: one Director, €<€0.1   million). Key management compensation Aggregate compensation for key   management, being the Directors and members of the Executive Committee, was   as follows: 2017 Restated 2016 Restated 2015 €m €m €m Short-term employee   benefits 24 30 23 Share-based payments 25 26 23 49 56 46

 

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154 Vodafone   Group Plc Annual Report on Form 20-F 2017 Notes to the consolidated financial   statements (continued) 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. 2017   2016 2015 Employees Employees Employees By activity: Operations 18,207 18,869   17,602 Selling and distribution 38,252 38,325 35,629 Customer care and   administration 55,097 54,490 52,069 111,556 111,684 105,300 By segment:   Germany 14,478 14,862 14,520 Italy 6,601 6,676 6,757 Spain 5,118 5,935 5,324   UK 13,238 13,323 12,437 Other Europe 15,801 16,058 15,190 Europe 55,236   56,854 54,228 India (Discontinued operations) 13,187 13,346 12,303 Vodacom   7,590 7,515 7,260 Other Africa, Middle East and Asia-Pacific 14,183 14,262   14,312 Africa, Middle East and Asia-Pacific 34,960 35,123 33,875 Common   Functions 21,360 19,707 17,197 Total 111,556 111,684 105,300 The cost   incurred in respect of these employees (including Directors) was: 2017   Restated 2016 Restated 2015 €m €m €m Wages and salaries 4,630 4,759 4,265   Social security costs 582 621 563 Other pension costs (note 26) 212 270 239   Share-based payments (note 27) 95 154 104 5,519 5,804 5,171 India   (Discontinued operations) 217 212 182 Total 5,736 6,016 5,353 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.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 155 Overview Strategy Performance Governance   Additional information 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 2017 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   2017 Restated 2016 Restated 2015 €m €m €m Defined contribution schemes 192   214 190 Defined benefit schemes 20 56 49 Total amount charged to income   statement (note 25) 212 270 239

 

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Vodafone Group   Plc Annual Report 156 on Form 20-F 2017 Notes to the consolidated financial   statements (continued) Defined benefit schemes Vodafone Group’s retirement   policy is to provide competitive pension provision, in each operating   country, in line with the market median for that location. Vodafone Group’s   preferred retirement provision is focused on Defined Contribution (‘DC’)   arrangements and/or State provision for future service. The Group’s main   defined benefit funding liability is the Vodafone UK Group Pension Scheme   (‘Vodafone UK plan’). Since June 2014 the plan has consisted of two   segregated sections the Vodafone Section and the Cable & Wireless   Section. Both sections are closed to new entrants and to future accrual. The   Group also operates unfunded plans in Germany and funded plans in Ireland.   Defined benefit pension provision exposes the Group to actuarial risks such   as longer than expected longevity of participants, lower than expected return   on investments and higher than expected inflation, which may increase the   liabilities or reduce the value of assets of the schemes. The defined benefit   schemes are administered by Trustee Boards who are legally separate from the   Group and consist of representatives who are employees, former employees or are   independent from the Company. The Boards of the pension schemes are required   by legislation to act in the best interest of the participants, set the   investment strategy and contribution rates and are subject to statutory   funding objectives. The Vodafone UK plan is registered as an occupational   pension plan with HMRC and is subject to UK legislation and operates within   the framework outlined by 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   nor a unilateral right to improve members’ benefits. The trustees obtain   regular actuarial valuations to check whether the statutory funding objective   is met and whether a recovery plan is required to restore funding to the   level of the agreed technical provisions. The previous valuations for the   Vodafone and CWW Sections of the Vodafone UK plan were carried out as at 31   March 2013 resulting in the Group paying a special one-off contributions   totalling £365 million (€442 million) in April 2014 (£325 million (€394   million) into the Vodafone Section and £40 million (€48 million) into the CWW   Section). No further contributions were due in respect of the deficit   revealed at the 2013 valuation. The most recent triennial actuarial valuation   is currently being undertaken by independent actuaries appointed by the plan   trustees, with an effective date of 31 March 2016. The preliminary results   indicate that due to falls in government bond yields since the 2013   valuation, it is likely that additional deficit payments will be required.   The valuation results and recovery plan are currently being agreed by the   trustees and the Company. 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 €133 million will be   paid into the Group’s defined benefit pension schemes during the year ending   31 March 2018. 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: 2017 2016 2015 % % % Weighted average actuarial assumptions used   at 31 March1: Rate of inflation2 3.0 2.8 3.0 Rate of increase in salaries 2.6   2.6 2.8 Discount rate 2.6 3.2 3.0 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 24.1/25.4 years (2016: 24.0/25.3   years; 2015: 24.5/25.8 years) for a male/female pensioner currently aged 65   and 26.7/28.3 years (2016: 65 and 26.6/28.1 years; 2015: 27.1/28.7 years)   from age 65 for a male/female non-pensioner member currently aged 40. Charges   made to the consolidated income statement and consolidated statement of   comprehensive income (‘SOCI’) on the basis of the assumptions stated above   are: 2017 Restated 2016 Restated 2015 €m €m €m Current service cost 43 45 45   Past service costs (27) – – Net interest charge 4 11 4 Total included within staff   costs 20 56 49 Actuarial losses/(gains) recognised in the SOCI1 274 (216) 369   Note: 1 Amounts disclosed in the SOCI are stated net of a €2 million tax   credit (2016: €42 million tax charge; 2015: €78 million tax credit). 

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 157 Overview Strategy Performance   Governance Additional information The past service costs includes the results   of a Pension Increase Exchange (‘PIE’) exercise carried out in the main UK   defined benefit scheme between June and October 2016. All eligible pensioners   were given the opportunity to exchange future increases on part or all of   their pension and receive a higher pension immediately. If they accepted the   offer (after taking financial advice), they no longer receive future   increases on that part of their pension, the net impact of which was to   reduce the future liabilities of the scheme. 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 Liabilities Net   deficit €m €m €m 1 April 2015 restated 6,857 (7,407) (550) Service cost –   (49) (49) Interest income/(cost) 203 (214) (11) Return on plan assets   excluding interest income (206) – (206) Actuarial gains arising from   demographic assumptions – 96 96 Actuarial gains arising from changes in   financial assumptions – 381 381 Actuarial losses arising from experience   adjustments – (55) (55) Employer cash contributions 37 – 37 Member cash   contributions 10 (10) – Benefits paid (161) 161 – Exchange rate movements   (505) 502 (3) Other movements (6) 25 19 31 March 2016 restated 6,229 (6,570)   (341) Reclassification as held for sale – 12 12 6,229 (6,558) (329) Service   cost – 16 16 Interest income/(cost) 190 (194) (4) Return on plan assets   excluding interest income 818 – 818 Actuarial losses arising from changes in   financial assumptions – (1,204) (1,204) Actuarial gains arising from   experience adjustments – 112 112 Employer cash contributions 24 – 24 Member   cash contributions 8 (8) – Benefits paid (180) 180 – Exchange rate movements   (403) 403 – Other movements 23 (50) (27) 31 March 2017 6,709 (7,303) (594) An   analysis of net deficit assets is provided below for the Group as a whole.   2017 Restated 2016 Restated 2015 Restated 2014 Restated 2013 €m €m €m €m €m   Analysis of net deficit: Total fair value of scheme assets 6,709 6,229 6,857   4,652 4,413 Present value of funded scheme liabilities (7,222) (6,487)   (7,316) (5,237) (5,024) Net deficit for funded schemes (513) (258) (459)   (585) (611) Present value of unfunded scheme liabilities (81) (83) (91) (80)   (14) Net deficit (594) (341) (550) (665) (625) Net deficit is analysed as:   Assets1 57 224 234 42 62 Liabilities (651) (565) (784) (707) (687) 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.

 

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158 Vodafone   Group Plc Annual Report on Form 20-F 2017 Notes to the consolidated financial   statements (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 2017 Restated 2016 Restated 2015 Restated 2014   Restated 2013 2017 Restated 2016 Restated 2015 Restated 2014 Restated 2013 €m   €m €m €m €m €m €m €m €m €m Analysis of net assets/(deficit): Total fair value   of scheme assets 2,894 2,762 3,114 2,155 2,165 2,654 2,408 2,645 1,626 1,574   Present value of scheme liabilities (2,842) (2,543) (2,884) (2,097) (2,221)   (2,962) (2,548) (2,951) (2,030) (1,952) Net assets/(deficit) 52 219 230 58   (56) (308) (140) (306) (404) (378) Net assets/(deficit) are analysed as:   Assets3 52 219 230 58 – – – – – – Liabilities – – – – (56) (308) (140) (306)   (404) (378) 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 2017 is 22.9 years (2016: 22.3 years; 2015: 22.7   years). Fair value of pension assets 2017 Restated 2016 €m €m Cash and cash   equivalents 104 110 Equity investments: With quoted prices in an active   market 1,938 1,881 Without quoted prices in an active market 413 199 Debt   instruments: With quoted prices in an active market 3,982 3,474 Without quoted   prices in an active market 461 – Property: With quoted prices in an active   market 30 10 Without quoted prices in an active market 78 19 Derivatives:1   With quoted prices in an active market (1,218) (369) Without quoted prices in   an active market (1) – Investment fund 299 292 Annuity policies – Without   quoted prices in an active market 623 613 Total 6,709 6,229 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 annuity   policy. The CWW Section annuity policy fully matches the pension obligations   of those pensioners insured, and therefore the fair value has been set equal   to the present value of the related obligations. Investment funds of €299   million at 31 March 2017 include €278 million of investments in diversified   alternate beta funds held in the Vodafone Section of the Vodafone UK plan.   Plan assets have been measured at fair value in accordance with IFRS 13 “Fair   Value Measurement”. The actual return on plan assets over the year to 31   March 2017 was a gain of €1,008 million (2016: €3 million loss).

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 159 Overview Strategy Performance   Governance Additional information 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 2017. 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 €m Decrease by 1 year €m   (Decrease)/increase in present value of defined obligation (585) 666 (4) 4   868 (741) 199 (199) 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. 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 an average calculation of the closing price of the   Group’s shares on the days prior to the grant date, 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: –– 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 –– 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 2017. There are options outstanding   under 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 Sharesave Plan The Vodafone Group 2008 Sharesave Plan   enables UK staff to acquire shares in the Company through monthly savings of   up to £375 (increased from £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. Following a review   of the UK all-employee plans it was decided that with effect from 1 April   2017 employees would no longer be able to contribute to the Share Incentive   Plan and would therefore no longer receive matching shares.

 

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160 Vodafone   Group Plc Annual Report on Form 20-F 2017 Movements in outstanding ordinary   share options Ordinary share options 2017 2016 2015 Millions Millions   Millions 1 April 24 25 27 Granted during the year 31 7 7 Forfeited during the   year (1) (1) (2) Exercised during the year (7) (5) (6) Expired during the   year (6) (2) (1) 31 March 41 24 25 Weighted average exercise price: 1 April   £1.62 £1.49 £1.42 Granted during the year £1.61 £1.89 £1.56 Forfeited during   the year £1.66 £1.54 £1.45 Exercised during the year £1.50 £1.42 £1.25   Expired during the year £1.75 £1.59 £1.45 31 March £1.61 £1.62 £1.49 Summary   of options outstanding and exercisable at 31 March 2017 Outstanding   Exercisable Weighted Weighted average average Weighted remaining Weighted   remaining Outstanding average contractual Exercisable average contractual   shares exercise life shares exercise life Millions price Months Millions   price Months Vodafone Group savings related and Sharesave Plan: £1.01 – £2.00   41 £1.61 27 – – – Share awards Movements in non-vested shares are as follows:   2017 2016 2015 Weighted Weighted Weighted average fair average fair average   fair value at value at value at Millions grant date Millions grant date   Millions grant date 1 April 198 £1.77 217 £1.56 243 £1.44 Granted 74 £1.97 63   £2.22 83 £1.63 Vested (47) £1.77 (32) £1.80 (62) £1.35 Forfeited (47) £1.57   (50) £1.40 (47) £1.35 31 March 178 £1.91 198 £1.77 217 £1.56 Other   information The total fair value of shares vested during the year ended 31   March 2017 was £83 million (2016: £58 million; 2015: £84 million). The   compensation cost included in the consolidated income statement in respect of   share options and share plans was €95 million (2016: €154 million; 2015: €104   million) which is comprised principally of equity-settled transactions. The   average share price for the year ended 31 March 2017 was 216.2 pence (2016:   224.2 pence; 2015: 212.7 pence). Notes to the consolidated financial   statements (continued)

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 161 Overview Strategy Performance   Governance Additional information We completed a number of acquisitions and   disposals during the year, most significantly, the combination of our   operations in the Netherlands with those of Liberty Global plc to form   VodafoneZiggo, a 50:50 joint venture, details of which are set out below. 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 Cash   consideration paid: Acquisitions completed during the year 32 Net cash   acquired (4) 28 During the 2017 financial year, the Group completed a number   of acquisitions for an aggregate net cash consideration of €28 million. The   aggregate fair values of goodwill, identifiable assets and liabilities of the   acquired operations were €1 million, €34 million and €7 million respectively.   No amount of goodwill is expected to be deductible for tax purposes.   Disposals On 31 December 2016, we combined our operations in the Netherlands   with those of Liberty Global plc to create VodafoneZiggo Group Holding B.V.   (‘VodafoneZiggo’), a 50:50 joint venture providing national unified   communications. As a result of the transaction, we no longer consolidate our   previous interest in the Netherlands and account for our 50% interest in   VodafoneZiggo as a Joint Venture using the equity method. The Group   recognised a net gain on the formation of VodafoneZiggo of €1,275 million. €m   Goodwill (855) Other intangible assets (1,415) Property, plant and equipment   (1,164) Inventory (24) Trade and other receivables (302) Cash and cash   equivalents1 (56) Current and deferred taxation 87 Short and long-term   borrowings 1,000 Trade and other payables 387 Provisions 28 Net assets   contributed into VodafoneZiggo (2,314) Fair value of investment in   VodafoneZiggo2 2,970 Net cash proceeds arising from the transaction1,3 619   Net gain on formation of VodafoneZiggo4 1,275 Notes: 1 Included in purchase   of interests in associates and joint ventures in the consolidated statement   of cash flows. 2 The fair value of our initial investment in VodafoneZiggo is   not observable in a quoted market. Accordingly, the fair value has been   primarily determined with reference to the outcome of a discounted cash flow   analysis. Certain significant inputs used in the valuation, such as forecasts   of future cash flows, are based on our assumptions and are therefore   unobservable. The valuation therefore falls under Level 3 of the fair value   hierarchy. The weighted average cost of capital and terminal growth rate used   to value our initial investment in VodafoneZiggo were 7.0% and 1.0%   respectively. 3 Includes our 50% share of cash paid to both shareholders on creation   of VodafoneZiggo (€1,422 million), together with an equalisation payment of   €802 million made to Liberty Global plc. 4 Reported in other income and   expense in the consolidated income statement. Includes €637 million related   to the re-measurement of our retained interest in Vodafone Libertel B.V.   Transaction costs of €35 million were charged in the consolidated income   statement in the year.

 

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162 Vodafone   Group Plc Annual Report on Form 20-F 2017 Notes to the consolidated financial   statements (continued) 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: 2017 Restated 2016 €m €m Within one year 2,522 1,931 In more than   one year but less than two years 1,487 1,386 In more than two years but less   than three years 1,136 1,250 In more than three years but less than four   years 882 1,008 In more than four years but less than five years 709 799 In   more than five years 2,693 3,569 9,429 9,943 The total of future minimum   sublease payments expected to be received under non-cancellable subleases is   €584 million (2016: €502 million). Capital commitments Company and   subsidiaries Share of joint operations Group 2017 €m Restated 2016 €m 2017 €m   Restated 2016 €m 2017 €m Restated 2016 €m Contracts placed for future capital   expenditure not provided in the financial statements1 2,052 2,471 88 123   2,140 2,594 Note: 1 Commitment includes contracts placed for property, plant   and equipment and intangible assets. Acquisition commitments On 20 March   2017, Vodafone announced the agreement to combine its subsidiary, Vodafone   India (excluding its 42% stake in Indus Towers), with Idea Cellular, which is   listed on the Indian Stock Exchanges, with the combined company to be jointly   controlled by Vodafone and the Aditya Birla Group. Vodafone will own 45.1% of   the combined company after transferring a stake of 4.9% to the Aditya Birla   Group for circa INR39 billion (circa US$579 million) in cash concurrent with   completion of the merger. The Aditya Birla Group will then own 26.0% and has   the right to acquire more shares from Vodafone under an agreed mechanism with   a view to equalising the shareholdings over time. If Vodafone and the Aditya   Birla Group’s shareholdings in the combined company are not equal after four   years, Vodafone will sell down shares in the combined company to equalise its   shareholding to that of the Aditya Birla Group over the following five-year   period. Until equalisation is achieved, the voting rights of the additional   shares held by Vodafone will be restricted and votes will be exercised jointly   under the terms of the shareholders’ agreement. The transaction is subject to   approvals from the relevant regulatory authorities and is also subject to   other customary closing conditions, including the absence of any material   adverse change. Shareholder approval will be required from Idea shareholders   under a scheme of arrangement. The transaction has a break-fee of INR33   billion (US$500 million) that would become payable under certain   circumstances. It is anticipated that completion will take place during the   2018 calendar year. On 9 June 2016, Vodafone announced its intention to merge   with Sky Network Television in New Zealand, thereby creating the country’s   leading integrated telecommunications and media group. Vodafone will become a   51% shareholder in the combined group, will receive NZ$1.25 billion in cash   and will look to realise the benefits of an estimated NZ$850 million NPV from   synergies. Sky shareholders have voted in favour of the transaction but   completion is still subject to local regulatory approvals. In February 2017,   the New Zealand Commerce Commission (‘NZCC’) did not approve the proposed   merger with Sky Network Television. We are reviewing the reasoning of the   NZCC and have preserved the right to appeal the decision.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 163 Overview Strategy Performance   Governance Financials Additional information 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. 2017 Restated 2016 €m €m   Performance bonds1 2,413 1,074 Other guarantees and contingent liabilities2   3,576 3,216 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 AUD1.7 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 (the ‘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 a deficit remains for this section. The   deficit is measured on a prescribed basis agreed between the Group and   Trustee. The Group provides a combination of surety bonds and a charge over   UK indexed gilts as the security. The level of the security has varied since   inception in line with the movement in the Scheme deficit. At 31 March 2017   the Scheme retains security over €1.2 billion (notional value). The security   may be substituted either on a voluntary or mandatory basis. The Company has   also provided two guarantees to the Vodafone Section of the Scheme for a   combined value up to €1.5 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 €1.5 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 €130 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, however costs in complex litigation can be substantial. Indian tax   cases In August 2007 and September 2007, Vodafone India Limited (‘VIL’) and   Vodafone International Holdings BV (‘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 Cayman Island incorporated subsidiary that indirectly holds   interests in VIL. Following approximately five years of litigation in the   Indian courts in which VIHBV sought to set aside the tax demand issued by the   Indian tax authority, in January 2012 the Supreme Court of India 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 Supreme Court of India   quashed the relevant notices and demands issued to VIHBV in respect of   withholding tax and interest. On 28 May 2012 the Finance Act 2012 became law.   The Finance Act 2012, which amended various provisions of the Income Tax Act   1961 with retrospective effect, 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 from the Indian tax authority reminding it of the tax demand   raised prior to the Supreme Court of India’s judgement and purporting to   update the interest element of that demand to a total amount of INR142   billion, which amount includes principal and interest as calculated by the   Indian tax authority but does not include penalties. On 10 January 2014,   VIHBV served an amended trigger notice on the Indian Government under the   Netherlands-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. A trigger notice announces a party’s intention to submit a claim to   arbitration and triggers a cooling off period during which both parties may   seek to resolve the dispute amicably. Notwithstanding their attempts, the   parties were unable to amicably resolve the dispute within the cooling off   period stipulated in the Dutch BIT. On 17 April 2014, VIHBV served its notice   of arbitration under the Dutch BIT, formally commencing the Dutch BIT   arbitration proceedings. In June 2016, the tribunal was fully constituted   with Sir Franklin Berman KCMG QC appointed as presiding arbitrator. The   Indian Government has raised objections to the application of the treaty to   VIHBV’s claims and to the jurisdiction of the tribunal under the Dutch BIT.   The tribunal is considering these jurisdictional objections and has indicated   it will determine shortly whether to decide the Indian Government’s   objections to jurisdiction as a preliminary question.

 

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164 Vodafone   Group Plc Annual Report on Form 20-F 2017 30. Contingent liabilities and   legal proceedings (continued) Separately, 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 Income Tax Act   1961 (as amended by the Finance Act 2012). Although relating to the same   underlying facts as the claim under the Dutch BIT, the claim brought by   Vodafone Group Plc and Vodafone Consolidated Holdings Limited is a separate   and distinct claim under a different treaty. On 24 January 2017, Vodafone Group   Plc and Vodafone Consolidated Holdings Limited served a Notice of Arbitration   on the Indian Government formally commencing the arbitration. The Indian   Government has failed to appoint a second arbitrator as required under the UK   BIT and has objected to Vodafone’s request that the President of the   International Court of Justice (as appointing authority under the UK BIT)   appoint the second arbitrator to the tribunal. The Indian Government has   indicated that it considers the arbitration under the UK BIT to be an abuse   of process but this is strongly denied by Vodafone. On 12 February 2016,   VIHBV received a notice dated 4 February 2016 of an outstanding tax demand of   INR221 billion (which included interest accruing since the date of the   original demand) along with a statement that enforcement action, including   against VIHBV’s indirectly held assets in India would be taken if the demand   was 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 Supreme Court of   India. The hearing has since been periodically listed and then adjourned or   not reached hearing. VIHBV and Vodafone Group Plc will continue to defend   vigorously any allegation that VIHBV or VIL is liable to pay tax in   connection with the transaction with HTIL and will continue to exercise all   rights to seek redress including pursuant to the Dutch BIT and the UK BIT. We   have not recorded a provision in respect of the retrospective provisions of the   Income Tax Act 1961 (as amended by the Finance Act 2012) and any tax demands   based upon such provisions. 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 €2.6 billion plus interest, and   penalties of up to 300% of the principal. VISPL tax claims VISPL has been   assessed as owing tax of approximately €301 million (plus interest of €432   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 appealed to the Supreme Court of India. A   hearing has been adjourned until some time in July or August 2017 with no   specified date. Indian regulatory cases Litigation remains pending in the   Telecommunications Dispute Settlement Appellate Tribunal (‘TDSAT’), High   Courts and the Supreme Court of India 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 Supreme Court of India 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 Supreme Court of India in   March 2012, with an order that the Petitioner should pay a fine for abuse of   process. The case is pending before the Supreme Court of India and is   expected to be called for hearing at some uncertain future date. 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 Supreme Court of India. The matter is pending before the   Indian Supreme Court of India. 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 Supreme Court of India, and   will be listed in due course. Notes to the consolidated financial statements   (continued)

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 165 Overview Strategy Performance   Governance Financials Additional information Other public interest litigation   Three public interest litigations have been initiated in the Supreme Court of   India 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 Supreme Court of   India: 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 licence fees and spectrum usage charges are based. The cumulative   impact of the inclusion of these components is approximately Rs. 2,200 Crores   (€0.3 billion). The DoT also moved cross appeals challenging the tribunal’s   judgement. In the hearing before the Supreme Court of India, 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 of India 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 Patent   litigation Germany The telecoms industry is currently involved in significant   levels of patent litigation brought by non-practising 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 Marthon, IPCom and Intellectual Ventures.   Vodafone has contractual indemnities from suppliers which have been invoked   in relation to the alleged patent infringement liability. Spain Vodafone   Group Plc has been sued in Spain by TOT Power Control (‘TOT’), an affiliate   of Top Optimized Technologies. The claim makes a number of allegations   including patent infringement, with TOT seeking over €500 million from   Vodafone Group Plc as well as an injunction against using the technology in   question. Vodafone’s challenge of the appropriateness of Spain as a venue for   this dispute has been denied. Vodafone Group Plc will appeal the denial. A   hearing on TOT’s application for an injunction has taken place, and a   decision is expected shortly. Germany: Mannesmann 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 Mannesmann. This matter has been ongoing since 2001. The German courts are   also determining whether “squeeze out” compensation is payable to affected   Mannesmann shareholders in a similar proceeding. In September 2014, the   German courts awarded compensation to minority shareholders of Mannesmann in   the amount of €229.58 per share, which would result in a pay-out of €19   million (plus €13 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. These proceeding are in   their early stages, and, accordingly, Vodafone believes that it is too early   to assess the likely quantum of any claim. In a hearing dated 6 October 2016,   the Court examined the Kabel Deutschland business plan which formed the main   basis for the calculation of the offer per share. A decision is not expected   until summer 2017. 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 and the hearing is scheduled for July   2017. 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 final hearing took place in September 2016, and   on 1 March 2017 the Court rejected FASTWEB’s appeal and confirmed the first   instance ruling. FASTWEB has until October 2017 to appeal this decision to   the Supreme Court. 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 expert has prepared a draft report with a range of damages   from €nil–5.6 million.

 

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166 Vodafone   Group Plc Annual Report on Form 20-F 2017 30. Contingent liabilities and   legal proceedings (continued) 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. A number of small claims have been submitted by   individual customers in the small claims courts. 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 was 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 was postponed without a new date having been fixed. In July 2016,   Vodacom filed a request for arbitration with the International Chamber of   Commerce’s International Court of Arbitration. In their response GHI revised   their claim down to €237 million. Each party has appointed an arbitrator and   the arbitrators have appointed a third arbitrator to act as chairman of the   tribunal. 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 Vodacom 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 Vodacom’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) Vodacom is bound by the agreement concluded between Mr.   Makate and the then director of product development and services; (ii)   Vodacom 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. Mr. Makate failed to obtain from the Constitutional Court a   second order that compensation be based on revenue rather than fees for his   contribution. Negotiations between Vodacom and Mr. Makate continue in   accordance with the first order of the Constitutional Court. Notes to the   consolidated financial statements (continued)

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 167 Overview Strategy Performance   Governance Financials Additional information 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. 2017   Restated 2016 Restated 2015 €m €m €m Sales of goods and services to associates   37 39 44 Purchase of goods and services from associates 90 118 118 Sales of   goods and services to joint arrangements 19 21 7 Purchase of goods and services   from joint arrangements 183 92 96 Net interest income receivable from joint   arrangements1 87 92 100 Trade balances owed: by associates – 1 4 to associates   1 4 5 by joint arrangements 158 232 253 to joint arrangements 15 71 65 Other   balances owed by joint arrangements1 1,209 108 85 Other balances owed to joint   arrangements1 127 106 75 Note: 1 Amounts arise primarily through VodafoneZiggo,   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 2017, and as of 16 May 2017, 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 2017 and as of 16 May 2017, 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 On 15 May 2017, the Group announced that its   wholly-owned subsidiary, Vodafone International Holdings B.V. (‘VIHBV’), has   agreed to transfer part of its indirect shareholding in Safaricom Limited   (‘Safaricom’) to Vodacom Group Limited (‘Vodacom’), its sub-Saharan African   subsidiary. Based on the agreed terms of the transaction, VIHBV will be   exchanging a 35% indirect interest in Safaricom for 226.8 million new ordinary   Vodacom shares. The transaction, which has a value of €2,361 million based on   Vodacom’s closing share price on Friday 12 May 2017, will increase the   Group’s ownership in Vodacom from 65% to 70%. VIHBV will continue to hold a   5% indirect interest in Safaricom following the transfer, in addition to the interest   held through Vodacom. Completion of the transaction is subject to a number of   conditions, including approvals from Vodacom minority shareholders, approval   from the Financial Surveillance Department of the South African Reserve Bank   and confirmation from the Kenya Capital Markets Authority that the transaction   does not trigger an obligation for Vodacom to make a mandatory bid for Safaricom.   The transaction is expected to close in the third quarter of the 2017   calendar year and is not expected to have a material impact on the Group’s   free cash flow or earnings.

 

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168 Vodafone   Group Plc Annual Report on Form 20-F 2017 Company name % held by Group companies   Share class Albania Autostrada Tirane-Durres, Rruga: “Pavaresia”, Nr 61,   Kashar, Tirana, Albania Vodafone M-PESA SH.P.K. 99.94 Ordinary shares Vodafone   Albania Sh.A 99.94 Ordinary shares Angola Avenida Che Guevara, No 49,   Maculusso, Luanda, Angola Vodacom Business (Angola) Limitada3 65.00 Ordinary   shares Argentina Cerrito 348, 5to B, C1010AAH, Buenos Aires, Argentina CWGNL   S.A. 100.00 Ordinary shares Australia HLB Mann Judd (NSW) Pty Ltd, Level 19,   207 Kent Street, Sydney NSW NSW 2000, Australia Bluefish Australia Pty Ltd   100.00 Ordinary shares Mills Oakley, Level 12, 400 George Street, Sydney NSW   2000, Australia Vodafone Enterprise Australia Pty Limited 100.00 Ordinary   shares Level 7, 210 George Street, Sydney NSW 2000, Australia Quickcomm Pty Limited   100.00 Ordinary shares, Redeemable convertible preference shares Level 7, 40   Mount Street, North Sydney NSW 2060, Australia PPL Pty Limited 100.00 Ordinary   shares Talkland Australia Pty Limited 100.00 Ordinary shares VAPL No. 2 Pty Limited   100.00 Ordinary shares Austria Kohlmarkt 8-10, 1010, Wien, Austria Vodafone   Enterprise Austria GmbH 100.00 Ordinary shares Bahrain Office 304, Building   60 Falcon Tower, Road 1701, Diplomatic Area, Manama, 317, Bahrain Vodafone   Enterprise Bahrain W.L.L. 100.00 Ordinary shares Company name % held by Group   companies Share class Belgium Malta House, rue Archimède 25, 1000 Bruxelles,   Belgium Vodafone Belgium SA/NV 100.00 Ordinary shares Zaventemsesteenweg 162   1831 Diegem, Belgium Ipergy Communications NV 100.00 Ordinary shares Brazil   Av José Rocha Bonfim, 214, Cond Praça Capital – Edifício Toronto, sls 228/229   13080-900 Jardim Santa Genebra, Campinas, São Paulo, Brazil Cobra do Brasil   Serviços de Telemàtica ltda. 70.00 Ordinary shares Avenida Cidade Jardim,   400, 7th and 20th Floors, Jardim Paulistano, Sao Paulo, Brazil, 01454-000,   Brazil Vodafone Serviços Empresariais Brasil Ltda. 100.00 Ordinary shares City   of São Paulo, State of São Paulo, at Rua Boa Vista, 254, 13th Floor, Suite   38, Centro, 01014-907, Brazil Vodafone Empresa Brasil Telecomunicações Ltda   100.00 Ordinary shares Bulgaria 37A Fridtjof Nansen Str., 5th floor, Sredets   Region, Sofia, 1142, Bulgaria Vodafone Enterprise Bulgaria EOOD 100.00 Ordinary   shares Cameroon Porte 201A 3eme Etage Entree C, immeuble SOCAR, Boulevard de   la liberte, Akwa, Douala, Cameroon Vodacom Business Cameroon SA3 65.00 Ordinary   shares Canada 2 Bloor Street West, Suite 700, Toronto ON M4W3E2, Canada   Vodafone Canada Inc 100.00 Common shares Cayman Islands 190 Elgin Avenue,   George Town, Grand Cayman, KY1-9005, Cayman Islands CGP Investments (Holdings)   Limited 100.00 Ordinary shares Chile 222 Miraflores, P.28, Santiago, Metrop   97-763, Chile Vodafone Enterprise Chile SA 100.00 Regular nominative shares   Company name % held by Group companies Share class China Building 21, 11,   Kangding St., BDA, Beijing, 100176 - China, Vodafone Automotive Technologies   (Beijing) Co, Ltd 100.00 Ordinary shares Unit 23-25, China World Tower 1, No.   1 Jianguomenwai Avenue, Chaoyang District, Beijing 100004, China Vodafone China   Limited (China) 100.00 Equity interest shares Unit 558-560, Regus SCB Tower,   No. 210 Century Avenue, Pudong District, Shanghai, 200120, China Vodafone   Enterprise Communications Technical Services (Shanghai) Co. Ltd 100.00 Ordinary   shares Unit 1708, Full Tower, No. 9 Dong San Huan Zhong Road, Chaoyang District,   Beijing, 100020, China Cable & Wireless Communications Technical Service   (Shanghai) Co. Ltd (Beijing Branch) 100.00 Branch Congo, The Democratic   Republic of the 292 Avenue de la Justice, Commune de la Gombe, Kinshasa,   Congo Vodacash s.p.r.l.3 33.15 Ordinary shares Vodacom Congo (RDC) SA3,4   33.15 Ordinary shares, 4% redeemable preference shares Côte d’Ivoire No 62,   Rue du Docteur Blanchard, Zone 4C, Abidjan, Cote d’Ivoire Vodacom Business   Cote D’ivoire S.A.R.L.3 65.00 Ordinary shares Cyprus Ali Riza Efendi Caddesi   No:33/A Ortaköy, Lefkosa, Cyprus Vodafone Mobile Operations Limited 100.00 Ordinary   shares Czech Republic Námestí Junkových 2, Prague 5, Czech Republic, 13000,   Czech Republic Vodafone Czech Republic A.S. 100.00 Ordinary shares Oskar Mobil   S.R.O. 100.00 Basic capital shares Vodafone Enterprise Europe (UK) Limited –   Czech Branch 100.00 Branch 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 2017 is detailed   below. 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. 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Vodafone Group   Plc Annual Report on Form 20-F 2017 169 Overview Strategy Performance   Governance Financials Additional information Company name % held by Group   companies Share class Denmark c/o Lundgrens Law Firm P/S, Tuborg Havnevej 19,   2900, Hellerup, Denmark Vodafone Enterprise Denmark A/S 100.00 Ordinary   shares Egypt 14 Wadi el Nile ST, Dokki, Giza, Egypt, Egypt Sarmady Communications   54.91 Ordinary shares 17 Port Said Street, Maadi El Sarayat, Cairo, Egypt Misrfone   Trading Company LLC 54.38 Ordinary shares 2 Building, 36 Central Road, Giza,   Egypt Vodafone Data 54.93 Ordinary shares Piece No. 1215, Plot of Land No.   1/14A, 6th October City, Egypt Vodafone International Services LLC 54.93 Ordinary   shares Site No 15/3C, Central Axis, 6th October City, Egypt Vodafone Egypt   Telecommunications S.A.E. 54.93 Ordinary shares 37 Kaser El Nil St, 4th.   Floor, Cairo, Egypt Starnet 54.93 Ordinary shares Finland c/o AAtsto DLA Piper   Finland Oy, Fabianinkatu 23, Helsinki, 00130, Finland Vodafone Enterprise Finland   OY 100.00 Ordinary shares France 1300 Route de Cretes, Le WTC, Bat I1, 06560,   Valbonne Soph, France Vodafone Automotive Telematics Development S.A.S 100.00   Ordinary shares 144, Avenue Roger Salengro, 92372 – Chaville Cedex, France   Vodafone Automotive France S.A.S 50.94 Ordinary shares Tour Neptune – 20,   Place de Seine, 92400 Courbevoie, France Vodafone Enterprise France SAS   100.00 New euro shares Germany Altes Forsthaus 2, 67661, Kaiserslautern,   Germany TKS Telepost Kabel-Service Kaiserslautern Beteiligungs GmbH7 76.70   Ordinary shares TKS Telepost Kabel-Service Kaiserslautern GmbH & Co. KG7   76.70 Ordinary shares Altmarkt 10d, 01067 Dresden, Germany Radio Opt GmbH   100.00 Ordinary shares Betastraße 6-8, 85774 Unterföhring, Germany Kabel   Deutschland Holding AG7 76.70 Ordinary shares Kabel Deutschland Holding Erste   Beteiligungs GmbH7 76.70 Ordinary shares Kabel Deutschland Neunte Beteiligungs   GmbH 100.00 Ordinary shares Kabel Deutschland Holding Zweite Beteilgungs   GmbH7 76.70 Ordinary shares Kabel Deutschland Siebte Beteiligungs GmbH7 76.70   Ordinary shares Vodafone Kabel Deutschland GmbH7 76.70 Ordinary shares   Vodafone Kabel Deutschland Kundenbetreuung GmbH7 76.70 Ordinary shares   Buschurweg 4, 76870 Kandel, Germany Vodafone Automotive Deutschland GmbH   100.00 Ordinary shares Ferdinand-Braun-Platz 1, 40549, Duesseldorf, Germany   Vodafone Erste Beteiligungsgesellschaft mbH 100.00 Ordinary shares Vodafone   GmbH 100.00 Ordinary A 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 100.00 Ordinary   shares Vodafone Vierte Verwaltungs AG 100.00 Ordinary shares Company name %   held by Group companies Share class Friedrich-Wilhelm-Strasse 2, 38100,   Braunschweig, Germany KABELCOM Braunschweig Gesellschaft Fur Breitbandkabel-   Kommunikation Mit Beschrankter Haftung7 76.70 Ordinary shares Landsberger   Strasse 155, 80687 Munich, Germany Vodafone Enterprise Germany GmbH 100.00   Ordinary shares, Ordinary #2 shares Medienallee 24, 85774, Unterfohring,   Germany Kabelfernsehen Munchen Servicenter GmbH & Co. KG 23.18 Ordinary   shares Nobelstrasse 55, 18059, Rostock, Germany Urbana Teleunion Rostock GmbH   & Co.KG 53.69 Ordinary shares Verwaltung “Urbana Teleunion” Rostock GmbH7   38.35 Ordinary shares Seilerstrasse 18, 38440, Wolfsburg, Germany KABELCOM   Wolfsburg Gesellschaft Fur Breitbandkabel- Kommunikation Mit Beschrankter   Haftung7 76.70 Ordinary shares Sudwestpark 15, 90449, Nurnberg, Germany   Vodafone Kabel Deutschland Field Services GmbH7 76.70 Ordinary shares Ghana   3rd Floor, The Elizabeth Building, 68 Senchi Link, Airport Residential Area,   Accra, Ghana Vodacom Business (Ghana) Limited3 65.00 Ordinary shares and   non-voting, irredeemable, non-cumulative preference shares Telecom House,   Nswam Road, Accra-North, Greater Accra Region, PMB 221, Ghana Ghana   Telecommunications Company Limited 70.00 Ordinary shares National Communications   Backbone Company Limited 70.00 Ordinary shares Vodafone Ghana Mobile Financial   Services Limited 70.00 Ordinary shares Greece 1-3 Tzavella str, 152 31   Halandri, Athens, Greece Vodafone Global Enterprise Telecommunications   (Hellas) A.E. 100.00 Ordinary shares Vodafone-Panafon Hellenic Telecommunications   Company S.A. 99.87 Ordinary shares Marathonos Ave 18 km & Pylou, Pallini,   Attica, 15351, Greece Victus Networks S.A. 50.00 Ordinary shares Parnithos 43   & Dilou, Metamorfosi, Athens, Greece Zelitron S.A. 99.87 Ordinary shares   Pireos 74A Avenue, Neo Faliro, 18547, Greece 360 Connect S.A. 99.87 Ordinary   shares Hong Kong 2207-08, 22/F, St. George’s Building, No. 2 Ice House   Street, Central, Hong Kong Vodafone Global Enterprise (Hong Kong) Limited   100.00 Ordinary shares Suite 1106-8, 11/F., Tai Yau Building, No. 181   Johnston Road, Wanchai, Hong Kong, Vodafone China Limited (Hong Kong)1 100.00   Ordinary shares Level 24, Dorset House, Taikoo Place, 979 King’s Road, Quarry   Bay, Hong Kong Vodafone Enterprise Global Network HK Ltd 100.00 Ordinary   shares Vodafone Enterprise Hong Kong Ltd 100.00 Ordinary shares Company name   % held by Group companies Share class Hungary 40-44 Hungaria Krt. Budapest,   H-1087, Hungary VSSB Vodafone Shared Services Budapest Private Limited   Company 100.00 Registered ordinary shares 6 Lechner Ödön fasor, Budapest,   1096, Hungary Vodafone Magyarorszag Mobile Tavkozlesi Zartkoruen Mukodo   Reszvenytarsasag2 100.00 Series A registered common shares India 127, Maker   Chamber III, Nariman Point, Mumbai, Maharashtra, 400021, India Ag Mercantile   Company Private Limited 100.00 Equity shares Jaykay Finholding (India) Private   Limited 100.00 Equity shares MV Healthcare Services Private Limited 100.00   Equity shares Nadal Trading Company Private Limited 100.00 Equity shares ND   Callus Info Services Private Limited 100.00 Equity shares Omega Telecom Holdings   Private Limited 100.00 Equity shares Plustech Mercantile Company Private Limited   100.00 Equity shares Scorpios Beverages Pvt. Ltd 100.00 Equity shares SMMS   Investments Pvt Limited 100.00 Equity shares Telecom Investments India Private   Limited 100.00 Equity shares UMT Investments Limited 100.00 Equity shares 8th   Floor, RDB Boulevard, Plot K-1, Block- EP & GP, Sector - V, Saltlake City,   Kolkata, West Bengal, 700091, India Usha Martin Telematics Limited 100.00 Equity   shares 10th Floor, Tower A&B, Global Technology Park, (Maple Tree Building),   Marathahalli Outer Ring Road, Devarabeesanahalli Village, Varthur Hobli,   Bengaluru , Karnataka, 560103, India Cable & Wireless Global (India) Private   Limited 100.00 Ordinary shares Cable & Wireless Networks India Private Limited   74.00 Equity shares C-48, Okhla Industrial Estate, Phase - II, New Delhi, 110   020, India Vodafone Mobile Services Limited 100.00 Equity shares Vodafone Towers   Limited 100.00 Equity shares Business @ Mantri, Tower A, 3rd Floor, S No.197,   Wing A1 & A2, Near Hotel Four Points, Lohegaon, Pune, Maharashtra,   411014, India Vodafone Global Services Private Limited 100.00 Equity shares   Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai,   Maharashtra, 400013, India Vodafone India Digital Limited 100.00 Equity   shares Vodafone India Limited 100.00 Equity shares Vodafone India Ventures Limited   100.00 Ordinary shares Vodafone m-pesa Limited 100.00 Equity shares Vodafone   Technology Solutions Limited 100.00 Equity shares Mobile Commerce Solutions Limited   100.00 Equity shares Vodafone Foundation 100.00 Equity shares Skyline Ikon,   1st Floor, 86/92, Andheri Kurla Road, Marol Naka, Andheri East, Mumbai,   Maharashtra, 400059, India Connect (India) Mobile Technologies Private Limited   100.00 Equity shares Unit 1A & 1B Creator ITPL, Whitefiled Road,   Bangalore, Karnataka, 560066, India Cable and Wireless (India) Limited, Indian   Branch Office 100.00 Branch Vodafone House, Corporate Road, Prahladnagar, Off   S. G. Highway, Ahmedabad, Gujarat, 380051, India Vodafone Business Services Limited   100.00 Equity shares Vodafone India Services Private Limited 100.00 Ordinary   shares

 

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170 Vodafone   Group Plc Annual Report on Form 20-F 2017 33. Related undertakings (continued)   Company name % held by Group companies Share class Ireland 27 Lower Fitzwilliam   Street, Dublin 2, Ireland Siro Limited 50.00 Ordinary shares 2nd Floor, The   Iveagh Building, The Park, Carrickmines, Dublin 18, Ireland Eudokia Limited   100.00 Ordinary shares Mountainview, Leopardstown, Dublin 18, Ireland   Vodafone Ireland Marketing Limited 100.00 Ordinary shares Cable & Wireless   GN Limited 100.00 Ordinary shares Vodafone Ireland Property Holdings Limited   100.00 Ordinary shares Stentor Limited 100.00 Ordinary shares Vodafone   Enterprise Global Limited 100.00 Ordinary shares Vodafone Global Network Limited   100.00 Ordinary shares Vodafone Ireland Distribution Limited 100.00 Ordinary   shares Vodafone Ireland Limited 100.00 Ordinary shares Vodafone Ireland Retail   Limited 100.00 Ordinary shares Vodafone Group Services Ireland Limited 100.00   Ordinary shares Italy SS 33 del Sempione KM 35, 212, 21052 Busto Arsizio   (VA), Italy Vodafone Automotive Italia S.p.A 100.00 Ordinary shares Via Astico   41, 21100 Varese, Italy Vodafone Automotive Electronic Systems S.r.L 100.00   Ordinary shares Vodafone Automotive SpA 100.00 Ordinary shares Via Battistotti   Sassi 11, 20133, Milano, Italy Vodafone Enterprise Italy S.r.L 100.00 Euro   shares Via Lorenteggio 240, 20147, Milan, Italy Vodafone Gestioni S.p.A.   100.00 Ordinary shares Vodafone Servizi E Tecnologie S.R.L. 100.00 Equity   shares Viale Bianca Maria 23, 20122, Milan, Italy Vodafone Global Enterprise   (Italy) S.R.L. 100.00 Ordinary shares Via Jervis 13, 10015, Ivrea, Tourin,   Italy VEI S.r.l. 100.00 Partnership Interest shares Vodafone Italia S.p.A.   100.00 Ordinary shares Japan 5-2-32 Minami-azabu, Minato-ku, Tokyo, 106-0047,   Japan Vodafone Global Enterprise (Japan) K.K. 100.00 Ordinary shares KAKiYa   building, 9F, 2-7-17 Shin-Yokohama, Kohoku-ku, Yokoha- City, Kanagawa,   222-0033, Japan Vodafone Automotive Japan K.K 100.00 Ordinary shares Kenya   The Riverfront, 4th floor, Prof. David Wasawo Drive, Off Riverside Drive, Nairobi,   Kenya Vodacom Business (Kenya) Limited3 65.00 Ordinary shares and ordinary B   shares 6th Floor, ABC Towers, ABC Place, Waiyaki Way, Nairobi, 00100, Kenya   M-PESA Foundation 100.00 Ordinary shares M-PESA Holding Co. Limited 100.00   Ordinary shares Vodafone Kenya Limited 100.00 Ordinary voting shares Company   name % held by Group companies Share class Korea, Republic of 3rd Floor, 54   Gongse-ro, Gieheung-gu, Yongin-si, Gyeonggi-do, Republic of Korea Vodafone   Automotive Korea Limited 100.00 Ordinary shares Seocho-dong, Gangnam Building,   16th Floor, 396, Seocho-daero, Seocho-gu, Seou, Republic of Korea Vodafone   Enterprise Korea Limited 100.00 Ordinary shares Lesotho Block B, Level 7,   Development House, Kingsway Road, Maseru, Lesotho Vodacom Lesotho (Pty) Limited3   52.00 Ordinary shares Luxembourg 15 Rue Edward Steichen, Luxembourg, 2540,   Luxembourg Tomorrow Street GP S.à r.l. 100.00 Ordinary shares Vodafone Asset   Management Services S.à r.l. 100.00 Ordinary shares Vodafone Enterprise   Global Businesses S.à r.l. 100.00 Ordinary shares Vodafone International 1   S.à r.l. 100.00 Ordinary shares Vodafone International M S.à r.l. 100.00 Ordinary   shares Vodafone Investments Luxembourg S.à r.l. 100.00 Ordinary shares   Vodafone Luxembourg 5 S.à 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 Vodafone Procurement Company S.à r.l. 100.00 Ordinary shares Vodafone   Roaming Services S.à r.l. 100.00 Ordinary shares Vodafone Enterprise   Luxembourg S.A. 100.00 Ordinary shares Malaysia Suite 13.03, 13th Floor,   Menara Tan & Tan, 207 Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia   Vodafone Global Enterprise (Malaysia) Sdn Bhd 100.00 Ordinary shares Malta   SkyParks Business Centre, Malta International Airport, Luqa, LQA 4000, Malta   Multi Risk Indemnity Company Limited 100.00 A shares, B shares, ordinary A   shares Multi Risk Limited 100.00 Ordinary A shares, ordinary B shares   Vodafone Malta Limited 100.00 Ordinary shares Mauritius DTOS Ltd 10th Floor,   Raffles Tower, 19, Cybercity, Ebene, Mauritius Mobile Wallet VM13 65.00 Ordinary   shares Vodacom International Limited3 65.00 Ordinary shares, non cumulative   preference shares Mobile Wallet VM23 65.00 Ordinary shares VBA (Mauritius) Limited3   65.00 Ordinary shares Fifth Floor, Ebene Esplanade, 24 Cybercity, Ebene, Mauritius   Al-Amin Investments Limited 100.00 Ordinary shares Array Holdings Limited   100.00 Ordinary shares Asian Telecommunication Investments (Mauritius) Limited   100.00 Ordinary shares CCII (Mauritius), Inc. 100.00 Ordinary shares CGP India   Investments Ltd. 100.00 Ordinary shares Euro Pacific Securities Ltd. 100.00   Ordinary shares Mobilvest 100.00 Ordinary shares Prime Metals Ltd. 100.00 Ordinary   shares Trans Crystal Ltd. 100.00 Ordinary shares Vodafone Mauritius Ltd.   100.00 Ordinary shares Vodafone Telecommunications (India) Limited 100.00 Ordinary   shares Vodafone Tele-Services (India) Holdings Limited 100.00 Ordinary shares   Company name % held by Group companies Share class Mexico Ejercito Nacional   904, Piso 12, Polanco Los Morales, Miguel Hidalgo, C.P, 11510 MEXICO D.F, Mexico   Vodafone Empresa México S.de R.L. de C.V. 100.00 Corporate certificate series   A shares, corporate certificate series B shares Morocco 129 Rue du Prince   Moulay, Abdellah, Casablanca, Morocco Vodafone Maroc SARL 79.75 Ordinary   shares Mozambique Rua dos Desportistas, Numero 649, Cidade de Maputo, Mozambique   VM, SA3 55.25 Ordinary shares and redeemable preference shares Vodafone   M-Pesa, S.A 55.25 Ordinary shares Netherlands Rivium Quadrant 173, 15th   Floor, 2909 LC, Capelle Aan Den Ijssel, Netherlands Vodafone Enterprise   Netherlands BV 100.00 Ordinary shares Vodafone Europe B.V. 100.00 Ordinary   shares Vodafone International Holdings B.V. 100.00 Ordinary shares Vodafone   Panafon International Holdings B.V. 100.00 Ordinary shares Simon Carmiggelstraat   6, 1011 DJ, Amsterdam, Netherlands Wireless Interactions & NFC   Accelerator 2013 B.V. 100.00 Ordinary shares New Zealand 74 Taharoto Road,   Takapuna, Auckland, 0622, New Zealand Vodafone Mobile NZ Limited 100.00 Ordinary   shares Vodafone New Zealand Limited 100.00 Ordinary shares Vodafone Next   Generation Services Limited 100.00 Ordinary shares Level 1, 20 Viaduct   Harbour Avenue, Auckland, 1010, New Zealand Vodafone New Zealand Foundation Limited   100.00 Ordinary shares Level 1, Building C, 14-22 Triton Drive, Albany, New   Zealand TNAS Limited 50.00 Ordinary shares Nigeria 3A Aja Nwachukwu Close,   Ikoyi, Lagos, Nigeria Spar Aerospace (Nigeria) Limited3 65.00 Ordinary shares   Vodacom Business Africa (Nigeria) Limited3 65.00 Ordinary shares and   preference shares ICT Lawyers & Consultants, 2nd Floor, Oakland Center,   Plot 2940, Aguyi Ironi Street, Maitama, Abuja, Nigeria C&W Worldwide Nigeria   Limited 100.00 Ordinary shares Norway c/o EconPartner AS, Dronning Mauds gate   15, Oslo, 0250, Norway Vodafone Enterprise Norway AS 100.00 Ordinary shares   Notes to the consolidated financial statements (continued)

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 171 Overview Strategy Performance   Governance Financials Additional information Company name % held by Group   companies Share class Portugal Av. D. Joao II, Lote 1.04.01, 8 Piso, Parques   Das Nacoes, 1990-093 Lisboa, Portugal Oni Way – Infocomunicacoes, S.A 100.00   Ordinary shares Vodafone Portugal – Comunicacoes Pessoais, S.A.1 100.00 Ordinary   shares Av. da República, 50 - 10o, 1069-211, Lisboa, Portugal Vodafone   Enterprise Spain, S.L.U. – Portugal Branch 100.00 Branch Qatar P.O. Box   27727, Doha, Qatar Vodafone And Qatar Foundation L.L.C 51.00 Ordinary shares   Vodafone Qatar Q.S.C.4 22.95 Ordinary shares Romania Sectorul 4, Strada Olenitei,   Nr. 2, Etaj 3, Bucuresti, Romania Vodafone Shared Services Romania SRL 100.00   Ordinary shares Sectorul 2, Strada Barbu Vacarescu, Nr. 201, Etaj 3, Bucuresti,   Romania Vodafone România Technologies SRL 100.00 Ordinary shares Sectorul 2,   Strada Barbu Vacarescu, Nr. 201, Etaj 1, Bucuresti, Romania Vodafone România   M - Payments SRL 52.32 Ordinary shares 201 Barbu Vacarescu, 8th floor, 1st District,   Bucharest, 020276, Romania Vodafone Romania S.A 100.00 Nominactive shares,   Ordinary shares Russian Federation Chayanova ulitsa 14/10, stroenye 2, 125047   Moscow, Russia Cable & Wireless CIS Svyaz LLC 100.00 Charter Capital   shares Sadovnicheskaya st. 82, bld.2, 115035, Moscow, Russian Federation   Vodafone Global Enterprise Russia LLC 100.00 Equity shares Seychelles F20,   1st Floor, Eden Plaza, Eden Island, Seychelles Cavalry Holdings Ltd3 31.85   Ordinary A and Ordinary B shares East Africa Investment (Mauritius) Limited3   31.85 Ordinary A and Ordinary B shares Sierra Leone 12 White Street, Brookfield,   Off Railway Line, Freetown, Sierra Leone VBA International (SL) Limited3   65.00 Ordinary shares Singapore Asia Square Tower 2, 12 Marina View, #17-01,   Singapore, 018961, Singapore Bluefish Apac Communications Pte. Ltd 100.00 Ordinary   shares Vodafone Enterprise Global Network Pte. Ltd. 100.00 Ordinary shares   Vodafone Enterprise Regional Business Singapore Pte.Ltd. 100.00 Ordinary   shares Vodafone Enterprise Singapore Pte.Ltd 100.00 Ordinary shares Slovakia   Namestie, SNP15, Bratislava, 811 06, Slovakia Vodafone Global Network Limited   – Slovakia Branch 100.00 Branch Company name % held by Group companies Share   class South Africa 15 Burnside Island, 410 Jan Smuts Avenue, Craighall, 2024,   South Africa XLink Communications (Proprietary) Limited3 60.94 Ordinary A   shares 319 Frere Road, Glenwood, 4001, South Africa Cable and Wireless Worldwide   South Africa (Pty) Ltd 65.00 Ordinary shares 76 Maude Street, Sandton,   Johannesberg, 2196, South Africa Waterberg Lodge (Proprietary) Limited3 30.47   Ordinary shares 9 Kinross Street, Germiston South, 1401, South Africa   Vodafone Holdings (SA) Proprietary Limited 100.00 Ordinary shares Vodafone   Investments (SA) Proprietary Limited 100.00 Ordinary A shares, “B” ordinary   no par value shares Vodacom Corporate Park, 082 Vodacom Boulevard, Midrand,   1685, South Africa Vouchercloud SA (Pty) Ltd 82.89 Common stock shares GS   Telecom (Pty) Limited3 65.00 Ordinary shares Motifpros 1 (Proprietary) Limited3   60.94 Ordinary shares Scarlet Ibis Investments 23 (Pty) Limited3 60.94 Ordinary   shares Vodacom (Pty) Limited3 60.94 Ordinary shares Vodacom Business Africa   Group (Pty) Limited3 65.00 Ordinary shares Vodacom Financial Services (Proprietary)   Limited3 60.94 Ordinary shares Vodacom Group Limited3 65.00 Ordinary shares   Vodacom Insurance Administration Company (Proprietary) Limited3 60.94 Ordinary   shares Vodacom Insurance Company (RF) Limited3 60.94 Ordinary shares Vodacom   International Holdings (Pty) Limited3 65.00 Ordinary shares Vodacom Life   Assurance Company (RF) Limited3 60.94 Ordinary shares Vodacom Payment Services   (Proprietary) Limited3 60.94 Ordinary shares Vodacom Properties No 1 (Proprietary)   Limited3 60.94 Ordinary shares Vodacom Properties No.2 (Pty) Limited3 60.94   Ordinary shares Wheatfields Investments 276 (Proprietary) Limited3 65.00 Ordinary   shares Jupicol (Proprietary) Limited3 42.65 Ordinary shares Mezzanine Ware   Proprietary Limited (RF)3 45.07 Ordinary shares Storage Technology Services   (Pty) Limited3 31.00 Ordinary shares Spain Antracita, 7 – 28045, Madrid CIF   B-91204453, Spain Vodafone Automotive Iberia S.L 100.00 Ordinary shares Avenida   de América 115, 28042, Madrid, Spain Grupo Corporativo ONO, S.A.U. 100.00 Ordinary   shares Vodafone Espana S.A.U. 100.00 Ordinary shares Vodafone Holdings Europe   S.L.U. 100.00 Ordinary shares Vodafone ONO, S.A.U. 100.00 Ordinary A shares   Vodafone Enabler España, S.L. 100.00 Ordinary shares Vodafone Enterprise Spain   SLU 100.00 Ordinary shares Vodafone Servicios SL.U 100.00 Ordinary shares   Company name % held by Group companies Share class Sweden c/o Hellström   advokatbyrå, Box 7305, 103 90, Stockholm, Sweden Vodafone Enterprise Sweden   AB 100.00 Ordinary shares Switzerland BDO Ltd, Fabrikstrasse 50, CH-8031, Zurich,   Switzerland Vodafone Enterprise Switzerland AG 100.00 Ordinary shares   Schoenburgstrasse 41, 3013, Bern, Switzerland Vodafone Luxembourg 5 S.à r.l.,   Luxembourg, Zweigniederlassung Bern 100.00 Branch Vodafone International 1   S.a.r.l. Luxembourg, Zweigniederlassung Bern 100.00 Branch Via Franscini 10,   6850 Mendrisio, Switzerland Vodafone Automotive Telematics S.A 100.00 Ordinary   shares Zweigniederlassung Bern, Schonburgstr.41, P.O. Box 466, 3000 Bern 25,   Switzerland Vodafone Investments Luxembourg S.à r.l., Luxembourg, Zweigniederlassung   Bern 100.00 Branch Vodafone Luxembourg S.à r.l., Luxembourg, Zweigniederlassung   Bern 100.00 Branch Taiwan 13F, No. 156, Sec. 3, Minsheng E. Rd., Songshan District,   Taipei City 10596, Taiwan (R.O.C.) Vodafone Global Enterprise Taiwan Limited   100.00 Ordinary shares Tanzania, United Republic of 3rd Floor, Maktaba (Library),   ComplexBibi, Titi Mohaned Road, Dar es Salaam, United Republic of Tanzania   Gateway Communications Tanzania Limited3 65.00 Ordinary shares Mlimani City   Office Park, Mlimani City, Sam Nujoma Road, Dar es Salaam, United Republic of   Tanzania Vodacom Tanzania Public Limited Company3 53.40 Ordinary shares   Vodacom Tanzania Limited Zanzibar3 53.40 Ordinary shares Plot No 77, Kipawa industrial   area, P. O. Box 40985, Dar es Salaam, Tanzania Mirambo Limited3 31.85 Ordinary   shares Turkey Büyükdere Cad. No:251 Maslak, Sisli, Istanbul, 34398, Turkey   Vodafone Holding A.S. 100.00 Registered shares Vodafone Dagitim Hizmetleri   A.S. 100.00 Registered shares Vodafone Net Iletisim Hizmetleri A.S. 100.00   Ordinary shares Vodafone Elektronik Para Ve Ödeme Hizmetleri A.S. 100.00 Registered   shares Vodafone Telekomunikasyon A.S 100.00 Registered shares Vodafone Bilgi   Ve Iletisim Hizmetleri AS 100.00 Registered shares ITU Ayazaga Kampüsü, Koru   Yolu, Ari Teknokent Ari 3 Binasi, Maslak, Istanbul, 586553, Turkey Vodafone   Teknoloji Hizmetleri A.S. 100.00 Registered shares Ukraine Bohdana   Khmelnytskogo Str. 19-21, Kyiv, Ukraine LLC Vodafone Enterprise Ukraine   100.00 Ordinary shares United Arab Emirates Premises 2120, Floor 21, Building   AL Shatha Tower, Dubai, United Arab Emirates Vodafone Enterprise Europe (UK)   Limited – DubaiI Branch 100.00 Branch

 

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172 Vodafone   Group Plc Annual Report on Form 20-F 2017 Company name % held by Group   companies Share class United Kingdom 1-2 Berkeley Square, 99 Berkeley Street,   Glasgow, G3 7HR, Scotland Thus Group Holdings Limited 100.00 Ordinary shares   Thus Profit Sharing Trustees Limited 100.00 Ordinary shares Thus Group   Limited 100.00 Ordinary shares 5th Floor Legal Department, Group Corporate   Secretariat, 1 Kingdom Street, Paddington, London, England, W2 6BY, United   Kingdom Cable & Wireless Worldwide Pension Trustee Limited 100.00   Ordinary shares Avon House, Horizon West, Canal View Road, Newbury,   Berkshire, RG15 5XF, United Kingdom Talkmobile Limited 100.00 Ordinary shares   Imperial House, 4–10 Donegall Square East, Belfast, BT1 5HD, Northern Ireland   Vodafone (NI) Limited 100.00 Ordinary shares Leven House, 10 Lochside Place,   Edinburgh Park, Edinburgh, Scotland, EH12 9RG, United Kingdom Pinnacle   Cellular Group Limited 100.00 Ordinary shares Pinnacle Cellular Limited   100.00 Ordinary shares Vodafone (Scotland) Limited 100.00 Ordinary shares   Woodend Cellular Limited 100.00 Ordinary shares Woodend Communications   Limited 100.00 Ordinary shares Woodend Group Limited 100.00 Ordinary shares   Woodend Holdings Limited 100.00 Ordinary shares Quarry Corner, Dundonald,   Belfast, BT16 1UD, Northern Ireland Energis (Ireland) Limited 100.00 A   Ordinary shares, B Ordinary shares Shuttleworh House, 21 Bridgewater Close,   Network 65 Business Park, Hapton, Burnley, Lancashire, England, BB11 5TE,   United Kingdom Navtrak Ltd 100.00 Ordinary shares Vodafone Automotive UK   Limited 100.00 Ordinary shares Staple Court, 11 Staple Inn Building, London,   WC1V 7QH, United Kingdom Gateway Communications Africa (UK) Limited 65.00   Ordinary shares Vodacom Business Africa Group Services Limited3 65.00   Ordinary shares and preference shares Vodacom UK Limited3 65.00 Ordinary   shares, ordinary A shares Vodafone House, The Connection, Newbury, Berkshire,   RG14 2FN, United Kingdom AAA (Euro) Limited 100.00 Ordinary shares AAA (MCR)   Limited 100.00 Ordinary shares AAA (UK) Limited 100.00 Ordinary shares Acorn   Communications Limited 100.00 Ordinary shares Apollo Submarine Cable System   Limited 100.00 Ordinary shares Aspective Limited 100.00 Ordinary shares, A   preference shares, B preference shares and C preference shares Astec   Communications Limited 100.00 Ordinary shares Bluefish Communications Limited   100.00 Ordinary B shares, ordinary A shares, ordinary C shares, ordinary D shares   Business Serve Limited 100.00 Ordinary shares C.S.P. Solutions Limited 100.00   Ordinary shares Cable & Wireless Access Limited 100.00 Ordinary-A shares,   ordinary-B shares, series A convertible preference shares Company name % held   by Group companies Share class Cable & Wireless a-Services Limited 100.00   Ordinary shares Cable & Wireless Aspac Holdings Limited 100.00 Ordinary   shares Cable & Wireless Capital Limited 100.00 Ordinary shares Cable   & Wireless CIS Services Limited 100.00 Ordinary shares Cable &   Wireless Communications Data Network Services Limited 100.00 ‘A’ Ordinary   shares, ‘B’ Ordinary shares Cable & Wireless Communications Starclass   Limited 100.00 Ordinary shares Cable & Wireless Europe Holdings Limited   100.00 Ordinary shares Cable & Wireless Global Business Services Limited   100.00 Ordinary shares Cable & Wireless Global Holding Limited 100.00   Ordinary shares Cable & Wireless Global Telecommunication Services   Limited 100.00 Ordinary shares Cable & Wireless Holdco Limited 100.00   Ordinary shares Cable & Wireless U.K. 100.00 Ordinary shares Cable &   Wireless UK Holdings Limited 100.00 Ordinary shares Cable & Wireless UK   Services Limited 100.00 Ordinary shares Cable & Wireless Waterside   Holdings Limited 100.00 Ordinary shares Cable & Wireless Worldwide   Limited 100.00 Ordinary shares Cable & Wireless Worldwide Services   Limited 100.00 Ordinary shares Cable & Wireless Worldwide Voice Messaging   Limited 100.00 Ordinary shares Cable and Wireless (India) Limited 100.00   Ordinary shares Cable and Wireless Nominee Limited 100.00 Ordinary shares   Cellops Limited 100.00 Ordinary shares Cellular Operations Limited 100.00   Ordinary shares Central Communications Group Limited 100.00 Ordinary shares,   Ordinary A shares Central Telecom (Northern) Limited 100.00 Ordinary shares   Chelys Limited 100.00 Ordinary shares City Cable (Holdings) Limited 100.00   Ordinary shares CT Networks Limited 100.00 Ordinary shares CWW Operations   Limited 100.00 Ordinary shares Dataroam Limited 100.00 Ordinary shares,   Ordinary A shares Digital Island (UK) Ltd 100.00 Ordinary shares Emtel Europe   Limited 100.00 Ordinary shares Energis Communications Limited 100.00 Ordinary   shares Energis Holdings Limited 100.00 Ordinary shares Energis Local Access   Limited 100.00 Ordinary shares Energis Management Limited 100.00 Ordinary   shares Energis Squared Limited 100.00 Ordinary shares Erudite Systems Limited   100.00 Ordinary shares Eurocall Holdings Limited 100.00 Ordinary shares   Flexphone Limited 100.00 Ordinary shares FM Associates (UK) Limited 100.00   Ordinary shares General Mobile Corporation Limited 100.00 Ordinary shares   Generation Telecom Limited 100.00 Ordinary shares Global Cellular Rental   Limited 50.00 Ordinary shares How2 Telecom Limited 100.00 Ordinary shares   Intercell Communications Limited 100.00 Ordinary shares Internet Network   Services Limited 100.00 Ordinary shares Invitation Digital Limited 82.89   Ordinary shares, series A preferred shares Company name % held by Group   companies Share class Isis Telecommunications Management Limited 100.00 A   ordinary shares, C ordinary shares, B ordinary shares Jaguar Communications   Limited 100.00 Ordinary shares Legend Communications Limited 100.00 Ordinary   shares London Hydraulic Power Company 100.00 Ordinary shares, 5%   non-cumulative preference shares MetroHoldings Limited 100.00 Ordinary shares   ML Integration Group Limited 100.00 Ordinary shares ML Integration Limited   100.00 Ordinary shares ML Integration Services Limited 100.00 Ordinary shares   Mobile Phone Centre Limited 100.00 Ordinary shares Mobiles 4 Business.com   Limited 100.00 Ordinary shares Nat Comm Air Limited 100.00 Ordinary shares   Netforce Group Limited 100.00 Ordinary shares Oxygen Solutions Limited 100.00   Ordinary shares, redeemable preference shares, participating preference   shares P.C.P. (North West) Limited 100.00 Ordinary shares Peoples Phone   Limited 100.00 Ordinary shares Project Telecom Holdings Limited1 100.00   Ordinary shares PT Network Services Limited 100.00 Ordinary shares PTI   Telecom Limited 100.00 Ordinary shares Rian Mobile Limited 100.00 Ordinary   shares Singlepoint (4U) Limited 100.00 Ordinary shares Singlepoint Payment   Services Limited 100.00 Ordinary shares Stentor Communications Limited 100.00   Ordinary shares T.W. Telecom Limited 100.00 Ordinary shares T3   Telecommunications Limited 100.00 Ordinary shares Talkland Airtime Services   Limited 100.00 Ordinary shares Talkland Communications Limited 100.00   Ordinary shares Talkland International Limited 100.00 Ordinary shares   Talkland Midlands Limited 100.00 Ordinary shares Telecommunications Europe   Limited 100.00 Ordinary shares Ternhill Communications Limited 100.00   Ordinary shares, non C redeemable preference shares The Eastern Leasing   Company Limited 100.00 Ordinary shares The Old Telecom Sales Co. Limited   100.00 Ordinary shares Thus Limited 100.00 Ordinary shares Townley   Communications Limited 100.00 Ordinary shares Uniqueair Limited 100.00   Ordinary shares Vizzavi Limited 100.00 Ordinary shares Voda Limited 100.00   Ordinary shares Vodacall Limited1 100.00 Ordinary shares Vodafone (New   Zealand) Hedging Limited 100.00 Ordinary shares Vodafone 2. 100.00 Ordinary   shares Vodafone 4 UK 100.00 Ordinary shares Vodafone 5 Limited 100.00   Ordinary shares Vodafone 5 UK 100.00 Ordinary shares Vodafone 6 UK 100.00   Ordinary shares Vodafone Americas 4 100.00 Ordinary shares Vodafone Benelux   Limited 100.00 Preference shares, ordinary shares Vodafone Business Services   Limited 100.00 Ordinary shares Vodafone Business Solutions Limited 100.00   Ordinary shares 33. Related undertakings (continued) Notes to the consolidated   financial statements (continued)

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 173 Overview Strategy Performance   Governance Financials Additional information Company name % held by Group   companies Share class United Kingdom (continued) Vodafone House, The   Connection, Newbury, Berkshire, RG14 2FN, United Kingdom Vodafone Cellular   Limited1 100.00 Ordinary shares Vodafone Central Services Limited 100.00   Ordinary shares Vodafone Connect 2 Limited 100.00 Ordinary shares Vodafone   Connect Limited 100.00 Ordinary shares Vodafone Consolidated Holdings Limited   100.00 Ordinary shares Vodafone Corporate Limited 100.00 Ordinary shares   Vodafone Corporate Secretaries Limited1 100.00 Ordinary shares Vodafone DC   Pension Trustee Company Limited1 100.00 Ordinary shares Vodafone Distribution   Holdings Limited 100.00 Ordinary shares Vodafone Enterprise Corporate   Secretaries Limited 100.00 Ordinary shares Vodafone Enterprise Equipment   Limited 100.00 Ordinary shares Vodafone Enterprise Europe (UK) Limited 100.00   Ordinary shares Vodafone Euro Hedging Limited1 100.00 Ordinary shares   Vodafone Euro Hedging Two 100.00 Ordinary shares Vodafone Europe UK 100.00   Ordinary shares Vodafone European Investments1 100.00 Ordinary shares   Vodafone European Portal Limited1 100.00 Ordinary shares Vodafone Finance   Limited1 100.00 Ordinary shares Vodafone Finance Luxembourg Limited 100.00   Ordinary shares Vodafone Finance Sweden 100.00 Ordinary shares Vodafone   Finance UK Limited 100.00 Ordinary shares Vodafone Financial Operations   100.00 Ordinary shares Vodafone Global Content Services Limited 100.00   Ordinary shares Vodafone Global Enterprise Limited 100.00 Ordinary shares   Vodafone Group (Directors) Trustee Limited1 100.00 Ordinary shares Vodafone   Group Pension Trustee Limited1 100.00 Ordinary shares Vodafone Group Services   Limited 100.00 Ordinary shares, deferred shares Vodafone Group Services No.2   Limited1 100.00 Ordinary shares Vodafone Group Share Trustee Limited1 100.00   Ordinary shares Vodafone Hire Limited 100.00 Ordinary shares Vodafone   Holdings Luxembourg Limited 100.00 Ordinary shares Vodafone Intermediate   Enterprises Limited 100.00 Ordinary shares Vodafone International Holdings   Limited 100.00 Ordinary shares Vodafone International Operations Limited   100.00 Ordinary shares Vodafone Investment UK 100.00 Ordinary shares Vodafone   Investments Australia Limited 100.00 Ordinary shares Vodafone Investments   Limited1 100.00 Ordinary shares Vodafone IP Licensing Limited1 100.00   Ordinary shares Vodafone Leasing Limited 100.00 Ordinary shares Vodafone   Limited 100.00 Ordinary shares Vodafone M.C. Mobile Services Limited 100.00   Ordinary shares Vodafone Marketing UK 100.00 Ordinary shares Vodafone Mobile   Commerce Limited 100.00 Ordinary shares Vodafone Mobile Communications   Limited 100.00 Ordinary shares Company name % held by Group companies Share   class Vodafone Mobile Enterprises Limited 100.00 A ordinary shares, ordinary   shares, Vodafone Mobile Network Limited 100.00 A ordinary shares, ordinary   shares Vodafone Multimedia Limited 100.00 Ordinary shares Vodafone Nominees   Limited1 100.00 Ordinary shares Vodafone Oceania Limited 100.00 Ordinary   shares Vodafone Old Show Ground Site Management Limited 100.00 Ordinary   shares Vodafone Overseas Finance Limited 100.00 Ordinary shares Vodafone   Overseas Holdings Limited 100.00 Ordinary shares Vodafone Panafon UK 100.00   Ordinary shares Vodafone Partner Services Limited 100.00 Ordinary shares   Vodafone Property Investments Limited 100.00 Ordinary shares Vodafone Retail   (Holdings) Limited 100.00 Ordinary shares Vodafone Retail Limited 100.00   Ordinary shares Vodafone Sales & Services Limited 100.00 Ordinary shares   Vodafone Satellite Services Limited 100.00 Ordinary shares Vodafone   Specialist Communications Limited 100.00 Ordinary shares Vodafone UK Content   Services Limited 100.00 Ordinary shares Vodafone UK Investments Limited   100.00 Ordinary shares Vodafone UK Limited1 100.00 Ordinary shares Vodafone   Ventures Limited1 100.00 Ordinary shares Vodafone Worldwide Holdings Limited   100.00 Ordinary shares Vodafone Yen Finance Limited 100.00 Ordinary shares   Vodafone-Central Limited 100.00 Ordinary shares Vodaphone Limited 100.00   Ordinary shares Vodata Limited 100.00 Ordinary shares Your Communications   Group Limited 100.00 Ordinary shares c/o BDO MPR Management Limited, PO Box   119, Martello Court, Admiral park, St Peter Port, Guernsey, Channel Islands   FB Holdings Limited 100.00 Ordinary shares Redwood House, St Julian’s Avenue,   St Peter Port, Guernsey, GY1 1WA, Channel Islands Silver Stream Investments   Limited 100.00 Ordinary shares P.O. Box 119, Commerce House, St Peter Port,   Guernsey, GY1 3HB, Channel Islands Le Bunt Holdings Limited 100.00 Ordinary   shares Roseneath, The Grange, St Peter Port, Guernsey, GY1 2QJ, Channel   Islands VBA Holdings Limited3 65.00 Ordinary shares And non-voting   irredeemable non-cumulative preference VBA International Limited3 65.00   Ordinary shares And non-voting irredeemable non-convertible non-cumulative   Preference 44 Esplanade, St. Helier, Jersey, JE4 9WG, Channel Islands Aztec   Limited 100.00 Ordinary shares Globe Limited 100.00 Ordinary shares Plex   Limited 100.00 Ordinary shares Vizzavi Finance Limited 100.00 Ordinary shares   Vodafone Holdings (Jersey) Limited 100.00 Ordinary shares Vodafone   International 2 Limited 100.00 Ordinary shares Vodafone Jersey Dollar   Holdings Limited 100.00 Ordinary shares Vodafone Jersey Finance 100.00   Ordinary shares Vodafone Jersey Yen Holdings Unlimited 100.00 Limited   liability shares Company name % held by Group companies Share class United   States 160 Greentree Drive, Suite 101, Dover, Delaware 19904, United States   Bluefish Communications Inc. 100.00 Common stock shares 2875 Michelle Drive,   Ste. 100, Irvine CA 92606, United States Vodafone US Inc. 100.00 Common stock   shares 4701 Cox Road Suite 301, Glen Allen, VA 23060, United States Vodafone   Americas Virginia Inc. 100.00 Common stock shares c/o United Corporate   Services Inc., 15 North East Street, Kent County, Dover DE 19901, United   States Cable & Wireless a-Services, Inc 100.00 Common shares Corporation   Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware,   19808, United States of America Cable & Wireless Americas Systems, Inc.   100.00 Common stock shares Zambia Orange Park, Plot 35185, Alick Nkhata Road,   Lusaka, Zambia Africonnect (Zambia) Limited3 65.00 Ordinary shares

 

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174 Vodafone Group   Plc Annual Report on Form 20-F 2017 Associated undertakings and joint   arrangements Company Name % held by Group Companies Share class Australia   Level 1, 177 Pacific Highway, North Sydney NSW 2060, Australia H3ga   Properties (No 3) Pty Limited 50.00 Ordinary shares Mobileworld   Communications Pty Limited 50.00 Ordinary shares Mobileworld Operating Pty   Ltd 50.00 Ordinary shares Vodafone Australia Pty Limited 50.00 Ordinary   shares Vodafone Foundation Australia Pty Limited 50.00 Ordinary shares   Vodafone Hutchison Australia Pty Limited 50.00 Ordinary shares Vodafone   Hutchison Finance Pty Limited 50.00 Ordinary shares Vodafone Hutchison   Receivables Pty Limited 50.00 Ordinary shares Vodafone Network Pty Limited   50.00 Ordinary shares Vodafone Pty Limited 50.00 Ordinary shares Czech   Republic namestí Junkových 2808/2, Stodulky, Prague 5, 15500, Czech Republic   COOP Mobil s.r.o. 33.33 Ordinary shares Jankovcova 1037/49, 170 00 Praha   7-Holešovice, Czech Republic HBO Netherlands Channels sro 25.00 Member   interest Egypt 23 Kasr El Nil St., Cairo, Egypt, 11211 Wataneya   Telecommunications S.A.E 50.00 Ordinary shares Germany Willy-Brandt-Platz 6,   81829 Munich, Germany Device Insight 20.30 Preferred B shares Greece 43–45   Valtetsiou Str., Athens, Greece Safenet N.P,A. 24.97 Ordinary shares India   Bharti Crescent, 1 Nelson Mandela Road, Vasant Kunj, Phase-II, New   Delhi – 110070, India Indus Towers Limited 42.00 Equity shares A-19, Mohan   Co-operative Industrial Estate , Mathura Road, New Delhi, New Delhi, Delhi,   110044, India FireFly Networks Limited 50.00 Equity shares Italy Via per   Carpi 26/B - 42015 Correggio (RE), Italy VND S.p.A 35.00 Ordinary shares   Kenya Safaricom, P O Box 46350, 00100, Nairobi, Kenya Safaricom Limited5,6   40.00 Ordinary shares Luxembourg 14 rue Edward Steichen, Luxembourg, 2540,   Luxembourg Tomorrow Street SCA 50.00 Ordinary shares Company Name % held by   Group Companies Share class Netherlands Johan Huizingalaan 763 A, 3e   verdieping, 1066 VH, Amsterdam, Netherlands A-ccelerator B.V. 20.42 Ordinary   shares A-ccelerator Holding B.V 20.42 Ordinary shares SBC SMART CITY 1517   B.V. 29.20 Ordinary shares Boeingavenue 53, 1119PE, Schiphol-Rijk,   Netherlands VodafoneZiggo Group Holding B.V. 50.00 Ordinary shares Monitorweg   1, 1322 BJ Almere, Netherlands XB Facilities B.V. 50.00 Ordinary shares   Barbara Strozzilaan 101, 1083 HN Amsterdam, Netherlands HBO Nederland   Coöperatief U.A. 25.00 Partnershhip interest HBO Netherlands Distribution   B.V. 25.00 Ordinary shares Simon Carmiggeltstraat 6, 1011DJ Amsterdam,   Netherlands Vodafone Financial Services B.V. 50.00 Ordinary shares Atoomweg   100, 3542 AB Utrecht, Netherlands Amsterdamse Beheer- en   Consultingmaatschappij B.V. 50.00 Ordinary shares Esprit Telecom B.V. 50.00   Ordinary shares FinCo Partner 1 B.V. 50.00 Ordinary shares LGE HoldCo V B.V.   50.00 Ordinary shares LGE HoldCo VI B.V. 50.00 Ordinary shares LGE Holdco VII   B.V. 50.00 Ordinary shares LGE HoldCo VIII B.V. 50.00 Ordinary shares   Torenspits II B.V. 50.00 Ordinary shares UPC Nederland Holding I B.V. 50.00   Ordinary shares UPC Nederland Holding II B.V. 50.00 Ordinary shares UPC   Nederland Holding III B.V. 50.00 Ordinary shares Vodafone Nederland Holding I   B.V. 50.00 Ordinary shares Vodafone Nederland Holding II B.V. 50.00 Ordinary   shares Vodafone Nederland Holding III B.V. 50.00 Ordinary shares Ziggo B.V.   50.00 Ordinary shares Ziggo Deelnemingen B.V. 50.00 Ordinary shares Ziggo   Financing Partnership 50.00 Partnership interest Ziggo Finance 2 B.V. 50.00   Ordinary shares Ziggo Holding B.V. 50.00 Ordinary shares Ziggo Netwerk II B.V.   50.00 Ordinary shares Ziggo Services B.V. 50.00 Ordinary shares Ziggo   Services Employment B.V. 50.00 Ordinary shares Ziggo Services Netwerk 2 B.V.   50.00 Ordinary shares Ziggo Zakelijk Services B.V. 50.00 Ordinary shares ZUM   B.V. 50.00 Ordinary shares Winschoterdiep 60, 9723 AB Groningen, Netherlands   Zesko B.V. 50.00 Ordinary shares Ziggo Bond Company B.V. 50.00 Ordinary   shares Ziggo Netwerk B.V. 50.00 Ordinary shares Media Park boulevard 2, 1217   WE Hilversum, Netherlands Liberty Global Content Netherlands B.V. 50.00   Ordinary shares Avenue Ceramique 300, 6221 KX, Maastricht, Netherlands   Vodafone Libertel B.V. 50.00 Ordinary shares Assendorperdijk 2, 8012 EH   Zwolle, Netherlands Zoranet Connectivity Services B.V. 50.00 Ordinary shares   Company Name % held by Group Companies Share class New Zealand Level 1, 20   Viaduct Harbour Avenue, Auckland, 1142, New Zealand TSM NZ Limited 32.50   Ordinary shares Level 5, 151 Victoria Street West, Auckland 1010, New Zealand   Centurion GSM Limited 25.00 Ordinary shares Portugal Avenida D. João II Lote   1.03.23 Parque das Nações, 1998- 017, Lisboa, Portugal Celfocus – Solucoes   Informaticas Para Telecomunicacoes S.A 45.00 Ordinary shares Rua Pedro e   Inês, Lote 2.08.01, 1990-075 Parque das Wações, Lisboa, Portugal Sport TV   Portugal S.A 25.00 Nominative shares Romania Bulevardul DIMITRIE POMPEI, Nr.   10A, CLADIREA CONECT III, MO, Bucuresti, Sector 2, Romania Netgrid Telecom   SRL 50.00 Ordinary shares Russian Federation bld. 3, 11, Promishlennaya   Street, Moscow, 115516, Russian Federation Autoconnex Limited 35.00 Ordinary   shares South Africa Building 13 Ground Floor East, Thornhill, Office Park, 94   Bekker Road, Vorna Valley X67, Midrand, 1685, South Africa Number Portability   Company (Proprietary) Limited3 20.00 Ordinary shares United Kingdom 83 Baker   Street, London, W1U 6AG, United Kingdom Digital Mobile Spectrum Limited 25.00   Ordinary shares The Exchange Building 1330, Arlington Business Park, Theale,   Berkshire, RG7 4SA, United Kingdom Cornerstone Telecommunications   Infrastructure Limited 50.00 Ordinary shares 62-65, Chandos Place, London,   WC2N 4LP, United Kingdom Cable & Wireless Trade Mark Management Limited   50.00 Ordinary B shares 33 Holborn, London, EC1N 2HT, United Kingdom Mobile   by Sainsbury’s Limited 50.00 Ordinary shares United States 2711 Centerville   Road, Suite 400, Wilmington, DE 19808 Delaware, United States LG Financing   Partnership 50.00 Partnership interest Ziggo Financing Partnership 50.00   Partnership interest Notes: 1 Entities directly held by Vodafone Group Plc. 2   Trades as Vodafone Hungary Mobile Telecommunications Company Limited. 3   Shareholding is indirect through Vodacom Group Limited. The indirect   shareholding is calculated using the 65.0% ownership interest in Vodacom. 4   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 2018, on its ability to   exercise control over Vodafone Qatar Q.S.C. 5 The Group also holds two   non-voting shares. 6 At 31 March 2017 the fair value of Safaricom Limited was   KES271 billion (€6,489 million) based on the closing quoted share price on   the Nairobi Stock Exchange. 7 Shareholding is indirect through Vodafone Kabel   Deutschland GmbH. 33. Related undertakings (continued) Notes to the   consolidated financial statements (continued)

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 175 Overview Strategy Performance   Governance Financials Additional information The table below shows selected   financial data in respect of subsidiaries that have non-controlling interests   that are material to the Group. Vodacom Group Limited Vodafone Egypt   Telecommunications S.A.E. Vodafone Qatar Q.S.C. 2017 €m Restated 2016 €m 2017   €m Restated 2016 €m 2017 €m Restated 2016 €m Summary comprehensive income   information Revenue 5,294 5,325 1,333 1,641 510 510 Profit/(loss) for the   financial year 768 754 194 305 (67) (116) Other comprehensive   (expense)/income (10) 39 – – – – Total comprehensive income/(expense) 758 793   194 305 (67) (116) Other financial information Profit/(loss) for the   financial year allocated to non-controlling interests 257 263 88 139 (52)   (89) Dividends paid to non-controlling interests 258 271 152 3 – 23 Summary   financial position information Non-current assets 6,213 5,422 1,038 1,581   1,550 1,564 Current assets 2,023 1,649 352 872 137 122 Total assets 8,236   7,071 1,390 2,453 1,687 1,686 Non-current liabilities (2,368) (2,005) (25)   (78) (266) (259) Current liabilities (1,825) (1,513) (656) (895) (226) (239)   Total assets less total liabilities 4,043 3,553 709 1,480 1,195 1,188 Equity   shareholders’ funds 3,379 2,956 433 896 275 273 Non-controlling interests 664   597 276 584 920 915 Total equity 4,043 3,553 709 1,480 1,195 1,188 Statement   of cash flows Net cash flow from operating activities 1,702 1,575 520 661 134   103 Net cash flow from investing activities (790) (864) (609) (321) (93) (87)   Net cash flow from financing activities (778) (798) (328) (22) (32) (21) Net   cash flow 134 (87) (417) 318 9 (5) Cash and cash equivalents brought forward   464 681 619 430 31 39 Exchange gain/(loss) on cash and cash equivalents 21   (130) (145) (129) 3 (3) Cash and Cash Equivalents 619 464 57 619 43 31 The   voting rights held by the Group equal the Group’s percentage shareholding as   shown on pages 168 to 174.

 

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176 Vodafone   Group Plc Annual Report on Form 20-F 2017 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   2017. Name Registration number Cable & Wireless Access Limited 4005262   Cable & Wireless a-Services Limited 3930865 Cable & Wireless Aspac   Holdings Limited 4705342 Cable & Wireless Capital Limited 6702535 Cable   & Wireless CIS Services Limited 2964774 Cable & Wireless   Communications Starclass Limited 1018703 Cable & Wireless Europe Holdings   Limited 4659719 Cable & Wireless Global Business Services Limited 3537591   Cable & Wireless Global Holding Limited 3740694 Cable and Wireless   Nominee Limited 3249884 Cable & Wireless Worldwide Limited 7029206 Cable   & Wireless Worldwide Voice Messaging Limited 1981417 Cable & Wireless   UK Holdings Limited 3840888 City Cable (Holdings) Limited 1042087 Digital   Island (UK) Limited 3730837 Energis Communications Limited 2630471 Energis   (Ireland) Limited NI035793 Energis Squared Limited 3037442 Internet Network   Services Limited 3047165 Jaguar Communications Limited 1689995 Legend   Communications Limited 3923166 MetroHoldings Limited 3511122 ML Integration   Group Limited 3252903 ML Integration Services Limited 4087040 Stentor   Communications Limited 3224579 The Eastern Leasing Company Limited 1672832   Thus Group Limited SC226738 Thus Group Holdings Limited SC192666 Vizzavi   Finance Limited 80499 Vodafone 2 4083193 Vodafone 4 UK 6357658 Vodafone 5   Limited 6688527 Vodafone 5 UK 2960479 Vodafone Americas 4 6389457 Vodafone   Benelux Limited 4200960 Vodafone Cellular Limited 896318 Vodafone   Consolidated Holdings Limited 5754561 Vodafone Enterprise Equipment Limited   1648524 Name Registration number Vodafone Enterprise Europe (UK) Limited   3137479 Vodafone Euro Hedging Limited 3954207 Vodafone Euro Hedging Two   4055111 Vodafone European Investments 3961908 Vodafone European Portal   Limited 3973442 Vodafone Europe UK 5798451 Vodafone Finance Luxembourg   Limited 5754479 Vodafone Finance Sweden 2139168 Vodafone Finance UK Limited   3922620 Vodafone Financial Operations 4016558 Vodafone Global Content   Services Limited 4064873 Vodafone Holdings Luxembourg Limited 4200970   Vodafone IP Licensing Limited 6846238 Vodafone Intermediate Enterprises   Limited 3869137 Vodafone International 2 Limited 100403 Vodafone   International Holdings Limited 2797426 Vodafone International Operations Limited   2797438 Vodafone Investments Australia Limited 2011978 Vodafone Investments   Limited 1530514 Vodafone Investment UK 5798385 Vodafone Marketing UK 6858585   Vodafone Mobile Communications Limited 3942221 Vodafone Mobile Enterprises   Limited 3961390 Vodafone Mobile Network Limited 3961482 Vodafone (New   Zealand) Hedging Limited 4158469 Vodafone Nominees Limited 1172051 Vodafone   Oceania Limited 3973427 Vodafone Overseas Holdings Limited 2809758 Vodafone   Panafon UK 6326918 Vodafone Property Investments Limited 3903420 Vodafone UK   Limited 2227940 Vodafone Worldwide Holdings Limited 3294074 Vodafone Yen   Finance Limited 4373166 Voda Limited 1847509 Vodaphone Limited 2373469 Vodata   Limited 2502373 Your Communications Group Limited 4171876 Notes to the   consolidated financial statements (continued)

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 177 Overview Strategy Performance   Governance Financials Additional information Other unaudited financial information   Prior year operating results This section presents our operating performance   for the 2016 financial year compared to the 2015 financial year, providing   commentary on how the revenue and the adjusted EBITDA performance of the   Group and its operating segments developed, with all amounts presented   restated into euros following the change in the Group’s presentation currency   and include the results of Vodafone India as discontinued operations   following the agreement to combine it with Idea Cellular. Group1,2 Europe €m   AMAP €m Other3 €m Eliminations €m 2016 €m 2015 €m % change Reported Organic*   Revenue 36,462 11,891 1,567 (110) 49,810 48,385 2.9 2.1 Service revenue   33,381 10,043 1,303 (109) 44,618 43,635 2.3 1.1 Other revenue 3,081 1,848 264   (1) 5,192 4,750 Adjusted EBITDA 10,485 3,706 (36) – 14,155 13,702 3.3 2.3   Adjusted operating profit/(loss) 1,927 1,941 (39) – 3,829 4,040 (5.2) (3.8)   Adjustments for: Impairment loss (569) – Restructuring costs (316) (204)   Amortisation of acquired customer bases and brand intangible assets (1,338)   (1,617) Other expense (286) (146) Operating profit 1,320 2,073 Notes: 1 With   effect from 1 April 2016, the Group’s presentation currency was changed from   pounds sterling to the euro to better align with the geographic split of the   Group’s operations. The results for the year ended 31 March 2016 have been   restated into euros and include the results of Vodafone India as discontinued   operations following the agreement to combine it with Idea Cellular. Group   revenue and service revenue includes the results of Europe, AMAP, Other   (which includes the results of partner markets) and eliminations. 2016   results reflect average foreign exchange rates of €1:£0.73, €1:INR72.3,   €1:ZAR15.21, €1:TKL3.14 and €1: EGP8.66. 2 Alternative performance measures   are non-GAAP measures that are presented to provide readers with additional   financial information that is regularly reviewed by management and should not   be viewed in isolation or as an alternative to the equivalent GAAP measure.   See “Alternative performance measures” on page 205 for reconciliations to the   closest respective equivalent GAAP measure and “Definition of terms” on page   218 for further details. 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 2.9% to €49.8 billion and   service revenue increased 2.3% to €44.6 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 8.0%* continuing its sustained track record of strong   organic growth. Adjusted EBITDA Group adjusted EBITDA increased 3.3% to €14.2   billion driven by organic growth in Europe and AMAP and the positive impact   of the acquisitions of HOL and Cobra and foreign exchange movements. On an   organic basis, adjusted EBITDA rose 2.3%* and the Group’s adjusted EBITDA   margin stabilised at 28.4%. 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 205).   The items that are included in operating profit but are excluded from   adjusted operating profit are discussed below. An impairment loss of €569   million was recognised in the 2016 financial year (2015: €nil). Further   detail is provided in note 4 to the Group’s consolidated financial   statements. Restructuring costs of €316 million (2015: €204 million) have   been incurred to improve future business performance and reduce costs.   Amortisation of intangible assets in relation to customer bases and brands   are recognised under accounting rules after we acquire businesses and   decreased to €1,338 million (2015: €1,617 million) due to the acquisition of   Ono. Including the above items, operating profit decreased by €0.8 billion to   €1.3 billion as the €0.6 billion impairment charge, €0.5 billion higher   depreciation and amortisation charges and €0.1 billion increase in   restructuring costs were partly offset by a €0.4 billion increase in adjusted   EBITDA. 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. Organic growth is an alternative performance measure.   See “Alternative performance measures” on page 205 for further details and   reconciliations to the respective closest equivalent GAAP measure.

 

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178 Vodafone   Group Plc Annual Report on Form 20-F 2017 Other unaudited financial   information (continued) Prior year operating results (continued) Europe   Germany €m Italy €m UK €m Spain €m Other Europe €m Eliminations €m Europe €m   % change Reported Organic* Year ended 31 March 2016 restated Revenue 10,626   6,008 8,428 4,959 6,599 (158) 36,462 3.3 0.4 Service revenue 9,817 5,129   7,987 4,468 6,132 (152) 33,381 2.4 (0.6) Other revenue 809 879 441 491 467   (6) 3,081 Adjusted EBITDA 3,462 2,015 1,756 1,250 2,002 – 10,485 4.0 1.7   Adjusted operating profit 523 805 (97) 75 621 – 1,927 (13.0) (12.9) Adjusted   EBITDA margin 32.6% 33.5% 20.8% 25.2% 30.3% 28.8% Year ended 31 March 2015   restated Revenue 10,677 5,844 7,916 4,615 6,360 (116) 35,296 24.3 (4.4)   Service revenue 9,862 5,169 7,527 4,240 5,924 (110) 32,612 23.3 (5.0) Other   revenue 815 675 389 375 436 (6) 2,684 Adjusted EBITDA 3,390 1,956 1,724 1,003   2,004 – 10,077 25.2 (12.3) Adjusted operating profit 677 822 39 8 670 – 2,216   (18.5) (40.6) Adjusted EBITDA margin 31.8% 33.5% 21.8% 21.7% 31.5% 28.5%   Revenue increased 3.3% for the year. M&A activity, including HOL and   Cobra, contributed a 1.3 percentage point positive impact and foreign   exchange movements contributed a 1.6 percentage point positive impact. On an   organic basis, service revenue decreased by 0.6%*, reflecting continued   competitive pressures in a number of markets. Adjusted EBITDA increased 4.0%,   including a 1.3 percentage point positive impact from M&A activity and a   1.0 percentage point positive impact from foreign exchange movements. On an   organic basis adjusted EBITDA increased 1.7%* driven by good cost control in   a number of our markets, as well as the benefits of acquisition integrations.   Reported change % Other activity (including M&A) pps Foreign exchange pps   Organic* change % Revenue – Europe 3.3 (1.3) (1.6) 0.4 Service revenue   Germany (0.5) – 0.1 (0.4) Italy (0.8) – – (0.8) UK 6.1 0.4 (6.8) (0.3) Spain   5.4 (8.9) – (3.5) Other Europe 3.5 (1.9) (0.1) 1.5 Europe 2.4 (1.5) (1.5)   (0.6) Adjusted EBITDA Germany 2.1 – – 2.1 Italy 3.0 – 0.1 3.1 UK 1.9 4.7   (5.4) 1.2 Spain 24.6 (20.1) (0.3) 4.2 Other Europe (0.1) (1.3) (0.1) (1.5)   Europe 4.0 (1.3) (1.0) 1.7 Adjusted operating profit Europe (13.0) (0.4) 0.5   (12.9) 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. Mobile   service revenue declined 1.6%*. Consumer contract revenue stabilised in the   year, supported by consistent growth in contract net additions (+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   additions 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.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 179 Overview Strategy Performance   Governance Financials Additional information 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 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 roll-out 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. UK   Service revenue declined 0.3%* for the year (Q3: -0.7%*; Q4: -0.1%*), with   improving trends in fixed 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 oneoff   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).   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   marketleading 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. 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. 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 (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 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.

 

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180 Vodafone   Group Plc Annual Report on Form 20-F 2017 Other unaudited financial   information (continued) Prior year operating results (continued) Africa,   Middle East and Asia-Pacific Vodacom €m Other AMAP €m Eliminations €m AMAP €m   % change Reported Organic* Year ended 31 March 2016 restated Revenue 5,325   6,566 – 11,891 2.5 8.1 Service revenue 4,419 5,624 – 10,043 2.8 8.0 Other   revenue 906 942 – 1,848 Adjusted EBITDA 2,028 1,678 – 3,706 3.4 9.0 Adjusted   operating profit 1,356 585 – 1,941 11.2 19.9 Adjusted EBITDA margin 38.1%   25.6% 31.2% Year ended 31 March 2015 restated Revenue 5,539 6,061 – 11,600   3.6 4.6 Service revenue 4,451 5,319 – 9,770 1.5 2.3 Other revenue 1,088 742 –   1,829 Adjusted EBITDA 1,949 1,635 – 3,584 1.0 1.8 Adjusted operating profit   1,314 432 – 1,746 (9.5) (9.7) Adjusted EBITDA margin 35.2% 27.0% 30.9%   Revenue increased 2.5%, with strong organic growth partly offset by a 4.8   percentage point adverse impact from foreign exchange movements. On an   organic basis, service revenue was up 8.0%* driven by growth in the customer   base, increased voice and data usage, and continued good commercial   execution. Adjusted EBITDA increased 3.4%, including a 5.0 percentage point   adverse impact from foreign exchange movements. On an organic basis, adjusted   EBITDA grew 9.0%*, driven by growth in all major markets. Reported change %   Other activity (including M&A) pps Foreign exchange pps Organic* change %   Revenue – AMAP 2.5 0.8 4.8 8.1 Service revenue Vodacom (0.7) – 6.1 5.4 Other   AMAP 5.7 1.8 2.6 10.1 AMAP 2.8 1.0 4.2 8.0 Adjusted EBITDA Vodacom 4.1 – 8.6   12.7 Other AMAP 2.6 1.3 0.6 4.5 AMAP 3.4 0.6 5.0 9.0 Adjusted operating   profit AMAP 11.2 1.6 7.1 19.9 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.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 181 Overview Strategy Performance   Governance Financials Additional information 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 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 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. Indus Towers’   contribution to the Group’s adjusted operating profit was €101 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. India1 On 20 March 2017, Vodafone announced the   agreement to combine its subsidiary, Vodafone India (excluding its 42% stake   in Indus Towers), with Idea Cellular, with the combined company to be jointly   controlled by Vodafone and the Aditya Birla Group. The results of Vodafone   India are detailed below. 2016 €m 2015 €m % change Reported Organic* Revenue   6,161 5,502 12.0 Service revenue 6,135 5,480 12.0 5.0 Other revenue 26 22   Direct costs (1,835) (1,714) Customer costs (287) (245) Operating expenses   (2,224) (1,908) Adjusted EBITDA 1,815 1,635 11.0 4.1 Depreciation and   amortisation (1,276) (1,075) Adjusted operating profit 539 560 (3.9)   Adjustments for: Other (116) (104) Operating profit 423 456 Adjusted EBITDA   margin 29.5% 29.7% Note: 1 The results of Vodafone India are classified as   discontinued operations in accordance with IFRS. 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.

 

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Shareholder information Investor calendar Ex-dividend date for   final dividend 8 June 2017 Record date for final dividend 9 June 2017 Trading   update 21 July 2017 Annual general meeting 28 July 2017 Final dividend   payment 4 August 2017 Half-year financial results 14 November 2017 Ex-dividend   date for interim dividend 23 November 2017 Record date for interim dividend   24 November 2017 Interim dividend payment 2 February 2018 Dividends See pages   42 and 125 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. Euro dividends Dividends are now   declared in euros and paid in euros and pounds sterling according to where   the shareholder is resident. Cash dividends to ADS holders are paid by the   ADS depositary in US dollars. This aligns the Group’s shareholder returns   with the primary currency in which we generate free cash flow. The foreign   exchange rate at which dividends declared in euros are converted into pounds   sterling and US dollars is calculated based on the average exchange rate of   the five business days during the week prior to the payment of the dividend. See   vodafone.com/dividends for further information about dividend payments or,   alternatively, please contact our registrar or the ADS depositary, as   applicable. See page 191 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,   Deutsche Bank, through its transfer agent, American Stock Transfer &   Trust Company, LLC (AST) maintains a DB Global Direct Investor Services   Program which is a direct purchase and sale plan for depositary receipts with   a dividend reinvestment facility. Taxation of dividends See pages 194 to 196   for details on dividend taxation. 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: –– update dividend mandate bank   instructions and review dividend payment history; –– update member details   and address changes; and –– 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 191 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 elected for electronic communication   will be sent an email alert containing a link to the relevant documents. 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 191. See vodafone.com/investor for further information about this   service. Annual General Meeting Our thirty-third annual general meeting will   be held at the Queen Elizabeth II Conference Centre, Broad Sanctuary,   Westminster, London SW1P 3EE on Friday 28 July 2017 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. 190 Vodafone Group Plc Annual Report on   Form 20-F 2017  Unaudited information

 

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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. 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. 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/scamsmart for more   detailed information about this or similar activities. Registrar and transfer   office The Registrar Computershare Investor Services PLC The Pavilions Bridgwater   Road, Bristol BS99 6ZZ, England Telephone: +44 (0)370 702 0198 investorcentre.co.uk/contactus   Holders of ordinary shares resident in Ireland Computershare Investor   Services (Ireland) Ltd PO Box 9742 Dublin 18, Ireland Telephone: +353 (0)818   300 999 investorcentre.co.uk/contactus ADS transfer agent AST Operations Center   6201 15th Avenue Brooklyn NY 11219 United States of America Telephone: +1 800   233 5601 (toll free) or, for calls outside the United States, +1 201 806 4103   Email: db@astfinancial.com Share price history The closing share price at 31   March 2017 was 208.10 pence (31 March 2016: 221.20 pence). The closing share   price on 15 May 2017 was 211.05 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. London Stock Exchange Pounds per ordinary   share NASDAQ Dollars per ADS Year ended 31 March High Low High Low 2013 1.92   1.54 30.07 24.42 2014 2.52 1.80 41.57 27.74 2015 2.40 1.85 38.26 29.67 2016   2.55 2.00 39.21 29.19 2017 2.40 1.91 34.69 24.30 Quarter High Low High Low 2015/2016   First quarter 2.55 2.20 39.21 32.71 Second quarter 2.46 2.04 38.25 30.90 Third   quarter 2.26 2.04 34.42 31.00 Fourth quarter 2.25 2.00 32.72 29.19 2016/2017 First   quarter 2.33 2.09 34.69 28.31 Second quarter 2.40 2.19 31.68 28.99 Third   quarter 2.28 1.91 29.30 24.30 Fourth quarter 2.15 1.92 26.91 24.42 2017/2018 First   quarter1 2.11 1.99 27.58 25.59 London Stock Exchange Pounds per ordinary   share NASDAQ Dollars per ADS Month High Low High Low November 2016 2.22 1.94   27.49 24.44 December 2016 2.02 1.91 25.45 24.30 January 2017 2.15 1.93 26.65   24.58 February 2017 2.03 1.92 25.77 24.42 March 2017 2.12 2.02 26.91 25.04 April   2017 2.07 1.99 26.48 25.59 May 20171 2.11 1.99 27.58 26.21 Note: 1 Covering   period up to 15 May 2017. Foreign currency translation The following table   sets out the euro exchange rates of the other principal currencies of the   Group, being: “Sterling”, “£” or “pence”, the currency of the United Kingdom,   and “US dollars”, “US$”, “cents” or “¢”, the currency of the United States. 31   March Currency (=€1) 2017 2016 % Change Average: Sterling 0.84 0.73 15.1 US   dollar 1.10 1.10 0.0 At 31 March: Sterling 0.85 0.79 7.6 US dollar 1.07 1.13   (5.3) Vodafone Group Plc Annual Report on Form 20-F 2017 191 Overview   Strategy Performance Governance Financials Additional information

 

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The following   table sets out, for the periods and dates indicated, the period end, average,   high and low exchange rates for euro expressed in US dollars per €1.00. Year   ended 31 March 31 March Average High Low 2013 1.28 1.29 1.37 1.21 2014 1.38   1.34 1.39 1.28 2015 1.08 1.27 1.39 1.05 2016 1.13 1.10 1.16 1.06 2017 1.07   1.10 1.15 1.04 The following table sets out, for the periods indicated, the   high and low exchange rates for euro expressed in US dollars per €1.00. Year   ended 31 March High Low November 2016 1.11 1.06 December 2016 1.08 1.04 January   2017 1.08 1.04 February 2017 1.08 1.05 March 2017 1.09 1.05 April 2017 1.09   1.06 On 15 May 2017 (the latest practicable date for inclusion in this   report), the exchange rates between euros and US dollars and between euros and   sterling were as follows: €1 = US$1.10 and €1 = £0.85. 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 Deutsche Bank, as depositary, under a deposit agreement, dated 27   February 2017 between the Company, the depositary and the holders from time   to time of ADRs issued thereunder. Prior to 27 February 2017 the Company’s   depositary bank was Bank of New York Mellon. ADS holders are not members of   the Company but may instruct Deutsche Bank 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 193. Shareholders as at 31   March 2017 Number of ordinary shares held Number of accounts % of total issued   shares 1–1,000 310,731 0.24 1,001–5,000 42,748 0.35 5,001–50,000 12,263 0.55 50,001–100,000   456 0.12 100,001–500,000 603 0.55 More than 500,000 1,109 98.19 367,910   100.00 Ownership location (as a percentage of shares held) as at 31 March   2017 2016 UK 38.4 45.3 Europe (excluding UK) 14.2 13.2 North America 40.7   34.0 Rest of World 6.7 7.5 Major shareholders Deutsche Bank as custodian of   our ADR programme, held approximately 17.19% of our ordinary shares of   2020/21 US cents each at 15 May 2017 as nominee. The total number of ADRs   outstanding at 15 May 2017 was 457,705,038. At this date 1,449 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 2017 the following percentage interests in the ordinary share   capital of the Company, disclosable under the Disclosure Guidance and   Transparency Rules, (‘DTR’ 5), have been notified to the Directors. Shareholder   Shareholding Black Rock Investment Management Ltd. 3.08% Legal & General   Investment Management Ltd. 3.44% No changes in the interests disclosed under   DTR 5 have been notified to the Company between 31 March 2017 and 15 May   2017. Other than previously disclosed, between 1 April 2014 and 15 May 2017, no   shareholder held more than 3% of, or 3% of voting rights attributable to, the   ordinary shares of the Company other than Bank of New York Mellon as   custodian of our ADR programme. During this period, and as notified, its   holding was reduced to below the 3% reporting threshold as of 27 February   2017, the date that Deutsche Bank became custodian of our ADR programme. 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 15 May 2017 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. 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 194 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. Vodafone Group Plc   Annual Report 192 on Form 20-F 2017 Shareholder information (continued) Unaudited   information

 

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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. 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 2016 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 67 to 85. Rights   attaching to the Company’s shares At 31 March 2017 the issued share capital   of the Company was comprised of 50,000 7% cumulative fixed rate shares of   £1.00 each and 26,622,078,509 ordinary shares (excluding treasury shares) of   2020/21 US cents each. As at 31 March 2017, 2,192,064,339 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. 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 or proxies 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 2016 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 2017 notice of annual general   meeting. Vodafone Group Plc Annual Report on Form 20-F 2017 193 Overview   Strategy Performance Governance Financials Additional 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. 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. 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: –– 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; –– 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; –– the 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; and –– the   Implementation Agreement dated 20 March 2017 between Vodafone India Limited   and Idea Cellular Limited and such other parties as listed in the agreement. 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 American Depositary Shares (‘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. 194 Vodafone Group   Plc Annual Report on Form 20-F 2017 Shareholder information (continued) Unaudited   information

 

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A US holder is   a beneficial owner of shares or ADSs that is for US federal income tax   purposes: –– an individual citizen or resident of the United States; –– a US   domestic corporation; –– an estate, the income of which is subject to US   federal income tax regardless of its source; or –– 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 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 American Depositary Receipts (‘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 196). 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. Dividends will be taxable in the UK   at the dividend rates applicable where the income received is above the   tax-free dividend allowance (currently £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   noncorporate 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. Vodafone   Group Plc Annual Report on Form 20-F 2017 195 Overview Strategy Performance   Governance Financials Additional 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: –– is a citizen of the United States and is resident in the   UK; –– 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); –– i s a US domestic   corporation resident in the UK by reason of being centrally managed and   controlled in the UK; or –– 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. 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. 196 Vodafone Group Plc Annual Report on   Form 20-F 2017 Shareholder information (continued) Unaudited information

 

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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: –– 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. –– 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. –– 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’). –– 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. –– On 8 May 2007   we acquired companies with controlling interests in Vodafone India Limited   (‘VIL’), formerly Vodafone Essar Limited, for US$10.9 billion (€7.7 billion).   –– On 20 April 2009 we acquired an additional 15.0% stake in Vodacom for cash   consideration of ZAR20.6 billion (€1.8 billion). On 18 May 2009 Vodacom   became a subsidiary. –– On 10 September 2010 we sold our entire 3.2% interest   in China Mobile Limited for cash consideration of £4.3 billion (€5.2   billion). –– On 16 June 2011 we sold our entire 44% interest in SFR to   Vivendi for a cash consideration of €7.75 billion and received a final   dividend from SFR of €200 million. –– 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 (€2.9   billion) including withholding tax. –– 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 INR28.6 billion (€410 million). On 8   February 2012, they purchased a further 5.5% of VIL from the Essar Group for   a cash consideration of approximately INR30.1 billion (€460 million) taking Piramal’s   total shareholding in VIL to approximately 11%. –– On 9 November 2011 we sold   our entire 24.4% interest in Polkomtel in Poland for cash consideration of   approximately €920 million before tax and transaction costs. –– On 27 July   2012 we acquired the entire share capital of Cable & Wireless Worldwide   plc for a cash consideration of £1,050 million (€1,340 million). –– On 31   October 2012 we acquired TelstraClear Limited in New Zealand for a cash   consideration of NZ$840 million (€660 million). –– On 13 September 2013 we   acquired a 76.57% interest in Kabel Deutschland Holding AG in Germany for   cash consideration of €5.8 billion. –– 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 (€95 billion) including the   remaining 23.1% minority interest in Vodafone Italy. Following completion,   Vodafone shareholders received Verizon shares and cash totalling US$85   billion (€37 billion). –– 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 INR89.0   billion (€1.0 billion), taking our ownership interest to 100%. –– 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. –– On 31 December 2016 we completed the   transaction with Liberty Global plc to combine our Dutch operations in a   50:50 joint venture called VodafoneZiggo Group Holding B.V.   (‘VodafoneZiggo’). See note 28 “Acquisitions and disposal” for further   details. –– On 20 March 2017 we announced the agreement to combine Vodafone   India (excluding its 42% stake in Indus Towers), with Idea Cellular, which is   listed on the Indian Stock Exchanges, with the combined company to be jointly   controlled by Vodafone and the Aditya Birla Group. See note 29 “Commitments”   for further details. Details of significant transactions that occurred after   31 March 2017 and before the signing of this Annual Report on 16 May 2017 are   included in note 32 “Subsequent events”. Vodafone Group Plc Annual Report on   Form 20-F 2017 197 Overview Strategy Performance Governance Financials   Additional information Unaudited information

 

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Regulation Vodafone Group Plc Annual Report 198 on Form 20-F   2017 Unaudited information 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 2017. 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. European Union (‘EU’) In January 2017 the Telecoms Single   Market package was finalised when agreement was reached on the revised   maximum wholesale rates for regulated roaming in the EU. The new rates will   see the price of wholesale roaming fall on 15 June 2017 from 5 to 3.2   eurocents per minute for voice, from 2 to 1 eurocents for SMS and from 5 to   0.77 eurocents per megabyte for data. In addition a glide path has been established   reducing roaming data services to 0.25 eurocents per megabyte by 1 Jan 2022.   In December 2016 the European Commission (‘the Commission’) published the   implementing act in relation to the Fair Use Policy and the Sustainability   Mechanism. As a result, from 15 June 2017 all operators will be required to   implement “Roam Like at Home”. Under this approach, all roaming customers   will be able to use their home tariff whilst roaming. Operators will be able   to apply fair use limits in line with the rules set out by the Commission. In   exceptional circumstances operators will be able to apply for an exemption   from implementing “Roam Like at Home” if it is demonstrably unsustainable from   a financial perspective. In September 2016 the Commission published a set of   initiatives and legislative proposals on connectivity. These include the   European Electronic Communications Code (‘Communications Code’) and strategic   communications documents, which sets EU-wide common rules and objectives for   the regulation of providers of networks and communications services, common   broadband tar gets for 2025, a 5G action plan (that foresees a common EU   calendar for identification and allocation of spectrum and a coordinated 5G   commercial launch in 2020) and a support scheme for public authorities who   want to offer free Wi-Fi access to their citizens. The Communications Code covers   the following five areas: access regulation, spectrum, rules for   communications services, universal service, and the institutional set-up and   governance. There is a clear focus on incentivising the investment required   to meet the proposed broadband tar gets and ensure sustainable competition,   the further harmonisation of spectrum regulation and the creation of a fair   and level playing field for competing services. The Commission has also   published a number of proposals and reports on the online sale of goods and   audiovisual services which are likely to impact e-commerce and the   distribution of content across the European Single Market in a variety of   areas. These include proposals on copyright, tangible goods and a new   portability regulation, which will allow consumers access to online TV and   Video on Demand (‘VoD’) subscriptions while travelling across Europe. In   September 2016 the Commission issued new proposals on the Satellite and Cable   Directive, together with a Preliminary Report on the E-commerce Sector   Inquiry which is also likely to lead to change in a variety of areas in and   beyond competition that impact e-commerce across the European Single Market. Europe   region Germany In September 2016 BNetzA’s vectoring proposals entered into force   and after taking the Commission’s comments into account, the layer 2   bitstream product entered into force in December 2016. In addition to the layer   2 bitstream product, BNetzA has proposed to mandate a virtual unbundled local   access (‘VULA’) product at street cabinets that will be under the obligations   of a reference offer. Deutsch Telekom’s vectoring deployment is expected to   commence in September 2017, once the existing unbundled local loop (‘ULL’)   reference offer updates have been finalised. Vodafone Germany’s   very-high-rate digital subscriber line (‘VDSL’) customers are due to be   migrated on to the substitute products from mid-2018. Italy Vodafone Italy   has no new material items to report in the year ending 31 March 2017. For   information on litigation in Italy, see note 30 “Contingent liabilities and   legal proceedings” to the consolidated financial statements. United Kingdom In   July 2016 Hutchison 3G submitted an appeal to the EU’s General Court against   the Commission’s competition authority (‘DGCOMP’) decision in May 2016 to   prohibit the proposed Hutchison 3G acquisition of Telefónica UK (‘O2’). In   March 2017 BT agreed to Ofcom’s proposal for the legal separation of   Openreach. In May 2017 the Court of Appeal upheld the Competition Tribunal’s decisions   against BT’s appeals on three matters relating to the charges for Ethernet   services between 2004 and 2011. The decisions are subject to any further   appeals. 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. The National   Audience decision is awaited. In June 2016 following on from the National   Markets and Competition Commission’s (‘CNMC’) draft decision on the   regulatory ex ante price squeeze test run on Telefónica’s retail offers, it   is proposed that there will be a maximum permissible discount for promotions   on fixed broadband and TV content bundles incorporating national football   content, in order to allow replicability for competitors. In September 2016   CNMC approved Masmovil’s proposed acquisition of Yoigo. In January 2017   following a public consultation and subsequent notification to the   Commission, CNMC’s decision requiring Telefónica to offer VULA products where   there is insufficient network-based competition entered into force. In   January 2017 following a public consultation and subsequent notification to   the Commission, CNMC’s decision to maintain the access component cost but   reduce the traffic component cost of the CNMCapproved wholesale broadband   service (‘NEBA’) prices, for both NEBA Copper and fibre-to-the-home (‘FTTH’)   by 40%, entered into force. In April 2017 following notification to the   Commission on Market 15 deregulation, the CNMC adopted the Resolution   eliminating the ex-ante obligations imposed to Telefónica and Vodafone in   providing wholesale tariffs to MVNOs.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 199 Overview Strategy Performance   Governance Financials Additional information Netherlands In September 2016   the European Court of Justice (‘ECJ’) issued its ruling on the legal status   of the recommendation to use pure bottom up long run incremental cost   (‘BULRIC’). The ECJ confirmed that a national court is allowed to deviate   from the European MTR/FTR recommendation prescribing pure BULRIC as a cost   methodology. Based on the ECJ ruling, the Court of Appeal is expected to   issue its final ruling on the national regulatory and competition authority’s   (‘ACM’) proposed 2013-2016 MTR-FTR rates by September 2017. ACM’s final decision   on the proposed MTR-FTR rates for the period 2017-2020 is expected to be   published in June 2017, with rates due to enter into force on 1 July 2017. In   April 2017 the Court of Rotterdam ruled that the European rules on net   neutrality prevail over the amendment to the Telecommunications Act that was   passed by the Senate in 2016 that imposed an absolute ban on zero-rating. The   ruling confirms that the European rules allow operators to offer zero rated   services. ACM have a right to appeal the decision in the Court of Appeals in   The Hague. In December 2016 following the Dutch Supreme Court’s February 2016   ruling that bundled “all-in” mobile subscription agreements (i.e. device   along with mobile services) are considered consumer credit agreements,   Vodafone Netherlands was granted a consumer credit licence by the Dutch   Financial supervisory body (‘AFM’) containing a phased compliance path. In   December 2016 the Commission and ACM cleared Vodafone Netherlands and Liberty   Global’s proposed joint venture, following the divestment of Vodafone’s fixed   consumer business in the Netherlands, Vodafone Thuis. ACM has indicated that   as a result of the joint venture it will start a new analysis of the ULL   market in 2017. This process is expected to take one to two years. Ireland In   November 2016 the national regulatory authority (‘ComReg’) commenced its   review of the wholesale access markets 3a and 3b. ComReg has proposed a move   to cost oriented price control on Wholesale Local Access and (‘WLA’) and   Wholesale Central Access (WCA) markets with the exception of FTTH wholesale   products. The initial consultation closed in January 2017 and responses to   the subsequent pricing consultation are required by 2 June 2017. Portugal In   May 2016 Vodafone Portugal continued its challenge to payment notices   totalling €9.8 million issued by the national regulatory authority (‘ANACOM’)   regarding the extraordinary compensation of Universal Service Net Costs for   2012–2013. In September 2016 ANACOM approved the final decision on market 4   that identified the wholesale markets where Portugal Telecom’s Serviços de   Comunicações e Multimédia (‘MEO’) has significant market power and requires   ex-ante regulation in accordance with the principles of competition law.   Wholesale markets for high-quality access in competitive areas will no longer   require ex-ante regulation and the existing obligations will be withdrawn   after a transition period of 12 months. In March 2017 ANACOM rejected the   Commission’s recommendation to open up MEO’s fibre network to competitors by   providing regulated access in non-competitive areas. The Commission is yet to   comment, however it had previously indicated that it could resort to legal   measures if the recommendation was not adopted. Romania Vodafone Romania has   no new material items to report in the year ending 31 March 2017. Greece In   August 2016 the Ministry of Infrastructure, Transport and Networks (‘MITN’)   announced its decision in relation to Vodafone Greece’s expired spectrum   licence. The 2x15MHz at 1800Mhz licence was extended by 18 months to February   2018 at a cost of €5.8 million. In December 2016 following notification to   the Commission, the national regulatory authority (‘EETT’) announced that the   detailed specification requirements for the regulation of vectoring and other   next generation access (‘NGA’) technologies will be determined by a public   consultation that commenced in March 2017 and is expected to be concluded in   May 2017. Areas will be allocated by auction, on a 28-month exclusive basis,   to deploy VDSL vectoring or any alternative 100MBps or above, access network.   The successful bidder will sell VULA services to other operators in that   auction area. There is an asymmetrical coverage obligation of 80% applied to   Hellenic Telecommunications Organization (‘OTE’) in each local exchange,   whereas all others operators have a 50% minimum coverage requirement. At the   end of the exclusive period, any other operator can request access to any   street cabinets that have not been VDSL vectoring enabled. Czech Republic In   June 2016 the auction of the 1800MHz and 2.6GHz spectrum previously unsold in   2013 was concluded. Vodafone Czech Republic acquired an additional spectrum   licence of 2x5MHz at 1800MHz, at a cost of €16.4 million, expiring in June   2029. The national regulatory authority (‘CTU’) has deferred the proposed   auction for the 3.7GHz spectrum to 2017. In October 2016 DG COMP opened an   investigation into a network sharing agreement between O2 CZ/CETIN and   T-Mobile CZ. The Commission will examine whether the cooperation restricts   competition and thereby harms innovation in breach of EU antitrust rules. In   May 2017 CTU confirmed their intention to extend Vodafone Czech Republic’s   existing 900MHz and 1800MHZ spectrum licences to June 2029. Hungary In June   2016 Vodafone Hungary acquired a spectrum licence of 2x30MHz at 3.5GHz, at a   cost of €2.1 million, expiring in June 2034. In August 2016 the national   regulatory authority (‘NMHH’) commenced an investigation into a proposed   agreement between Magyar Telekom and Telenor to share spectrum in the 900MHz   band. This deal can be regarded as a second step in network collaboration   after their 800MHz network and spectrum sharing deal, that is still subject to   an ongoing competition law investigation. Albania In June 2016 Vodafone   Albania renewed its 2x8MHz at 900MHz and 2x9MHz at 1800MHz spectrum licences   at a cost of €10.9 million, expiring in June 2031. Malta Vodafone Malta has   no new material items to report in the year ending 31 March 2017.

 

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Vodafone Group   Plc Annual Report 200 on Form 20-F 2017 Regulation (continued) Unaudited   information Africa, Middle East and Asia-Pacific region India Vodafone   India’s challenge in the Telecom Tribunal (‘TDSAT’) against the financial   demands by the Department of Telecommunications (‘DoT’) for approving the   transfer of Vodafone India telecom licences that were held under seven   subsidiary companies to create two telecom licensed companies – Vodafone   India Limited and its subsidiary Vodafone Mobile Services Limited, is   pending. Vodafone India has deposited INR24.5 billion with DoT based on orders   from the Supreme Court and TDSAT, this is without prejudice to its rights and   contentions in the matter. The matter is listed for hearing in the TDSAT in   due course. In August 2016 in response to the Indian Supreme Court decision   on call drops, TRAI launched a consultation on tightening benchmarks for network   quality of service parameters, the outcome of which is awaited. In August   2016 TRAI initiated a review of termination charges and initiated a   consultation on Internet Telephony and App to Public Switched Telephone   Network and Public Land Mobile Network (‘PSTN/PLMN’) calling and a review of   the Interconnection framework, the outcome of which are awaited. The current   MTR regime introduced in February 2015 was challenged by Vodafone India in   the Delhi High Court and the next hearing is currently scheduled in September   2017. In August 2016 Vodafone India received 128 notices for financial demands   (licence and spectrum fee) from the DoT of INR78.90 billion and INR0.94   billion for six notices concerning access and National and International Long   Distance services based on the audit of Vodafone India’s telecom operations   by the DoT appointed auditor and by the Comptroller & Auditor General of   India (‘CAG’) for the years 2006/7 to 2010/11. Vodafone India has submitted   its response to the demand notices. In October 2016 Vodafone India acquired a   total of 2x82.6MHZ and 1x200MHz of spectrum across the 1800MHz, 2.1GHz and   2.5GHZ bands at a cost of INR200 billion, expiring in October 2036, enabling   its 4G services to be expanded to a total of 17 circles. In October 2016 TRAI   recommended to the DoT that a fine of INR10.5 billion should be levied   against Vodafone India for failing to provide adequate points of   interconnection to Reliance Jio (‘RJIL’). Similar fines were also recommended   against Bharti Airtel and Idea Cellular. Vodafone India has challenged TRAI’s   recommendation in the Delhi High Court and the next hearing is scheduled on   24 October 2017. Vodafone India has filed a petition in the Delhi High Court   on the basis that RJIL’s zero/free mobile tariff offers are not compliant   with TRAI’s tariff requirements for interconnect usage charges and that the promotion/free   benefits is continuing beyond the 90 days permitted by TRAI. The matter was   heard at the Delhi High Court in April 2017 where it was adjourned. Similar   petitions have been filed by Bharti Airtel and Idea Cellular in the TDSAT. In   March 2017 Vodafone India and Idea announced their proposal to merge. The   transaction is expected to close during 2018, subject to customary approvals.   In May 2017 Vodafone India filed a challenge in TDSAT against DoT’s microwave   spectrum interim guidelines issued in October 2015, and their letter of   January 2017, that conflict with the confirmations given to Vodafone India at   the time of the 2014 and 2015 spectrum auctions that the microwave resources   of expiring licences will be transferred to the Universal Licence. For   information on litigation in India, see note 30 “Contingent liabilities and   legal proceedings” to the consolidated financial statements. Vodacom: South   Africa In April 2017 the national competition authority (‘CompCom’) announced   that it would not refer Cell C’s allegation against Vodacom and MTN of market   dominance abuse. However, CompCom will engage the national regulatory   authority (‘ICASA’) to explore the need for any regulatory interventions to   ensure the market is competitive. In October 2016 the Ministry of   Telecommunications and Postal Services published the cabinet-approved   National Integrated ICT Policy White Paper (‘White Paper’). The White Paper   sets out a framework on how the government wants to provide access to modern communications   infrastructure and services to facilitate the entry of new players and the   meaningful participation of all citizens, including those in rural areas. Its   adoption will require various amendments to existing laws and regulations   flowing from the Electronic Communications Act. Engagements between the   various stakeholders and Government to explore the possibility of finding an   amicable way to implement the White Paper are ongoing. In November 2016 the   Final Amended ICT Sector Black Economic Empowerment Codes were gazetted. The   Codes contain variations to the draft ICT Sector Code, some of which are in   conflict with that of the Revised Department of Trade and Industry Codes and   will be used in May 2017 to rate Vodacom’s and the other operators   performance for the 2016/17 financial year. Due to the nature of the new   Codes, the industry is engaging the BEE ICT Sector Council to resolve some of   the concerns. In February 2017 ICASA formally deferred the timeframe for the Invitation   to Apply (‘ITA’) spectrum licensing process in the 700MHz, 800MHz and 2.6GHz   bands whilst the judicial review process in the High Court is ongoing. Vodacom:   Democratic Republic of Congo In August 2016 the Minister of Communications   and Minister of Finance issued a ministerial decree setting the new tax on   mobile payments at 3% of annual service revenue. The Ministry of Finance   DGRAD-Tax Administration has proposed a revision to the spectrum fees model   which will result in a 69% increase in annual fees. Vodacom Congo and other   industry participants have engaged the DGRAD and Minister of Communications   to request the nullification of this change on the grounds that such a tax   will negatively impact communication costs. As of March 2017 Vodacom Congo is   implementing a compliance plan and continues to participate in industry   association engagement with authorities to secure electronic SIM   registration. Vodacom: Tanzania In July 2016 the national regulatory   authority (‘TCRA’) published an open invitation to apply for 3.5GHz spectrum.   Vodacom Tanzania has submitted its application and the evaluation of all   applications by TCRA is still pending. In July 2016 the national competition   authority (‘FCC’) approved Vodacom Tanzania’s acquisition of Shared Networks   Tanzania which holds 2x5MHz of 900MHz spectrum licences which will be used to   support the provision of rural services. In March 2017 the Initial Public   Offering for Vodafone Tanzania Public Company Limited was launched under the   requirements of the Finance Act 2016, with the offer open until 11 May 2017. In   March 2017 the Ministry of Communications published its draft amendments to   the Electronic and Postal Communications Act 2010 with comments submitted by   14 April 2017.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 201 Overview Strategy Performance   Governance Financials Additional information In April 2017 Vodafone Tanzania   received a non-compliance order from TCRA in relation to SIM registration   tests conducted in December 2016. Vodafone Tanzania will continue to work   with TCRA to execute the SIM registration compliance actions. Vodacom:   Mozambique In July 2016 a new Communications Act was approved by Parliament, that   required the national regulatory authority (‘INCM’) to issue new regulations   under the Act by February 2017. To date only draft regulations for Licensing   Regulations and Infrastructure Sharing Regulations have been issued, to which   Vodacom Mozambique has submitted its comments. In November 2016 Vodacom   Mozambique complied with an order from INCM and blocked all existing unregistered   users. Vodacom: Lesotho In April 2016 the national regulatory authority   (‘LCA’) finalised the approved renewal of Vodacom Lesotho’s service licence   at a cost of ZAR5 million, expiring in May 2036. International roaming in   Africa In September 2016 an impact assessment carried out by TERA Consultants   on East Africa Community (‘EAC’) Roaming was submitted to the Tanzanian   Ministry of Communications as part of the ongoing public consultation to   implement Phase 1 price caps for EAC countries. Vodacom has engaged with the   consultation process and presented its views at the February 2017 East   African Legislative Assembly conference. As of March 2017 no national   regulatory authority in the Vodacom Group markets had fully complied with the   Communications Regulators’ Association of Southern Africa (‘CRASA’) guidance   on the Southern African Development Community (‘SADC’) roaming glide paths,   that had been issued in September 2015. In the meantime, Vodacom Group has   developed its new Africa Roaming Product across SADC which is being rolled   out in 2017. Turkey As of March 2017 the national regulatory authority’s   (‘ICTA’) proposed action to broaden the scope of the 3G coverage to include   new metropolitan areas is still suspended by the Council of State motion, as   Vodafone Turkey’s appeal to the administrative court is still pending. Australia   In May 2017 Vodafone Australia acquired a spectrum licence of 2x5MHz at   700MHz band spectrum, at a cost of AU$285 million, expiring in December 2029.   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   implemented with Orange Egypt (formerly Mobinil) and Telecom Egypt, however,   the arbitration case with Etisalat Misr is still pending. In October 2016   Vodafone Egypt acquired a spectrum licence for 2x5MHz at 2.1GHz and extended   the existing 2G/3G licences a cost of US$335 million all expiring in October   2031, enabling the launch of 4G services. For information on litigation in   Egypt, see note 30 “Contingent liabilities and legal proceedings” to the   consolidated financial statements. Ghana Vodafone Ghana has no new material   items to report for the year ending 31 March 2017. New Zealand In January   2017 the New Zealand Government awarded contracts to extend the existing   Ultra-Fast Broadband fibre to the premises (‘FTTP’) initiative from 75% to   85% of premises passed at a projected cost of NZ$210 million. The Government   has also announced a further NZ$150 million of funding to improve broadband   coverage in rural areas and address mobile blackspots, with competitive   tenders expected to be awarded in late 2017. In February 2017 the Commerce   Commission declined to clear the proposed merger between Vodafone New Zealand   and Sky New Zealand under the New Zealand Commerce Act. Safaricom: Kenya In   May 2016 the national regulatory authority (‘CA’) appointed Analysis Mason to   conduct a study on competition within the Telecommunication subsector to   identify any dominant operators and recommend regulatory remedies. The   interim report was released in April 2017 and Safaricom’s comments have been   submitted. In June 2016 following the CA’s stakeholders’ consultation on the allocation   of LTE spectrum in the 800MHz band to all mobile operators, Safaricom secured   a full spectrum licence for 2x10MHz at 800MHz at a cost of US$25 million. As   of March 2017 Safaricom continues to work with the authorities to ensure an   effective transition to the national regulatory authority’s (‘CA’) new   registration process. Qatar As of May 2017 Vodafone Qatar’s challenges to the   decisions by the ministry and national regulatory authority relating to the   application and enforcement of the dominance framework are ongoing in the administrative   courts.

 

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Vodafone Group   Plc Annual Report 202 on Form 20-F 2017 Regulation (continued) Unaudited   information Overview of spectrum licences at 31 March 2017 700MHz 800MHz   900MHz 1400/1500MHz 1800MHz 2.1GHz 2.6GHz 3.5GHz Country by region Quantity1 (Expiry   date) Quantity1 (Expiry date) Quantity1 (Expiry date) Quantity1 (Expiry date)   Quantity1 (Expiry date) Quantity1 (Expiry date) Quantity1 (Expiry date) Quantity1   (Expiry date) Europe region Germany 2x10 (2033) 2x10 (2025) 2x10 (2033) 1x20 (2033)   2x25 (2033) 2x10+5 (2020) 2x20+25 (2025) n/a 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 (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) 2x20 (2025) Greece n/a 2x10 (2030) 2x15   (2027) n/a 2x10 (2027) 2x20+5 (2021) 2x20+20 (2030) n/a 2x152 (2018) Czech   Republic n/a 2x10 (2029) 2x10 (2021) n/a 2x18 (2021) 2x20 (2025) 2x20 (2029) n/a   2x92 (2029) Hungary n/a 2x10 (2029) 2x10 (2022)4 n/a 2x15 (2022)3 2x15 (2019)   2x20+25 (2029) 2x30 (2034) 2x1 (2029)4 Albania n/a n/a 2x8 (2031) n/a 2x9 (2031)   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 2x21 (2020)

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 203 Overview Strategy Performance   Governance Financials Additional information 700MHz 800MHz 900MHz 1400/1500MHz   1800MHz 2.1GHz 2.6GHz 3.5GHz Country by region Quantity1 (Expiry date) Quantity1   (Expiry date) Quantity1 (Expiry date) Quantity1 (Expiry date) Quantity1 (Expiry   date) Quantity1 (Expiry date) Quantity1 (Expiry date) Quantity1 (Expiry date)   Africa, Middle East and Asia-Pacific India5 n/a n/a (2021–2036)5 n/a   (2021–2036)5 (2030–2036)5 n/a n/a Vodacom: South Africa6 n/a n/a 2x116 n/a   2x126 2x15+56 n/a n/a Vodacom: Democratic Republic of Congo n/a n/a 2x6 (2028)   n/a 2x18 (2028) 2x10+15 (2032) n/a 2x15 (2026) Lesotho7 n/a 2x207 2x227 n/a   2x307 2x157 1x407 1x427 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 1x14+1x14   (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 (2031) n/a 2x10 (2031)   2x20 (2031) 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 2x10 (TBC)9 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)10 n/a n/a Qatar n/a 2x10 (2029) 2x11 (2028) n/a 2x20 (2028) 2x15 (2028)   2x20 (Trial) n/a 2x52 (2029) Notes: 1 Single (or unpaired) blocks of spectrum   are used for asymmetric data (non-voice) use; block quantity has been rounded   to the nearest whole number. 2 Blocks within the same spectrum band but with   different licence expiry dates are separately identified. 3 UK – 900MHz,   1800MHz and 2.1GHz – indefinite licence with a five-year notice of   revocation. 4 Hungary – 900MHz and 1800MHz – conditional options to extend   these licences to 2034. 5 India comprises 22 separate service area licences   with a variety of expiry dates. 6 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 20 year duration and will expire in 2028. 7 Vodacom’s   Lesotho spectrum licences are renewed annually, N.B. 1x40MHz in 2.6GHz column   is actually 2.3GHz. 8 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. 9 Kenya – Awaiting   confirmation of full licence terms. 10 Ghana – The NRA has issued provisional   licences with the intention of converting them to full licences once the NRA   has been reconvened. 

 

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Vodafone Group   Plc Annual Report 204 on Form 20-F 2017 Regulation (continued) Unaudited   information 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: Country by region 20151   20161 20171 1 April 20172 Europe Germany (€ cents) 1.72 1.66 1.10 1.10 Italy   (€ cents) 0.98 0.98 0.98 0.98 UK (GB £ pence) 0.67 0.68 0.51 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 0.84 0.84 Portugal (€ cents) 1.27 0.83 0.79 0.79 Romania   (€ cents) 0.96 0.96 0.96 0.96 Greece (€ cents) 1.099 1.081 1.072 0.982 (30   April 2017) Czech Republic (CZK) 0.27 0.27 0.248 0.248 Hungary (HUF) 7.06   1.71 1.71 1.71 Albania (ALL) 1.48 1.48 1.48 1.48 Malta (€ cents) 0.40 0.40   0.40 0.40 Africa, Middle East and Asia-Pacific India (rupees)4 0.14 0.14 0.14   0.14 Vodacom: South Africa (ZAR) 0.20 0.16 0.13 0.13 Vodacom: Democratic   Republic of Congo (USD cents) 3.40 3.40 2.50 2.50 Lesotho (LSL/ZAR) 0.38 0.32   0.26 0.26 Mozambique (MZN/USD cents) 0.86 0.86 0.44 0.44 Tanzania (TZN) 30.58   28.57 26.96 26.96 Turkey (lira) 0.0258 0.0258 0.0258 0.0258 Australia (AUD   cents) 3.60 1.70 1.70 1.70 Egypt (PTS/piastres) 10.00 10.00 10.00 10.00 New   Zealand (NZD cents) 3.56 3.56 3.56 3.56 Safaricom: Kenya (shilling) 1.15 0.99   0.99 0.99 Ghana (peswas) 4.00 5.00 5.00 5.00 Qatar (dirhams) 16.60 9.00 7.62   7.62 Notes: 1 All MTRs are based on end of financial year values. 2 MTRs   established from 1 April 2017 are included at the current rate or where a   glide-path or a final decision has been determined by the national regulatory   authority. 3 MTR decision due September 2017. 4 MTR under appeal and due to   be heard September 2017. 

 

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Alternative performance measures Vodafone Group Plc Annual   Report on Form 20-F 2017 205 Overview Strategy Performance Governance   Financials Additional information Unaudited information In the discussion of   the Group’s reported operating results, alternative performance measures are   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 alternative   performance measures should not be viewed in isolation or as an alternative   to the equivalent GAAP measure. 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. We believe that it is both useful and necessary to report   this measure for the following reasons: –– it is used for internal   performance reporting; –– it is used in setting director and management   remuneration; and –– it is useful in connection with discussion with the   investment analyst community. A reconciliation of reported service revenue to   the respective closest equivalent GAAP measure, revenue, are provided in the   “Operating results” section on pages 35 to 43 and the “Prior year operating results”   on pages 177 to 181. Adjusted EBITDA Adjusted EBITDA is operating profit   excluding share of results in associates, depreciation and amortisation,   gains/losses on the disposal of fixed assets, impairment losses,   restructuring costs arising from discrete restructuring plans, 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 in note 2 “Segmental analysis”   to the consolidated financial statements. Group adjusted EBIT, adjusted   operating profit and adjusted earnings per share Group adjusted EBIT and   adjusted operating profit exclude impairment losses, restructuring costs   arising from discrete restructuring plans, amortisation of customer bases and   brand intangible assets, other operating income and expense and other   significant one-off items. Adjusted EBIT also excludes the share of results   in associates and joint ventures. 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 as   they are used for internal performance reporting, in setting director and   management remuneration and in connection with discussions with the   investment analyst community and debt rating agencies. Adjusted EBIT is   reconciled to the respective closest equivalent GAAP measure, operating   profit, in the “Operating results” on page 35. A reconciliation of adjusted   operating profit to the respective closest equivalent GAAP measure, operating   profit, is provided 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 37. 2017   financial year guidance The adjusted EBITDA and free cash flow guidance   measures for the year ended 31 March 2017 were forward-looking alternative   performance measures based on the Group’s assessment of the global   macroeconomic outlook and foreign exchange rates of €1:INR76.4, €1:ZAR16.5,   €1:£0.79, €1:TRY3.2 and €1:EGP9.8. These guidance measures exclude the impact   of licence and spectrum payments, material one-off tax-related payments, restructuring   costs, and any fundamental structural change to the Eurozone. They also   assume no material change to the current structure of the Group. We believe   it is both useful and necessary to report these guidance measures to give   investors an indication of the Group’s expected future performance, the   Group’s sensitivity to foreign exchange movements and to report actual   performance against these guidance measures. Reconciliations of adjusted   EBITDA and free cash flow to the 2017 financial year guidance basis is shown   below. Adjusted EBITDA Free cash flow 2017 €bn Restated 2016 €bn Growth % 2017   €bn Reported 14.1 14.2 – 4.1 Discontinued operations – India 1.6 1.8 0.1 Foreign   exchange (0.1) (0.7) 0.1 Guidance basis 15.8 15.3 3.4 4.3

 

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Vodafone Group   Plc Annual Report 206 on Form 20-F 2017 Alternative performance measures   (continued) Unaudited information Cash flow measures and capital additions In   presenting and discussing our reported results, free cash flow, capital   additions 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: –– free cash flow allows us   and external parties to evaluate our liquidity and the cash generated by our   operations. Free cash flow and capital additions do 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; –– 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; –– these   measures are used by management for planning, reporting and incentive   purposes; and –– these measures are useful in connection with discussion with   the investment analyst community and debt rating agencies. A reconciliation   of cash generated by operations, the closest equivalent GAAP measure, to   operating free cash flow and free cash flow, is provided below. 2017 €m Restated   2016 €m Restated 2015 €m Cash generated by operations (refer to note 19)   13,781 13,497 12,041 Capital additions (7,675) (10,561) (10,710) Working   capital movement in respect of capital additions (822) (140) 1,009 Disposal   of property, plant and equipment 43 164 190 Restructuring costs 266 252 429 Other1   34 (4) 473 Operating free cash flow 5,627 3,208 3,432 Taxation (761) (738)   (651) Dividends received from associates and investments 433 92 74 Dividends   paid to non-controlling shareholders in subsidiaries (413) (309) (310) Interest   received and paid (830) (982) (866) Free cash flow 4,056 1,271 1,679 Note: 1   Other movements for the year ended 31 March 2017 include €nil (2016: €nil,   2015: €444 million) UK pensions contribution payment and €nil (2016: €nil,   2015: €140 million) of KDG incentive scheme payments that vested upon   acquisition. Other Certain of the statements within the Strategic Report   contains forward-looking alternative performance measures 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 17   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: –– it provides additional information on underlying growth   of the business without the effect of certain factors unrelated to its operating   performance; –– it is used for internal performance analysis; and –– 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). The   Group’s organic growth rates for all periods excludes the results of Vodafone   India (excluding its 42% stake in Indus Towers) which are now included in   discontinued operations. For the quarter ended 31 March 2015 and the year   ended 31 March 2015, the Group’s organic 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. Organic growth rates for the   quarter ended 31 March 2016 and the year ended 31 March 2016 have been   similarly adjusted to exclude these impacts.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 207 Overview Strategy Performance   Governance Financials Additional information For the quarter ended 30 September   2015 and year ended 31 March 2016, the Group’s and Vodafone UK’s organic   growth rates have been adjusted to exclude the beneficial impact of a   settlement of another historical interconnect rate dispute in the UK. Organic   growth rates for the quarter ended 30 September 2016 and the year ended 31   March 2017 have been similarly adjusted to exclude these impacts. The Group’s   organic growth rate for the year ended 31 March 2017 and the quarters ended   31 December 2016 and 31 March 2017 have also been adjusted to exclude the   results of Vodafone Netherlands following the disposal of its consumer fixed   business and subsequent merger into VodafoneZiggo, as well as the results of   VodafoneZiggo after the merger. We have not provided a comparative in respect   of organic growth rates as the current rates describe the change between the   beginning and end of the current year, with such changes being explained by   the commentary in this news release. If comparatives were provided,   significant sections of the commentary from the news release for the prior   year would also need to be included, reducing the usefulness and transparency   of this document. Reconciliations of organic growth to reported growth are   shown where used or in the following tables. 2017 Restated 2016 Reported Other   activity (including M&A) Foreign exchange Organic €m €m % pps pps % Year   ended 31 March 2017 Revenue Europe 34,550 36,462 (5.2) 2.0 2.8 (0.4) AMAP   11,773 11,891 (1.0) (0.2) 8.6 7.4 Of which: Turkey 3,052 2,959 3.1 – 12.2   15.3 Of which: Egypt 1,329 1,634 (18.7) – 35.0 16.3 Other 1,390 1,567 Eliminations   (82) (110) Total 47,631 49,810 (4.4) 1.5 4.1 1.2 Service revenue Germany   10,006 9,817 1.9 – – 1.9 Mobile service revenue 6,071 6,062 0.1 – – 0.1 Fixed   service revenue 3,935 3,755 4.8 – – 4.8 Italy 5,247 5,129 2.3 – – 2.3 Mobile   service revenue 4,365 4,303 1.4 – 0.1 1.5 Fixed service revenue 882 826 6.8 –   – 6.8 UK 6,632 7,987 (17.0) 1.4 12.3 (3.3) Mobile service revenue 5,079 6,025   (15.7) – 12.4 (3.3) Fixed service revenue 1,553 1,962 (20.8) 5.7 11.7 (3.4) Spain   4,507 4,468 0.9 – – 0.9 Other Europe 5,756 6,132 (6.1) 8.4 (0.1) 2.2 Of   which: Ireland 954 954 – – – – Of which: Portugal 911 896 1.7 – – 1.7 Of   which: Greece 789 785 0.5 – – 0.5 Eliminations (173) (152) Europe 31,975   33,381 (4.2) 1.8 3.0 0.6 Fixed service revenue 8,624 8,691 (0.8) 1.3 3.0 3.5 Vodacom   4,447 4,419 0.6 – 3.5 4.1 Of which: South Africa 3,396 3,269 3.9 – 1.7 5.6 Of   which: International operations 1,001 1,071 (6.5) – 8.8 2.3 Other AMAP 5,509   5,624 (2.0) – 12.8 10.8 Of which: Turkey 2,310 2,222 4.0 – 12.0 16.0 Of   which: Egypt 1,278 1,578 (19.0) – 34.6 15.6 Of which: New Zealand 1,169 1,101   6.2 – (5.4) 0.8 AMAP 9,956 10,043 (0.9) – 8.6 7.7 Other 1,138 1,303 Eliminations   (82) (109) Total service revenue 42,987 44,618 (3.7) 1.4 4.2 1.9 Other   revenue 4,644 5,192 Revenue 47,631 49,810 (4.4) 1.5 4.1 1.2

 

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Vodafone Group   Plc Annual Report 208 on Form 20-F 2017 Alternative performance measures   (continued) Unaudited information 2017 Restated 2016 Reported Other activity (including   M&A) Foreign exchange Organic €m €m % pps pps % Year ended 31 March 2017   (continued) Other growth metrics Group – Enterprise service revenue 12,735 13,318   (4.4) 2.7 4.0 2.3 Vodafone Group Enterprise – Service revenue 2,982 3,108   (4.1) 1.7 5.4 3.0 Europe – Service revenue excluding the impact of regulation   31,975 33,381 (4.2) 2.8 3.0 1.6 Germany – Mobile service revenue excluding   the impact of regulation 6,071 6,062 0.1 1.5 – 1.6 Spain – Service revenue   excluding the impact of handset financing 4,507 4,468 0.9 3.1 – 4.0 Ireland –   Service revenue excluding the impact of MTR cuts 954 954 – 2.0 – 2.0 South   Africa – Data revenue 1,352 1,143 18.3 – 1.4 19.7 South Africa – Voice   revenue 1,505 1,586 (5.1) – 1.4 (3.7) India – Service revenue 5,834 6,135   (4.9) 2.5 1.7 (0.7) India – Adjusted EBITDA 1,596 1,815 (12.1) – 1.6 (10.5) Adjusted   EBITDA Germany 3,617 3,462 4.5 – – 4.5 Italy 2,229 2,015 10.6 – – 10.6 UK 1,212   1,756 (31.0) 5.1 10.1 (15.8) Spain 1,360 1,250 8.8 – – 8.8 Other Europe 1,865   2,002 (6.8) 10.1 (0.1) 3.2 Europe 10,283 10,485 (1.9) 2.9 2.1 3.1 Vodacom   2,063 2,028 1.7 – 3.2 4.9 Other AMAP 1,791 1,678 6.7 – 18.0 24.7 Of which:   Turkey 646 553 16.8 – 13.1 29.9 Of which: Egypt 590 683 (13.6) – 36.3 22.7 AMAP   3,854 3,706 4.0 – 9.2 13.2 Other 12 (36) Total 14,149 14,155 – 1.8 4.0 5.8 Percentage   point change in adjusted EBITDA margin Germany 34.1% 32.6% 1.5 – – 1.5 Italy   36.5% 33.5% 3.0 – – 3.0 UK 17.5% 20.8% (3.3) 0.8 (0.1) (2.6) Spain 27.3%   25.2% 2.1 – – 2.1 Other Europe 30.4% 30.3% 0.1 0.5 – 0.6 Europe 29.8% 28.8%   1.0 0.2 (0.2) 1.0 Vodacom 39.0% 38.1% 0.9 0.2 (0.4) 0.7 Other AMAP 27.6%   25.6% 2.0 – 0.9 2.9 Of which: Turkey 21.2% 18.7% 2.5 Of which: Egypt 44.4%   41.8% 2.6 AMAP 32.7% 31.2% 1.5 – 0.1 1.6 Group 29.7% 28.4% 1.3 – (0.1) 1.2 Adjusted   EBIT Group 3,970 3,769 5.3 (3.0) 4.7 7.0 Adjusted operating profit Europe   1,890 1,927 (1.9) (2.4) (0.7) (5.0) AMAP 2,238 1,941 15.3 – 9.9 25.2 Other 6   (39) Total 4,134 3,829 8.0 (1.1) 4.9 11.8

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 209 Overview Strategy Performance   Governance Financials Additional information 2017 Restated 2016 Reported Other   activity (including M&A) Foreign exchange Organic €m €m % pps pps % Six   months ended 31 March 2017 Adjusted EBITDA Germany 1,830 1,726 6.0 – – 6.0 Italy   1,125 1,014 10.9 – (0.1) 10.8 UK 537 826 (35.0) – 9.8 (25.2) Spain 668 591   13.0 – 0.1 13.1 Other Europe 825 983 (16.1) 16.5 – 0.4 Europe 4,985 5,140   (3.0) 3.3 2.1 2.4 Vodacom 1,111 960 15.7 – (10.1) 5.6 Other AMAP 851 849 0.2   – 26.4 26.6 AMAP 1,962 1,809 8.5 – 5.3 13.8 Other 112 21 Total 7,059 6,970 1.3   1.5 3.5 6.3 Depreciation and amortisation (5,669) (5,874) Share of result in   associates and joint ventures 91 65 Impairment loss – (569) Restructuring   costs (378) (160) Other income and expense 1,109 (3) Operating profit 2,212   429 Quarter ended 31 March 2017 Service revenue Germany 2,492 2,462 1.2 – –   1.2 Italy 1,298 1,263 2.8 – – 2.8 UK 1,624 1,903 (14.7) – 9.9 (4.8) Spain   1,109 1,094 1.4 – (0.1) 1.3 Other Europe 1,102 1,516 (27.3) 28.6 – 1.3 Of   which: Ireland 235 238 (1.3) – 0.1 (1.2) Of which: Portugal 226 221 2.3 –   (0.1) 2.2 Of which: Greece 189 189 – – 0.2 0.2 Eliminations (32) (36) Europe   7,593 8,202 (7.4) 5.3 2.2 0.1 Vodacom 1,198 992 20.8 – (17.0) 3.8 Of which:   South Africa 937 717 30.7 – (25.1) 5.6 Of which: International operations 252   259 (2.7) – 3.2 0.5 Other AMAP 1,239 1,404 (11.8) – 21.6 9.8 Of which: Turkey   526 560 (6.1) – 20.0 13.9 Of which: Egypt 224 390 (42.6) – 65.4 22.8 Of   which: New Zealand 303 272 11.4 – (11.1) 0.3 AMAP 2,437 2,396 1.7 – 5.1 6.8 Other   314 335 Eliminations (23) (45) Total service revenue 10,321 10,888 (5.2) 3.9   2.8 1.5 Other revenue 1,020 1,118 Revenue 11,341 12,006 (5.5) 2.8 2.9 0.2 Other   growth metrics Germany – Mobile service revenue excluding the impact of   regulation 1,500 1,505 (0.3) 2.2 (0.1) 1.8 UK – Fixed service revenue   excluding carrier services 406 491 (17.3) 5.0 9.8 (2.5) Spain – Service   revenue excluding the impact of handset financing 1,109 1,094 1.4 2.5 (0.1)   3.8 Ireland – Service revenue excluding the impact of MTR cuts 235 238 (1.3)   3.5 0.1 2.3 India – Service revenue 1,379 1,532 (10.0) 2.3 (3.8) (11.5) India   – Data browsing revenue 247 306 (19.4) – 3.5 (15.9) India – Voice revenue 870   1,046 (16.8) – 3.6 (13.2)

 

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Vodafone Group   Plc Annual Report 210 on Form 20-F 2017 Alternative performance measures   (continued) Unaudited information Restated 2016 Restated 2015 Reported Other   activity (including M&A) Foreign exchange Organic €m €m % pps pps % Quarter   ended 31 December 2016 Service revenue Germany 2,505 2,460 1.8 – – 1.8 Italy   1,330 1,291 3.0 – – 3.0 UK 1,607 1,998 (19.6) – 16.4 (3.2) Spain 1,125 1,116   0.8 – – 0.8 Other Europe 1,537 1,536 0.1 1.9 (0.2) 1.8 Of which: Ireland 235   240 (2.1) – 0.1 (2.0) Of which: Portugal 227 223 1.8 – 0.4 2.2 Of which:   Greece 195 192 1.6 – (0.4) 1.2 Eliminations (41) (35) Europe 8,063 8,366   (3.6) 0.3 4.0 0.7 Vodacom 1,165 1,107 5.2 – (1.2) 4.0 Of which: South Africa   896 817 9.7 – (4.1) 5.6 Of which: International operations 256 270 (5.2) –   7.1 1.9 Other AMAP 1,363 1,423 (4.2) – 14.7 10.5 Of which: Turkey 581 562 3.4   – 11.6 15.0 Of which: Egypt 288 395 (27.1) – 46.7 19.6 Of which: New Zealand   299 276 8.3 – (8.3) – AMAP 2,528 2,530 (0.1) – 7.5 7.4 Other 281 308 Eliminations   (17) (18) Total service revenue 10,855 11,186 (3.0) 0.3 4.8 2.1 Other revenue   1,384 1,536 Revenue 12,239 12,722 (3.8) 0.9 4.4 1.5 Other growth metrics Germany   – Mobile service revenue excluding the impact of regulation 1,516 1,517 (0.1)   1.1 0.1 1.1 Spain – Service revenue excluding the impact of handset financing   1,125 1,116 0.8 3.3 – 4.1 India – Service revenue 1,450 1,529 (5.2) 2.5 0.8   (1.9) India – Data browsing revenue 293 289 1.4 – (0.8) 0.6 India – Voice   revenue 991 1,014 (2.3) – (0.7) (3.0)

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 211 Overview Strategy Performance   Governance Financials Additional information Restated 2016 Restated 2015   Reported Other activity (including M&A) Foreign exchange Organic €m €m %   pps pps % Year ended 31 March 2016 restated Revenue Europe 36,462 35,296 3.3   (1.3) (1.6) 0.4 AMAP 11,891 11,600 2.5 0.8 4.8 8.1 Other 1,567 1,595 Eliminations   (110) (106) Total 49,810 48,385 2.9 (0.7) (0.1) 2.1 Service revenue Germany   9,817 9,862 (0.5) – 0.1 (0.4) Mobile service revenue 6,062 6,160 (1.6) – –   (1.6) Fixed service revenue 3,755 3,702 1.4 – 0.1 1.5 Italy 5,129 5,169 (0.8)   – – (0.8) Mobile service revenue 4,303 4,353 (1.1) – – (1.1) Fixed service   revenue 826 816 1.2 – – 1.2 UK 7,987 7,527 6.1 0.4 (6.8) (0.3) Mobile service   revenue 6,025 5,702 5.7 0.6 (7.0) (0.7) Fixed service revenue 1,962 1,825 7.5   (0.5) (5.9) 1.1 Spain 4,468 4,240 5.4 (8.9) – (3.5) Mobile service revenue   3,034 3,210 (5.5) (2.6) 0.1 (8.0) Fixed service revenue 1,434 1,030 39.2   (31.4) – 7.8 Other Europe 6,132 5,924 3.5 (1.9) (0.1) 1.5 Of which:   Netherlands 1,750 1,746 0.2 – 0.1 0.3 Eliminations (152) (110) Europe 33,381   32,612 2.4 (1.5) (1.5) (0.6) Vodacom 4,419 4,451 (0.7) – 6.1 5.4 Of which:   South Africa 3,269 3,367 (2.9) – 7.6 4.7 Of which: International operations   1,071 1,002 6.9 – 3.1 10.0 Other AMAP 5,624 5,319 5.7 1.8 2.6 10.1 Of which:   Turkey 2,222 2,052 8.3 – 11.4 19.7 Of which: Egypt 1,578 1,473 7.1 5.9 (4.1)   8.9 AMAP 10,043 9,770 2.8 1.0 4.2 8.0 Other 1,303 1,356 Eliminations (109)   (103) Total service revenue 44,618 43,635 2.3 (0.8) (0.4) 1.1 Other revenue   5,192 4,750 Revenue 49,810 48,385 2.9 (0.7) (0.1) 2.1 Other growth metrics Group   – Enterprise service revenue 13,318 12,779 4.2 (1.2) (1.3) 1.7 UK – Fixed   service revenue excluding carrier services 1,962 1,825 7.5 0.8 (5.9) 2.4 Spain   – Service revenue excluding the impact of handset financing 4,468 4,240 5.4   (5.1) – (0.3) South Africa – Data revenue 260 289 (10.0) – 28.8 18.8 India –   Service revenue 6,135 5,480 12.0 – (7.0) 5.0 India – Service revenue   excluding the impact of MTR cuts 6,135 5,480 12.0 5.0 (7.0) 10.0 India –   Adjusted EBITDA 1,815 1,635 11.0 – (6.9) 4.1 India – Percentage point change   in adjusted EBITDA margin 29.5% 29.7% (0.2) – – (0.2)

 

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Vodafone Group   Plc Annual Report 212 on Form 20-F 2017 Alternative performance measures   (continued) Unaudited information Restated 2016 Restated 2015 Reported Other   activity (including M&A) Foreign exchange Organic €m €m % pps pps % Year   ended 31 March 2016 restated (continued) Adjusted EBITDA Germany 3,462 3,390   2.1 – – 2.1 Italy 2,015 1,956 3.0 – 0.1 3.1 UK 1,756 1,724 1.9 4.7 (5.4) 1.2 Spain   1,250 1,003 24.6 (20.1) (0.3) 4.2 Other Europe 2,002 2,004 (0.1) (1.3) (0.1)   (1.5) Europe 10,485 10,077 4.0 (1.3) (1.0) 1.7 Vodacom 2,028 1,949 4.1 – 8.6   12.7 Other AMAP 1,678 1,635 2.6 1.3 0.6 4.5 AMAP 3,706 3,584 3.4 0.6 5.0 9.0 Other   (36) 41 Total 14,155 13,702 3.3 (1.6) 0.6 2.3 Percentage point change in   adjusted EBITDA margin Germany 32.6% 31.8% 0.8 – – 0.8 Italy 33.5% 33.5% – –   – – UK 20.8% 21.8% (1.0) 0.9 0.3 0.2 Spain 25.2% 21.7% 3.5 (2.2) – 1.3 Other   Europe 30.3% 31.5% (1.2) 0.2 – (1.0) Europe 28.8% 28.5% 0.3 0.0 0.1 0.4 Vodacom   38.1% 35.2% 2.9 – 0.7 3.6 Other AMAP 25.6% 27.0% (1.4) (0.1) (0.6) (2.1) AMAP   31.2% 30.9% 0.3 – – 0.3 Group 28.4% 28.3% 0.1 (0.1) 0.1 0.1 Adjusted   operating profit Europe 1,927 2,216 (13.0) (0.4) 0.5 (12.9) AMAP 1,941 1,746   11.2 1.6 7.1 19.9 Other (39) 78 Total 3,829 4,040 (5.2) (1.7) 3.1 (3.8) Quarter   ended 31 March 2016 restated Service revenue Germany 2,462 2,423 1.6 – – 1.6 Italy   1,263 1,246 1.4 – (0.1) 1.3 UK 1,903 2,093 (9.1) 5.4 3.6 (0.1) Spain 1,094   1,131 (3.3) – 0.1 (3.2) Other Europe 1,516 1,481 2.4 (0.1) (0.2) 2.1 Of   which: Netherlands 428 434 (1.4) – 0.1 (1.3) Of which: Portugal 221 213 3.8 –   (0.3) 3.5 Of which: Romania 174 163 6.7 – 1.0 7.7 Eliminations (36) (44) Europe   8,202 8,330 (1.5) 1.1 0.9 0.5 Vodacom 992 1,183 (16.1) – 22.4 6.3 Of which:   South Africa 717 888 (19.3) – 25.8 6.5 Other AMAP 1,404 1,478 (5.0) 7.0 10.1   12.1 AMAP 2,396 2,661 (10.0) 4.0 15.6 9.6 Other 335 442 Eliminations (45)   (69) Total service revenue 10,888 11,364 (4.2) 2.3 4.1 2.2 Other revenue   1,118 1,376 Revenue 12,006 12,740 (5.8) 2.0 4.5 0.7 India – Service revenue   1,532 1,547 (1.0) – 6.3 5.3

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 213 Overview Strategy Performance   Governance Financials Additional information Restated 2015 Restated 2014   Reported Other activity (including M&A) Foreign exchange Organic €m €m %   pps pps % Quarter ended 31 December 2015 restated Service revenue Germany 2,460   2,469 (0.4) – – (0.4) Italy 1,291 1,295 (0.3) – – (0.3) UK 1,998 1,854 7.8   0.8 (9.3) (0.7) Spain 1,116 1,153 (3.2) 0.1 – (3.1) Other Europe 1,536 1,485   3.4 (1.9) 0.1 1.6 Of which: Netherlands 438 438 – – 0.2 0.2 Eliminations (35)   (19) Europe 8,366 8,237 1.6 (0.1) (2.1) (0.6) Vodacom 1,107 1,128 (1.9) – 9.1   7.2 Of which: South Africa 817 846 (3.4) – 10.6 7.2 Other AMAP 1,423 1,327   7.2 – 3.6 10.8 AMAP 2,530 2,455 3.1 – 6.1 9.2 Other 308 330 Eliminations (18)   (12) Total service revenue 11,186 11,010 1.6 0.1 (0.4) 1.3 Other revenue   1,536 1,377 Revenue 12,722 12,387 2.7 0.1 (0.1) 2.7 India – Service revenue   1,529 1,393 9.8 – (7.5) 2.3 Year ended 31 March 2015 restated Revenue Europe   35,296 28,389 24.3 (26.5) (2.2) (4.4) AMAP 11,600 11,198 3.6 (0.8) 1.8 4.6 Other   1,595 1,293 Eliminations (106) (37) Total 48,385 40,843 18.5 (19.5) (1.1)   (2.1) Service revenue Europe 32,612 26,456 23.3 (26.0) (2.3) (5.0) AMAP 9,770   9,627 1.5 (1.0) 1.8 2.3 Other 1,356 1,075 Eliminations (103) (37) Total   43,635 37,121 17.5 (19.6) (1.1) (3.2) Other revenue 4,750 3,722 Total 48,385   40,843 18.5 (19.5) (1.1) (2.1) Adjusted EBITDA Europe 10,077 8,051 25.2   (35.4) (2.1) (12.3) AMAP 3,584 3,550 1.0 (0.3) 1.1 1.8 Other 41 239 Total   13,702 11,840 15.7 (23.2) (0.8) (8.3) Adjusted operating profit Europe 2,216   2,719 (18.5) (21.4) (0.7) (40.6) AMAP 1,746 1,929 (9.5) (0.1) (0.1) (9.7) Other   78 92 Total 4,040 4,740 (14.8) (11.9) (0.1) (26.8) Other growth metrics Group   – Enterprise service revenue 12,779 11,338 12.7 (10.6) (2.1) –

 

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Form 20-F cross reference guide Vodafone Group Plc Annual Report   214 on Form 20-F 2017 Unaudited information This annual report on Form 20-F   for the fiscal year ended 31 March 2017 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 221 Shareholder   information: Foreign currency translation 191 and 192 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 28   to 34 4 Information on the Company 4A History and development of the Company   History and development 197 Contact details Back cover Shareholder   information: Registrar and transfer office 191 Shareholder information:   Articles of Association and applicable English law 192 and 193 Chief   Executive’s strategic review 12 to 15 Chief Financial Officer’s review 16 and   17 Note 1 “Basis of preparation” 103 to 108 Note 2 “Segmental analysis” 109   to 111 Note 7: “Discontinued operations and assets held for sale” 123 and 124   Note 11 “Property, plant and equipment” 128 and 129 Note 28 “Acquisitions and   disposals” 161 Note 29 “Commitments” 162 4B Business overview Performance   highlights – At a glance 8 and 9 Market overview 10 and 11 Chief Executive’s   strategic review 12 to 15 Our business model 18 to 21 Sustainable business 26   and 27 Operating results 35 to 41 Financial position and resources 42 and 43 Prior   year operating results 177 to 181 Note 2 “Segmental analysis” – Segmental   revenue and profit 109 to 111 Regulation 198 to 204 4C Organisational   structure Note 33 “Related undertakings” 168 to 175 Note 12 “Investments in   associates and joint arrangements” 130 to 132 Note 13 “Other investments” 133   4D Property, plant and equipment Chief Executive’s strategic review 12 to 15 Chief   Financial Officer’s review 16 and 17 Financial position and resources 42 and   43 Note 11 “Property, plant and equipment” 128 and 129 4A Unresolved staff   comments None –

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 215 Overview Strategy Performance   Governance Financials Additional information Item Form 20-F caption Location   in this document Page 5 Operating and financial review and prospects 5A   Operating results Operating results 35 to 41 Prior year operating results 177   to 181 Note 21 “Borrowings” 140 to 144 Shareholder information: Foreign   currency translation 191 and 192 Regulation 198 to 204 5B Liquidity and   capital resources Financial position and resources: Liquidity and capital   resources 43 Note 23 “Capital and financial risk management” 148 to 153 Note   22 “Liquidity and capital resources” 144 to 147 Note 21 “Borrowings” 140 to   144 Note 29 “Commitments” 162 5C Research and development, patents and   licences, etc. Chief Executive’s strategic review 12 to 15 Chief Financial   Officer’s review 16 and 17 Regulation: Licences 202 and 203 5D Trend   information Chief Executive’s strategic review 12 to 15 Market overview 10   and 11 5E Off-balance sheet arrangements Note 22 “Liquidity and capital   resources” – Off-balance sheet arrangements 144 to 147 Note 29 “Commitments”   162 Note 30 “Contingent liabilities and legal proceedings” 163 to 166 5F   Tabular disclosure of contractual obligations Financial position and   resources: Contractual obligations and commitments 42 5G Safe harbor   Forward-looking statements 217 6 Directors, senior management and employees 6A   Directors and senior management Board of Directors 48 and 49 Executive   Committee 50 and 51 Leadership structure 46 and 47 6B Compensation Directors’   remuneration 67 to 85 Remuneration policy 71 to 76 Note 24 “Directors and key   management compensation” 153 6C Board practices Shareholder information:   Articles of Association and applicable English law 192 and 193 Directors’   remuneration 67 to 85 Board of Directors 48 and 49 Board Committees 56 to 63 Leadership   structure 46 and 47 6D Employees Our people 24 and 25 Note 25 “Employees” 154   6E Share ownership Directors’ remuneration 67 to 85 Remuneration policy 71 to   76 Note 27 “Share-based payments” 159 and 160 7 Major shareholders and   related party transactions 7A Major shareholders Shareholder information:   Major shareholders 192 7B Related party transactions Directors’ remuneration   67 to 85 Note 30 “Contingent liabilities and legal proceedings” 163 to 166 Note   31 “Related party transactions” 167 7C Interests of experts and counsel Not   applicable – 8 Financial information 8A Consolidated statements and other   financial information Financials 99 to 176 Report of independent registered   public accounting firm 98 Note 30 “Contingent liabilities and legal   proceedings” 163 to 166 8B Significant changes Note 32 “Subsequent events”   167 Subsequent events A-1

 

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Vodafone Group   Plc Annual Report 216 on Form 20-F 2017 Form 20-F cross reference guide   (continued) Unaudited information Item Form 20-F caption Location in this   document Page 9 The offer and listing 9A Offer and listing details   Shareholder information: Share price history 191 9B Plan of distribution Not   applicable – 9C Markets Shareholder information: Markets 192 9D Selling   shareholders Not applicable – 9E Dilution Not applicable – 9F Expenses of the   issue Not applicable – 10 Additional information 10A Share capital Not   applicable – 10B Memorandum and Articles of Association Shareholder   information: Articles of Association and applicable English law 192 and 193 10C   Material contracts Shareholder information: Material contracts 194 10D   Exchange controls Shareholder information: Exchange controls 194 10E Taxation   Shareholder information: Taxation 194 to 196 10F Dividends and paying agents   Not applicable – 10G Statement by experts Not applicable – 10H Documents on   display Shareholder information: Documents on display 194 10I Subsidiary   information Not applicable – 11 Quantitative and qualitative disclosures   about market risk Note 23 “Capital and financial risk management” 148 to 153 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 B-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 44 to   63 Directors’ statement of responsibility: Management’s report on internal   control over financial reporting 89 Report of independent registered public   accounting firm 98 16 16A Audit Committee financial expert Board Committees   56 to 63 16B Code of ethics Our US listing requirements 66 16C Principal   accountant fees and services Note 3 “Operating profit” 112 Board Committees:   Audit and Risk Committee – External audit 61 and 62 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 66 16H Mine safety disclosure Not   applicable – 17 Financial statements Not applicable – 18 Financial statements   Financials 99 to 176 Report of Independent registered public accounting firm   98 19 Exhibits Filed with the SEC Index to Exhibits

 

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Forward-looking statements Vodafone Group Plc Annual Report on   Form 20-F 2017 217 Overview Strategy Performance Governance Financials   Additional information Unaudited information 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: –– 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, preparation for 5G and expectations regarding customers; ––   intentions and expectations regarding the development of products, services   and initiatives introduced by, or together with, Vodafone or by third parties;   –– 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; –– revenue   and growth expected from the Group’s Enterprise and total communications   strategy; –– mobile penetration and coverage rates, MTR cuts, the Group’s   ability to acquire spectrum and licences, including 5G licences, expected growth   prospects in the Europe and AMAP regions and growth in customers and usage   generally; –– anticipated benefits to the Group from cost-efficiency   programmes, including their impact on the absolute indirect cost base; ––   possible future acquisitions, including increases in ownership in existing   investments, the timely completion of pending acquisition transactions and   pending offers for investments; –– 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; –– 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 –– the impact of regulatory and legal proceedings involving   the Group and of scheduled or potential regulatory changes. 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 “tar gets”. 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: –– general economic and   political conditions in the jurisdictions in which the Group operates and   changes to the associated legal, regulatory and tax environments; ––   increased competition; –– levels of investment in network capacity and the   Group’s ability to deploy new technologies, products and services; –– rapid   changes to existing products and services and the inability of new products   and services to perform in accordance with expectations; –– the ability of   the Group to integrate new technologies, products and services with existing   networks, technologies, products and services; –– the Group’s ability to   generate and grow revenue; –– 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; –– slower than expected customer   growth, reduced customer retention, reductions or changes in customer   spending and increased pricing pressure; –– the Group’s ability to extend and   expand its spectrum resources, to support ongoing growth in customer demand   for mobile data services; –– the Group’s ability to secure the timely   delivery of high-quality products from suppliers; –– loss of suppliers,   disruption of supply chains and greater than anticipated prices of new mobile   handsets; –– changes in the costs to the Group of, or the rates the Group may   charge for, terminations and roaming minutes; –– the impact of a failure or   significant interruption to the Group’s telecommunications, networks, IT   systems or data protection systems; –– the Group’s ability to realise   expected benefits from acquisitions, partnerships, joint ventures,   franchises, brand licences, platform sharing or other arrangements with third   parties; –– acquisitions and divestments of Group businesses and assets and the   pursuit of new, unexpected strategic opportunities; –– the Group’s ability to   integrate acquired business or assets; –– 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; ––   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; –– the Group’s ability to satisfy working capital   requirements; –– changes in foreign exchange rates; –– changes in the   regulatory framework in which the Group operates; –– the impact of legal or   other proceedings against the Group or other companies in the communications   industry; and –– changes in statutory tax rates and profit mix. 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 28 to 34   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   forwardlooking 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.

 

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Definition of terms Vodafone Group Plc Annual Report 218 on Form   20-F 2017 Unaudited information 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.   Adjusted EBIT Operating profit excluding share of results in associates and   joint ventures, impairment losses, amortisation of customer bases and brand   intangible assets restructuring costs arising from discrete restructuring   plans and other income and expense. The Group’s definition of adjusted EBIT   may not be comparable with similarly titled measures and disclosures by other   companies. Adjusted EBITDA Operating profit excluding share of results in   associates and joint ventures, depreciation and amortisation, gains/losses on   the disposal of fixed assets, impairment losses, restructuring costs arising   from discrete restructuring plans and other income and expense. The Group’s   definition of adjusted EBITDA may not be comparable with similarly titled   measures and disclosures by other companies. Adjusted operating profit Group   adjusted operating profit excludes impairment losses, restructuring costs   arising from discrete restructuring plans, amortisation of customer bases and   brand intangible assets and other income and expense. 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 customer revenue and incoming revenue divided by average   customers. Capital additions (‘capex’) Comprises the purchase of property,   plant and equipment and intangible assets, other than licence and spectrum   payments, during the year. 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. Converged customer A customer who   receives both fixed and mobile services (also known as unified   communications) on a single bill or who receives a discount across both   bills. 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. 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 data network. Fixed service revenue Service revenue relating   to provision of fixed line (‘fixed’) and carrier services. 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.

 

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Vodafone Group   Plc Annual Report on Form 20-F 2017 219 Overview Strategy Performance   Governance Financials Additional information 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 arising from discrete restructuring plans and licence and   spectrum payments. For the year ended 31 March 2016 and 31 March 2015, free   cash flow also excluded payments in respect of the Group’s historical UK tax   settlement. 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. Incoming revenue Comprises revenue from   termination rates for voice and messaging to Vodafone customers. Internet of   Things (‘IoT’) 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 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 service revenue   Service revenue relating to the provision of mobile services. 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   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. Next generation networks (‘NGN’) Fibre or cable   networks typically providing high-speed broadband over 30Mbps. 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 additions (excludes capital   licence and spectrum payments) and cash receipts from the disposal of   intangible assets and property, plant and equipment, but before restructuring   costs arising from discrete restructuring plans. Organic growth An   alternative performance measure which presents performance on a comparable basis,   both in terms of merger and acquisition activity and movements in foreign   exchange rates. See pages 205 to 213 “Alternative performance measures” for   further details. Other revenue Other revenue includes revenue from connection   fees and equipment sales. 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. Regulation Impact of industry specific law and regulations   covering telecommunication services. The impact of regulation on service   revenue comprises the effect of changes in mobile termination rates and   roaming regulations.

 

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Vodafone Group   Plc Annual Report 220 on Form 20-F 2017 Definition of terms (continued) Unaudited   information Reported growth Reported growth is based on amounts reported in   euros as determined under IFRS. Restructuring costs Costs incurred by the   Group following the implementation of discrete restructuring plans to improve   overall efficiency. RGUs/sub Revenue Generating Units/unique subscriber ratio   (‘RGUs/sub’) describes the average number of fixed services taken by   subscribers. 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. See pages   205 to 213 “Alternative performance measures” for further details. 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. 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.

 

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Selected financial data Vodafone Group Plc Annual Report on Form   20-F 2017 221 Overview Strategy Performance Governance Financials Additional   information Unaudited information At/for the year ended 31 March 2017 Restated   2016 Restated 2015 Restated 2014 Restated 2013 Consolidated income statement   data (€m) Revenue 47,631 49,810 48,385 40,845 41,895 Operating profit/(loss)   3,725 1,320 2,073 (4,722) (2,877) Profit/(loss) before taxation 2,792 (190)   1,734 (5,960) (3,913) (Loss)/profit for financial year from continuing   operations (1,972) (5,127) 7,805 13,900 (4,704) (Loss)/profit for the   financial year (6,079) (5,122) 7,477 71,515 742 Consolidated statement of   financial position data (€m) Total assets 154,684 169,107 169,579 147,536   163,956 Total equity 73,719 85,136 93,708 86,919 85,921 Total equity   shareholders’ funds 72,200 83,325 91,510 85,733 84,722 Earnings per share1,2 Weighted   average number of shares (millions) – Basic 27,971 26,692 26,489 26,472   26,831 – Diluted 27,971 26,692 26,629 26,682 26,831 Basic (loss)/earnings per   ordinary share (22.51)c (20.25)c 27.48c 269.41c 1.65c Diluted (loss)/earnings   per ordinary share (22.51)c (20.25)c 27.33c 267.29c 1.65c Basic   (loss)/earnings per share from continuing operations (7.83)c (20.27)c 28.72c   51.77c (18.64)c Cash dividends1,3 Amount per ordinary share (eurocents)   14.77c – – – – Amount per ADS (eurocents) 147.7c – – – – Amount per ordinary   share (pence) – 11.45p 11.22p 11.00p 10.19p Amount per ADS (pence) – 114.5p   111.2p 110.0p 101.9p Amount per ordinary share (US cents) 18.52c 16.49c   16.65c 18.31c 15.49c Amount per ADS (US cents) 182.5c 164.9c 166.5c 183.1c   154.9c Other data Ratio of earnings to fixed charges4 2.1 – 2.2 – 1.9 Deficiency   between fixed charges and earnings (€m)4 – 159 – 485 – 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. 2 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 year ended 31 March 2013 has been restated   accordingly. 3 The final dividend for the year ended 31 March 2017 was   proposed by the Directors on 16 May 2017 and is payable on 4 August 2017 to   holders of record as of 9 June 2016. The total dividends have been translated   into US dollars at 31 March 2017 for purposes of the above disclosure but the   dividends are payable in US dollars under the terms of the ADS depositary   agreement. 4 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, interest capitalised and   preferred share dividends. The selected financial data shown below for the   years ended 31 March 2016, 2015, 2014 and 2013 has been restated into euros   following the change in the Group’s presentation currency and include the   results of Vodafone India as discontinued operations following the agreement   to combine it with Idea Cellular. Vodafone, the Vodafone Portrait, the   Vodafone Speechmark, Vodacom, M-Pesa, M-Pawa and Vodafone One 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 2017 Text printed on revive 50 silk   which is made from 50% recycled and 50% virgin fibres. The cover is on revive   100 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 Annual Report on Form 20-F 2017 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   

 

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**Subsequent events**

 

**Events occurring subsequent to the approval of the Company’s Annual Report on 16 May 2017**

 

On 24 May 2017 Vodafone announced an agreement to combine Melita Ltd (‘Melita’) and Vodafone Malta Ltd (‘Vodafone Malta’) to create a new fully integrated communications company in Malta (together, the ‘Combined Company’).

 

At completion, the current shareholders of Melita will own 51% of the Combined Company and Vodafone Europe B.V. (“VEBV”), the current shareholder of Vodafone Malta, will own the remaining 49%1. In addition, on completion, Vodafone will receive an estimated cash payment of €120 million which will be used for general corporate purposes. Melita’s shareholders will receive an estimated cash payment of €33 million.

 

The transaction is conditional on approval from the Malta Competition and Consumer Affairs Authority and is expected to close in the second half of the 2017 calendar year.

 

----

Note:

 

1                 Excluding the dilutive effect of management incentivisation plans for the Combined Company.

 

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

 

**Fees payable by ADR Holders**

 

Deutsche Bank, 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 |
| $.05 (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                                                                                                                                                                                            |
| $ 5.00 per 100 ADSs (or portion thereof)                                                                                                                                                             | ·  An annual fee for the   operation and maintenance of administering the ADSs                                                                                                                                                                  |
| 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 2017, 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.

 

Deutsche Bank serves as the depository bank for Vodafone’s American Depositary Receipt Program, having replaced Bank of New York Mellon (BNYM) on 27 February 2017.

 

During the financial year (April 1, 2016 through March 31, 2017), we received approximately $13 million from BNYM, the previous depositary bank for our American Depositary Receipt Program arising out of fees charged in respect of dividends paid during the year.

 

Deutsche Bank agreed to reimburse Vodafone $30,000 in legal fees associated with the cost of transition of the American Depositary Receipt Program.

 

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** **

**Index of Exhibits to the Company’s Annual Report on Form 20-F for the financial year ended March 31, 2017**

 
| 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 January 12, 2016 between the Company and   The Law Debenture Trust Corporation p.l.c. further modifying and restating   the provisions of the Trust Deed dated 16 July 1999 relating to a Euro   30,000,000,000 Euro Medium Term Note Programme   (incorporated by reference to Exhibit 2.3   to the Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2016 (File No. 001-10086)). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 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   (incorporated by reference to Exhibit 2.4   to the Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2016 (File No. 001-10086)).                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 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   (incorporated by reference to Exhibit 2.5   to the Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2016 (File No. 001-10086)).                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 2.6    | Deposit   Agreement among Vodafone Group Plc, Deutsche Bank Trust Company Americas, as   depositary, and the owners and beneficial owners from time to time of   American Depositary Receipts, dated as of February 27, 2017.                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 2.7    | Form of   American Depositary Receipt (included in Exhibit 2.6)                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 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 15   December 2015 in relation to the Group’s €3,860,000,000 five year   Revolving Credit Facility (incorporated by reference to   Exhibit 4.2   to the Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2016 (File No. 001-10086)).                                                                                                            |

 

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| 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 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 15   December 2015 in relation to the Group’s US$3,935,000,000 Revolving   Credit Facility (incorporated by reference to Exhibit 4.6   to the Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2016 (File No. 001-10086)).                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.7    | Extension   letter dated 10 January 2017 in relation to the US$4.09 billion   Revolving Credit Facility dated February 27, 2015.                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.8    | $1,000,000,000   Facility Agreement dated September 9, 2015 between the Company and The   Bank of Tokyo-Mitsubishi UFJ, LTD (incorporated by reference to   Exhibit 4.7   to the Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2016 (File No. 001-10086))                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.9    | $1,000,000,000   Facility Agreement dated November 9, 2015 between the Company and Mizuho   Bank LTD (incorporated by reference to Exhibit 4.8 to   the Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2016 (File No. 001-10086)).                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 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 1.50 per cent Subordinated Mandatory   Convertible Bonds due 2017 (incorporated by reference to   Exhibit 4.9   to the Company’s Annual Report on Form 20-F for the financial year ended   March 31, 2016 (File No. 001-10086)).  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.11   | 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 (incorporated by reference to   Exhibit 4.10 to the Company’s Annual Report on   Form 20-F for the financial year ended March 31, 2016 (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 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)).                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.14   | 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)).                                                                                                                                                                                                                                               |

 

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| 4.15   | 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)).            |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                   |
| 4.16   | 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)).         |
|   |                                                                                                                                                                                                                                   |
| 4.17   | 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)).            |
|   |                                                                                                                                                                                                                                   |
| 4.18   | 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)).     |
|   |                                                                                                                                                                                                                                   |
| 4.19   | 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)).      |
|   |                                                                                                                                                                                                                                   |
| 4.20   | 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)).  |
|   |                                                                                                                                                                                                                                   |
| 4.21   | 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)).          |
|   |                                                                                                                                                                                                                                   |
| 4.22   | 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)).   |
|   |                                                                                                                                                                                                                                   |
| 4.23   | 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)).      |
|   |                                                                                                                                                                                                                                   |
| 4.24   | 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)).            |
|   |                                                                                                                                                                                                                                   |
| 4.25   | 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)).    |
|   |                                                                                                                                                                                                                                   |
| 4.26   | 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)).     |
|   |                                                                                                                                                                                                                                   |
| 4.27   | 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)). |

 

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| 4.28   | 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)).                                                                                                                                                                         |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.29   | Letter   of appointment for David Nish (incorporated by reference to   Exhibit 4.32 to the Company’s Annual Report on   Form 20-F for the financial year ended March 31, 2016 (File   No. 001-10086)).                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.30   | Letter   of appointment for Maria Amparo Moraleda Martinez.                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.31   | Final   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 Ziggo Group Holding B.V. and   Vodafone Libertel B.V. to Lynx Global Europe II B.V. and the formation of the   Netherlands joint venture. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.32   | Implementation   Agreement dated 20 March 2017 relating to the combination of the mobile   telecommunications businesses of Vodafone Group and Idea Group.                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 7.     | Unaudited   Computation of Ratio of Earnings to Fixed Charges for the financial years   ended March 31, 2017, 2016, 2015, 2014 and 2013                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 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, 2017).                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 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, 2017.                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 15.1   | Consent   letter of PricewaterhouseCoopers LLP.                                                                                                                                                                                                                                                                                                                                                                       |

 

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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 9, 2017 |                                          |