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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549Form 20-F

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|   |                                                                                                                                               
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------
|   | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934                                                
|  
|OR
|   |                                                                                                                                               
|   | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: March 31, 2007                
|  
|OR
|   |                                                                                                                                               
|   | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from:to                    
|  
|OR
|   |                                                                                                                                               
|   | 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:
|   |                                                                                                                                               
|   | Commission file number:1-10086                                                                                                                
|   |                                                                                                                                               

VODAFONE GROUP PUBLIC LIMITED COMPANY(formerly VODAFONE AIRTOUCH 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)

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

|Title of
      each class | Name of each exchangeon which registered
|------------------------- | ----------------------------------------
|See Schedule A            | See Schedule A                          

Securities registered or to be registered pursuant to Section 12(g) of the Act:None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: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 11 3/7 US
      cents each 
      7% Cumulative Fixed Rate Shares of £1 each |  | 52,835,077,347
      50,000 | 

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

|                       
|-----------------------
|Yes                  No

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

|Indicate by check mark which financial statements item the registrant has elected to follow:
|--------------------------------------------------------------------------------------------

|                            
|----------------------------
|Item 17              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).
|---------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                             
|Yes                  No                                                                                                                      

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SCHEDULE A

|Title of each class                                                                                          | Name of each exchangeon which registered
|------------------------------------------------------------------------------------------------------------ | ----------------------------------------
|Ordinary shares of 11 3/7 US cents each                                                                      | New York Stock Exchange*                
|American Depositary Shares (evidenced by American Depositary Receipts) each representing ten ordinary shares | New York Stock Exchange                 
|Floating rate notes due June 2007                                                                            | New York Stock Exchange                 
|4.161% due November 2007                                                                                     | New York Stock Exchange                 
|Floating rate notes due December 2007                                                                        | New York Stock Exchange                 
|3.95% due January 2008                                                                                       | New York Stock Exchange                 
|Floating rate notes due June 2011                                                                            | New York Stock Exchange                 
|5.5% due June 2011                                                                                           | New York Stock Exchange                 
|5.35% due Feb 2012                                                                                           | New York Stock Exchange                 
|Floating rate notes due Feb 2012                                                                             | New York Stock Exchange                 
|5% due December 2013                                                                                         | New York Stock Exchange                 
|5.375% due January 2015                                                                                      | New York Stock Exchange                 
|5% due September 2015                                                                                        | New York Stock Exchange                 
|5.75% March 2016                                                                                             | New York Stock Exchange                 
|5.625% due Feb 2017                                                                                          | New York Stock Exchange                 
|4.625% due July 2018                                                                                         | New York Stock Exchange                 
|6.25% due November 2032                                                                                      | New York Stock Exchange                 
|6.15% due Feb 2037                                                                                           | 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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| | Vodafone Group Plc               |  | 
| | Annual Report on Form 20-F       |  | 
| | For the year ended 31 March 2007 |  | 
| |                                  |  |  | 
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| | Our
        goal is to be the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
| | communications
        leader                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
| | in
      an increasingly                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
| | connected
      world                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| | This
        constitutes the Annual Report on Form 20-F (the “20-F”) of
        Vodafone Group Plc (the “Company”) in accordance with the
        requirements of the US Securities and Exchange Commission (the “SEC”)
        and is dated 14 June 2007. This document contains certain information set
        out within the Company’s Annual Report in accordance with International
        Financial Reporting Standards (“IFRS”) and with those parts
        of the UK Companies Act 1985 applicable to companies reporting under IFRS,
        dated 29 May 2007, as updated or supplemented at the time of filing of
        the 20-F with the SEC, which may be later amended if necessary. References
        to IFRS refer to IFRS as issued by the IASB and IFRS as adopted for use
        in the European Union (“EU”). The content of the Group’s
        website (www.vodafone.com) should not be considered to form part of this
        Annual Report or the Company’s Annual Report on Form 20-F.
      The terms “Vodafone”, the “Group”, “we”, “our” and “us” refer to the Company and, as applicable, its
subsidiary undertakings and/or its interests in joint ventures and associated undertakings.
      In the discussion of the Group's reported financial position and results for the year ended 31 March 2007,
information in addition to that contained within the Consolidated Financial Statements is presented on
the basis that it provides readers with additional financial information regularly reviewed by management.
This information is provided to assist investor assessment of the Group’s performance from period to
period. However, the 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. Definitions of the terms presented are shown on page 159. |  | In presenting and discussing the Group’s reported financial position, operating results and cash flows,
certain information is derived from amounts calculated in accordance with IFRS but this information
is not itself an expressly permitted GAAP measure. Such non-GAAP measures should not be viewed in
isolation or as an alternative to the equivalent GAAP measure. An explanation as to the use of these
measures and reconciliations to their nearest equivalent GAAP measures can be found on
pages 62 to 63.
      The Report of the Directors, incorporating the Business Review, covers pages 4 to 88 of this Annual
Report. This Annual Report 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 business management and strategy, plans and objectives for the Group. For further
details, please see “Performance – Cautionary Statement Regarding Forward-Looking Statements”
and “Performance – Risk Factors, Seasonality and Outlook” for a discussion of the risks associated with
these statements.
      Vodafone, the Vodafone logos, Vodafone live!, Vodafone Mobile Connect, Vodafone Wireless Office,
Vodafone Passport, Vodafone At Home, Vodafone Office, Vodafone Applications Service, Vodafone
Business Email, Vodafone Travel Promise, Vodafone Push Email, Vodafone Consumer Push Email and
Vodafone ßetavine are trademarks of the Vodafone Group. Other product and company names
mentioned herein may be the trademarks of their respective owners. | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 

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Highlights for the Year Key highlights:•
    The Group has delivered against its financial
        and operating targets andmade
        good progress on executing against its five strategic objectives•
    Voice and data usage growth offset competitive
    and regulatorypressures
    in Europe•
    Continued strong performance in emerging markets,
        with the recentacquisition in India significantly
        increasing Vodafones presence in high
        growth
markets•
    The Group remains confident of delivering its
          stated capital andoperating expenditure
          targets in Europe in the 2008 financial year, with
          core cost reduction initiatives well on trackFinancial performance from continuing
    operations:•
    Group revenue of £31.1 billion•
    Basic loss per share was 8.94 pence, with loss
        before taxation for theyear
      of £2.4 billion, after impairment losses of £11.6 billion•
    Free cash flow of £6.1 billion
          and net cash inflow from operating activities
    of £10.2 billion, after net taxation paid of £2.2 billionIncreasing returns to shareholders:•
    Total dividends per share increased by 11.4%,
        to 6.76 pence, with afinal dividend per
        share of 4.41 pence, giving a dividend pay out ratio of
        60% and a total pay
out of £3.6 billion for the financial year•
    In recognition of the earnings dilution arising
        from the Hutchison Essartransaction,
        the Board is targeting modest increases in dividend per share
        in the near
term until the payout ratio returns to 60% in accordance
with current policy


Highlights2
	Financial HighlightsStrategy4
	Chairmans Statement5
	Group at a Glance6
	Chief Executives Review8
	Delivering on our Strategic ObjectivesBusiness10
	Business Overview24
	RegulationPerformance29
	Performance Introduction30
	Critical Accounting Estimates33
	Key Performance Indicators34
	Operating Results52
	Financial Position and Resources58
	Risk Factors, Seasonality and Outlook61
	Cautionary Statement Regarding
Forward-Looking Statements62
	Non-GAAP InformationGovernance64
	Board of Directors and Group
Management67
	Corporate Governance75
	Corporate Responsibility and
Environmental Issues78
	Boards Report to Shareholders
on Directors Remuneration88
	Directors Statement of Responsibility89
	Report of Independent Registered
Public Accounting Firm to the Members
of Vodafone Group PlcFinancials91
	Report of Independent Registered
Public Accounting Firm to the Members
of Vodafone Group Plc92
	Consolidated Financial Statements143
	Company Financial Statements of
Vodafone Group Plc149
	Independent Auditors Report to the
Members of Vodafone Group PlcShareholders150
	Shareholder Information157
	Form 20-F Cross Reference GuideGlossary159
	Definition of Terms




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Back to Contents

Financial Highlights

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The selected financial data set out on the
    following pages is derived from the Consolidated Financial Statements of
    the Company on pages 92 to 142 and as such should be read in conjunction
    with them. Certain trends within the financial data presented below have
    been impacted by business acquisitions and disposals, the most significant
    of which are described in Business Business Overview  How We Developed.
    The Consolidated
Financial


Statements are prepared in accordance with IFRS, on the basis set out in note
1 to the Consolidated Financial Statements, which differ in certain significant
respects from US GAAP. For further details, see note 38 to the Consolidated Financial
Statements. Solely for convenience, amounts represented below in dollars have
been translated at $1.9685: £1, the Noon Buying
Rate on 30 March 2007.




|                                                                |                                          | At/year ended 31 March |        
|--------------------------------------------------------------- | ---------------------------------------- | ---------------------- | -------
|                                                                |                                          |                        |        
|                                                                |                                          | 2007                   |        
|                                                                |                                          | $m                     |        
|                                                                |                                          |                        |        
|IFRS                                                            |                                          |                        |        
|Consolidated Income Statement Data                              |                                          |                        |        
|Revenue                                                         | 61,228                                   |                        | 31,104 
|Operating (loss)/profit                                         | (3,079                                   | )                      | (1,564 
|Adjusted operating profit (Non-GAAP measure)(1)                 | 18,762                                   |                        | 9,531  
|(Loss)/profit before taxation                                   | (4,691                                   | )                      | (2,383 
|(Loss)/profit for the financial year from continuing operations | (9,461                                   | )                      | (4,806 
|(Loss)/profit for the financial year                            | (10,427                                  | )                      | (5,297 
|Consolidated Cash Flow Data(2)                                  |                                          |                        |        
|Net cash flows from operating activities                        | 20,065                                   |                        | 10,193 
|Net cash flows from investing activities                        | 8,132                                    |                        | 4,131  
|Net cash flows from financing activities                        | (18,352                                  | )                      | (9,323 
|Free cash flow (Non-GAAP measure)(1)                            | 12,061                                   |                        | 6,127  
|Consolidated Balance Sheet Data                                 |                                          |                        |        
|Total assets                                                    | 215,780                                  |                        | 109,617
|Total equity                                                    | 132,466                                  |                        | 67,293 
|Total equity shareholders funds                                | 132,021                                  |                        | 67,067 
|Total liabilities                                               | 83,314                                   |                        | 42,324 
|Earnings Per Share (EPS)(3)                                   |                                          |                        |        
|Weighted average number of shares (millions)                    |                                          |                        |        
|                                                               | Basic                                    | 55,144                 |        
|                                                               | Diluted                                  | 55,144                 |        
|Basic (loss)/earnings per ordinary share                        |                                          |                        |        
|                                                               | (Loss)/profit from continuing operations | (17.60                 | )¢     
|                                                               | (Loss)/profit for the financial year     | (19.37                 | )¢     
|Diluted (loss)/earnings per ordinary share                      |                                          |                        |        
|                                                               | (Loss)/profit from continuing operations | (17.60                 | )¢     
|                                                               | (Loss)/profit for the financial year     | (19.37                 | )¢     
|Basic (loss)/earnings per ADS                                   |                                          |                        |        
|                                                               | (Loss)/profit from continuing operations | (176.0                 | )¢     
|                                                               | (Loss)/profit for the financial year     | (193.7                 | )¢     
|Diluted (loss)/earnings per ADS                                 |                                          |                        |        
|                                                               | (Loss)/profit from continuing operations | (176.0                 | )¢     
|                                                               | (Loss)/profit for the financial year     | (193.7                 | )¢     
|                                                                |                                          |                        |        



|2 | Vodafone Group PlcAnnual
        Report 2007
|- | --------------------------------------------

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Back to Contents

| | Highlights
| | ----------
| |           



|
|



|                                                                 | At/year ended 31 March |   
|---------------------------------------------------------------- | ---------------------- | --
|                                                                 |                        |   
|                                                                 | 2007                   |   
|                                                                 | $m                     |   
|                                                                 |                        |   
|US GAAP                                                          |                        |   
|Consolidated Income Statement Data                               |                        |   
|Revenue                                                          | 49,919                 |   
|Net loss(4)                                                      | (8,514                 | ) 
|Consolidated Balance Sheet Data                                  |                        |   
|Shareholders equity                                             | 139,923                |   
|Earnings per share (EPS)(3)                                    |                        |   
|Weighted average number of shares  basic and diluted (millions) | 55,144                 |   
|Basic and diluted loss per ordinary share                        | (15.43                 | )¢
|Basic and diluted loss per ADS                                   | (154.3                 | )¢
|Cash Dividends(3)(5)                                             |                        |   
|Amount per ordinary share                                        | 13.31                  | ¢ 
|Amount per ADS                                                   | 133.1                  | ¢ 
|Other Data                                                       |                        |   
|IFRS                                                             |                        |   
|Ratio of earnings to fixed charges(6)                            |                       |   
|Deficit                                                          | (8,640                 | ) 
|US GAAP                                                          |                        |   
|Ratio of earnings to fixed charges(6)                            |                       |   
|Deficit(7)                                                       | (13,319                | ) 
|                                                                 |                        |   
|                                                                 |                        |   

|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   
|(5)   
|(6)   
|(7)   



|Vodafone Group Plc Annual Report
        2007 | 3
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Chairmans Statement Reaching the 200 million proportionate customer milestone has been a tremendous
achievement for your Company and now we are on the edge of a further revolution
as we enter the era of broadband and internet
communications.





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It was an honour to become your Chairman at the AGM
  in July 2006. I joined Vodafone from the world of banking, whose history and
  institutions run back over many centuries. The mobile telephone industry is
  very much younger and even in the last twenty years has seen dramatic changes
  which have transformed the face of telecommunications and society. When Vodafone
  first started to operate more than 20 years ago, the telecommunications industry
  was dominated by
  fixed line companies. A one hour local phone call within the UK cost £4.56;
today, the same call on the Vodafone network could cost as little as 21 pence. With the unprecedented growth of mobile communications
  since the mid 1980s, the effects on other sectors, the wider economy and society
  as a whole have been far reaching. Changes in communications have underpinned
  the
development of the whole IT industry, helped economic growth, particularly in
developing markets, and enabled families, friends and communities to communicate
across countries and time zones. Mobile telephones have been of enormous benefit to society and, as a market leader,
Vodafone has played a major role. Reaching the 200 million proportionate customer
milestone in this financial year has been a tremendous achievement for your Company
and now we are on the edge of a further revolution as we enter the era of wireless
broadband and internet communications. There are currently around three billion mobile customers globally. At the moment,
the majority are in the western world. We believe we will see 70% of the growth
in customers in the next five years coming from emerging markets. The challenges
we face in these markets are very different from the challenges we face in our
European and mature markets. We will continue to expand in markets where mobile
handsets are not widely dispersed and where there is rising GNP per capita. This
is why we have acquired the business of Hutchison Essar in India, to deliver
a major presence in a market with penetration of around 14%, which we believe
will become larger than the European Union within a reasonable
time frame. The challenge in Europe, where the markets are mature and penetration is, in
many cases, over 100%, is quite different and we need to find more efficiencies
through initiatives such as network sharing to improve our productivity and developing
other services beyond voice to help us grow new revenue. Across the world, governments and regulators see our industry in very different
ways, from being a source of tax revenue through to being an important part of
the social and economic infrastructure of the country. The impact of regulation
on our business can be significant, as we have seen during the year with the
government intervention on our tariffs in Italy and at a European level on roaming.


The Vodafone brand is enormously
    well known and highly regarded across the globe. It was recently rated the
    most powerful UK brand by the leading research company Millward Brown, and
  number 22 in the world. Your Board takes the management of Vodafones reputation very seriously,
  together with our commitments in corporate responsibility. We have set out
  clearly in a separate report what we have achieved in this area. We are particularly
  proud of our global handset recycling initiative and our ongoing programme
  on energy efficiency in our networks. The Board is very conscious of the concerns which are expressed about possible
  health issues in relation to mobile phones. As a responsible company, we fund
  and support independent research into this important area and our policy is to
  be completely transparent in relation to this issue, which your Board reviews
  on a regular basis. On the Board, there have been a number of changes
    since the AGM in 2006. We said farewell to Thomas Geitner as an executive
    director and we thank him for all he has done for the business and wish him
    well in the
future. Alec Broers retires from the Board at this years AGM and we are
grateful for his significant contribution, including his chairmanship of the
Vodafone Group Foundation, over his nine years as a non-executive director. We
welcomed back Vittorio Colao as Deputy Chief Executive and Chief Executive of
our European region. We have appointed three new non-executive directors, Alan
Jebson, Nick Land and Simon Murray. We need non-executive directors who are equipped
with the skill set to
understand the rapidly changing markets in terms of consumer taste, technology
and the emerging markets in which we operate. Future appointments will ensure
that we have the right balance of skills and experience. During the year we also
completed an independent Board evaluation by MWM Consulting to ensure the highest
standards of corporate governance. Your Board looks at any acquisition in a disciplined way and our decision to
acquire Hutchison Essar was completed within the financial criteria we have set
ourselves. We also take decisions to sell businesses or minority shareholdings
where better value for shareholders is more likely to arise from reinvestment
elsewhere or by returning the funds through dividends or buybacks. During the
year, we sold our interests in Belgium and Switzerland for this
reason. We are confident about Vodafones future and your Board has proposed a final
dividend of 4.41 pence per share, bringing total dividends for the year to 6.76
pence per share, up 11.4% on last year, and representing a payout ratio of 60%
of adjusted earnings per share. We continue to look for sources of profitable
growth within highly penetrated markets. We have a particularly strong position
in the business sector which we intend to develop further. We also plan to grow
services beyond core voice and messaging and continue to search for new sources
of revenue which are closely related to our customers
needs. The mobile phone is an enormously versatile device and one of the features of
the last 20 years has been the new uses to which the phone can be adapted, including
data services, entertainment, advertising, internet portals and, most recently,
financial payments. In my first months as Chairman, I have spent time in and around the Group meeting
customers, suppliers, business partners, other stakeholders and my new colleagues
in our offices, retail stores, call centres and canteens. I have also visited
seven of our international operations. I have been enormously impressed by the
talented people at all levels within Vodafone and I am fortunate to be involved
with such a young and dynamic business. Your Board wants to pay tribute to all our 66,000 people and to thank them on
your behalf for all they do to help Vodafone progress in a rapidly changing business
environment. We, as a Board, look forward to your continuing support as we address
the challenges ahead. Sir John BondChairman




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Group at a Glance

Vodafone is a world leader in providing voice and data communications services
for both consumer and enterprise customers, with a significant presence in Europe,
the Middle East, Africa, Asia, Pacific and the United States. The Group is structured
into two regions to address the different business challenges inherent in them.

Europe

Markets
	
	
	
	Key FocusGermany
	
	Greece
	
	RevenueItaly
	
	Ireland
	
	stimulation andSpain
	
	Malta
	

cost reductionUK
	
	NetherlandsAlbania
	
	PortugalKey
      market data(2)Average
      mobile customer penetration
  
  Mobile share of
    total minutes>100%
  
  33%


Contribution toContribution to
	
	
	Group adjustedGroup revenue
	79%
	
	operating profit
	59%


EMAPA(1)

Markets
    
    
    
    
    
    Key FocusCzech Rep.
    
    Kenya
    
    Fiji
    
    DeliverHungary
    
    South
    
    India
    
    strong growthPoland
    
    Africa
    
    USA
    

in emergingRomania
    
    Australia
    
    France
    

marketsTurkey
    
    New
    
    ChinaEgypt
    
    ZealandKey
      market data(2)Average mobile customer
        penetration27% Notes:(1)
    Eastern Europe, Middle East & Africa,
      Asia Pacific and affiliates (associated undertakings and investments).(2)
    Industry analyst information: Total
        minutes is for mobile and fixed line operators. Market penetration
      data for EMAPA excludes USA, France and China.


Contribution toContribution to
    
    
    Group adjustedGroup revenue
    21%
    
    operating profit
    39% (3)

Excludes non-operating income and expense
    of associates, impairment losses and other income expense.




|Vodafone Group Plc Annual Report
        2007 | 5
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Chief Executives Review We updated our strategy in 2006 and have made good progress executing each strategic objective throughout the year. We have met or exceeded our stated financial expectations for the year in all areas and your business is well
positioned for the future. Our strategic
      objectives•
	Revenue stimulation and cost reduction in Europe•
	Innovate and deliver on our customers total communications needs•
	Deliver strong growth in emerging markets•
	Actively manage our portfolio to maximise returns•
	Align capital structure and shareholder returns policy to strategy  The past 12 months have been an important period for Vodafone. We updated our strategy in 2006 to address changing customer needs, the availability of new technologies, a growing demand for broadband services and the
greater growth potential of emerging markets. This new strategy is positioning us well as competition and regulatory pressures increase and our customers have greater choice in communications. Operationally, we have grown new revenue streams across the Group and implemented
numerous programmes to significantly reduce our cost base. Our emerging markets
assets have continued to show strong growth and our recent acquisition in India
significantly increases our presence in high growth markets. Our customer franchise
was further strengthened both through organic growth and acquisition and now
exceeds 206 million proportionate customers. We have met or exceeded our stated financial expectations for the year in all
areas. Robust cash generation continues to support returns to our shareholders,
with dividends per share increasing by 11.4% to 6.76 pence per share, representing
a payout of 60% of our adjusted earnings per share. We have made good progress executing our
    updated strategy throughout the year and we are now beginning to realise
    some positive early results. We will remain focused on executing our strategic
    objectives in the year ahead and believe your business is well positioned
    to be the leader in the communications industry. Financial reviewStatutory revenue increased
    by 6% to £31.1 billion, with organic revenue growth of 4.3%. The Europe
    region, where competitive and regulatory pressure is most intense, delivered
    organic revenue growth of 1.4%. Continued strong progress in Spain, which
    delivered another year of double digit revenue growth, offset year on year
    declines in Germany and Italy. The market environment is challenging for all
    operators in Europe. However, we have outperformed our principal competitors
    in Germany and Spain on revenue and EBITDA growth, and have delivered a similar
    performance to our principal competitor in Italy. In the UK, we revised our
    tariffs mid-way through We have launched innovative
    offerings and are lowering our cost structure to position us well for the
  future


the year to improve our competitiveness and
    share of market growth. Our EMAPA region produced strong growth, with organic
   revenue up 21.1% and strong performances in many emerging markets. While overall voice revenue remains under pressure, messaging and, in particular
data revenue, continue to show strong organic growth of 7% and 31% respectively.
Data revenue reached £1.4 billion, primarily from business services and
the continued growth in the take up of 3G devices in our customer base, which
doubled to 15.9 million. Our focus on profitable growth delivered a 4.2% organic increase in adjusted
operating profit, with 1.4% growth in total. Strong performances in the US, Spain
and a number of emerging markets offset declines in our other major European
markets. We invested £4.2 billion in capital expenditure during the year and have
now achieved the core level of 3G and HSDPA coverage across our European networks
necessary for the wider uptake of high speed data services. Free cash flow generation
remained strong at £6.1 billion, although lower than last year, primarily
due to higher tax payments as expected. We now have an unrivalled global customer reach, with over 206 million proportionate
customers across 25 countries, adding over 35 million customers during the year.
We completed the sale of our operation in Japan in April 2006 and of our minority
interests in Belgium and Switzerland later in the year. In May 2006, we completed
the acquisition of the assets of Telsim in Turkey and more recently gained a
controlling position in a leading Indian
operator.  Delivering on our strategyIn May 2006, we introduced five new
strategic objectives to ensure our continued success. Our focus on executing
this strategy throughout the year has generated positive results across a number
of areas. Revenue stimulation and cost reduction in EuropeIn Europe, our focus is to drive additional usage and revenue from core mobile voice and messaging services and to reduce our cost base. Central to stimulating revenue is driving
mobile usage through larger minute bundles, innovative tariffs, prepaid to contract migrations and targeted promotions. We are also focused on leveraging our market leading position in the business segment, which represents 25% of our service revenue in Europe. New tariff options, such as free weekends, have been launched in the UK and Germany that stimulated usage and in Italy we ran successful
voice and messaging promotions duringthe
year that increased revenue per customer. We also continued to perform well in
Spain, driving an increase in total voice minutes of around 30%. However, pricing
pressure is expected to remain strong in the year ahead and improving price elasticity
is core to our revenue stimulation objective in Europe.




|6 | Vodafone Group PlcAnnual
        Report 2007
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Over 11 million customers now benefit from lower roaming pricing through Vodafone Passport and our European customers are now benefiting from our commitment to reduce roaming prices by 40% compared to summer 2005. We
expect roaming revenues to be lower year on year in 2008 due to the combined effect of Vodafones own initiatives and direct regulatory intervention. During the year, we began implementing the core cost reduction programmes we
developed last year. We have successfully outsourced IT application development
and maintenance and we are well on track to deliver expected unit cost savings
of approximately 25% to 30% within two to four years. We have also made faster
than expected progress on data centre consolidation, with anticipated savings
of 25% to 30% in one to two years. Centralisation of our network supply chain
management was also completed in April 2007 and is expected to reduce costs by
around £250 million within one year. In addition, we are seeking to reduce the longer term cost of ownership of our
networks through network sharing arrangements and have announced initiatives
in Spain and the UK. While many of these cost initiatives are multi-year programmes that are expected
to deliver significant benefits over time, we are focused on realising some early
savings in the year ahead and, for Europe and common functions, continue to target
a 10% mobile capital expenditure to revenue ratio next year, with broadly stable
mobile operating expenses compared to the 2006 financial year. Innovate and deliver on our customers total communications needsThere are several key initiatives
underway in this area and we expect these to begin to become more significant
to the Group towards the end of next year. As part of our drive to substitute fixed
    line usage with mobile, we have launched several fixed location pricing plans
    offering customers fixed line prices when they call from within or around
    their home or office. These offerings target fixed to mobile substitution
    from home and office environments and are proving popular with customers.
    Vodafone At Home and Vodafone Office are currently available in seven markets
    for consumers and twelve markets for businesses, with over three million
    and over two million customers respectively. Complementary to our high speed mobile broadband (HSDPA) offerings,Vodafone
is now offering fixed broadband services (DSL) in five markets. With the exception
of Arcor, our fixed line business in Germany, the provision of these services
to date has been on a resale basis. We will continue to develop our approach
for the provision and roll out of DSL services on a market by market basis and
in some cases may complement our resale approach by building or acquiring our
own infrastructure where the returns justify the
investment. We are also developing products and services to integrate the mobile and PC environments
by enhancing our Vodafone live! service and forming partnerships with leading
internet players. In the coming months, our customers will be able to experience
PC to mobile instant messaging with Yahoo! and Microsoft, search with Google,
auctions via eBay, videos through YouTube and social networking with MySpace,
all via their mobile. Mobile advertising is also a potentially significant future revenue stream for
our business. We have signed agreements with Yahoo! in the UK and leading providers
in Germany and Italy to enter into this new business through banner and content
based advertising. Deliver strong growth in emerging marketsOur focus is to build on our strong
track record of creating value in emerging markets. We have delivered further
strong growth in our existing operations in Egypt, Romania and South Africa.
Our recent acquisition in Turkey has performed ahead of our business plan at
the time of the acquisition, with strong revenue growth and better than expected
profitability. The acquisition of interests in Hutchison Essar accelerates Vodafones move
to a controlling position in a leading operator in India and significantly increases
our presence in emerging markets. With market penetration of around 14% and with
a population of over 1.1 billion, India provides a very significant opportunity
for future growth. We look forward to bringing Vodafones products, services
and brand to the Indian market.


Actively manage our portfolio to maximise returnsOur strategy is to invest only where
we can generate superior returns for our shareholders. We look to invest in markets
that offer a strong local position, with a focus on specific regions, with any
transactions
subject to strict financial investment criteria. India exposes us to one of the fastest
  growing communications markets in the world In line with this strategy, we executed
    a number of transactions during the year. We sold our non-controlling interests
    in Belgium and Switzerland at attractive valuations,
    with cash proceeds of £1.3 billion and £1.8 billion respectively.
    More recently, we increased our emerging markets presence with an additional
    4.8% interest in Vodafone Egypt
    and gained control in India for £5.5 billion in May 2007. We remain committed to our investment in Verizon
    Wireless in the US which continues to deliver strong performances on all key
    metrics, with record customer growth, due in part to a market leading low
    churn rate, and continued success in driving the uptake of non-voice services. Align capital structure and shareholder returns policy to strategyIn May 2006, we outlined a new capital
structure and returns policy consistent with the operational strategy of the
business, resulting in a targeted annual 60% payout of adjusted earnings per
share in the form of
dividends. We also moved to a higher level of gearing and, having returned over £19
billion to shareholders excluding dividends in the two previous financial years,
including a £9 billion one-off return in August 2006, we have no current
plans for further share purchases or one-time returns. The Board remains committed
to its existing policy of distributing 60% of adjusted earnings per share by
way of dividend. However, in recognition of the earnings dilution arising from
the Hutchison Essar acquisition, it has decided that it will target modest increases
in dividend per share in the near term until the payout ratio returns to 60%. Prospects for the year aheadOur focus in the year ahead
will be on improving price elasticity in Europe, achieving more savings from
our cost reduction programmes, delivering on our total communications strategy
and beginning to realise the very
significant growth opportunity in India. We expect market conditions to remain challenging for the year ahead in Europe,
notwithstanding continued positive trends in data revenue and voice usage. Overall
growth prospects for the EMAPA region remain strong due to increasing market
penetration and they are further enhanced by the recent acquisition in India. Against this background, Group revenue is expected to be in the range of £33.3
billion to £34.1 billion, with adjusted operating profit in the range of £9.3
billion to £9.8 billion. Capital expenditure on fixed assets is anticipated
to be in the range of £4.7 billion to £5.1 billion, including in excess
of £1.0 billion in India. Free cash flow is expected to be £4.0 billion
to £4.5 billion, after taking into
account £0.6 billion of payments related to long standing tax issues, a
net cash outflow of £0.8 billion in respect of India and a £0.5 billion
outflow from items rolling over from 2007. We have completed the first year under our new strategy and I am excited by the
start we have made. We have made good progress towards fulfilling our total communications
vision and this is a journey that we are all
looking forward to taking at Vodafone. We are well placed to continue executing our strategy in the year ahead, to deliver
the core benefits of mobility to our customers and to generate superior returns
for our shareholders. Arun sarinChief Executive




|Vodafone
            Group Plc Annual Report 2007 | 7
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Delivering on Our Strategic Objectives

| |                                                                                                                                                                                                                                                                                                                              |  | tariffs, prepaid to contract migrations
          and targeted promotions, with a key focus also on leveraging Vodafones
          market leading presence across Europe in the business segment, which
          represents around 25% of service revenue. Vodafones unique presence
          also allows it to offer Pan-European products and services such as
          Vodafone Passport for roaming customers. Whilst
          usage growth in the year was strong, pricing pressure continues to
          be high and the Groups key focus is to improve the overall price
          elasticity of its offerings in the market place.
          The Group has established several
              core cost reduction programmes, leveraging the benefits of its
          local and |  | regional scale. Key initiatives have focused on the outsourcing and centralisation
      of certain activities, as well as network sharing arrangements with other
      operators.
        Summer promotions driving usage
                in ItalyOver 3 million customers
        benefited from successful summer promotions in Italy which stimulated
        voice and messaging usage and revenue. For a monthly fee and per call
        set up charge, customers were able to make calls and send messages for
        free to other Vodafone customers. Customers in the voice promotion generated
        22% more ARPU than before and 9% more in the messaging promotion. | 
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | Revenue
      stimulation and cost reduction in Europe                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | The Groups
          strategy is to drive additional usage and revenue from core mobile
          voice and messaging services, which represents around 80% of revenue
          in Europe
    today, and to reduce its cost base.
    Today, around one third of voice traffic
      is carried over mobile networks, with |  | Vodafones
          customers only using their mobiles for approximately 140 minutes on
          average per month. This provides a significant opportunity to drive
          greater voice
    usage onto mobile.
      The
            Group has launched a number of initiatives
      to achieve this through larger minute bundles, innovative                                                                                                                                                                                                                                                                                                                                                                                                                                         
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| |                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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| | Innovate and deliver on our customers total
    communications needs                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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| | The communications environment
          is constantly evolving and Vodafone is at the forefront of this change.Customers
          are increasingly looking for one supplier to address all their needs,
          whether that is for mobile or fixed services.
    The Group is increasingly targeting its
        propositions on replacing traditional fixed line providers in the home
        or office, as well as developing new and innovative ways for customers
        to enjoy the benefits of
mobility. |  | Vodafone
          is already delivering broadband and data services to customers and,
          together with industry leading partners, will shortly be driving new
          revenue streams from opening up the internet to the mobile and from
          mobile advertising.
    In total, the Group expects its total
        communications initiatives to represent approximately 20% of Group revenue
        in three years time, increasing from approximately 10% for the
    2007 financial year.
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|                                                                                                                                                                                                                                                                                                                     | Deliver strong growth in emerging
    markets |                                                                                                                                                                                                                                                                                                                       | Egypt,
          Romania and South Africa, with Turkey performing ahead of the business
          plan at the time of the acquisition.
    As a result of the Groups increased
        presence in emerging markets, the proportion of Group EBITDA from the
        EMAPA region is expected to increase from 19% this year to around 33%
      in five years time. |  | Vodafone
          will continue to seek selective opportunities to increase its emerging
          markets footprint as well as taking opportunities to increase its stakes
          in existing markets, with a view to gaining control over
  time.
    Romania: Market leader for
            business servicesVodafone extended its
    leadership in the business segment in Romania during the year, with 38% growth
    in business customers giving a market share of 42%. Key to success has been
    its integrated mobile and fixed communications solution which delivered over
    50% revenue growth in the year and now represents one third of business revenues. | 
|                                                                                                                                                                                                                                                                                                                     |                                               |                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|The
          Groups focus is to build on its strong track record of creating
          value in emerging markets where average market penetration is relatively
    low, offering significant customer and revenue growth potential.
    In the last 12 months, Vodafone has
      gained control of businesses in |                                               | Turkey,
          with a population of 70 million, and in India, with a population of
          1.1 billion, adding to the Groups existing emerging market presence
          in parts of the Middle East, Africa and Eastern Europe.
    During the 2007 financial year, the Group
      saw strong performances in |                                                                                                                                                                                                                                                                                                                                                                        | 
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|                                                                                                                                                                                                                                                                                                                     |                                               |                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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|                                                                                                                                                                                                                                                                                                                     |                                               |                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 

| | EMAPA region  annual growth for 2007 | Reported | Organic                                                                                                                                                                                                 | 
| | ------------------------------------- | -------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |                                       |          |                                                                                                                                                                                                         | 
| | Closing customers                     | 55%      | 27%                                                                                                                                                                                                     | 
| |                                       |          |                                                                                                                                                                                                         | 
| | Revenue                               | 41%      | 21%                                                                                                                                                                                                     | 
| |                                       |          |                                                                                                                                                                                                         | 
| |                                       |          | Where applicable, growth percentages are stated
        on local currency and are calculated by applying the Groups current
        equity interest to the whole of the 2007 and 2006 financial years.



|8 | Vodafone Group PlcAnnual
        Report 2007
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| | Innovative tariffs delivering
            market leading performance in SpainThe Vitamina tariff in Spain
      offers a single, any network, any time price for prepaid and contract customers,
      together with attractive add-on options, such as talking for 60 minutes
      but only paying for one and half price SMS, that target different customer
      needs. Over 50% of the Vodafone Spain customer base is now on a Vitamina
      tariff, driving an increase in voice usage of around 30% and 13% growth
      in revenue in local currency.
      Market leader in business services
        in the UKVodafone is the clear
        market leader for business services in the UK, increasing its market
      share during |  | the year by around 4
          percentage points to 46%. Key success factors have been customer focused
          propositions, in particular tariffs for small and medium sized businesses,
          as well as mobile data products such as 3G broadband USB modems and
          mobile connect data cards (where Vodafone has 55% market share), and
          mobile email solutions such as BlackBerry® from Vodafone.
    Vodafone PassportOver 11 million customers
    now benefit from lower roaming pricing through Vodafone Passport since it
    was first launched in 2005, helping Vodafone to reduce the average cost of
    voice roaming in Europe for its customers
by 40% compared to |  | summer 2005. Around 50%
          of all roaming minutes in Europe are now on Vodafone Passport.
    Cost reductionNetwork sharing with other
    operators is generally intended to reduce the number of base stations that
    each operator owns and maintains whilst retaining an independent high quality
    service to customers. Sharing arrangements have been announced for rural
    areas in Spain and a memorandum of understanding has been agreed to share
    across the UK. These activities are expected to lead to savings in operating
    expenses and capital expenditure over time, as well as reducing Vodafones
    impact on the environment. |  | OutsourcingVodafone can realise
      the benefits of outsourcing certain functions, such as IT applications,
      to industry leading partners for a lower cost than keeping the operations
      within the Group.
    PurchasingVodafone has centralised
    the bulk purchasing of handsets and key network components for many years
    to generate purchasing efficiencies. More recently, the Group extended this
    activity by centralising all purchasing activities for its networks, IT and
    service platforms to realise further savings. | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                | 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
| | The internet on your mobileThe internet is becoming
      increasingly important for customers, with rising numbers of users and
      increasing amount and frequency of use. Customers spend a significant proportion
      of their time communicating online, either through traditional email and
      instant messaging or through the relatively new phenomena of social networking
      and file sharing.
    Part of the Groups total communications
        strategy is to develop products and services that enable customers to
        use the internet on their mobiles in much the same way as they use it
        on their PC. In order to do
this, the Group has |  |  |  | partnered with some of the most significant
          internet companies to mobilise their services in a way that is seamless
    to customers.
    Driving usage in the homeThe Vodafone Zuhause range
    of products in Germany offers a competitively priced alternative to fixed
    line pricing by recognising when a customer is within the home zone area.
    Vodafone Zuhause customers have reached 2.4 million, with significant increases
    in household usage and improvements in customer spend per household. |  | Delivering DSLArcor is the leading alternative
    fixed line provider in Germany, with 2.1 million DSL customers and revenue
    growth of 10% for the year. Arcor is also enabling Vodafone Germany to offer
    DSL services to its mobile customers as well as providing a centre of excellence
    for DSL for the Group. | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                | 



|                                                                                                                                                                                                                             | Egypt: Improved
                customer value with Super DardashaLower prepaid prices
        in Egypt with the Super Dardasha tariff launched in July 2006 has led
        to a significant increase in the number of prepaid customers and their
        usage, driving a 25% rise in prepaid ARPU this year and 85% growth in
        prepaid revenue. 75% of prepaid customers are now on the Super Dardasha
        tariff.
      Turkey: Successful rebranding
              to VodafoneThe transition to the
      Vodafone brand was successfully completed ahead of plan in Turkey in March
      2007, after a period of necessary investment in the network and customer
      services following completion of the acquisition in May 2006. |                                                                                                                     | South Africa: Driving
              growth in non-voice revenueNon-voice revenue increased
      by 33% this year, driven by both messaging and data services, and now represents
      over 8% of service revenue. Increasing 3G and HSDPA network coverage is
      enabling a wider data offering to customers, such as the Vodafone Mobile
      Connect card and the Vodafone Mobile Connect USB modem, and delivering
      a fast and reliable mobile alternative to fixed-line connectivity in South
    Africa where fixed line services are available to only 10% of the population. |  |  |  |  | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  |  | 
|IndiaVodafone has gained control
    of a leading operator in the attractive and fast growing Indian mobile market,
    with already over 27 million customers and nationwide market share of around
    16%. In a market of |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 1.1 billion people and mobile penetration
    of only around 14%, the opportunity for future growth is significant.
|                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                    
|Revenue growth                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                    
|                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                    
|Romania                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 28%                                                                                                                
|                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                    
|Egypt                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 41%                                                                                                                
|                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                    
|Turkey                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 37%                                                                                                                
|                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                    
|South Africa                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 22%                                                                                                                
|                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                    
|India                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | >50%                                                                                                               
|                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  |  |  | 
|                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  |  |  | 



|Vodafone Group Plc Annual Report
        2007 | 9
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ContentsPageBusiness Overview
	10 Who We Are
	10 Where We Operate
	10 What We Offer Our Customers
	14 How We Deliver Our Services
	17 Our Technology and Resources
	19 How We Developed
	22Regulation
	24  Business Overview Who We Are Vodafone is a world leader in providing voice and data communications services for both consumer and enterprise customers, with a significant presence in Europe, the Middle East, Africa, Asia, Pacific and the United States.
The Group is structured into two regions to address the different business challenges inherent in them. At 31 March 2007, based on the registered customers of mobile communications
ventures in which it had equity interests at that date, the Group had approximately
206.4 million proportionate customers. The Company has equity interests in 25 countries,
    through its subsidiary undertakings, joint ventures, associated undertakings
    and investments. Partner Market arrangements extend the Groups footprint
  to a further 38 countries. The table on page 13 sets out a summary of the Groups worldwide mobile
operations at 31 March 2007 and venture customer growth, being growth based on
100% of the operations customer base, in the year then ended
(the 2007 financial year). Through its mobile businesses, the Group provides a wide range of mobile communications
services, including voice, text messages (SMS), picture messages
(MMS) and other data services, and is continually developing and
enhancing service offerings, particularly through third generation (3G)
mobile technology which has been deployed in the majority of the Groups
operations. Services are provided to both consumers and corporate customers,
through a variety of both prepaid and contract tariff arrangements. The Groups mobile services are currently offered over a Global System for
Mobile Communications (GSM) network, on which a General Packet Radio
Service (GPRS) is also provided and, in certain operations, over
a Wideband Code Division Multiple Access (W-CDMA) 3G network. Where
3G licences have been issued, the Group has secured such licences in jurisdictions
in which it operates through its subsidiary undertakings. Vodafone offered 3G
services in 14 of its controlled operations at 31 March 2007. In line with the Groups strategy, the Group is increasingly focusing on
developing total communications solutions for customers, making use of the evolving
technological changes which provide a far greater choice in services, whilst
maintaining a mobile centric approach, focusing on the core benefits to customers
of mobility and personalisation. As part of these offerings, the Group now offers
fixed broadband connectivity as part of the total communications solution in
a number of markets in which it operates.


The Group has a controlling interest in a fixed line telecommunications service
provider in Germany, with fixed line services in other markets typically provided
using wholesale relationships with infrastructure
providers. During the year the Group was ranked number one in the 2006 Global Accountability
Rating, which measures how companies have built responsible business practices,
emphasising Vodafones commitment to Corporate and
Social Responsibility. The Companys ordinary shares are listed on the London Stock Exchange and
the Companys ADSs are listed on the New York Stock Exchange (NYSE).
The Company had a total market capitalisation of
approximately £80 billion at 25 May 2007, making it the third largest company
in the Financial Times Stock Exchange 100 (FTSE 100) index and the
twenty second largest company in the world based on market capitalisation at
that
date. Where We Operate The Group is managed and organised through two geographic regions  Europe
and EMAPA (Eastern Europe, Middle East, Africa and Asia, Pacific and Affiliates)  with
the objective of aligning operations with the
Groups strategy and focusing the Groups businesses according to different
market and customer requirements. In addition, there are a number of central functions, which are referred to as
Common Functions, which provide services to the Groups operations and allow
the Group to leverage its scale and scope and manage risk
effectively. EuropeEurope
includes the Groups principal mobile subsidiaries, located inGermany,
Spain and the UK, its joint venture in Italy, as well as the Groups 73.7%
controlling interest in a fixed line telecommunications business in Germany.
Other businesses in the European region comprise the
Groups other subsidiaries in this geographic area, being Albania, Greece,
Ireland, Malta, Netherlands and Portugal. The Groups mobile subsidiaries in Europe and joint venture in Italy operate
under the brand name Vodafone. The Groups fixed line subsidiary
operates as Arcor. Arcor is the second largest fixed line telecommunications
provider in Germany and offers its customers a range of services for voice and
data transfer, based on its own Germany-wide networks, with a focus on direct
access based broadband and internet protocol enabled virtual private network
(IP-VPN) products. The mobile market share of the Groups operators in its principal markets,
based on publicly available information, is estimated as follows:




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| | Business
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EMAPAThe EMAPA region covers Eastern Europe,
    Middle East, Africa and Asia, Pacific and Affiliates, and includes the Groups
    subsidiary operations in the Czech Republic, Hungary, Romania, Turkey, Egypt,
    Australia and New Zealand, joint ventures in Poland, Kenya, South Africa and
    Fiji, associated undertakings in France and the US and the Groups investments
    in China and India. The Groups subsidiaries in EMAPA operate under the Vodafone brand. The joint ventures, associated undertakings and investments operate under the following brands: China  China Mobile; Fiji
 Vodafone; France  SFR and Neuf Cegetel; India  Airtel; Kenya  Safaricom; Poland  Plus GSM; South Africa  Vodacom; US  Verizon Wireless. On 8 May 2007, the Group completed its acquisition of a controlling interest in Hutchison Essar Limited (Hutchison Essar), a mobile telecommunications operator in the Indian market, which operates under the
Hutch brand. EMAPAs results include the results from non-mobile telecommunications businesses. The Group has a 17.91% indirect ownership in Neuf Cegetel, the leading alternative operator for fixed telecommunication services
in France, offering a wide range of fixed line services to residential and business customers as well as special corporate services ranging from internet and customer relations management to internet and intranet hosting services. The Group also has
a direct and indirect interest constituting in aggregate a 9.99% ownership in Bharti Airtel, an Indian based mobile and fixed line telecommunications operation with three strategic business units, mobile services, broadband and telephone services
and enterprise services. In conjunction with the acquisition of Hutchison Essar Limited, a Bharti Group entity agreed on 9 May 2007 to acquire 5.60% of Bharti Airtel from the Group. Following the completion of this sale, the Group will continue to
hold an indirect stake of 4.39% in Bharti Airtel. The mobile market share of the Groups
    operators in its most significant EMAPA markets, based on publicly available
    information, is estimated as follows: Customer
        market share (%)At 31 December
        2006


CompetitionThe Group faces significant competition
    in each of its geographic markets. It is subject to indirect competition from
    providers of other communications services in the domestic markets in which
    it operates in addition to direct competition from existing mobile communications
    network operators and mobile virtual network operators (MVNOs)
    who do not operate a mobile telecommunications network. There are also new
    types of competitors, such as fixed line operators offering combined fixed
    and mobile service offerings, and internet based companies extending their
    services to include telecommunications. Competitive pressures impact the level
    of customer churn, which the Group seeks to manage by a continued focus on
    tariffs and customer acquisition and retention initiatives. The Group expects that competition will continue from existing operators as well as from a number of new market entrants, including those arising following the award of new 3G licences and MVNOs. The scope of this
increased competition, and the impact on the results of operations, is discussed further in Performance  Risk Factors, Seasonality and Outlook. Many of Vodafones key markets are highly
    penetrated, some with penetration rates of over 100% due to a number of customers
    owning more than one subscriber identity module (SIM), which is,
    broadly, the Groups basis for defining a mobile customer. The penetration
    rates for the Groups operations in its principal markets, based on publicly
    available information, is estimated as follows: Estimated
        penetration  Europe (%)At 31 December
        2006Estimated
        penetration  EMAPA (%)At 31 December
        2006




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      2007 | 11
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Business Overviewcontinued Partner MarketsPartner Markets are operations in which
    the Group has entered into a partnership agreement with a local mobile operator,
    enabling a range of Vodafones global products and services to be marketed
    in that operators territory. Under the terms of these Partner Market
    agreements, the Group and its partners co-operate in the development and marketing
    of certain services, often under dual brand logos. The Groups Partner
    Market strategy enables the Group to implement its global services in new
    territories, extend its brand reach into new markets and create additional
    revenue without the need for equity investment. Similar arrangements also exist with a number
    of the Groups joint ventures, associated undertakings and investments. The results of Partner Markets are included
    within Common Functions. Partnership agreements in place as at 31 March 2007,
    excluding those with the Groups joint ventures, associated undertakings
    and investments, are as follows: Country
      Operator
      
      Country
      OperatorArgentina
      CTI Móvil(1)
      
      Iceland
      VodafoneAustria
      A1
      
      Indonesia
      XLBahrain
      MTC-Vodafone
      
      Jersey
      Jersey Airtel(Bahrain)
      
      Kuwait
      MTC-VodafoneBelgium
      Proximus
      
      Latvia
      BITE LatvijaBermuda
      Digicel
      
      Lithuania
      BitéBrazil
      Claro(1)
      
      Luxembourg
      LUXGSMBulgaria
      Mobiltel
      
      Malaysia
      CelcomCaribbean(2)
      Digicel
      
      Mexico
      Telcel(1)Chile
      Claro(1)
      
      Nicaragua
      Claro(1)Colombia
      Comcel(1)
      
      Norway
      TDC SongCroatia
      VIPnet
      
      Paraguay
      CTI MóvilCyprus
      Cytamobile-
      
      
      Paraguay(1)Vodafone
      
      Peru
      Claro Peru(1)Denmark
      TDC Mobil
      
      Samoa
      DigicelEcuador
      Porta(1)
      
      Singapore
      Mobile OneEl Salvador
      Claro(1)
      
      Solvenia
      Si.mobile-vodafoneEstonia
      Elisa
      
      Sri Lanka
      DialogFinland
      Elisa
      
      Sweden
      TelenorGuatemala
      Claro(1)
      
      Switzerland
      SwisscomHonduras
      Claro(1)
      
      Uruguay
      CTI Móvil Uruguay(1)Hong Kong
      SmarTone-Vodafone Notes:(1)
      Partnership through America Móvil.(2)
      This includes the following countries:
        Anguilla, Antigua and Barbuda, Aruba, Barbados, Bonaire, Curacao, the
        Cayman Islands, Dominica, French West Indies, Grenada, Jamaica, Haiti,
        St Lucia, St Kitts and Nevis, St Vincent, Trinidad and Tobago, Turks and
        Caicos and British Guyana.




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Summary of Group mobile communications businesses
  at 31 March 2007A summary of the Groups businesses
  and significant mobile operators in each of Vodafones markets at 31 March
  2007 is provided in the following table. Arcors principal competitor in
  the German fixed line market is T-Com.

|                                 |            |     |              |   |          |      |               |      | Controlled  |   |            |      |                                                      |    
|-------------------------------- | ---------- | --- | ------------ | - | -------- | ---- | ------------- | ---- | ----------- | - | ---------- | ---- | ---------------------------------------------------- | ---
|                                 |            |     |              |   | Venture  |      | Registered    |      | and jointly |   |            |      |                                                      |    
|                                 |            |     | Venture      |   | customer |      | proportionate |      | controlled  |   | Registered |      |                                                      |    
|                                 | Percentage |     | customers(2) |   | growth   |      | customers     |      | customers   |   | prepaid    |      |                                                      |    
|Country by region                | ownership  | (1) | (000        | ) | (%       | )(3) | (000         | )    | (000       | ) | (%         | )(4) | Names of other significant
      mobile operators(5) |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|EUROPE                           |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Germany                          | 100.0      |     | 30,818       |   | 5.6      |      | 30,818        |      | 30,818      |   | 54.4       |      | e-Plus, O2
      , T-Mobile                          |    
|Italy                            | 76.9       |     | 27,366       |   | 13.8     |      | 21,034        |      | 21,034      |   | 92.0       |      | TIM, Wind, 3                                         |    
|Spain                            | 100.0      |     | 14,893       |   | 10.1     |      | 14,893        |      | 14,893      |   | 45.2       |      | Orange, Telefónica
      Móviles, Yoigo              |    
|UK                               | 100.0      |     | 17,411       |   | 6.8      |      | 17,411        |      | 17,411      |   | 60.7       |      | Orange, O2 , T-Mobile,
      3, Virgin Mobile        |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Other Europe                     |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Albania                          | 99.9       |     | 956          |   | 23.7     |      | 955           |      | 956         |   | 96.6       |      | AMC                                                  |    
|Greece                           | 99.9       |     | 5,057        |   | 12.9     |      | 5,051         |      | 5,057       |   | 69.2       |      | Cosmote, Q-Telecom, TIM                              |    
|Ireland                          | 100.0      |     | 2,177        |   | 4.9      |      | 2,177         |      | 2,177       |   | 73.3       |      | Meteor, O2 , 3                                       |    
|Malta                            | 100.0      |     | 186          |   | 6.4      |      | 186           |      | 186         |   | 89.6       |      | Go Mobile                                            |    
|Netherlands                      | 100.0      |     | 3,880        |   | (0.8     | )    | 3,880         |      | 3,880       |   | 45.3       |      | KPN Mobile, Orange, T-Mobile,
      Telfort          | (6)
|Portugal                         | 100.0      |     | 4,751        |   | 11.1     |      | 4,751         |      | 4,751       |   | 79.0       |      | Optimus(7), TMN(7)                                   |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Other Europe total               |            |     | 17,007       |   | 8.4      |      | 17,000        |      | 17,007      |   | 68.8       |      |                                                      |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Europe total                     |            |     | 107,495      |   | 8.8      |      | 101,156       |      | 101,163     |   | 66.0       |      |                                                      |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|EMAPA                            |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Eastern Europe                   |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Czech Republic                   | 100.0      |     | 2,475        |   | 11.8     |      | 2,475         |      | 2,475       |   | 47.5       |      | T-Mobile, Telefonica O2                              |    
|Hungary                          | 100.0      |     | 2,163        |   | 4.8      |      | 2,163         |      | 2,163       |   | 61.1       |      | Pannon GSM, T-Mobile                                 |    
|Poland                           | 19.6       |     | 12,661       |   | 29.5     |      | 2,483         |      | 2,483       |   | 59.8       |      | Orange, ERA                                          |    
|Romania                          | 100.0      |     | 7,954        |   | 24.6     |      | 7,954         |      | 7,954       |   | 66.2       |      | Orange, Cosmote, Zapp                                |    
|Turkey                           | 100.0      |     | 13,900       |   |         |      | 13,900        |      | 13,900      |   | 90.1       |      | Turkcell, Avea                                       |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Eastern Europe total             |            |     | 39,153       |   | 91.6     |      | 28,975        |      | 28,975      |   | 71.2       |      |                                                      |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Middle East, Africa, Asia        |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Egypt                            | 54.9       |     | 9,652        |   | 45.9     |      | 5,299         |      | 9,652       |   | 93.8       |      | MobiNil                                              | (8)
|Kenya                            | 35.0       |     | 6,082        |   | 54.2     |      | 2,129         |      | 2,433       |   | 98.5       |      | Celtel                                               | (9)
|South Africa(10)                 | 50.0       |     | 30,149       |   | 28.2     |      | 13,835        | (11) | 15,075      |   | 89.4       |      | Cell C, MTN, Celtel, DRC                             |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Middle East, Africa, Asia total  |            |     | 45,883       |   | 34.6     |      | 21,263        |      | 27,160      |   | 91.5       |      |                                                      |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Pacific                          |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Australia                        | 100.0      |     | 3,367        |   | 6.0      |      | 3,367         |      | 3,367       |   | 73.6       |      | Optus, Telstra, 3                                    |    
|Fiji                             | 49.0       |     | 285          |   | 38.2     |      | 139           |      | 139         |   | 95.3       |      |                                                     |    
|New Zealand                      | 100.0      |     | 2,244        |   | 8.5      |      | 2,244         |      | 2,244       |   | 75.8       |      | Telecom New Zealand                                  |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Pacific total                    |            |     | 5,896        |   | 8.2      |      | 5,750         |      | 5,750       |   | 75.4       |      |                                                      |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Associates and investments       |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|US                               | 45.0       |     | 60,716       |   | 14.5     |      | 27,322        |      |            |   |           |      | National operators(12):
      Cingular,              |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      | Sprint Nextel, T-Mobile                              |    
|China                            | 3.3        |     | 316,120      |   | 21.3     |      | 10,337        |      |            |   |           |      | China Netcom, China Telecom,                         |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      | China Unicom                                         |    
|France                           | 44.0       |     | 17,881       |   | 3.5      |      | 7,876         |      |            |   |           |      | Bouygues Telecom, Orange                             |    
|India(13)                        | 9.99       |     | 37,141       |   | 89.7     |      | 3,714         |      |            |   |           |      | Hutch, Idea, BSNL/MTNL,                              |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      | Reliance Infocom, Tata Teleservices                  |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Associates and investments total |            |     | 431,858      |   | 20.2     |      | 49,249        |      |            |   |           |      |                                                      |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|EMAPA total                      |            |     | 522,790      |   | 24.7     |      | 105,237       |      | 61,885      |   | 81.7       |      |                                                      |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    
|Group total                      |            |     | 630,285      |   | 21.7     |      | 206,393       |      | 163,048     |   | 73.2       |      |                                                      |    
|                                 |            |     |              |   |          |      |               |      |             |   |            |      |                                                      |    

|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   
|(5)   
|(6)   
|(7)   
|(8)   
|(9)   
|(10)  
|(11)  
|(12)  
|(13)  



|Vodafone Group Plc Annual Report
      2007 | 13
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Back to Contents

Business Overviewcontinued

What We Offer Our Customers Vodafone offers a wide variety of products and services to its customers. Traditionally, this has been through the provision of voice services allowing customers to make and receive calls whilst at home and abroad. Messaging
services are also offered which allow customers to send and receive SMS and MMS messages and, more recently, email and instant messaging services have been provided in a number of the Groups operations. Various data services are now provided in many of the Groups operations, allowing customers to access internet services, watch mobile TV and download games, ringtones, music and other content onto their mobile phones,
while Vodafone Mobile Connect data cards allow people to access the internet, corporate intranets and their emails whilst on the move using their notebooks. During the current financial year, the Group has been executing on its total communications
strategy through fixed location based services, enhanced mobile data and internet services, and DSL offerings.  Voice servicesVoice services continue to make up the
  largest portion of the Groups revenue. The Group has undertaken a wide
  range of activities to stimulate growth in voice usage in the past year. These
  activities range from improvements of basic tariff designs to launching differentiated
  voice offerings such as Vodafone At Home, which is described in more detail
  below. Voice minutes usage growth
    for the Groups principal mobile markets(1)  Note:(1)
    Total statutory voice minutes
      per year for Germany, Italy, Spain and UK.


A continuing increase in the level of competition
    and further pressure on voice prices in the Western European markets have
    challenged the Group to be innovative in ways to deliver more value for money
    to customers. By introducing voice offerings that enable customers to significantly
    increase their usage whilst only having to commit to a small incremental fee,
    the Group has strengthened the role of the mobile as a primary method of telecommunication. Customers now have more freedom to use their
    mobile in ways that offer them more value depending on their particular communication
    needs. Differentiated, targeted tariffs launched in local markets include
    offers such as closed user group calling for business customers and designated
    free numbers or family offers for consumer customers. The launch of new, low-end
    contract offers has unlocked increased voice usage through lower rates per
    minute. In emerging markets the Group has seen the
    positive development of voice usage, which is partly driven by economic growth
    and is partly the result of providing mobile communication to a wider population
    through improved entry level offers. The majority of the Groups customers
    in these regions use prepaid services. In order to deliver more value to customers,
    the Group has offered different promotions that reward frequent or high credit
    top-ups. In emerging markets with limited fixed infrastructure, mobile phones
    are often the only telecommunications option. Here the Group seeks to continue
    to improve its service offerings, making services more broadly available and
    encouraging greater use. Fixed location
    based servicesThe Group is delivering on
    customers total communications needs and driving greater voice usage
    through offering integrated communications services. Vodafone At HomeVodafone At Home comprises a range
    of offers designed to introduce Vodafone into the household as a total communications
    provider. Vodafone At Home voice propositions offer customers the opportunity
    to satisfy their communication needs through one operator and with a single
    device. Vodafone At Home voice offerings include zonal
    tariff and fixed line telephony and had 3.25 million customers as at 31 March
    2007. With a zonal tariff the customer can make calls from a defined Vodafone
    At Home geographical area to fixed line numbers and, depending on the offer,
    other destinations (for example on Vodafone mobile networks), at rates similar
    to fixed line providers. In addition, the customers obtain a fixed line number
    to enable them to receive incoming calls when within the Vodafone At Home
    geographical area. At 31 March 2007, zonal tariffs had been launched in five
    markets  Germany, Italy, France, Hungary and Portugal. Fixed line telephony offers a customer traditional
    fixed line calls via public switched telephone networks (PSTN).
    At 31 March 2007, this offer had been launched in two markets; in the UK as
    part of the DSL offering and in New Zealand. Vodafone OfficeVodafone Office is the umbrella
    name for a series of products and services designed to meet all our business
    customers communications needs. Vodafone Wireless Office provides companies
    the opportunity to reduce their number of fixed desk phones, facilitating
    the transfer of voice minutes from the fixed to the mobile network. The solution
    includes a closed user group tariff, allowing employees to call each other
    for a flat monthly fee. In three markets, Germany, Spain and Portugal, the
    offer has been expanded to include location-based office-zone charging, giving
    preferential rates when calling from an office location. Additionally, in
    these markets, geographic numbers have been introduced, enabling further fixed
    mobile substitution. At 31 March 2007, Vodafone Wireless Office
  was available in 14 markets and had over two million customers.




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Voice roamingWhen travelling abroad, roaming allows
  mobile phone users to make and receive calls using a mobile network in the country
  they are visiting. The Group continued to expand its roaming coverage and services
  during the 2007 financial year. The focus was to provide reduced, clearer and
  easier to understand prices to our customers under the Vodafone Travel Promise
  roaming campaign launched in May 2005. On 8 May 2006, the Group announced that by April 2007, when compared to the period from June to August 2005, average European roaming voice cost for Vodafone customers would be cut by at least 40%. This has been
achieved and is expected to benefit over 30 million Vodafone customers who roam every year. During the year, commercial management of wholesale roaming relationships with the Groups main roaming partners has resulted in a number of important wholesale discount agreements. These provide cost structures
that support the development of our retail propositions, promote the mutual development of roaming services with our Partner Markets and deliver significant cost savings as well as securing revenue from the customers of Partner Market networks using
Vodafones networks. The cost per minute to Vodafone is now 45 eurocents or lower for more than 90% of Vodafones European traffic. Managed roaming is also now operating in 13 markets. This network technology automatically directs Vodafone customers to the Vodafone networks or networks of Partner Markets, delivering a strong Vodafone customer
experience and allowing the Group to benefit from an improved cost structure. Vodafone PassportThe success of Vodafone Passport
    continued throughout the year and, at 31 March 2007, the service had attracted
    12.7 million customers across 17 markets. Vodafone Passport enables customers to take their home tariff abroad, offering greater price transparency and certainty to customers when using roaming services abroad. Whilst abroad, customers can make
calls using their domestic tariff, in some cases including free minute bundles, and receive calls at no charge  for a one-off connection fee per call. Customer usage patterns continue to show that, on average, Vodafone Passport customers both talk more and pay less per call when abroad. Messaging servicesAll of the Groups mobile operations
    offer messaging services, which allow customers to send and receive messages
    using mobile handsets and various other devices. Messaging usage grew 34.0%
    in the year to 31 March 2007 and was driven by increased customer activity,
    due to the network effect of a larger user community, and a shift from price
    per message to bundled fees, a fixed price for a specified number of messages.
    MMS, which offers customers the ability to send and receive multiple media,
    such as pictures, music, sound, video and text, to and from other compatible
    devices is also available in all Group mobile operations. MMS has enjoyed
    strong revenue growth in the 2007 financial year across the Group through
    improved handset camera capabilities. SMS usage growth for the
    Groups principal mobile markets(1)  Note:(1)
    Total SMSs (billions) sent per year for
      Germany, Italy, Spain and UK.


Data servicesThe Group offers a number of products
  and services to enhance customers access to data services, including Vodafone
  live! for consumers, as well as a suite of products for business users consisting
  of Vodafone Mobile Connect data cards, internet based email solutions and Vodafone
  Office. Vodafone live!Vodafone live!, the Groups
  content and internet services proposition, has been launched in four additional
  markets since 31 March 2006, Czech Republic, Romania, Turkey and Bulgaria, bringing
  the total number of countries in which Vodafone live! is offered to 28. Vodafone has continued to develop the Vodafone live! offering by improving the handset user experience, making it faster and easier to find content and lowering barriers to regular use through more transparent and
better value tariffs. The design of the Vodafone live! portal, through which customers can access a range of online services including games, ringtones, news, sports and information, is being continually enhanced to provide richer content and to
make it easier for customers to find and purchase content. During the 2007 financial year, 18 new 2.5G phones were added to the Vodafone live! portfolio, with a sustained emphasis on exclusive and customised devices. Vodafone live! with
    3GVodafone live! with 3G is now
  available in 21 markets, including launches in Hungary, Malta, Romania and Bulgaria
  in the 2007 financial year. This enhanced version of the proposition delivers
  all the content and portal services of 2.5G, with richer media services, such
  as music on demand and mobile TV, enabled by the faster network capabilities
  of 3G. In addition, 18 of these markets with Vodafone live! with 3G have now deployed the even faster capabilities of 3G Broadband/HSDPA. At 31 March 2007, there were 15.9 million devices registered on the controlled and
jointly controlled networks capable of accessing the Vodafone live! with 3G portal. During the 2007 financial year, 30 new 3G phones were added to the Vodafone live! portfolio. The latest 3G devices are now similar in design to 2.5G handsets and have improved battery performance, thereby overcoming
barriers that were experienced by earlier phone generations. Supported by significantly lowered entry level pricing and exclusive devices from all major vendors, about 30% of Vodafone live! gross additions in Europe are now connected on 3G
devices. Vodafone has continued to improve offerings available by developing further insights into customer needs around TV, music and mobile internet. For example, an improved user interface has been developed for the Mobile
TV service, delivering improved channel switching and navigation. This was first deployed in Vodafone Germany in October 2006 and is being rolled out to other Vodafone networks. Vodafone Italy launched Vodafones first mobile broadcast TV
service using DVB-H technology and spectrum in December 2006. Vodafone is continuing to work with major international and national media brands to grow the existing market through breadth of appeal and prove the concepts of future revenue streams
such as video on demand, interactivity and advertising-funding. Key partners include Time Warner, News Corp, NBC, Universal and Sony. Content from all of these companies complements national content brands. The Vodafone live! with 3G service also supports full track music downloads, which allow customers to use their phone to listen to music, choosing from a catalogue of more than 750,000 music tracks. Vodafone has
secured music from some of the worlds greatest artists through agreements with Sony BMG Music Entertainment, EMI, Universal Music, Warner Music and other independent record labels. Key ease of use improvements during this financial year
included artist and title search and artists pages, enabling full tracks, ringtones, video clips and other related items to be found together.




|Vodafone Group Plc Annual Report
      2007 | 15
|------------------------------------------- | --

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Back to Contents

Business Overviewcontinued

Following on from the mobile internet search deal signed with Google in February 2006, Vodafone announced in February 2007 a number of important collaborations to bring the benefits of key internet brands to the
mobile. The collaboration with eBay, MySpace and Google Maps will enable integrated applications on to customers phones for an easy and secure user experience. An agreement with YouTube will also allow customers to view a daily selection of
new videos, forward links of their favourites, search across multiple categories and upload their own videos from their mobiles. In addition, Vodafone is supporting customers access to their internet
messaging services via their mobiles with the introduction of Vodafone Consumer
Push Email. This service was first made commercially available in Portugal in
March 2007. The service offers customers easy mobile access to their email accounts
held in both global, such as Microsoft MSN and AOL, and local email providers. In February 2007, Vodafone announced an agreement with Yahoo! and Microsoft to
provide direct access to their instant messaging services from the mobile and
the PC. Vodafone Mobile ConnectThe Vodafone Mobile Connect data card provides
simple and secure access to existing business systems such as email, corporate
applications, company intranets and the internet for customers on the move, and
is available through a selection of distribution channels. The Vodafone Mobile
Connect data card based on 2.5G technology is available in eight markets, with
33 markets now offering the service on 3G technology. Additionally, the Vodafone
Mobile Connect 3G broadband data card offers enhanced download speeds of up to
3.6 Mbps by utilising HSDPA technology and has been launched in 26 markets. Vodafone has also entered into exclusive partnerships with Acer, Dell, HP and
Lenovo across multiple markets. These companies launched a range of builtin 3G
broadband connectivity notebooks (with a Vodafone SIM built-in at point of manufacture)
supporting HSDPA technology. Additionally, Vodafone launched the Mobile Connect
USB Modem, an innovative, compact and easy to use plug and play device. Vodafone
also released an updated version of its Vodafone Mobile Connect software that
supports the Microsoft Vista operating system. These products provide greater
choice and connectivity options to our customers for high speed mobile working.
At 31 March 2007, there were 1.5 million registered Vodafone Mobile Connect data
cards in the Groups controlled and jointly controlled markets. Mobile applicationsIn addition to the wireless enablement of notebook
computers, there is an increasing demand for handheld solutions that allow real-time
access to email, calendar, contact and other applications. Vodafone Business Email, Windows Mobile Email and BlackBerry from
Vodafone provide business customers, ranging from small start-up companies to
multinational corporates, with wireless access to their enterprise and internet
based email solutions. Vodafone Business Email and BlackBerry from
Vodafone offerings are now available in 36 markets and at 31 March 2007 were
supported by 25 global devices and a variety of local devices in the controlled
and jointly controlled markets. There were one million Vodafone email customers in the Groups controlled
and jointly controlled markets as at 31 March 2007.


Data roamingVodafone has continued to improve the simplicity,
price predictability and value for money offered to data services customers.
For Vodafone Mobile Connect 3G broadband data card users, Vodafone complemented
the monthly roaming bundle launched in 2005 with a daily roaming tariff appealing
to less-frequent international travellers. At 31 March 2007, this tariff was
available in three controlled markets. On 14 March 2007, Vodafone announced that
the daily tariff
would be reduced by over 50% by July 2007. Vodafone has successfully implemented data wholesale tariff structures with more
than 15 Partner Market networks, enabling the launch of new data roaming propositions.
Vodafone also announced on 14 March 2007 that it would make lower data roaming
wholesale rates available to all other European operators on a reciprocal basis. DSL and other servicesIn May 2006, Vodafone announced its intention to enter the fixed broadband space in order to provide customers with data solutions to meet their total communication needs. DSL offered as part of the Vodafone At Home
package is now available in five markets, Germany, Italy, UK, Malta and New Zealand, with further markets intended to be launched throughout 2007. Current DSL offers are provided by Arcor (Germany) and ihug (New Zealand), as well as in partnership
with BT (UK), Fastweb (Italy) and Melita (Malta). Vodafone Office also includes fixed data DSL offerings. At 31 March 2007, DSL
was available to business customers in five markets  UK, Spain, Netherlands,
Portugal and Egypt. With the launch of the Vodafone Applications Service in the UK and Spain, Vodafone
has also taken a further step towards making mobile applications accessible to
businesses of all sizes. This service quickly and efficiently connects existing
business applications to mobile handsets, allowing users to access and exchange
information when out of the office. The Group has been extending its business model to generate revenue from mobile
advertising by partnering with advertising specialists in individual markets.
An agreement with Yahoo! has been operational since March
2007 in the UK.




|16 | Vodafone
            Group PlcAnnual Report
            2007
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Summary of Group products and servicesThe
    following table summarises the availability of the Groups most significant
    products and services as at 31 March 2007 in the markets in which they are
  available. Vodafone live!
	Vodafone live! with 3G
	Vodafone Mobile Connect GPRS
    data card
	Vodafone Mobile Connect 3G/GPRS
    data card
	BlackBerry from Vodafone Vodafone
    Push Email
	Vodafone Wireless Office
	Vodafone Passport
	Vodafone Consumer Push Email
	Vodafone At Home (Zonal)
	Vodafone AT Home (fixed line
    telephony)
    Vodafone At Home (DSL)SubsidiariesGermany
	•
	•
	
	•
	•
	•
	•
	
	•
	
	•Spain
	•
	•
	
	•
	•
	•
	•UK
	•
	•
	
	•
	•
	•
	•
	
	
	•
	•Albania
	
	
	•
	
	•
	
	•Australia
	•
	•
	
	•
	•
	•Czech
	•
	
	•Egypt
	•
	
	•
	
	•
	•Greece
	•
	•
	
	•
	•
	•
	•Hungary
	•
	•
	
	•
	•
	•
	•
	
	•Ireland
	•
	•
	
	•
	•
	•
	•Malta
	•
	•
	
	•
	•
	
	•
	
	
	
	•Netherlands
	•
	•
	
	•
	•
	•
	•New Zealand
	•
	•
	
	•
	•
	•
	
	
	
	•
	•Portugal
	•
	•
	
	•
	•
	•
	•
	•
	•Romania
	•
	•
	
	•
	•
	
	•Turkey
	•Joint VenturesFiji
	
	
	•
	
	•Italy
	•
	•
	
	•
	•
	•
	•
	
	•
	
	•South Africa
	•
	•
	
	•
	•
	
	•Subtotal
	17
	14
	4
	14
	17
	12
	13
	1
	4
	2
	5AssociateFrance
	•
	•
	•
	•
	•
	•
	•
	
	•Partner MarketsAustria
	•
	•
	
	•
	•Bahrain
	
	
	
	•
	•Belgium
	•
	•
	
	•
	•
	
	•Bulgaria
	•
	•
	
	•
	•Croatia
	•
	•
	
	•
	•Cyprus
	•
	
	
	•Denmark
	
	
	
	•
	•Estonia
	
	
	
	•
	•
	•Finland
	
	
	
	•
	•Hong Kong
	
	
	
	•
	•Iceland
	•
	
	•
	
	•
	
	•Indonesia
	
	
	
	
	•Kuwait
	
	
	•Latvia
	
	
	
	•Lithuania
	
	
	
	•Luxembourg
	•
	
	
	•
	•Malaysia
	
	
	
	•
	•Norway
	
	
	
	•Singapore
	
	
	
	•
	•Slovenia
	•
	
	•
	
	•Sri Lanka
	
	
	
	
	•Sweden
	•
	•
	
	•
	•
	
	•Switzerland
	•
	•
	
	•
	•Total
	28
	21
	8
	33
	36
	14
	17
	1
	5
	2
	5 Key:•
    Available throughout the 2007 financial year•
    Launched in the 2007 financial year


How We Deliver Our Services Products and services are available directly to both consumer and business customers
in the majority of markets under the Vodafone brand. In the 2007 financial year,
the Group continued to focus on social products with the establishment of a new
social investment fund, which has been formed to provide resources for initiatives
that can demonstrate high social values. DistributionThe Group distributes its products and services through a wide variety of direct and indirect channels, with different approaches used in the consumer and business sectors. Main developments in distribution are within
the area of IT resellers, distributors and MVNOs. Over 1,100 stores are directly owned and managed by Vodafone, with an additional
5,500 Vodafone branded stores. In addition, local websites offer products and
services online, local sales forces are in place to discuss terms with business
customers and call centres are available to support customers. The extent of indirect distribution varies between markets but may include using
third party service providers, independent dealers, distributors and retailers. Vodafones engagement with IT resellers and distributors continued to grow
throughout the 2007 financial year. The partner marketing programme has attracted
over 5,000 resellers across eight countries, providing sales support and training.
This engagement with the IT channel enables Vodafone to sell to small and medium
enterprises as well as providing a key platform to support the sales of the built-in
3G broadband connectivity notebooks from our PC partners, including Acer, Dell,
HP and Lenovo. The last few years have seen the growth of MVNOs who buy access to existing networks
and re-sell that access to customers under a different brand name and proposition.
Where appropriate, Vodafone seeks to enter mutually profitable relationships
with MVNO partners as an additional route to market. Vodafone Global EnterpriseVodafones Global Enterprise unit, previously
  the multinational corporate business unit, is now entering its third year of
  operation and continues to build its capability, providing global enterprises
  with consistent levels of service, support and commercial terms worldwide.
  Vodafone has enjoyed continued success with these customers and delivered strong
growth in this segment. During the last year, this business unit has developed a number of services and
solutions specifically for global enterprises. The device portfolio offers a
consistent range of mobile devices at different price points across multiple
markets. Mobile Spend Management is an analysis and reporting tool which allows
global administrators to track and control their mobile communications spend.
The master services agreement has been simplified and is now available across
12 countries. To ensure the Group is best placed to continually meet the needs of this customer
segment, Vodafone has brought full ownership and control for the management of
these customers to the business unit. HandsetsVodafone pushed 3G into the mass market with
  the support of one exclusive mobile phone per high value brand supplier: the
  Nokia 6234, Samsung ZV40, SEMC V630i and Motorola V1100 in the consumer segment
  and the Palm Treo 750v for the business market. Approximately one third of the
  Vodafone live! sales volume was driven by devices that are exclusively available
through Vodafone.




|Vodafone Group Plc Annual Report
        2007 | 17
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Back to Contents

Business Overviewcontinued

The launch of the Vodafone McLaren Mercedes F1 team was supported with three special edition Vodafone McLaren branded phones. Vodafone is also leading the way into 3G broadband, with six HSDPA handsets launched.
3G Broadband PC connectivity was supported by a full range of data card products
and by 3G modules that embed 3G connectivity in the laptops of several leading
Original Equipment Manufacturers. In October 2006, the VF 710, the first own branded 3G consumer phone, was launched
in all European markets and since then over half a million units have been sold. Vodafone has also announced several collaboration and partnership agreements
with the objective to consolidate the software platforms for mobile devices around
three major platforms  Nokia S60, Microsoft Windows Mobile and a new Linux
platform that is anticipated to be developed through the LiMo Foundation with
NTT DoCoMo, Motorola, NEC, Panasonic, Samsung and Vodafone as founding members.
This strategic programme is expected to deliver long term cost savings and improve
the time to market for new service innovations to be integrated on a mobile device. Marketing and brandBrand and customer communicationsVodafone has continued to focus on delivering
a superior, consistent and differentiated customer experience through its brand
and communications activities. The Vodafone operating companies in Romania and
Turkey migrated to a single Vodafone brand during the year, and Iceland was the
first franchise partner market to move to a single Vodafone brand. Vodafones brand purpose of 'helping our customers make the most of their
time' has been embedded in the organisation via the ongoing brand engagement
programme which brings the brand to life for Vodafone employees, ensuring that
they can do the same for customers. Externally, the brand idea has been introduced
to customers through the launch of the Make the Most of Now communications
campaign in all 18 of Vodafones branded
markets. SponsorshipsVodafones global sponsorship strategy
has evolved in the past year to better support the changing needs of consumers
and the competitive business environment. The majority of global sponsorship
investment continues to focus on Formula 1 and football because these sports
are best positioned to meet Vodafones
specific business needs. In July 2006, Vodafone's three year sponsorship of the UEFA Champions League
commenced. This sponsorship enables Vodafone to build a credible association
with the world's most popular sport in a manner which is relevant to the business
and brand objectives. In January 2007, Vodafone became the title partner of the Vodafone McLaren Mercedes
Formula 1 team. Vodafone will be able to use the partnership to deliver opportunities
which will engage customers and project a consistent brand positioning to a global
audience. Globally, Vodafones sponsorships build brand awareness, differentiate Vodafone
from the competition and deliver revenue, driving opportunities through both
business and consumer channels. The Groups individual operating countries
benefit from a variety of marketing propositions which are delivered through
all aspects of their marketing mix. Music continues to play an important role in our business. Many of the local
Vodafone operating companies already deliver highly successful music sponsorships.


Customer strategy and managementVodafone continues to use a customer management
system called customer delight to measure customer satisfaction in the Groups
controlled markets at a local and global level. This is a proprietary diagnostic
system which tracks customer satisfaction across all the points of interaction
with Vodafone and identifies the drivers of customer delight and their relative
impact. This information is used to identify any areas for improvement and highlight
which areas to focus on. Social productsVodafone has continued making mobile services
more accessible to people with special communication needs and has undertaken
significant research to better understand the levels of exclusion relating to
use of mobile
technology, which is helping to inform relevant areas of the business. One of the initiatives that has benefited from the social investment fund is
M-PESA, an innovative mobile micro-finance service now on trial in Kenya. This
service, run in conjunction with a local bank and
Vodafones Kenyan joint venture, Safaricom, enables customers to move money
in and out of accounts, between other customers and to withdraw cash, all using
secure mobile messaging. For further information on this see the Governance Corporate
Responsibility and Environmental Issues section on pages 75 to 77. Content standardsVodafone has continued the rollout of the off-net
content filter. The access control programme demonstrates Vodafone's commitment
to deliver content responsibly and provides the capability for parents to restrict
access to content that may be inappropriate for younger users. Ensuring that
the mobile needs of parents and their children are satisfied will remain a priority
during the 2008 financial year. As new media channels evolve, a number of Vodafone initiatives are designed to
ensure protection for our customers from inappropriate content, contact and commercialism.
These include providing supporting guidelines around the marketing of content
to customers, social networking/Web 2.0 services, mobile advertising and the
continued development of parental controls requirements to meet new technological
requirements.




|18 | Vodafone Group PlcAnnual
        Report 2007
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Our Technology and Resources Vodafones key technologies and resources encompass the telecommunication
licences it holds, the related mobile network infrastructure and the approximately
66,000 people Vodafone employs worldwide. These key technologies and resources
enable the Group to operate mobile networks in 21 controlled and jointly controlled
markets around the world. LicencesThe
Group is dependent on the licences it holds to operate mobile telecommunications
services. Further detail on the issue and regulation of licences can be found
in Business  Regulation. The table
below summarises the significant licences held by the Groups mobile operating subsidiaries and the Groups
joint venture in Italy at 31 March 2007. Country by
	Licence
	Licence expiry
	Date of commencementregion
	type(1)
	date
	of commercial serviceEuropeGermany
	2G
	December 2009(2)
	June 19923G
	December 2020
	February 2004Italy
	2G
	January 2015
	December 19953G
	December 2021
	February 2004Spain
	2G
	July 2023(3)
	October 19953G
	April 2020
	February 2004UK
	2G
	See note(4)
	December 19913G
	December 2021
	February 2004Albania
	2G
	June 2016
	August 2001Greece
	2G
	September 2012
	July 19933G
	August 2021
	July 2004Ireland
	2G
	May 2011(5)
	March 19933G
	October 2022
	May 2003Malta
	2G
	September 2010
	July 19973G
	August 2020
	August 2006Netherlands
	2G
	March 2013
	September 19953G
	December 2016
	February 2004Portugal
	2G
	October 2021
	October 19923G
	January 2016
	February 2004(6)EMAPAAustralia
	2G
	See note(7)
	September 19933G
	October 2017
	October 2005Czech
	2G
	January 2021
	March 2000Republic
	3G
	February 2025
	See note(8)Egypt
	2G
	January 2022(9)
	November 19983G
	January 2022
	May 2007Hungary
	2G
	July 2014(10)
	November 19993G
	December 2019
	December 2005New Zealand
	2G
	See note(11)
	July 19933G
	March 2021(11)
	August 2005Romania
	2G
	December 2011
	April 19973G
	March 2020
	April 2005Turkey
	2G
	April 2023
	April 1998  Notes:(1)
	All 2G networks are of a GSM/GPRS network type. All 3G networks are of a W-CDMA network type.(2)
	On 15 May 2007, the Group secured a seven year extension of its GSM licence in Germany toDecember 2016.(3)
	Date relates to 1800MHz spectrum licence. Vodafone Spain also has a separate 900MHzspectrum licence which expires in February 2020.(4)
	Indefinite licence with a one year notice of revocation.(5)
	Date refers to 900MHz licence. Vodafone Ireland also has a separate 1800MHz spectrumlicence which expires in December 2015.(6)
	Portugal launched the Vodafone Mobile Connect 3G/GPRS data card in February 2004 andthe launch of 3G voice services took place in May 2005.(7)
	Refers to a 900MHz spectrum rolling five year licence. Various licences are held for 1800MHzlicences, which are issued by specific regional regulators. The earliest expires in June 2013and the latest in March 2015.(8)
	Launch date to be determined.(9)
	Egypt extended its 2G licence for a further nine years in January 2007.(10)
	There is an option to extend this licence for seven years.(11)
	Vodafone New Zealand owns three GSM 900 licences (2x21MHz) and one GSM1800 licence(2x15MHz). The GSM900 licences expire in November 2011, July 2012 and September 2021.The GSM1800 licence expires in March 2022.


Mobile network infrastructureNetwork
infrastructure is fundamental to the Group being able to provide mobile services.
The mobile network enables the Groups customers to place and receive voice
calls and allows the Group to provide other
services, such as text messaging. When a voice call or data transmission is made on a mobile device, voice or data
is sent from the device and transmitted by low powered radio signals to the nearest
base station, which in turn is connected to the
Groups network. Each base station provides coverage over a given geographic
area, often referred to as a cell. Cells can be as small as an individual building
or as large as 20 miles across. Each cell is equipped with its own radio transmitter
and receiver antenna. This network of cells provides, within certain limitations,
coverage over the service area. When a customer using a mobile device approaches
the boundary of one cell, the mobile network senses that the signal is becoming
weak and automatically hands over the call to the transmission unit in the next
cell into which the device is moving. If the voice call or data transmission is intended for delivery to another device
which is not on the Vodafone network, the information is delivered through a
public or private fixed line telephone network or the
internet. In a second generation (2G) network, each cell contains a base station
using a number of radio frequencies or channels. A group of base stations is
connected to a base station controller, which in turn is connected to a mobile
switching centre and then via a gateway support node for access to a fixed line
network or the internet. In a 3G network, voice or data traffic is passed through a node B, being similar
to a base station in a 2G network, to a radio network controller which is then
connected to a mobile switching centre, similar to a 2G
network. Base stations and node Bs form a critical element of a mobile network and an
insufficient number of base stations can result in loss of service for customers.
In addition, the correct deployment of the right base stations is instrumental
in achieving the network quality and coverage that are crucial to customer satisfaction. 2GVodafone operates 2G networks in all its mobile
operating subsidiaries, through GSM networks, offering customers services such
as voice, text messaging and basic data services.
In addition, all of the Groups controlled networks operate GPRS, often
referred to as 2.5G. GPRS allows mobile devices to be used for sending and receiving
data over an internet protocol (IP) based network, enabling wireless
access to data networks like the internet. The GPRS data service offering includes internet and e-mail access, allowing
the customer to be always connected at download speeds slightly below a dial-up
modem. Vodafone also offers a great variety of services on its Vodafone live!
portal, such as picture and video messaging, download of ringtones, news and
many other services. 3GVodafones 3G networks, operating the W-CDMA
standard, provide customers with mobile broadband data access allowing data download
speeds of up to 384 kilobits per second (kbps), which is up to seven
times faster than a dial-up modem. Vodafone has expanded its service offering
on 3G networks with high speed internet and e-mail access, video telephony, full
track music downloads, mobile TV and other data services, in addition to existing
voice
and data services. The Group has secured 3G licences in all jurisdictions in which it operates through
its subsidiary undertakings and in which such licences have been awarded to date,
as well as in Italy through its joint venture. Vodafone expects to participate
in additional 3G licence allocation procedures in other jurisdictions in which
it operates where this is commercially viable. No assurances can be given that
the Group will be successful in obtaining any 3G licences for which it intends
to apply or bid.




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Business Overviewcontinued

Roll out of the 3G network infrastructure has continued throughout the 2007 financial year across the Groups mobile operations, including approximately £625 million expenditure on 3G network infrastructure.
By the end of March 2007, over 41,000 node Bs were in operation in the Groups controlled operations and the Groups joint venture in Italy. In many of the Groups markets, Vodafone has achieved the leading position on 3G
coverage and quality of service. High Speed Downlink Packet Access (HSDPA)HSDPA is a wireless technology enabling data
transmission speeds of up to 3.6 megabits per second in the first phase. It allows
increased mobile data traffic, and improves the customer experience through the
availability of enhanced mobile broadband services and significantly shorter
download times. In later phases, peak speeds up to 7.2Mbps will be available in hotspots first,
with up to 14.4 Mbps achievable with later releases. This is expected to provide
customers with faster access speeds than experienced on existing 3G networks.
The performance figures quoted are theoretical peak rates deliverable by the
technology in ideal radio conditions with no customer contention for resources. HSDPA is enabled through the deployment of new software in the 3G radio network
and expanding the processing capabilities of the node B. Significant performance
benefits are achieved by using mechanisms that use the radio interface more effectively
and are further adapted to bursty packet based data traffic using
IP. Vodafone Mobile Connect data cards which support HSDPA are available commercially,
and compatible Vodafone live! handsets were
launched in the summer of 2006. HSDPA was launched commercially in many of the major mobile markets of the Group
during the 2007 financial year. All markets are considering upgrades to serve
higher bandwidths for customers as each market situation
justifies. While HSDPA focuses on downlink (network to mobile), Vodafone is also improving
the data speeds in the uplink (mobile to network) to achieve speeds of up to
384kbps. HSUPA (High Speed Uplink Packet Access) is expected to further enhance
the uplink speed beyond 1 megabit per second. EmployeesVodafone employs approximately 66,000 people
worldwide, with a goal to recruit, develop and retain the most talented, motivated
people that are well aligned with the Vodafone brand essence. The Company aims
to do this by providing a productive, safe working environment, treating people
with respect and offering attractive performance based incentives and opportunities.
Training and development programmes help employees to develop their skills and
experience and
to reach their full potential, benefiting themselves and the Company. Employee involvementThe
Boards aim is to ensure that employees understand the Groups strategic
goals and the mutual obligations of working in a high performing, values-based
organisation. Vodafones values continue to provide a common way of behaving and are implicit
in all that the Group does for and with its shareholders, customers and employees.
During the year, Vodafone has built further on its employee engagement initiative
through embedding the Vodafone brand, Red, Rock Solid, Restless, into
the business through all of its people practices. This has been supported by
the development of a Vodafone People Strategy that provides a common goal for
the experience all employees receive when joining and working for Vodafone.


The employer brand programme continues to deliver the desired change in culture
of the Group to one that inspires the behaviour of employees in their interactions
with customers and other stakeholders. Employee engagement with the brand is
measured through a survey tool, with October 2006 results demonstrating 79% awareness
of the brands importance to Vodafones success. The Board places a high priority on effective employee communications to create
a dialogue with the Groups employees. In addition to the more traditional
channels, the Group increasingly uses its own products and services, such as
SMS and audio based messaging, and this year has seen the use of Vodafone TV
for broader communications, including financial results and product launch communications
to employees, with very positive feedback. The Chief Executive and other members of the executive management team continue
to host the Talkabout programme, which aims to visit each of the
Groups local operating companies every year. In the Talkabout sessions,
the executive team use the opportunity to discuss the Groups strategic
goals with as wide an audience of Vodafone employees as possible, listening to
their views and talking about the issues that matter most to them, as well as
exchanging ideas about how Vodafone can serve its customers. Vodafones success is driven by the passion and effort of the Groups
employees. In return, Vodafone values employees opinions on improving the
performance of the Group. Within European subsidiaries, employee representatives
meet annually with members of the executive management team in the Vodafone European
Employee Consultative Council to discuss the performance and prospects of the
Group and significant trans-national issues. In October 2007, Vodafone plans to carry out its third global all employee opinion
survey. In addition, the Group now conducts half yearly interim surveys on a
representative sample of employees across its organisation to continue to track
employee engagement on a more regular basis. In 2006, the Group conducted two interim surveys in April and October covering
all operating companies. The results showed that employees continue to be highly
engaged with Vodafone. In particular, the results showed that employees now have
a greater understanding of what is expected of them and receive better coaching
support to improve their performance. Again, the overwhelming majority of employees
are proud to work for Vodafone, understand the importance of
Vodafones values, know the results expected of them in their jobs and have
a good understanding of Vodafones strategic goals and priorities. Vodafone is focused on continually improving and, as a result, continues to focus
on some previously identified areas that need to be addressed through co-ordinated
global and local action: •
    To improve the Groups understanding
        of the underlying customer focus issues in each market and identify improvements
        in the service offered. Meeting customers requirements remains
        at the heart of the business and will continue to differentiate Vodafone
      from our competition; and•
    To continue to develop practical
          global frameworks and guidelines to help employees
    effectively manage change within the business.




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In addition, Vodafone has added another specific area of focus this year: •
    To create an environment where people
        are attracted to work forVodafone
        and are truly engaged to grow and deliver their best efforts. This goal
        is supported by the rollout of the Vodafone People Strategy. During the
        2008 financial year the Vodafone People Strategy will be communicated
        to all employees, with the ultimate goal that employee engagement levels
      will be in the top quartile in every market in which the Group operates. Employment policiesThe Groups employment
policies are consistent with the principles of the United Nations Universal Declaration
of Human Rights and the International Labour Organisation Core Conventions and
are developed to reflect local legal, cultural and employment requirements. High
standards are maintained wherever the Group operates, as Vodafone aims to ensure
that the Group is recognised as an employer of choice. Employees at all levels
and in all companies are encouraged to make the greatest possible contribution
to the Groups success. The Group considers its employee relations to be
good. Equal opportunitiesVodafone does not condone
unfair treatment of any kind and operates an equal opportunities policy for all
aspects of employment and advancement, regardless of race, nationality, sex,
age, marital status, disability or religious or political belief. In practice,
this means that the Group is able to select the best people available for positions
on the basis of merit and capability, making the most effective use of the talents
and experience of people in the business and providing them with the opportunity
to develop and realise their potential. The disabledVodafone is conscious of the
difficulties experienced by people with disabilities. Every effort is made to
ensure ready access to the Groups facilities and services and a range of
products has been developed for people with special needs. In addition, disabled
people are assured of full and fair consideration for all vacancies for which
they offer themselves as suitable candidates and efforts are made to meet their
special needs, particularly in relation to access and mobility. Where possible,
modifications to workplaces are made to provide access and, therefore, job opportunities
for the disabled. Every effort is made to continue the employment of people who
become disabled via the provision of additional facilities, job design and the
provision of appropriate training. Health, safety and wellbeingThe health, safety and wellbeing
of the Groups customers, employees and others who could be affected by
its activities are of paramount importance to Vodafone and the Group applies
rigorous standards to all its
operations. The health and safety management in each operating company is audited annually
and the results are submitted in a report for discussion by the Board. The Groups
annual global health and safety audit has been recently upgraded in line with
the new health and safety management system. This online system provides improved
detailed assessment and management reporting. The system, which includes global
policies, standards and best practice samples, provides easy to access guidance
and supports governance requirements, particularly for Vodafone businesses in
developing markets. The Vodafone People Strategy includes health, safety and wellbeing as a central
part, with employee wellbeing a major focus as the business moves forward. The
2008 financial year will see Vodafone health, safety and wellbeing professionals
focusing on three key initiatives to support this strategy: implementation of
employee wellbeing initiatives, emphasis on communication and implementation
of updated mobile phone and driving policy requirements and the continued development
of group standards for the selection and evaluation of appropriately trained
and qualified contractors and service providers.


Supply chain managementHandsets,
network equipment, marketing and IT services account for the majority of Vodafones purchases, with the bulk of these purchases from global suppliers. The Groups Global Supply Chain Management
(GSCM) team is responsible for managing most of the Groups
relationships with these suppliers. The ongoing transformation of the supply chain organisation under one leadership
and global material strategies has enabled savings across all operating companies.
This is supported by a uniform savings methodology applied across all operating
companies. Enablers such as eAuctions and seamless B2B applications form a vital
part in leveraging the Groups scale further. Vodafones eSourcing programme continues to drive and create significant
benefits for the entire organisation. Amongst its successes in the 2007 financial
year, the programme has established world class benchmark prices in hardware
procurement. GSCM continues to implement best practices across the
Groups mobile operations with the aim of harmonising business processes,
which will bring the benefits of further reducing procurement costs and reducing
time
to market. Global suppliers are required to comply with the Groups Code of Ethical
Purchasing which sets out the labour and environmental standards the Group expects
suppliers to meet. The Code is based on the Groups values and international
standards, including the Universal Declaration of Human Rights and the International
Labour Organisation Conventions on Labour Standards. GSCM has implemented a consistent
supplier performance management process that ensures that key suppliers are evaluated
across six areas, covering aspects of financial stability, technological and
commercial criteria, delivery and quality management requirements and corporate
responsibility. Consistent with GSCMs pro-active approach to strategic sourcing, Vodafone
launched the China Sourcing Centre based in Beijing in March 2007, which will
act as the GSCM competency centre for low cost sourcing and
emerging suppliers. It is the Groups policy to agree terms of transactions, including payment
terms, with suppliers and it is the Groups normal practice that payment
is made accordingly. The number of days outstanding between receipt of invoices
and date of payment, calculated by reference to the amount owed to suppliers
at the year end as a proportion of the amounts invoiced by suppliers during the
year, was 34 days (2006: 36 days) in aggregate for the
Group. Research and Development (R&D)The
Group R&D function comprises an international and multicultural team for applied research in mobile and internet communications and their applications. The majority of the work of the Groups R&D
function is undertaken through the Groups research centres, located in Newbury, Maastricht, Munich, California and Madrid, and in an associate centre in Paris belonging to Vodafones associated undertaking in France, SFR. In the 2007
financial year, the R&D centre in Milan was re-absorbed into the Italian
operation and ceased to engage in research and development for the Group. Governance is provided by the Group R&D Board, which is chaired by the Group
R&D Director and consists of the chief technology officers from six of the
operating subsidiaries in Europe, the heads of Business Strategy and Global Terminals
and a representative from EMAPA.




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Business Overviewcontinued

Group R&D works beyond the traditional established markets of Vodafone in search of technology based business opportunities. It delivers a systematic programme of demand inspired research and development in
wireless and internet communications that is positioned between basic research and commercial product development. It directs Vodafones
work with technical standards bodies and its intellectual property activities. Typically, Group R&D works on developments that are expected to be introduced
into the business in three to five years time. This horizon covers some
significant business developments that can already be
anticipated for example, the transition of traditional telecommunications
protocols to the internet protocol, the emergence of the internet as a personal
communications platform and the introduction of wireless technology beyond our
current
generation  including disruptive radio technologies for mobilising the
internet. The emphasis of the Group R&D work programme is on providing technology analysis
and a vision that can contribute directly to business decisions, enabling new
applications of mobile communications, using new technology for new services
and research for improving operational efficiency and quality of the Groups
networks. This is done by pioneering the adoption of new technologies, business
opportunities and innovations through technology analysis, trials, invention
and prototypes; by making Vodafone aware of market opportunities or threats posed
by new technologies and business models, and helping the Company to exploit or
resist them; by providing technology leadership by working with the industry
to define and standardise the technology Vodafone uses; and by securing intellectual
property and greater technology ownership for the Company. The work of Group R&D is delivered through a portfolio of programmes and
cross industry activities with a substantial number of trials, demonstrations
and prototypes. All work is set in a business and social context. There is growing
emphasis on work that secures intellectual property rights or can otherwise lead
to Vodafone having stronger influence on the technology it will deploy in the
future. In addition, Group R&D provides leadership for funding research into
health and safety aspects of mobile communications and technical leadership for
the Groups
spectrum strategy. The main themes currently being researched are mobile technologies beyond the
current generation, the internet as a communications platform, mobile TV and
media and service enabler technology like near field communications. A number
of significant wireless technology trials are underway and several internet based
services have been prototyped and demonstrated within the Vodafone community.
Application of mobile communications to intelligent transport systems and the
digital home are also being researched. Much of the work of Group R&D is done in collaboration with others, both
within the Group and externally. The Group has established R&D collaboration
with all of its traditional suppliers and is now extending this to other companies
in the communications, media and internet industries. There is a programme of
work with academic institutions, which includes student placements in Vodafone
laboratories during summer vacations, and the Group is developing new ways in
which to use the internet as a platform for research and innovation  at
the forefront of this is Vodafone ßetavine, a research space on the internet.
There is also a programme to capture innovation from start-up companies, particularly
those based in Silicon Valley, USA, and many of those companies were introduced
to the Vodafone Executive Committee and operating company CEOs at a specially
hosted event in September 2006. Group R&D also continues to develop relationships
with a number of universities. These relationships include sponsoring research
students, collaboration in European research activities, funding specialised
research centres and working with Vodafone funded chairs and research publications.
This year, Group R&D again hosted an academic conference where it brought
together its academic partners
to consolidate its academic research programme.


The R&D programme provides the Group with long term technical policy, strategy
and leadership, as well as providing technical underpinning for the Groups
public policies and government relations, and is shared with all subsidiaries
of the Company and Group functions. They are able to influence the programme
through working relationships that are designed to allow delivery of the results
of the programme directly into the business units where they
are needed. How We Developed  The Company was incorporated under English law in 1984 and through a series of business transactions, including the merger with AirTouch Communications, Inc. in 1999 and the acquisition of Mannesmann AG in 2000, has become a
world leader in providing voice and data communications for both consumer and enterprise customers. The Group has continued to execute on its strategy of actively managing its portfolio
to maximise returns, with recent acquisitions in the high growth markets of Romania,
the Czech Republic, Turkey and India. Vodafone began in July 1984 when it was incorporated as Racal Strategic Radio Limited (registered number 1833679). After various name changes, 20% of Racal Telecom Plc 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. Between 1991 and 2004 the Group entered into various transactions which consolidated
the Groups position in the United Kingdom and enhanced its international
presence. The most significant of these transactions
were as follows: •
    The merger with AirTouch Communications,
          Inc. (AirTouch), which completed
          on 30 June 1999. The Company changed its name to Vodafone AirTouch Plc in June 1999. The company reverted to its former
          name, Vodafone Group Plc, on 28 July
    2000.•
    The acquisition of Mannesmann
          AG (Mannesmann), which completed on 12
          April 2000. Through this transaction the Group acquired subsidiaries
          in two of Europes most important markets, Germany and Italy,
          and increased the Groups indirect
    holding in SFR, a French mobile telecommunications operator.•
    Over a period from June 1999 to
          October 2001 the Group acquired an effective
          interest of 69.76% in J-Phone Co. Limited. During the 2004 financial year, after various name changes and business transactions,
          the Group held a 69.7% interest in Vodafone
          K.K. and a 66.7% interest in Vodafone
    Holdings K.K.




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Summary of transactions since 31 March
    2004•
    25 May 2004  Japan: Increased effective
    stake in Vodafone K.K. to 98.2% and stake in Vodafone Holdings K.K. to 96.1%
    for £2.4 billion.•
    1 October 2004  Japan: Merger of
    Vodafone K.K. and Vodafone Holdings K.K. completed. The Groups stake
    in the merged company was 97.7%.•
    12 January 2005  Hungary: Vodafone
    Hungary became a wholly owned subsidiary of the Group following various transactions
    throughout the 2005 financial year.•
    26 January 2005  Egypt: Disposed
        of 16.9% of Vodafone Egypt reducing the Groups effective interest
      to 50.1%.•
    11 May 2005  France: The Groups
    effective shareholding in Neuf Cegetel became 12.4% after a transaction completed
    by the Groups associated undertaking SFR.•
    31 May 2005  Czech Republic and
    Romania: 79.0% of the share capital of MobiFon S.A. (MobiFon)
    in Romania, and 99.9% of the share capital of Oskar Mobil a.s. (Oskar)
    in the Czech Republic were acquired for $3.5 billion (£1.9 billion).
    In addition, the Group assumed approximately $1.0 billion (£0.6
    billion) of net debt.•
    18 November 2005  India: Acquired
        a 5.61% interest in Bharti and on 22 December 2005 acquired a further
        4.39% interest in Bharti. Total consideration for the combined 10.0%
      stake was Rs. 67 billion  (£858 million).•
    5 January 2006  Sweden: Sold
        Vodafone Sweden for970
    million  (£660 million).•
    20 April 2006  South Africa: Increased
    stake in Vodacom Group (Pty) Limited (Vodacom) by 15.0% to 50.0%
    for a consideration of  ZAR15.8 billion
    (£1.5 billion).•
    27 April 2006  Japan: Disposed of
    97.7% stake in Vodafone Japan for ¥1.42 trillion (£6.9 billion)
    including the repayment of intercompany debt of ¥0.16 (£0.8 billion)
    to SoftBank. The Group also received non-cash consideration with a fair value
    of approximately ¥0.23 trillion (£1.1 billion), comprised of preferred
    equity and a subordinated loan. SoftBank also assumed debt of approximately ¥0.13
    trillion (£0.6 billion).


•
    24 May 2006  Turkey: Telsim Mobil
        Telekomunikasyon (Telsim) was acquired for $4.67 billion
    (£2.6 billion).•
    29 June 2006  Greece: Since Vodafone
        Greece announced a public offer for all remaining shares not held by
        the Group on 1 December 2003, the Group increased its effective interest
        in Vodafone Greece to 99.8%
at 31 March 2006. Between 1 and 29 June 2006, the Group acquired a further 0.1%
        interest in Vodafone Greece through private transactions at a price equal
    to the price paid in the public offer, leading to an interest of 99.9%.•
    3 November 2006  Belgium: Disposed
        of 25% interest in Belgacom Mobile SA for 2.0
    billion (£1.3 billion).•
    25 November 2006  Netherlands: Groups
        shareholdings increased to 100.0% following a compulsory acquisition
    of outstanding shares.•
    3 December 2006  Egypt: Acquired
        an additional 4.8% stake in Vodafone Egypt bringing the Groups
    interest to 54.9%.•
    20 December 2006  Switzerland: Disposed
        of 25% interest in Swisscom Mobile AG for CHF4.25 billion (£1.8
    billion).•
    8 May 2007  India: Acquired companies
        with interests in Hutchison Essar for $10.9 billion (£5.5 billion),
        following which the Group controls Hutchison Essar (see note 35 to the
        Consolidated Financial
Statements).•
    9 May 2007  India: A Bharti group
        company irrevocably agreed to purchase the Groups 5.60% direct
    shareholding in Bharti Airtel (see note 35
    to the Consolidated Financial Statements).




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Regulation

The Groups 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 (anti-trust) law applicable to all activities. Some regulation
implements commitments made by Governments under the Basic Telecommunications
Accord of the World Trade Organisation to facilitate market entry and establish
regulatory frameworks. The following section describes the regulatory framework and the key regulatory
developments in the EU and selected countries in which the Group has significant
interests. 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, the Group is unable to attach a specific
level of financial risk to the Groups performance
from such
matters. European UnionAlthough
    all Member States of the EU (Member States) have now implemented the EU Regulatory Framework for the communications sector (the EU Framework),
  which was adopted in 2002, there remain both ongoing and new infringement proceedings
against a number of Member States for late or inadequate implementation. The EU Framework consists of four principal Directives outlining matters such
as the objectives to be pursued by national regulatory
authorities (NRAs), the way in which telecommunications operators
are to be licensed, measures to be taken to protect consumers and ensure universal
provision of certain telecommunications services and the terms and basis upon
which operators interconnect and provide access to each other. The EU Framework seeks to align the techniques for defining where sector specific
regulation may be applied, and the threshold for when such regulation can be
applied, with those already employed in EU competition law. It is also intended
to ensure consistency of approach amongst NRAs within the Member States. All
NRAs are required to take utmost account of a list of markets which are specified
by the European Commission (the Commission) in a Recommendation when
deciding which markets to investigate. The first such Recommendation was published
by the Commission in February 2003 and includes markets at a wholesale level
for voice call termination on individual mobile networks (the call
termination market), the wholesale national market for international
roaming (the roaming market) and the wholesale market for access
and call origination (the access market) on public mobile networks
(together the relevant markets). NRAs may, with the Commissions
consent, also propose markets not included in the Recommendation. The Commission is currently reviewing the Framework and theRecommendation
(the review) and a revised list of markets is expected to come into
force during 2007. This review may lead to an increase or a decrease in the number
and scope of markets subject to sector specific regulation. Changes to the Recommendation
are expected to become effective in late 2007 or early 2008, while any changes
to the EU Framework would become effective following their transposition into
national law from around 2010 onwards. The Commission currently proposes changes
to the way spectrum is managed in Europe to increase flexibility, a change to
the institutional framework aimed at greater
consistency and harmonisation


and the inclusion of functional separation as a possible regulatory remedy. The
impact of the review will depend on the changes actually adopted by the EU, the
manner in which revised directives are subsequently implemented in Member States
and how the revised regulatory framework will be applied by the respective NRAs. Under the EU Framework, regulation can only be applied to undertakings with significant
market power (SMP), either individually or collectively, in the relevant
markets, subject to the Commissions consent. SMP under the EU Framework
accords with the concept of dominance under existing EU competition
law. For individual dominance, this generally implies a market share of at least
40%, although other factors may also be taken into consideration. The Commission
published SMP Guidelines in July 2002, which set out principles for use by NRAs
in the analysis of markets to determine if undertakings have SMP under the EU
Framework. SpectrumIn February 2007, the Commission published a Communication on its plans to introduce greater flexibility in the use of spectrum in selected bands, including 2G and 3G bands, through the use of Decisions agreed with the
Radio Spectrum Committee (an EU level committee comprising the Commission and Member States). These reforms are expected to take place in advance of the review, which is proposing full service and technology neutrality as the general principle in
spectrum management, spectrum trading and greater coordination among Member States. The first proposed measure is a replacement of the GSM Directive by a decision to allow the deployment of UMTS services using 900 MHz and 1800 MHz
spectrum. The Commission and the RSPG (Radio Spectrum Policy Group) are analysing
the various options for the use of the spectrum that will be released after the
analogue broadcasting switch-off, the so called digital dividend.
The Commission has sent a mandate to the European Conference of Postal and Telecommunications
Administrations (CEPT) to verify the technical feasibility of using
part of the digital dividend for mobile
services. International RoamingIn February 2006, the Commission proposed
    new legislation by way of a regulation (the roaming regulation)
    under Article 95 of the EU Treaty (which would have immediate effect) to reduce
    what it considers to be excessive prices charged by mobile network operators
    for international roaming services. These proposals have been amended and
    adopted by the European Parliament and by the European Council on 7 June 2007
    and will come into force on 30 June 2007. The regulation
    requires mobile operators to offer, within 1 month of the regulation coming
    into force, a Euro-tariff under which the cost of making calls
    within the EU is capped at 49 eurocents per minute and the cost of receiving
    calls within the EU is capped at 24 eurocents per minute. Customers who have
    not otherwise already opted for another roaming tariff (such as Vodafone Passport)
    must be automatically opted onto the Euro-tariff within three months of the
    regulation coming into force. The regulation also requires that wholesale
    roaming charges within the EU are capped at an average rate of 30 eurocents
    per minute within 2 months of the regulation coming into force and that operators
    provide certain tariff transparency services to customers when they roam.
    The level of the retail and wholesale caps will fall further 12 and 24 months
    following the application of the regulation. The roaming regulation will terminate
    after 3 years. Anti-trust proceedings in relation to international roaming continue. In July
2004, the Commission issued a statement of objections, a document detailing its
proposed findings following its investigation into the UK market for wholesale
international roaming and, in January 2005, the Commission issued a statement
of objections following its investigation of the German market. In both cases
the statement of objections was addressed to both the national mobile operating
subsidiaries and to the Company and, in both




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cases, Vodafone has responded in writing and in oral proceedings to both statements of objections, as subsequently amended. The Commissions proposed findings are that Vodafone has monopoly power
over its wholesale customers in both the UK and Germany. Vodafone UK and Vodafone
Germany are alleged to have engaged in excessive or unfair pricing. The Commission
alleges that the abuse occurred from 1997 to at least September 2003 in the UK
and from 2000 to December 2003 in Germany. In the event the Commission finds
that there has been a breach of competition law, it may impose a fine on any
addressee who had committed the breach. Separately, the roaming market is one of the relevant markets in the Recommendation.
In view of the proposed roaming regulation theCommission
has proposed that this market be removed from the list during the review. Regulation in Vodafones Markets EuropeGermanyVodafone Germany has been found to
have SMP in the call termination market and the NRA
has set Vodafones termination rate at 8.79 eurocents per minute. In April
2007, an administrative court ruled that the NRA decision is invalid insofar
as it provides for ex ante regulation as a consequence of the SMP decision. This
decision is under appeal. The NRA has recently notified to the European Commission its findings that no
operator had SMP in the access market. The NRA has concluded that it will harmonise the expiry of all 2G licences in
2016 and on 15 May 2007 extended Vodafones licence accordingly. The NRA
is also consulting on proposals to licence spectrum at 2.6 GHz
(the 3G extension band) and unused spectrum at 1.8 GHz and 2 GHz
(core 3G band)
during 2008. In May 2007, the Commission issued a reasoned opinion, which was the second stage
of infringement proceedings against Germany. This opinion alleged that new provisions
in German law could grant Deutsche Telekom an exemption from regulation, in spite
of a finding that it had a dominant position in the fixed broadband market. ItalyThe NRA has concluded that all mobile network operators have SMP in the call termination market and has imposed obligations on Vodafone Italy, including price controls, and the NRA foresees further reductions on
both 1 July 2007 and 1 July 2008 of 13% below the retail price index from the rate of 11.20 eurocents currently charged. The NRA has also decided to impose a cost orientation obligation to a competitor, Hutchison Italy, but
is still considering at what level and over what time period. The NRA concluded its review of the access
    market in February 2006 and found that no operator had SMP but has said it
    will keep the market under review and has indicated that it will commence
    a further market review. In addition, the NRA sought to find SMP in the market
    for wholesale access to premium rate and non-geographic services but subsequently
    withdrew this proposal. In March 2005, the National Competition Authority
    (NCA) in Italy conducted unannounced inspections of the offices
    of mobile network operators in Italy, including Vodafone Italy, seeking evidence
    of collusion following complaints by resellers and potential MVNOs about alleged
    anticompetitive conduct. Vodafone Italy submitted undertakings to the NCA
    in 2007 which have been accepted by the NCA, resolving the issues for Vodafone
    without further action. The proceeding is still continuing against TIM and Wind and a final decision is expected before August 2007.


A new law announced in January 2007 has prohibited the application of fees or
other charges in addition to airtime for prepaid services and has also introduced
transparency measures to enable consumers to terminate subscription contracts
without penalties. SpainIn 2006, the Spanish NRA found
all mobile network operators to have SMP in the call termination market and imposed
obligations including non discrimination, cost orientation and accounting separation
on Vodafone Spain. Vodafone Spain expects to reduce rates from 10.48 eurocents
to 7 eurocents in six monthly reductions up to April 2009. In February 2006, the NRA found that all three mobile network operators held
a position of joint SMP in the access markets. This decision was reviewed by
the European Commission and the NRA was allowed to proceed. The NRA has the power
to impose wholesale network access terms facilitating the entry of firms including
MVNOs, although it has not done so to date. Vodafone has appealed against the
decision of the NRA to find Vodafone as holding SMP in the Spanish courts and
has appealed the decision of the European Commission to allow the NRA to proceed
to the Court of First Instance at Luxembourg. United KingdomThe NRA found that all mobile
network operators have SMP in the call termination market in respect of calls
conveyed over both 2G
and 3G networks. Vodafones average termination rate is set at 5.7p per
minute for the financial year ending 31 March 2008. Rates then decline by 3.2%
below the retail price index in the 2009 financial year and 2.5% below the retail
price index in the 2010 and 2011 financial years. The NRA is considering a modification
to the charge controls on mobile termination rates to remove the effect of number
portability
on effective termination rates. The NRA is currently investigating a complaint from BT plc about the level of
Vodafones termination rates from September 2004. The NRA is assessing whether to liberalise
    the use of 2G spectrum. The NRA is proposing to auction the so called 3G extension
    bands during 2008 and to auction the spectrum released by digital switchover
    in the second half of 2008. AlbaniaIn March 2006, the NRA issued
for consultation to the operators its analysis of the mobile market in Albania,
where the NRA proposed to designate the mobile network operators, including Vodafone
Albania, as having
SMP
in two markets: the call termination market and the market of mobile services
to end users. As a result, the NRA proposes obligations of transparency,
non-discrimination and access obligations. The NRA may also impose retail price
controls. Vodafone Albania has submitted its comments and objections
on the NRAs market analysis. In April 2007, the NRA decided to extend Vodafone
Albanias SMP status to October 2007. Vodafone Albania is evaluating the
decision. In addition, the Competition Authority commenced an investigation and
has reached the preliminary conclusion that during the period from 2000 to 2005
Vodafone Albania was dominant in the mobile market and abused the dominant position
by charging unfair and/or excessive prices. Vodafone Albania will respond in
a hearing set for June 2007. In the event the decision is confirmed, Vodafone
Albania faces the risk of a fine. GreeceThe NRA has found all firms
to have SMP in the call termination market. Vodafone Greece will reduce its rate
from 11.74 eurocents to 10.71 eurocents in June 2007. In March 2006, the three largest mobile network operators were found by the NRA
to have colluded in the setting of retail SMS prices and were fined




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Regulationcontinued

1
    million each. Vodafone Greece has filed an administrative appeal and a hearing
    has been held. In January 2007, Vodafone Greece was fined76 million by the Administrative
    Authority for Secrecy of Communications (ADAE) having been made
    aware of a security issue in its network. Software foreign to the network
    and capable of intercepting calls had been installed without Vodafones
    knowledge in the network software created, supported and maintained by an
    external supplier. The foreign software was removed without delay and the
    Greek authorities were promptly informed. Vodafone Greece has paid the fine
    but is appealing against the decision. Due to the interception incident, the
    NRA has required Vodafone Greece to give its views on any breach of the Greek
    electronic communications legislation, including breach of privacy and secrecy
    of communication. IrelandIn its review of the call termination market,
    the NRA has found that all mobile network operators have SMP. The NRA has
    imposed obligations of cost orientation and non-discrimination on all operators
    and obligations ofaccounting separation
    and transparency on Vodafone and O2. Vodafone Ireland
    has agreed to reduce its rates by 11% below the retail price index per annum
    for the 24 months commencing January 2006. The NRA is conducting a second review of
    the access market. The previous joint
    SMP designation of Vodafone and O2
    was annulled on appeal. The fixed incumbent, eircom, which also owns
    Meteor, Irelands third largest mobile operator, was awarded the fourth
    3G licence in March 2007. MaltaIn the call termination market, the NRA has
    found both mobile network operators as having SMP and has imposed obligations
    on Vodafone Malta of cost orientation, non-discrimination, accounting separation
    and transparency. Vodafone Malta reduced its mobile termination rates from
    4.65 Maltese cents per minute in January 2006 to 4.39 Maltese cents and will
    further reduce the rates to 4.13 Maltese cents in January 2008. The NRA has
    found Vodafone and Go Mobile, the two Maltese mobile network operators, as
    having joint SMP in the access market and proposes to impose an obligation
    to offer cost based access to MVNOs. The NetherlandsThe NRA had proposed that all operators have
    SMP and proposed remedies of cost orientation, non-discrimination and transparency.
    The NRAs proposal was appealed and its proposal was rejected by the
    court. The NRA is currently rerunning its review of the call termination market
    and proposes that Vodafone Netherlands reduce its rates to0.07
    by 1 July 2009 from 0.11
    currently with the cuts phased over two years from 1 July 2007. In March 2007, the Government decided to
    extend the 2G 900 MHz licences which expire in 2010. The Vodafone Netherlands
    licence will be extended for three years at a total price of36.5 million, to be paid in yearly instalments from March
    2010. The deadline to comply with 3G licence coverage
    obligations has been postponed from January 2007 to September 2007. A consultation
    is expected before then on the interpretation of the roll-out obligations. The Ministry is consulting on proposals to
    licence 3G extension band spectrum at 2.6 GHz. PortugalFollowing its review of the call termination
    market, the NRA found all three mobile network operators as having SMP and
    has imposed obligations on Vodafone Portugal including cost orientation, non-discrimination,
    accounting separation and transparency. In October 2006, Vodafone Portugal
    reduced its mobile termination rates in the final step of the regulated glidepath
    to 11 eurocents.


The NRAs analysis of the access market is expected to take place in 2007. Vodafone Portugal has had its 2G licence
    renewed for a period of 15 years from October 2006 with terms which remain
    essentially unchanged from those which previously applied. In October 2006, the NRA approved a change
    to the terms of Vodafone Portugals licence to allow the provision of
    the Vodafone Casa service. EMAPAAustraliaVodafone Australias appeal of the NCAs
    decision requiring Vodafone Australias mobile termination rates to fall
    from 21 Australian cents per minute to 12 Australian cents per minute for
    the period 2005 to 2007 was rejected by the Australian Competition Tribunal.
    The NRA is now in the process of setting rates for the period July 2007 to
    June 2009. Czech RepublicIn February 2005, Vodafone Czech Republic
    was awarded a 3G licence. The EU investigated a complaint but concluded in
    December 2006 that the award did not breach EU competition law. In its review of the call termination market,
    the NRA has proposed that all mobile network operators have SMP and has imposed
    obligations of cost orientation, non-discrimination, accounting separation
    and transparency. Vodafone Czech Republic complied with a requirement to reduce
    its call termination rates from July 2006 by 4% from CZK 3.11 per minute to
    CZK 2.99 per minute. In its review of the access market, the NRA found that
    no mobile network operator had SMP. EgyptIn July 2006, the Government awarded a third
    mobile licence to Etisalat, which enables both 2G and 3G services, and awarded
    a 3G mobile licence to Vodafone Egypt in January 2007. Mobile number portability
    and national roaming are expected to be implemented in Egypt in 2007 and are
    the subject of continuing discussions with the NRA. FijiDuring 2006, the Fijian Government proceeded
    with proposals to remove exclusive rights and began a process of consultation
    with Vodafone Fiji regarding potential compensation for the loss of exclusivity.
    In December 2006, the Government was removed and the interim Government is
    considering how best to proceed with telecommunications reform. HungaryIn its second review of the call termination
    market, the NRA has proposed that all mobile network operators have SMP and
    has imposed obligations of cost orientation, non-discrimination, accounting
    separation and transparency. Vodafone Hungary had appealed similar findings
    following the first review. In May 2005, Vodafone Hungary complied with a
    requirement following the first review to reduce its call termination rates
    by 16%. Subsequently the NRA has required Vodafone to reduce its rates in
    a series of steps to 16.84 HUF by 1 January 2009. Vodafone Hungary has appealed
    these decisions. IndiaIn April 2007, the Department of Telecommunications
    (DoT) completed the tender process to issue subsidies from the
    universal service fund for provision of infrastructure and mobile services
    in specified rural and remote areas. In April 2007, the NRA also submitted Recommendations
    on Infrastructure Sharing to the DoT, which recommended that licensees be
    permitted to commercially agree active infrastructure sharing
    arrangements. This would include Node Bs, Radio Access Networks, and backhaul
    between Base Transceiver Stations and the Base Station Controller, but not
    spectrum. The DoT is considering the NRAs Recommendations.




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From 1 April 2007, a new Access Deficit Charge (ADC) regime became effective, which will result in a 38% reduction of the total ADC paid by operators in the 2008 financial year. It is proposed that the ADC
be removed by the 2009 financial year. In February 2007, the NRA set price controls
    on national roaming retail tariffs, which will result in up to 56% reduction
    of tariffs. In December 2006, the DoT rejected the NRAs recommendation
    that mobile number portability should be implemented. The DoT is expected to announce its plans
    to allocate and license 3G and WiMAX spectrum in 2007. KenyaIn May 2007, a Communications Amendment Bill
    was submitted to Parliament which if passed would result in significant changes
    to the regulatory environment. In February 2007, the NRA reduced Safaricoms
    and Celtels mobile call termination rates from Ksh 8.12 per minute to
    Ksh 6.28 per minute from 1 March 2007. This followed a previous reduction
    of Safaricoms mobile call termination rate from Ksh 10 per minute in
    October 2006. The NRA undertook to carry out a review at the end of 2007 before
    introducing new interconnection rates for January 2008. The NRA also imposed
    a Ksh 30 per minute retail price cap that will be imposed on mobile off-net
    voice calls from 1 July 2007. In September 2006, Safaricom obtained a one
    year 3G trial licence. New ZealandThe NRA released a report proposing regulation
    of mobile termination rates for fixed to mobile calls, including a rate reduction
    of 44% from 27 New Zealand cents per minute to 15 New Zealand cents per minute
    and reducing further to 12 New Zealand cents per minute by the 2011 financial
    year. These proposals were submitted to the Minister for approval, who requested
    the NRA to reconsider them. The NRA did so and published a further position
    in which its key findings remain essentially unchanged. These were resubmitted
    to the Minister for reconsideration in the context of new offers by the two
    mobile operators to reduce mobile termination rates voluntarily and, where
    relevant, to pass through savings from reduced rates to end users of fixed
    to mobile calling. The Minister decided to reject the NRA decision in favour
    of the industry solution. The NRA is also investigating regulation of national
    roaming and co-location and Vodafone has tabled an undertaking for these services.
    Following feedback from the NRA, Vodafone has tabled a revised undertaking
    which will be taken into account by the NRA in producing its draft report. During 2006, Vodafone New Zealand was successful
    in obtaining a determination from the NRA in support of local interconnection
    services with the fixed incumbent, Telecom New Zealand. Local and mobile number
    portability was introduced on 1 April 2007. The Government has determined the process
    for the renewal of 900 MHz 2G licences which expire in the 2012 financial
    year, ensuring that a quarter of the spectrum passes into the hands of a new
    entrant. Although currently used for 2G services this spectrum may be used
    for the provision of UMTS services. The price to Vodafone for renewal of the
    remaining spectrum is yet to be determined. During 2006, the Government intervened to
    regulate local loop unbundling and the operational separation of Telecom New
    Zealand. PolandThe
    NRA, in its review of the call termination market, has found that all mobile
    network operators (including Vodafones joint venture, Polkomtel) have
    SMP and it has imposed obligations of cost orientation, transparency and non-discrimination.
    In April 2007, the NRA issued a decision in which it proposes to require Polkomtel
    to reduce its termination rate to 0.40 PLN in


May 2007 and to further reduce it in three annual steps to 0.2162 PLN by May 2010. RomaniaThe NRA in Romania is implementing market
    reviews as required by the EU Framework following Romanias entry to
    the EU in January 2007. In its review of the call termination market,
    the NRA has proposed that all mobile network operators have SMP and has imposed
    obligations of cost orientation, non-discrimination and accounting separation.
    In September 2006, the NRA reduced termination rates to 7.21 eurocents. In
    January 2008, rates are to reduce to 6.40 eurocents and in January 2009 to
    5.03 eurocents. Vodafone Romania has appealed this decision. Regulations mandating the introduction of
    number portability were adopted in March 2007. The Romanian Competition Authority is investigating
    the termination rates charged by Vodafone Romania to international carriers.
    If Vodafone Romania is found to have infringed the competition law, it could
    be subject to a fine. South AfricaThe Electronic Communications Act became
    effective in July 2006, replacing previous telecommunications and broadcasting
    legislation. The Act introduces a new licence regime, which all existing licences
    are required to be converted prior to July 2007 but, to date, the NRA has
    not issued the process by which this would occur. An Information Communication Technologies
    Black Economic Empowerment Sector Code (the Sector
    Code) is expected to be finalised in 2007. The Sector Code will set
    targets to evaluate a companys contribution to Broad-Based Black Economic
    Empowerment, under which is the Government policy to increase economic empowerment
    of historically disadvantaged individuals in South Africa. Separately, in January 2007, the NRA issued
    proposals to declare Vodacom, MTN and Cell C as having SMP in the wholesale
    mobile call termination market and the imposition of regulation, including
    LRIC-based (Long Run Average Incremental Cost) price controls, on Vodacom
    and MTN. A final decision is expected before the end of 2007. In May 2006, the Government submitted the
    Regulation of Interception of Communications and Provision of Communication-related
    Information Amendment Bill (Bill) to Parliament. The Bill requires
    mobile operators to register all existing pre-pay subscribers within 12 months
    and that all subscribers not registered by this date must be disconnected.
    Vodacom and other mobile operators have been engaged with the Government,
    law enforcement agencies and Parliament to extend the registration period
    and agree the information to be registered. The Bill is expected to be finalised
    by July 2007. Mobile number portability was implemented
    in November 2006. TurkeyThe Turkish Government is considering enacting
    a new Communications Law as part of a broader harmonisation of domestic law
    and regulation with the EU Framework. The NRA determined as of January 2006 that
    all three operators were dominant in relation to mobile termination on their
    own networks. In June and July 2006, the NRA determined historic interconnection
    disputes between Telsim and Turk Telecom and Telsim and Avea. The NRA also
    announced on 2 June 2006 forward-looking interconnection reference rates,
    which it proposes as a reference point for resolving any further interconnection
    disputes between operators. These rates were YTL 0.152 for Vodafone Turkey,
    YTL 0.14 for Turkcell and YTL 0.175 for Avea. Vodafone Turkey has appealed
    these decisions and has agreed rates with Turkcell for




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Regulationcontinued

three years which are significantly higher
    than the NRAs proposals. For Vodafone Turkey, rates of YTL 0.1737 for
    the 2007 financial year, YTL 0.165 for the 2008 financial year and YTL 0.16
    for the 2009 financial year were agreed and, for Turkcell, a rate of YTL 0.16
    until the 2009 financial year was agreed. The NRA announced further rates
    which it intends to apply from 1 March
    2007, being YTL 0.145 for Vodafone Turkey, YTL 0.136 for Turkcell and YTL
    0.167 for Avea. The Turkish Government has stopped the conduct
    of an auction of 3G mobile licences, originally intended for 25 May 2007. USThe Federal Communications Commission (FCC),
    the United States NRA, commenced a Notice of Inquiry in 2004 into the
    level of termination rates charged by foreign mobile network operators to
    US international operators. The FCC sought inputs on the status of foreign
    mobile termination rates, including actions taken to date by foreign regulators
    to address the issue. This proceeding remains pending. ChinaThe timing and terms of 3G licence awards,
    and related changes to the telecommunications regulatory framework, are currently
    under review by the Chinese Government.


FranceIn its review of the call termination market,
    the NRA concluded that all mobile network operators have SMP and imposed obligations
    of cost orientation, non-discrimination, accounting separation and transparency.
    It has set a price cap for Vodafones associated undertaking, SFR, of
    7.5 eurocents per minute from 1 January 2007. The NRA has found all mobile network operators
    to have SMP in a new market, the market for wholesale SMS termination, and
    has imposed a price cap for wholesale termination of no greater than 3 eurocents
    per minute for SFR and Orange and 3.5 eurocents for Bouygues. In March 2007, the Minister responsible for
    electronic communications launched a call for tenders for a fourth 3G licence.
    The deadline for applications is 31 July 2007. The fourth licence will contain
    a right for the licensee to request some 2G spectrum. This could have an impact
    on the timing of refarming as current 2G spectrum assignments may need to
    be revised.




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ContentsPagePerformance Introduction
	29Critical Accounting Estimates
	30 Impairment Reviews
	30 Business Combinations
	31 Intangible Assets, Excluding Goodwill
	31 Property, Plant and Equipment
	31 Taxation
	32 Revenue Recognition and Presentation
	32Key Performance Indicators
	33 Financial
	33 Operational
	33Operating Results
	34 2007 Financial Year Compared to the
    2006 Financial Year
	34 2006 Financial Year Compared to the
    2005 Financial Year
	44 US GAAP Reconciliation
	51Financial Position and Resources
	52 Balance Sheet
	52 Contractual Obligations
	52 Contingencies
	53 Equity Dividends
	53 Liquidity and Capital Resources
	53Risk Factors, Seasonality and Outlook
	58Cautionary Statement Regarding Forward-Looking Statements
	61Non-GAAP Information
	62  Performance IntroductionThe following discussion is based on the Consolidated Financial Statements included elsewhere in this Annual Report. The Consolidated Financial Statements are
    prepared in accordance with IFRS as issued by the IASB and as adopted for
    use in the EU. IFRS as issued by the IASB and IFRS as adopted for use in the
    EU differ in certain significant respects from US GAAP. Reconciliations of
    the material differences in the IFRS Consolidated Financial Statements to
    US GAAP are disclosed in note 38 to the Consolidated Financial Statements. The Group faces a number of significant risks
    that may impact on its future performance and activities. Please see Performance
     Risk Factors, Seasonality and Outlook. Foreign Currency TranslationThe Company publishes its Consolidated Financial
    Statements in pounds sterling. However, the majority of the Companys
    subsidiaries, joint ventures and associated undertakings report their revenue,
    costs, assets and liabilities in currencies other than pounds sterling and
    the Company translates the revenue, costs, assets and liabilities of those
    subsidiaries, joint ventures and associated undertakings into pounds sterling
    when preparing its Consolidated Financial Statements. Consequently, fluctuations
    in the value of pounds sterling versus other currencies could materially affect
    the amount of these items in the Consolidated Financial Statements, even if
    their value has not changed in their original currency.


The following table sets out the pounds sterling
    exchange rates of the other principal currencies of the Group, being: euros,  or eurocents, the currency of the EU Member States which have adopted the euro as their currency, and US dollars, $, cents or ¢,
    the currency of the United States. At / year ended
        31 March
	
	  ChangeCurrency (=£1)
	  2007
	
	  2006
	
	  %Average:Euro
	  1.48
	
	  1.47
	
	  0.7US dollar
	  1.89
	
	  1.79
	
	  5.6At 31 March:Euro
	  1.47
	
	  1.43
	
	  2.8US dollar
	  1.97
	
	  1.74
	
	  13.2 Merely for convenience, this Annual Report
    contains translations of certain pounds sterling amounts into US dollars at
    specified rates. These translations should not be construed as representations
    that the pounds sterling amounts actually represent such US dollar amounts
    or could be converted into US dollars at the rate indicated or at any other
    rate. Unless otherwise indicated, the translations of pounds sterling into
    US dollars have been made at $1.9685 per £1.00, the Noon Buying Rate
    in the City of New York for cable transfers in sterling amounts as certified
    for customs purposes by the Federal Reserve Bank of New York (the Noon
    Buying Rate) on 30 March 2007. The Noon Buying Rate on 25 May 2007 was
    $1.9845 per £1.00. The following table sets out, for the periods
    and dates indicated, the period end, average, high and low Noon Buying Rates
    for pounds sterling expressed in US dollars per £1.00, to two decimal
    places. Years ended 31 March
	  Period end
	  Average
	  High
	  Low2002
	  1.42
	  1.43
	  1.48
	  1.372003
	  1.58
	  1.54
	  1.65
	  1.432004
	  1.84
	  1.69
	  1.90
	  1.552005
	  1.89
	  1.85
	  1.96
	  1.752006
	  1.74
	  1.79
	  1.92
	  1.712007
	  1.97
	  1.89
	  1.98
	  1.74  Month
      High
      
      LowNovember 2006
      1.9693
      
      1.8883December 2006
      1.9794
      
      1.9458January 2007
      1.9847
      
      1.9305February 2007
      1.9699
      
      1.9443March 2007
      1.9694
      
      1.9235April 2007
      2.0061
      
      1.9608May 2007(1)
      1.9993
      
      1.9695 Note:(1)
In respect of May 2007, for the period
        from 1 May to 25 May 2007, inclusive. InflationInflation has not had a significant effect
    on the Groups results of operations and financial condition during the
    three years ended 31 March 2007. Presentation of InformationIn the discussion of the Groups reported
    financial position and results, information in addition to that contained
    within the Consolidated Financial Statements is presented. Refer to page 159
    for definition of terms.




|Vodafone Group Plc Annual Report
        2007 | 29
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Critical Accounting Estimates

The Group prepares its Consolidated Financial
  Statements in accordance with IFRS, the application of which often requires
  judgements to be made by management when formulating the Groups financial position and
results. Under IFRS, the directors are required to adopt those accounting policies most appropriate to the Groups circumstances for the purpose of presenting fairly the Groups financial position, financial performance and cash flows. The
Group also prepares a reconciliation of the Groups revenue, net profit or loss and shareholders equity
between IFRS and US GAAP. In determining and applying accounting policies,
    judgement is often required in respect of items where the choice of specific
    policy, accounting estimate or assumption to be followed could materially
    affect the reported results or net asset position of the Group should it later
    be determined that a different choice would be more appropriate. Management considers the accounting estimates
    and assumptions discussed below to be its critical accounting estimates and,
    accordingly, provides an explanation of each below. Where it is considered
    that the Groups US GAAP accounting policies differ materially from the
    IFRS accounting policy, a separate explanation is provided. The discussion below should also be read
    in conjunction with the Groups disclosure of significant IFRS accounting
    policies, which is provided in note 2 to the Consolidated Financial Statements,
    Significant accounting policies and with the US GAAP information
    provided in note 38 to the Consolidated Financial Statements. Management has discussed its critical accounting
    estimates and associated disclosures with the Companys Audit Committee. Impairment ReviewsAsset recoverability is an area involving
    management judgement, requiring assessment as to whether the carrying value
    of assets can be supported by the net present value of future cash flows derived
    from such assets using cash flow projections which have been discounted at
    an appropriate rate. In calculating the net present value of the future cash
    flows, certain assumptions are required to be made in respect of highly uncertain
    matters, as noted below. IFRS requires management to undertake an
    annual test for impairment of indefinite lived assets and, for finite lived
    assets, to test for impairment if events or changes in circumstances indicate
    that the carrying amount of an asset may not be recoverable. Group management
    currently undertakes an annual impairment test covering goodwill and other
    indefinite lived assets and also reviews finite lived assets and investments
    in associated undertakings at least annually to consider whether a full impairment
    review is required. In the year to 31 March 2007, the Group has recognised
    impairment losses amounting to £11,600 million relating to the Groups
    operations in Germany and Italy. US GAAPUnder US GAAP, the requirements for testing
    the recoverability of intangible assets and property, plant and equipment
    differ from IFRS. US GAAP requires the carrying value of such assets with
    finite lives to be compared to undiscounted future cash flows over the remaining
    useful life of the primary asset of the asset group being tested for impairment,
    to determine if the asset or asset group is recoverable. If the carrying value
    exceeds the undiscounted cash flows, the carrying value is not recoverable
    and the asset or asset group is written down to the net present value of future
    cash flows derived in a manner similar to IFRS. For purposes of goodwill impairment testing
    under US GAAP, the fair value of a reporting unit including goodwill is compared
    to its carrying value. If the fair value of a reporting unit is lower than
    its carrying value, the fair value of the goodwill within that reporting unit
    is compared with its respective carrying value, with any excess carrying value
    written off as an impairment. The fair value of the goodwill is the difference
    between the fair


value of the reporting unit and the fair
    value of the net assets of the reporting unit. The carrying value of the Groups
    mobile operations in Germany at31
    January 2007, the date of the Groups annual impairment test, was more
    than £25 billion, significantly in excess of its fair value, estimated
    using discounted cash flows. However, in accordance with SFAS No. 144, Accounting
    for the Impairment or Disposal of Long-Lived Assets, no impairment has
    been recognised as the estimated undiscounted cash flows are in excess of
    the carrying value. At 31 January 2007, a 16.0% reduction in the undiscounted
    cash flows would eliminate this excess and result in a material impairment
    loss under US GAAP. Any impairment loss would be measured by comparing the
    carrying value of the Groups mobile operations in Germany with its respective
    fair value, estimated using discounted cash flows. AssumptionsThere are a number of assumptions and estimates
    involved in calculating the net present value of future cash flows from the
    Groups businesses, including managements expectations of: •
      growth in EBITDA, calculated
        as adjusted operating profit beforedepreciation and amortisation;•
      timing and quantum of future capital
        expenditure;•
      uncertainty of future technological
        developments;•
      long term growth rates; and•
      the selection of discount rates to
        reflect the risks involved.The Group
        prepares and internally approves formal ten-year plans for itsbusinesses and uses these as the basis for its impairment reviews.Management
        uses the initial five years of the plans, except in markets which
        are forecast to grow ahead of the long term growth
        rate for the market. In such cases, further
        years will be used until the forecast growth rate trends towards
        the long term growth rate, up to a maximum of ten years.For mobile
        businesses where the first five years of the ten year management
        plan are used for the Groups value in use calculations, a longterm 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 EBITDA in years six to ten of
        the management plan.For
        mobile businesses where the full ten year management plans are used
        for the Groups value in use calculations,
        a long term growth rate intoperpetuity
        has been determined as the lower of:•
      the nominal GDP rates for
        the country of operation; and•
      the compound annual
        growth rate in EBITDA in years nine to ten of the management
        plan.For non-mobile
        businesses, no growth is expected beyond managementsplans
        for the initial five year period.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 evaluationand, hence, results.The Groups
        review includes the key assumptions related to sensitivity in thecash flow projections.




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| | Performance
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The following changes to the assumptions used in the impairment review would have (increased)/decreased the combined impairment loss recognised in the year ended 31 March 2007 in respect of the Groups
mobile
operations in Germany and Italy: Increase by 1/2%
	
	Decrease by 1/2%£bn
	
	£bnDiscount rate
	(1.4
	)
	1.5Budgeted EBITDA(1)
	0.8
	
	(0.8
	)Capital expenditure(2)
	(0.1
	)
	0.1Long term growth rate
	1.7
	
	(1.5
	) Notes:(1)
    Represents the compound annual growth
        rate for
the initial five years of the Groups approved financial plans.(2)
    Represents capital expenditure as a percentage
    of revenue in the initial five years of the Groups approved plans. These assumption changes in isolation would
    not have resulted in an impairment loss in any other of the Groups
continuing operations. US GAAPUnder US GAAP, the assumptions and
estimates involved in reviewing for impairment are similar to IFRS, with the
exception of the requirement to determine the primary asset of an asset group.
For asset groups
represented by the Groups operating companies, the primary asset is determined
as the 3G licence, except for operating companies where no 3G licence has been
acquired, in which case the 2G licence is the primary asset. If the primary asset
of
the Groups mobile operations in Germany were the 2G rather than the 3G
licence, the carrying value would exceed the undiscounted cash flows and result
in a significant impairment loss. Business CombinationsGoodwill
only arises in business combinations. The amount of goodwill initially recognised
is dependent on the allocation of the purchase price to the fair value of the
identifiable assets acquired and the liabilities assumed. The determination of
the fair value of the assets and liabilities is based, to a considerable extent,
on managements judgement. Allocation of the purchase price affects the results of the Group as finite lived
intangible assets are amortised, whereas indefinite lived intangible assets,
including goodwill, are not amortised and could result in differing amortisation
charges based on the allocation to indefinite lived and finite lived intangible
assets. On the acquisition of mobile network operators, the identifiable intangible assets
may include licences, customer bases and brands. The fair value of these assets
is determined by discounting estimated future net cash flows generated by the
asset, assuming no active market for the assets exist. The use of different assumptions
for the expectations of future cash flows and the discount rate would change
the valuation of the intangible assets. IFRSOn
transition to IFRS, the Group elected not to apply IFRS 3, Business Combinations, retrospectively as the difficulty in applying these requirements to the large number of business combinations completed
by the Group from incorporation through to 1 April 2004 exceeded any potential benefits. Goodwill arising before the date of transition to IFRS, after adjusting for items including the impact of proportionate consolidation of joint ventures,
amounted to £78,753 million. If the Group had elected to apply the accounting for business combinations retrospectively,
it may have led to an increase or decrease in goodwill and increase in licences,
customer bases, brands and related deferred
tax liabilities recognised on acquisition. US GAAPFor acquisitions prior to 29 September 2004, the key difference from IFRS was that for the acquisition of mobile network businesses, the excess of purchase price over the fair value of the identifiable assets and
liabilities


acquired other than licences (the residual) was allocated to licences,
as opposed to goodwill. However, subsequent to this date and due to the prohibition
of this method of accounting following the issuance of EITF Topic D-108, licences
are valued using a direct valuation approach, with the residual being allocated
to goodwill. For acquisitions preceding this date, the residual has been and
will continue to be allocated to goodwill. Intangible Assets, Excluding GoodwillOther
intangible assets include the Groups aggregate amounts spent on the acquisition
of 2G and 3G licences, customer bases, brands, computer software and development
costs. These assets arise from both separate purchases and from acquisition as
part of business combinations. The relative size of the Groups intangible assets, excluding goodwill,
makes the judgements surrounding the estimated useful lives and basis of amortisation
critical to the Groups financial position and
performance. At 31 March 2007, intangible assets, excluding goodwill, amounted to £15,705
million (2006: £16,512 million) and represented 14.3% (2006: 13.0%) of the
Groups total assets. Estimation of useful lifeThe
useful life used to amortise intangible assets relates to the future performance
of the assets acquired and managements judgement of the period over which
economic benefit will be derived from the asset. The basis for determining the
useful life for the most significant categories of intangible assets is as follows: Licences and spectrum feesThe estimated useful life is, generally,
the term of the licence, unless there is a presumption of renewal at negligible
cost. Using the licence term reflects the period over which the Group will receive
economic benefit. For technology specific licences with a presumption of renewal
at negligible cost, the estimated
useful economic life reflects the Groups expectation of the period over
which the Group will continue to receive economic benefit from the licence. The
economic lives are periodically reviewed, taking into consideration such factors
as changes in technology. Historically, any changes to economic lives have not
been material following these reviews. Customer basesThe 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. Historically, changes to the estimated useful
    lives have not had a significant impact on the Groups results and financial
    position. Capitalised softwareThe useful life is determined
    by management at the time the software is acquired and brought into use and
    is regularly reviewed for appropriateness. For computer software licences,
    the useful life represents managements view of expected benefits over
    which the Group will receive benefits from the software, but not exceeding
    the licence term. For unique software products controlled by the Group, the
    life is based on historical experience with similar products as well as anticipation
    of future events, which may impact their life, such as changes in technology. Historically, changes in useful lives have
    not resulted in material changes to the Groups amortisation charge. Property, Plant and EquipmentProperty,
plant and equipment also represent a significant proportion of the asset base
of the Group, being 12.3% (2006: 10.8%) of the Groups total assets. Therefore, the estimates and assumptions made to
determine their carrying value and related depreciation are critical to the Groups
financial position and performance.




|Vodafone Group Plc Annual Report
        2007 | 31
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Critical Accounting EstimatescontinuedEstimation of useful lifeThe
charge in respect of periodic depreciation is derived after determining an estimate
of an assets expected useful life and the expected residual value at the end of its life. Increasing an assets
expected life or its residual value would result in a reduced depreciation charge in the Groups
income statement. The useful lives of Group assets are determined by management at the time the
asset is acquired and reviewed annually for appropriateness. The lives are based
on historical experience with similar assets as well as anticipation of future
events, which may impact their life, such as changes in technology. Furthermore,
network infrastructure is only depreciated over a period that extends beyond
the expiry of the associated licence under which the operator provides telecommunications
services, if there is a reasonable expectation of renewal or an alternative future
use for the asset. Historically, changes in useful lives have not resulted in material changes to
the Groups depreciation charge. Cost capitalisationCost
includes the total purchase price and labour costs associated with the Groups
own employees to the extent that they are directly attributable to construction
costs, or where they comprise a proportion of a department directly engaged in
the purchase or installation of a fixed asset.Management judgement is involved in determining the appropriate internal costs
to capitalise and the amounts involved. For the year ended 31 March 2007, internal
costs capitalised represented approximately 6% (2006: 7%) of expenditure on property,
plant and equipment and computer software and approximately 1% (2006: 1%) of
total operating expenses. TaxationThe
  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 necessarily involves a degree of estimation and
  judgement in respect of certain items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority or, as appropriate, through a formal legal process. The final resolution of some of these items
may give rise to material profit and loss and/or cash flow variances. See Performance  Financial Position and Resources. The growth in complexity of the Groups structure following its rapid expansion
geographically has made the degree of estimation and judgement more challenging.
The resolution of issues is not always within the control of the Group and it
is often dependent on the efficiency of the legal processes in the relevant taxing
jurisdictions in which the Group operates. Issues can, and often do, take many
years to resolve. Payments in respect of tax liabilities for an accounting period
result from payments on account and on the final resolution of open items. As
a result, there can be substantial differences between the tax charge in the
income statement and tax payments. Significant items on which the Group has exercised accounting judgement include
a provision in respect of an enquiry from UK HM Revenue and Customs with regard
to the Controlled Foreign Companies tax legislation (see note 6 to the Consolidated
Financial Statements), legal proceedings to recover VAT in relation to 3G licence
fees (see page 53) and potential tax losses in respect of a write down in the
value of investments in Germany (see note 6 to the Consolidated Financial Statements).
The amounts recognised in the Consolidated Financial Statements in respect of
each matter are derived from the Groups best estimation and judgement,
as described above. However, the inherent uncertainty regarding the outcome of
these items means eventual resolution could differ from the accounting estimates
and therefore impact the Groups results and cash flows.


Recognition of deferred tax assetsThe recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will be available in the future, against which the reversal of temporary differences
  can be deducted. Recognition, therefore, involves judgement regarding the future financial performance of the particular legal entity or tax group in which the deferred tax asset has been recognised. Historical differences between forecast and actual taxable profits have not resulted
in material adjustments to the recognition of deferred tax assets. Revenue Recognition and PresentationRevenue
from mobile telecommunications comprises amounts charged to customers in respect
of monthly access charges, airtime charges, messaging, the provision of other
mobile telecommunications services, including data services and information provision,
fees for connecting users of other fixed line and mobile networks to the Groups network, revenue from the sale of equipment, including handsets, and revenue arising from the Groups
Partner Network
agreements. Arrangements with multiple deliverablesIn revenue arrangements including more than one deliverable, the arrangement consideration is allocated to each deliverable based on the fair value of the individual element. The Group generally determines the fair
value of individual elements based on prices at which the deliverable is regularly sold on a standalone basis. Deferral periodCustomer
connection fees, when combined with related equipment revenue, in excess of the
fair value of the equipment are deferred and recognised over the expected life
of the customer relationship. The life is determined by reference to historical
customer churn rates. An increase in churn rates would reduce the expected customer
relationship life and accelerate revenue recognition. Historically, changes to
the expected customer relationship lives have
not had a significant impact on the Groups results and financial position. Any excess upgrade or tariff migration fees over the fair value of equipment
provided are deferred over the average upgrade or tariff migration period as
appropriate. This time period is calculated based on historical activity of customers
who upgrade or change tariffs. An increase in the time period would extend the
period over which revenue is recognised. PresentationWhen
deciding the most appropriate basis for presenting revenue or costs of revenue,
both the legal form and substance of the agreement between the Group and its
business partners are reviewed to determine each
partys respective role in the transaction. Where the Groups role in a transaction is that of principal, revenue is
recognised on a gross basis. This requires revenue to comprise the gross value
of the transaction billed to the customer, after trade discounts, with any related
expenditure charged as an operating cost. Where the Groups role in a transaction is that of an agent, revenue is
recognised on a net basis, with revenue representing the margin earned.




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| | Performance
| | -----------
| |            

Key Performance Indicators

The Board and the Executive Committee monitor the Groups progress against its strategic objectives and the financial performance of the Groups operations on a regular basis. Performance is assessed against the
strategy, budgets and forecasts using financial and non-financial measures. The following section details the most significant Key Performance Indicators
(KPIs) used by the Group, describing their purpose, the basis of
calculation and the source of the underlying data. Definitions of the key terms
are provided on page 159. Financial The Group uses the following primary measures
to assess the performance of the Group and its individual businesses. A number
of these measures at a Group level are presented on an organic basis, which provides
an assessment of underlying growth excluding the effect of business acquisitions
and disposals and changes in exchange rates. Financial measures presented on
an organic basis are non-GAAP financial measures. For more information on these
measures and
the basis of calculation of organic growth see Performance  Non-GAAP Information on
page 62. RevenueRevenue
and its growth for the Group, and its regions, covering the 2007, 2006 and 2005
financial years, is reviewed in Performance  Operating Results on
pages 34 to 51. Revenue and revenue growth are used for internal performance analysis and by
investors to assess progress against outlook statements provided externally by
the Group. Adjusted operating profitAdjusted
operating profit is used by the Group for internal performance analysis as it
represents the underlying operating profitability of the Groups businesses. The measure is presented both for the Group and
its regions, covering the 2007, 2006 and 2005 financial years, in Performance Operating Results on pages 34 to 51. The basis of calculation, along with an analysis of why the Group believes it is a useful measure, is provided in
the section titled Performance  Non-GAAP Information on page
62. Free cash flowFree cash flow provides an evaluation
    of the Groups liquidity and the cash generated by the Groups operations.
    The calculation of free cash flow, along with an analysis of why the Group
    believes it is a useful measure, is provided in the section titled Performance
     Non-GAAP Information on page 62. The Group has provided an outlook
    for free cash flow in the 2008 financial year on page 60. OperationalCertain
operational measures relating to customers and revenue for the Group and its
regions, covering the 2007, 2006 and 2005 financial years, are provided in Performance  Operating Results on
pages 34 to 51, with the exception of customer delight. These measures are commonly
used in the mobile communications industry. CustomersThe
Group highly values its customers and strives to delight them. As a result, customer
based KPIs are important measures for internal performance analysis. Management
also believes that some of these measures provide useful information for investors
regarding the success of the Groups customer acquisition and retention activities. For customer numbers and churn, the data used to calculate the KPIs is derived from the customer relationship management
systems of each of the Groups operations. Customer numbersThe Group prepares customer numbers
on a venture, proportionate and controlled or jointly controlled basis for its
mobile operations. A summary of the customer numbers on all bases is presented
in Business
Overview 


Where We Operate on page 13. ChurnChurn represents the disconnection
rate of customers in each of the Groups mobile operations. It is calculated
as the total gross customer disconnections in the period divided by the average
total customers in the period. Churn rates stated in this Annual Report are calculated
for the entire financial year. Customer delightThe
Group uses a proprietary customer delight system to track customer
satisfaction across its controlled markets and jointly controlled market in Italy.
More information on the benefits of the system are
provided in Business Overview  How We Deliver Our Services on
page 17. Customer delight is measured by an index based on the results of surveys performed
by an external research company which cover all aspects of service provided by
Vodafone and incorporates the results of the relative
satisfaction of the competitors customers. An overall index for the Group
is calculated by weighting the results for each of the Groups operations
based on service revenue. Increased customer expectations are putting a downward pressure on customer satisfaction
for the Group and many of its competitors. Despite this trend, the Group outperformed
its target for customer delight in the 2007 financial year and the index was
broadly stable compared to the previous financial year. Revenue based measuresManagement believes that revenue based measures provide useful information for investors regarding trends in customer revenue derived from mobile communications services and the extent to which customers use mobile
services. The data used to calculate these KPIs is derived from a number of sources. Financial
information, such as service revenue, is extracted from the Groups financial
systems, whilst operational information, including customer and usage metrics,
is derived from the customer relationship management and billing systems of each
of the Groups operations. Average revenue per user (ARPU)ARPU represents the average revenue
by customers over a period and is calculated as service revenue, being total
revenue excluding equipment revenue and connection fees, divided by the weighted
average number of customers during the period. ARPU disclosed in this Annual
Report is presented on a monthly basis and represents the total ARPU for the
financial year divided by twelve. Voice usageVoice usage is the total number of
minutes of voice use on the Groups mobile networks, including calls made
by the Groups customers, often referred to as outgoing usage, and calls
received by the
Groups customers, often referred to as incoming usage. Messaging and data revenueMessaging and data revenue represent
the non-voice element of service revenue. In recent years, these revenues have
grown at a faster rate than voice revenue as customers increasingly use these
services and new products and services have been launched. As competition has
intensified in many of the markets in which the Group operates and penetration
rates have increased, the ability of the Group to grow messaging and data revenue
has become an increasingly
important factor, internally and for investors. CostsEurope targetsThe Group has set targets in respect
of revenue market share, operating expenses and capitalised fixed asset additions.
Progress against the revenue market share target is measured by tracking performance
in Germany, Italy, Spain and the UK against their principal competitors. The
operating expense and capitalised fixed asset additions targets relate to the
Europe region and common functions in aggregate. These targets are discussed
in more detail on pages 38 to
39.




|Vodafone Group Plc Annual Report
        2007 | 33
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This section presents detail of the Groups operating performance for the 2007 financial year versus the 2006 financial year and for the 2006 financial year versus the 2005 financial year, providing understanding of how
the revenue and the adjusted operating profit performance of the Group and its operating segments within the Europe and EMAPA regions have developed in the last three years.

During the year ended 31 March 2007, the Group changed the organisational structure of its operations. The following results are presented for continuing operations in accordance with the new organisational structure. Europe
includes the results of the Groups mobile operations in Western Europe and its fixed line business in Germany, while EMAPA includes the Groups operations in Eastern Europe, the Middle East, Africa and Asia and the Pacific area and the
Groups associates and investments.

2007 Financial Year Compared
    to the 2006 Financial
Year

|Group                                                    | 
|-------------------------------------------------------- | 
|                                                         | 
|                                                         | 
|                                                         | 
|                                                         | 
|Voice revenue                                            | 
|Messaging revenue(2)                                     | 
|Data revenue(2)                                          | 
|Fixed line operators and DSL revenue                     | 
|Other service revenue                                    | 
|                                                         | 
|Total service revenue                                    | 
|Acquisition revenue                                      | 
|Retention revenue                                        | 
|Other revenue                                            | 
|                                                         | 
|Total revenue                                            | 
|Interconnect costs                                       | 
|Other direct costs                                       | 
|Acquisition costs                                        | 
|Retention costs                                          | 
|Operating expenses                                       | 
|Acquired intangibles amortisation                        | 
|Purchased licence amortisation                           | 
|Depreciation and other amortisation                      | 
|Share of result in associates                            | 
|                                                         | 
|Adjusted operating profit                                | 
|Adjustments for:                                         | 
| Non-operating income of associates                     | 
| Impairment losses                                      | 
| Other income and expense                               | 
|                                                         | 
|Operating loss                                           | 
|Non-operating income and expense                         | 
|Investment income                                        | 
|Financing costs                                          | 
|                                                         | 
|Loss before taxation                                     | 
|Income tax expense                                       | 
|                                                         | 
|Loss for the financial year from continuing operations   | 
|Loss for the financial year from discontinued operations | 
|                                                         | 
|Loss for the financial year                              | 
|                                                         | 
|                                                         | 

|Notes:
|------
|(1)   
|(2)   
|      
|      

RevenueRevenue increased by 6.0% to £31,104
    million in the year to 31 March 2007, with organic growth of 4.3%. The net
    impact of acquisitions and disposals contributed 3.3 percentage points to
    revenue growth, offset by unfavourable movements in exchange rates of 1.6
    percentage points, with both effects arising principally in the EMAPA region. The Europe region recorded organic revenue
    growth of 1.4%, whilst the EMAPA region delivered organic revenue growth of
    21.1%. As a result, the EMAPA region accounted for more than 70% of the organic
    growth in Group revenue. Strong performances were recorded in Spain and a
    number of the Groups emerging markets.


An increase in the average mobile customer base and usage stimulation initiatives
resulted in organic revenue growth of 2.5% and 7.0% in voice and messaging revenue,
respectively. Data revenue is an increasingly important component of Group revenue,
with organic growth of 30.7%, driven by increasing penetration from 3G devices
and growth in revenue from business services. The Europe region and common functions contributed 79% of Group revenue, of which
approximately 63% was euro denominated, with the remaining 16% being denominated
in sterling. The remaining 21% was generated in the EMAPA region where no single
currency was individually significant.




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| | Performance
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Operating resultAdjusted operating profit increased
    by 1.4% to £9,531 million, with organic growth of 4.2%. The net impact
    of acquisitions and disposals and unfavourable exchange rate movements reduced
    reported growth by 0.3 percentage points and 2.5 percentage points, respectively,
    with both effects arising principally in the EMAPA region. The Europe region
    declined 4.7% on an organic basis, whilst the EMAPA region recorded organic
    growth of 24.3%. Strong performances were delivered in Spain, the US and a
    number of emerging markets. Adjusted operating profit is stated after charges in relation to regulatory fines
in Greece of £53 million and restructuring costs within common functions,
Vodafone Germany, Vodafone UK and Other Europe of £79 million. The EMAPA
region accounted for all of the Groups reported and organic growth in adjusted
operating profit. Adjusted operating profit for the 2007 financial year was principally denominated
in euro (55%), US dollar (22%) and sterling (5%), with the remaining 18% being
denominated in other currencies. The acquisitions and stake increases led to the rise in acquired intangible asset
amortisation, and these acquisitions, combined with the continued expansion of
network infrastructure in the region, resulted in higher
depreciation charges. The Groups share of results from associates increased by 13.0%, mainly
due to Verizon Wireless which reported record growth in net additions and increased
ARPU. The growth in Verizon Wireless was offset by a
reduction in the Groups share of results from its other associated undertakings,
which fell due to the disposals of Belgacom Mobile S.A. and Swisscom Mobile A.G.
as well as the impact of reductions in termination rates and intense competition
experienced by SFR in France. Statutory operating loss was £1,564 million compared with a loss of £14,084
million in the previous financial year following lower impairment charges. In
the year ended 31 March 2007, the Group recorded an
impairment charge of £11,600 million (2006: £23,515 million) in relation
to the carrying value of goodwill in the Groups operations in Germany (£6,700
million) and Italy (£4,900 million). The impairment in Germany resulted
from an increase in long term interest rates, which led to higher discount rates,
along with increased price competition and continued regulatory pressures in
the German market. The impairment in Italy resulted from an increase in long
term interest rates and the estimated impact of legislation cancelling the fixed
fees for the top up of prepaid cards and the related competitive response in
the Italian market. The increase in interest rates accounted for £3,700
million of the reduction in
value during the year. Certain of the Groups cost reduction and revenue stimulation initiatives
are managed centrally within common functions. Consequently, operating and capital
expenses are incurred centrally and recharged to the relevant countries, primarily
in Europe. This typically results in higher operating expenses with a corresponding
reduction in depreciation for the countries concerned. Other income and expense for the year ended 31 March 2007 included the gains
on disposal of Belgacom Mobile S.A. and Swisscom Mobile A.G., amounting to £441
million and £68 million, respectively.


Investment income and financing costs2007
	
	
	2006
	
	Change£m
	
	
	£m
	
	%Net financing costs before dividendsfrom investments(1)
	(435
	)
	
	(318
	)
	36.8Potential interest charges arising onsettlement of outstanding tax issues
	(406
	)
	
	(329
	)
	23.4Changes in the fair value of equity putrights and similar arrangements
	2
	
	
	(161
	)
	101.2Dividends from investments
	57
	
	
	41
	
	39.0Foreign exchange(2)
	(41
	)
	
	
	
	Net financing costs
	(823
	)
	
	(767
	)
	7.3 Notes:(1)
    Includes a one off gain of £86 million
    related to the Group renegotiating its investments in SoftBank(2)
    Comprises foreign exchange differences
        reflected in the income statement in relation to certain intercompany
        balances and the foreign exchange differences on financial instruments
        received as consideration in the disposal of Vodafone Japan to SoftBank,
    which completed in April 2006 Net financing costs before dividends from investments
    increased by 36.8% to £435 million as increased financing costs, reflecting higher average debt and interest rates, and losses on mark to market adjustments on
financial instruments more than offset higher investment income resulting from new investments in SoftBank, which arose on the sale of Vodafone Japan during the year, including an £86 million gain related to the renegotiation of these
investments. At 31 March 2007, the provision for potential interest charges arising on settlement of outstanding tax issues was £1,213
million. TaxationThe effective tax rate, exclusive of impairment
    losses, is 26.3% (2006: 27.5%), which
    is lower than the Groups weighted
average tax rate due to the resolution
of a number of historic tax issues
with tax authorities and additional tax
deductions in Italy. The prior year benefited
from the tax treatment of a share repurchase
in Vodafone Italy and favourable
tax settlements. A significant event in
the year was a European
Court decision in respect of the UK Controlled
Foreign Company (CFC)
legislation, following which Vodafone
has not accrued any additional provision
in respect of the application of UK CFC
legislation to the Group. The effective tax rate including impairment losses is (101.7)% compared to (16.0)% for the prior year. The negative tax rates arise from no tax benefit being recorded for the impairment losses of £11,600m (2006:
£23,515m). Basic loss per shareBasic loss per share from continuing
operations decreased from 27.66 pence to a loss per share of 8.94 pence for the
current year. The basic loss per share is after a charge of 21.04 pence per share
(2006: 37.56 pence per share) in relation to an impairment of the carrying value
of goodwill.




|Vodafone Group Plc Annual Report
        2007 | 35
|--------------------------------------------- | --

---



Back to Contents

Operating Resultscontinued

Europe

|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   | % change |  
|----------------------------------- | ------- | - | ----- | - | ----- | - | ------ | - | ----- | - | ------ | - | ------------ | - | ------ | - | ----- | - | -------- | -
|                                    | Germany |   | Italy |   | Spain |   | UK     |   | Arcor |   | Other  |   | Eliminations |   | Europe |   |       |   |          |  
|                                    | £m      |   | £m    |   | £m    |   | £m     |   | £m    |   | £m     |   | £m           |   | £m     |   | £     |   | Organic  |  
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|Year ended 31 March 2007            |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|Voice revenue                       | 3,995   |   | 3,329 |   | 3,435 |   | 3,621  |   | –     |   | 3,320  |   | (343         | ) | 17,357 |   | (2.6  | ) |          |  
|Messaging revenue                   | 746     |   | 563   |   | 380   |   | 760    |   | –     |   | 501    |   | (25          | ) | 2,925  |   | 3.1   |   |          |  
|Data revenue                        | 413     |   | 189   |   | 247   |   | 295    |   | –     |   | 194    |   | (38          | ) | 1,300  |   | 27.1  |   |          |  
|Fixed line operator and DSL revenue | 1       |   | –     |   | –     |   | –      |   | 1,419 |   | 3      |   | (26          | ) | 1,397  |   | 9.9   |   |          |  
|Other service revenue               | 1       |   | 2     |   | –     |   | 5      |   | –     |   | –      |   | –            |   | 8      |   |       |   |          |  
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|Total service revenue               | 5,156   |   | 4,083 |   | 4,062 |   | 4,681  |   | 1,419 |   | 4,018  |   | (432         | ) | 22,987 |   | 0.1   |   | 2.0      |  
|Acquisition revenue                 | 172     |   | 124   |   | 307   |   | 274    |   | 22    |   | 108    |   | (3           | ) | 1,004  |   | (1.4  | ) |          |  
|Retention revenue                   | 40      |   | 36    |   | 124   |   | 52     |   | –     |   | 102    |   | –            |   | 354    |   | (18.4 | ) |          |  
|Other revenue                       | 75      |   | 2     |   | 7     |   | 117    |   | –     |   | 47     |   | (1           | ) | 247    |   | (23.8 | ) |          |  
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|Total revenue                       | 5,443   |   | 4,245 |   | 4,500 |   | 5,124  |   | 1,441 |   | 4,275  |   | (436         | ) | 24,592 |   | (0.6  | ) | 1.4      |  
|Interconnect costs                  | (645    | ) | (628  | ) | (675  | ) | (1,001 | ) | (338  | ) | (813   | ) | 432          |   | (3,668 | ) | (1.9  | ) |          |  
|Other direct costs                  | (332    | ) | (242  | ) | (352  | ) | (452   | ) | (262  | ) | (275   | ) | 1            |   | (1,914 | ) | 14.9  |   |          |  
|Acquisition costs                   | (560    | ) | (249  | ) | (642  | ) | (677   | ) | (178  | ) | (301   | ) | 3            |   | (2,604 | ) | 4.1   |   |          |  
|Retention costs                     | (351    | ) | (107  | ) | (398  | ) | (372   | ) | –     |   | (315   | ) | –            |   | (1,543 | ) | (11.9 | ) |          |  
|Operating expenses                  | (1,126  | ) | (870  | ) | (866  | ) | (1,163 | ) | (396  | ) | (1,041 | ) | –            |   | (5,462 | ) | 4.2   |   |          |  
|Acquired intangibles amortisation   | –       |   | –     |   | –     |   | (11    | ) | –     |   | (11    | ) | –            |   | (22    | ) |       |   |          |  
|Purchased licence amortisation      | (340    | ) | (75   | ) | (37   | ) | (333   | ) | –     |   | (64    | ) | –            |   | (849   | ) |       |   |          |  
|Depreciation and other amortisation | (735    | ) | (499  | ) | (430  | ) | (604   | ) | (96   | ) | (524   | ) | –            |   | (2,888 | ) |       |   |          |  
|Share of result in associates       | –       |   | –     |   | –     |   | –      |   | –     |   | 5      |   | –            |   | 5      |   |       |   |          |  
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|Adjusted operating profit           | 1,354   |   | 1,575 |   | 1,100 |   | 511    |   | 171   |   | 936    |   |             |   | 5,647  |   | (5.1  | ) | (4.7     | )
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|Year ended 31 March 2006            |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|Voice revenue                       | 4,304   |   | 3,472 |   | 3,093 |   | 3,642  |   | –     |   | 3,672  |   | (356         | ) | 17,827 |   |       |   |          |  
|Messaging revenue                   | 815     |   | 526   |   | 328   |   | 674    |   | –     |   | 507    |   | (14          | ) | 2,836  |   |       |   |          |  
|Data revenue                        | 275     |   | 172   |   | 194   |   | 252    |   | –     |   | 170    |   | (40          | ) | 1,023  |   |       |   |          |  
|Fixed line operator and DSL revenue | –       |   | –     |   | –     |   | –      |   | 1,305 |   | –      |   | (34          | ) | 1,271  |   |       |   |          |  
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|Total service revenue               | 5,394   |   | 4,170 |   | 3,615 |   | 4,568  |   | 1,305 |   | 4,349  |   | (444         | ) | 22,957 |   |       |   |          |  
|Acquisition revenue                 | 185     |   | 94    |   | 269   |   | 285    |   | 15    |   | 170    |   | –            |   | 1,018  |   |       |   |          |  
|Retention revenue                   | 61      |   | 84    |   | 105   |   | 60     |   | –     |   | 124    |   | –            |   | 434    |   |       |   |          |  
|Other revenue                       | 114     |   | 15    |   | 6     |   | 135    |   | –     |   | 54     |   | –            |   | 324    |   |       |   |          |  
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|Total revenue                       | 5,754   |   | 4,363 |   | 3,995 |   | 5,048  |   | 1,320 |   | 4,697  |   | (444         | ) | 24,733 |   |       |   |          |  
|Interconnect costs                  | (732    | ) | (681  | ) | (634  | ) | (862   | ) | (368  | ) | (906   | ) | 444          |   | (3,739 | ) |       |   |          |  
|Other direct costs                  | (281    | ) | (241  | ) | (329  | ) | (355   | ) | (187  | ) | (273   | ) | –            |   | (1,666 | ) |       |   |          |  
|Acquisition costs                   | (551    | ) | (172  | ) | (543  | ) | (665   | ) | (147  | ) | (423   | ) | –            |   | (2,501 | ) |       |   |          |  
|Retention costs                     | (410    | ) | (177  | ) | (354  | ) | (455   | ) | –     |   | (356   | ) | –            |   | (1,752 | ) |       |   |          |  
|Operating expenses                  | (1,077  | ) | (822  | ) | (762  | ) | (1,088 | ) | (390  | ) | (1,104 | ) | –            |   | (5,243 | ) |       |   |          |  
|Acquired intangibles amortisation   | –       |   | –     |   | –     |   | –      |   | –     |   | (2     | ) | –            |   | (2     | ) |       |   |          |  
|Purchased licence amortisation      | (342    | ) | (74   | ) | (69   | ) | (333   | ) | –     |   | (66    | ) | –            |   | (884   | ) |       |   |          |  
|Depreciation and other amortisation | (865    | ) | (524  | ) | (336  | ) | (592   | ) | (89   | ) | (594   | ) | –            |   | (3,000 | ) |       |   |          |  
|Share of result in associates       | –       |   | –     |   | –     |   | –      |   | –     |   | 5      |   | –            |   | 5      |   |       |   |          |  
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|Adjusted operating profit           | 1,496   |   | 1,672 |   | 968   |   | 698    |   | 139   |   | 978    |   | –            |   | 5,951  |   |       |   |          |  
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|Change at constant exchange rates   | %       |   | %     |   | %     |   | %      |   | %     |   | %      |   |              |   |        |   |       |   |          |  
|Voice revenue                       | (6.7    | ) | (3.6  | ) | 11.8  |   | (0.6   | ) | –     |   | (9.2   | ) |              |   |        |   |       |   |          |  
|Messaging revenue                   | (7.8    | ) | 7.6   |   | 16.8  |   | 12.8   |   | –     |   | (0.6   | ) |              |   |        |   |       |   |          |  
|Data revenue                        | 51.2    |   | 10.8  |   | 27.5  |   | 17.1   |   | –     |   | 15.1   |   |              |   |        |   |       |   |          |  
|Fixed line operator and DSL revenue | –       |   | –     |   | –     |   | –      |   | 9.5   |   | –      |   |              |   |        |   |       |   |          |  
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|Total service revenue               | (3.9    | ) | (1.5  | ) | 13.1  |   | 2.5    |   | 9.5   |   | (7.2   | ) |              |   |        |   |       |   |          |  
|Acquisition revenue                 | (6.4    | ) | 33.1  |   | 14.5  |   | (3.9   | ) | 45.7  |   | (35.7  | ) |              |   |        |   |       |   |          |  
|Retention revenue                   | (34.1   | ) | (57.2 | ) | 18.8  |   | (13.3  | ) | –     |   | (17.2  | ) |              |   |        |   |       |   |          |  
|Other revenue                       | (33.5   | ) | (89.8 | ) | 22.5  |   | (13.3  | ) | –     |   | (15.7  | ) |              |   |        |   |       |   |          |  
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|Total revenue                       | (4.8    | ) | (2.2  | ) | 13.3  |   | 1.5    |   | 9.8   |   | (8.6   | ) |              |   |        |   |       |   |          |  
|Interconnect costs                  | (11.4   | ) | (7.2  | ) | 7.0   |   | 16.1   |   | (7.6  | ) | (9.7   | ) |              |   |        |   |       |   |          |  
|Other direct costs                  | 18.9    |   | 0.8   |   | 7.6   |   | 27.3   |   | 41.6  |   | 1.0    |   |              |   |        |   |       |   |          |  
|Acquisition costs                   | 2.2     |   | 46.1  |   | 18.8  |   | 1.8    |   | 21.3  |   | (28.6  | ) |              |   |        |   |       |   |          |  
|Retention costs                     | (13.8   | ) | (39.3 | ) | 13.1  |   | (18.2  | ) | –     |   | (11.2  | ) |              |   |        |   |       |   |          |  
|Operating expenses                  | 5.1     |   | 6.6   |   | 14.2  |   | 6.9    |   | 2.3   |   | (5.5   | ) |              |   |        |   |       |   |          |  
|Acquired intangibles amortisation   | –       |   | –     |   | –     |   | –      |   | –     |   | 423.8  |   |              |   |        |   |       |   |          |  
|Purchased licence amortisation      | –       |   | 1.5   |   | (45.4 | ) | –      |   | –     |   | (3.5   | ) |              |   |        |   |       |   |          |  
|Depreciation and other amortisation | (14.4   | ) | (4.5  | ) | 28.9  |   | 2.0    |   | 6.8   |   | (11.2  | ) |              |   |        |   |       |   |          |  
|Share of result in associates       | –       |   | –     |   | –     |   | –      |   | –     |   | –      |   |              |   |        |   |       |   |          |  
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  
|Adjusted operating profit           | (9.0    | ) | (5.3  | ) | 14.4  |   | (26.8  | ) | 24.0  |   | (3.7   | ) |              |   |        |   |       |   |          |  
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |       |   |          |  



|36 | Vodafone Group PlcAnnual
        Report 2007
|-- | --------------------------------------------

---



Back to Contents

| | Performance
| | -----------
| |            



|Mobile telecommunications
      KPIs       |      |  | Germany |  | Italy  |  | Spain  |  | UK     |  | Other  |  | Europe  | 
|------------------------------------------ | ---- |  | ------- |  | ------ |  | ------ |  | ------ |  | ------ |  | ------- | 
|                                           |      |  |         |  |        |  |        |  |        |  |        |  |         | 
|Closing customers (000)                   | 2007 |  | 30,818  |  | 21,034 |  | 14,893 |  | 17,411 |  | 17,007 |  | 101,163 | 
|                                           | 2006 |  | 29,191  |  | 18,490 |  | 13,521 |  | 16,304 |  | 15,692 |  | 93,198  | 
|Average monthly ARPU                       | 2007 |  | 21.2   |  | 25.9  |  | 35.2  |  | £23.6  |  | £20.1  |  |         | 
|                                           | 2006 |  | 23.3   |  | 28.5  |  | 35.6  |  | £24.0  |  | £22.0  |  |         | 
|Annualised blended churn (%)               | 2007 |  | 21.8%   |  | 20.6%  |  | 26.4%  |  | 33.8%  |  | 26.6%  |  |         | 
|                                           | 2006 |  | 20.2%   |  | 18.7%  |  | 20.9%  |  | 32.1%  |  | 24.2%  |  |         | 
|Closing 3G devices (000)                  | 2007 |  | 3,720   |  | 3,762  |  | 2,890  |  | 1,938  |  | 2,353  |  | 14,663  | 
|                                           | 2006 |  | 2,025   |  | 2,250  |  | 902    |  | 1,033  |  | 1,230  |  | 7,440   | 
|Voice usage (millions of minutes)          | 2007 |  | 33,473  |  | 32,432 |  | 30,414 |  | 31,736 |  | 28,491 |  | 156,546 | 
|                                           | 2006 |  | 26,787  |  | 29,604 |  | 23,835 |  | 28,059 |  | 27,648 |  | 135,933 | 
|                                           |      |  |         |  |        |  |        |  |        |  |        |  |         | 
|See page 159 for definition
      of terms |      |  |         |  |        |  |        |  |        |  |        |  |         | 

The Europe region, where market penetration
    exceeds 100%, continues to experience intense competition from established
    mobile operators and new market entrants as well as ongoing regulator imposed
    rate reductions on incoming calls. As part of the implementation of the Groups
    strategy, the current years performance saw a strong focus on stimulating
    additional usage in a way that enhances value to the customer and revenue,
    including significant tariff repositioning to maintain competitiveness in
    the UK and Germany. On the cost side, the centralisation of global service
    platform operations was completed in the year, with good progress made in
    the consolidation and harmonisation of the data centres, and a number of new
    initiatives to reduce the cost structure were implemented. RevenueTotal revenue decreased slightly
    by 0.6% for the year ended 31 March 2007, consisting of a 1.4% organic increase
    in revenue, offset by a 0.5 percentage point adverse impact from exchange
    rate movements and a 1.5 percentage point decrease resulting from the disposal
    of the Groups operations in Sweden in January 2006. The organic revenue
    growth was mainly due to the increase in organic service revenue. Service revenue growth was 0.1% for the Europe
    region. Organic growth of 2.0% was driven by a 7.7% increase in the average
    mobile customer base in the year, together with a 17.0% increase in total
    voice usage and 27.1% reported growth in data revenue, driven by innovative
    products and services, successful promotions and competitive tariffs in the
    marketplace, although in turn organic growth was largely offset by the downward
    pressure on voice pricing and termination rate cuts in certain markets. The
    estimated impact of termination rate cuts and other adjustments on the growth
    in service revenue and total revenue in the year is shown below. Estimatedimpact ofterminationrate cutsImpact of
      
      
      
      
      
      and otherexchange
      
      Impact of
      
      
      

adjustments
      (1)
      GrowthReported
      
      rates
      
      disposal
      
      Organic
      
      on revenue
      
      excludinggrowth
      
      Percentage
      
      Percentage
      
      growth
      
      growth
      
      these items%
      
      points
      
      points
      
      %
      
      %
      
      %Service revenueGermany
      (4.4
      )
      0.5
      
      
      
      (3.9
      )
      3.4
      
      (0.5
      )Italy
      (2.1
      )
      0.6
      
      
      
      (1.5
      )
      5.1
      
      3.6Spain
      12.4
      
      0.7
      
      
      
      13.1
      
      5.2
      
      18.3UK
      2.5
      
      
      
      
      
      2.5
      
      0.5
      
      3.0Arcor
      8.7
      
      0.8
      
      
      
      9.5
      
      
      
      9.5Other Europe
      (7.6
      )
      0.4
      
      7.3
      
      0.1
      
      4.7
      
      4.8Europe
      0.1
      
      0.5
      
      1.4
      
      2.0
      
      3.5
      
      5.5Total revenueEurope
      (0.6
      )
      0.5
      
      1.5
      
      1.4
      
      3.2
      
      4.6 Note:(1)
	Revenue for certain arrangements is now presented
net of associated direct costs Customer growth in the region was strong in most markets, including 21.7% and 16.9% growth in the closing contract customer base in Spain and Italy, respectively. The UK reported a 7.7% growth in the closing contract
base following a much improved performance in the second half of the year.


Contract churn across the region was stable
    or falling in most markets due to the continued focus on retention and longer
    contract terms being offered, whilst prepaid churn rose due to intensified
    competition and customer self-upgrades. Prepaid markets remained vibrant,
    with prepaid net additions accounting for around 65% of the total net additions
    reported for the region. Within the Europe region, Spain and Arcor
    contributed strong service revenue growth, partly offset by declines in Germany,
    Italy and Other Europe. In Spain, despite the increasing challenge in the
    marketplace from existing competitors, the launch of a fourth operator and
    branded resellers, local currency service revenue growth of 13.1% was achieved.
    This growth was mainly due to a 14.2% increase in the average mobile customer
    base in the period following successful promotions and competitive tariffs,
    particularly in relation to contract customers, which now account for 54.8%
    of the customer base, compared to 49.6% last year. Arcor also achieved strong
    growth in service revenue compared to the prior year, driven primarily by
    a 60.0% increase in DSL customers to 2,081,000 customers, with the launch
    of new competitive tariffs leading to particularly good growth since January
    2007. Despite high competition and structural price declines, service revenue
    growth in the UK accelerated throughout the year, driven by a higher contract
    customer base and increased usage resulting from refreshed tariff offerings.
    In Other Europe, reported service revenue decreased by 7.6%, whilst underlying
    service revenue increased by 4.8% following an increase in the average mobile
    customer base, and particularly strong growth in messaging and data revenue
    in the Netherlands and Portugal where new tariffs and Vodafone Mobile Connect
    data card initiatives proved particularly successful. Germany and Italy reported declines in local
    currency service revenue of 3.9% and 1.5% respectively, largely as a result
    of termination rate cuts. Underlying service revenue in Italy grew by 3.6%,
    with acceleration in the second half of the year due in particular to increasing
    messaging and voice volumes, achieved through new tariffs and offers targeted
    to specific segments, and despite the revenue loss incurred in March 2007
    following the Italian Governments decision to eliminate the top up fee
    on prepaid cards. In Germany, underlying service revenue declined slightly
    as a result of the intensely competitive market in Germany and the launch
    of new tariffs in October 2006. Voice revenueVoice revenue decreased by 2.6%,
    or by 0.7% on an organic basis, with strong growth in voice usage offset by
    pressures on pricing resulting from competition and from termination rate
    cuts. Across the Europe region, outgoing voice
    minutes increased by 20.7%, or by 22.3% on an organic basis, driven by the
    increased customer base and various usage stimulation initiatives and competitive
    tariff ranges. In Germany, outgoing voice usage increased by 35.7%, with continued
    success from the Vodafone Zuhause product, which promotes fixed to mobile
    substitution in the home and which achieved 2.4 million registered customers
    as at 31 March 2007. Additionally, new tariffs were launched in Germany in
    October 2006, which provided improved value bundles for customers allowing
    unlimited calls to other Vodafone customers and fixed line customers, all
    of which significantly contributed to increasing outgoing voice usage. In
    Italy, the increase in outgoing voice usage of 12.1% was mainly driven by
    demand stimulation initiatives such as fixed price per call




|Vodafone Group Plc Annual Report
        2007 | 37
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Operating Resultscontinued

offers and focus on high value customers and
    business customers. In Spain, the improved customer mix and success of both
    consumer and business offerings assisted in increasing outgoing voice usage
    by 34.2%. New and more competitive tariffs launched in the UK in July 2006
    and September 2006 and various promotions specifically aimed at encouraging
    usage contributed to the 16.7% increase in Vodafone UKs outgoing voice
    usage. Offsetting the organic growth in outgoing
    voice usage was the impact of pricing pressures in all markets due to increased
    competition, which has led to outgoing voice revenue per minute decreasing
    by 16.8% in the year ended 31 March 2007. Termination rate cuts were the main factor
    in the 7.4% decline in organic incoming voice revenue, with all markets except
    the UK experiencing termination rate cuts during the year. Announced termination
    rate cuts since 30 September 2006 include a cut of 7% to 11.35 eurocents per
    minute in Spain effective from October 2006 and a 20% cut to 8.8 eurocents
    per minute in Germany effective from November 2006. The impact of the termination
    rate cuts in the Europe region was to reduce the average effective incoming
    price per minute by around 13% to approximately 7 pence. Further termination
    rate cuts of 0.87 eurocents every six months will occur in Spain with effect
    from April 2007, reducing the rate to 7.0 eurocents by April 2009, whilst
    in Italy reductions in July 2007 and July 2008 of 13% below the retail price
    index have also been announced. The success of Vodafone Passport, a competitively
    priced roaming proposition with over 11 million customers as at 31 March 2007,
    contributed to increasing the volume of organic roaming minutes by 15.8% .
    Around 50% of the Groups roaming minutes within Europe are now on Vodafone
    Passport. Organic roaming revenue increased by 1.2% as the higher usage was
    largely offset by price reductions, due to increasing adoption of Vodafone
    Passport and also the Groups commitment to reduce the average cost of
    roaming in the EU by 40% by April 2007 when compared to summer 2005. On 23 May 2007, the European Parliament voted
    to introduce regulation on retail and wholesale roaming prices. We expect
    roaming revenues to be lower year on year in 2008 due to the combined effect
    of Vodafones own initiatives and this direct regulatory intervention. Non-voice revenueMessaging revenue increased by
    3.1%, or by 4.6% on an organic basis, mainly due to growth in Italy, Other
    Europe and particularly Spain and the UK, partly offset by declines in Germany.
    In Spain, the increase was driven by the larger customer base, while in the
    UK, SMS volumes increased by 25.0% following higher usage per customer. The
    growth in Italy was driven by an increase in SMS usage of 9.5%, with sharp
    acceleration in the second half of the year following successful demand stimulation
    initiatives. In Germany, messaging volumes declined, resulting from the attraction
    of bigger voice bundles and the fact that promotional activity that had occurred
    relating to messaging in the previous financial year was not repeated in the
    2007 financial year. Data revenue grew by 27.1%, or by 29.5% on
    an organic basis, with the growth being stimulated by the 97.1% increase in
    registered 3G enabled devices on the Groups networks as at 31 March
    2007, encouraged by an expanded portfolio and competitively priced offerings.
    Strong growth was experienced in all Europes segments, though Germany
    demonstrated particularly strong growth of 50% as a result of attractive tariff
    offerings, including flat rate tariff options, and the benefit of improved
    coverage of the HSDPA technology enabled network, facilitating superior download
    speeds for data services. Growth in Italy, Spain and the UK has been assisted
    by the roll-out of HSDPA network coverage and increased penetration of Vodafone
    Mobile Connect data cards, of which 74%, 64% and 53% were sold during the
    year as HSDPA enabled devices in each of these markets respectively. The launch
    of a modem which provides wireless internet access for personal computers
    has also made a positive contribution to data revenue. In Other Europe, successful
    Vodafone Mobile Connect data cards initiatives in the Netherlands and Portugal
    were the primary cause of growth in data revenue.


Fixed line operator and DSL revenue increased
    by 9.9%, due to Arcors increased customer base. Adjusted operating profitAdjusted operating profit fell
    by 5.1%, or by 4.7% on an organic basis, with the disposal of the Groups
    operations in Sweden being the main cause of the decline. The growth in operating
    expenses and other direct costs, including the charge in relation to a regulatory
    fine in Greece of £53 million also had an adverse effect on adjusted
    operating profit. Interconnect costs remained stable for the
    year, once the effect of the disposal of Sweden was excluded, with the increased
    outgoing call volumes to other networks offset by the cost benefit from the
    impact of the termination rate cuts. Reported acquisition and retention costs
    for the region decreased by 2.5%, but remained stable on an organic basis,
    when compared to the prior year. In Spain, the main drivers of the increased
    costs were the higher volumes of gross additions and upgrades, especially
    with regard to the higher proportion of contract gross additions which are
    being achieved with higher costs per customer as competition has intensified.
    In Italy, costs have increased slightly due to an increased focus on acquiring
    high value contract customers and an increased volume of prepaid customers.
    In Germany, retention costs declined as the cost per upgrade was reduced and
    volumes slightly decreased. The UK saw a reduction in retention costs resulting
    from a change in the underlying commercial model with indirect distribution
    partners, where a portion of commissions are now recognised in other direct
    costs. Acquisition costs in Other Europe decreased, primarily as a result
    of lower gross contract additions in Greece and a reduction in cost per gross
    addition in the Netherlands. Other direct costs increased by 14.9%, or
    by 16.7% on an organic basis, primarily caused by the regulatory fine in Greece
    and commissions in the UK discussed above. Arcor saw an increase in direct
    access charges primarily as a result of having a higher customer base. Operating expenses increased by 4.2%, or
    by 7.4% on an organic basis, primarily caused by increased intercompany recharges,
    a result of the centralisation of data centre and service platform operations,
    which were offset by a corresponding reduction in depreciation expense, and
    a 14.2% increase in local currency in Spains operating expenses as a
    result of the growth in this operating company, but which only slightly increased
    as a percentage of service revenue. Increased publicity spend in the UK, Italy
    and Greece, and restructuring costs in Germany, the UK and Ireland, also adversely
    affected operating expenses during the year. As many of the cost reduction initiatives
    are centralised in common functions, as described earlier, the Groups
    target in respect of operating expenses for the total of the Europe region
    (excluding Arcor) includes common functions but excludes the developing and
    delivering of new services and business restructuring costs. On this basis,
    these costs grew by 3.5% in 2007 financial year for the reasons outlined in
    the preceding paragraph. Cost reduction initiativesThe Group has set targets in respect
    operating expenses and capitalised fixed asset additions. The operating expense
    and capitalised fixed asset additions targets relate to the Europe region
    (excluding Arcor) and common functions in aggregate. The targets are detailed
    in Performance  Risk Factors, Seasonality and Outlook on
    page 60. During the 2007 financial year, the implementation of a range of
    Group wide initiatives and cost saving programmes commenced, designed to deliver
    savings in the 2008 financial year and beyond. The key initiatives are as
    follows: •
      The application development
        and maintenance initiative is focusing on driving cost and productivity
        efficiencies through outsourcing the application development and maintenance
        for key IT systems. In October 2006, the Group announced that EDS and
        IBM had been selected to provide application development and maintenance
        services to separate groupings of operating companies within the Group.
        The initiative is currently in the




|38 | Vodafone Group PlcAnnual
        Report 2007
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| | Performance
| | -----------
| |            



execution phase and is progressing ahead of plan, with a number ofoperating companies already having commenced service with their respective
vendors. The Group currently anticipates that this initiative will result in greater economies of scale and improved quality of software produced, as well as greater
flexibility, leading to the faster rollout of more varied services to customers. The Group currently expects to meet its savings target of 25-30% of IT application
development and maintenance unit costs within two to four years.•
    The supply chain management initiative focuses on centralising supply chain
    management activities and leveraging Vodafones scale in purchasing activities. Through the standardisation of designs and driving scale strategies in material categories, the Group is aiming to increase the proportion of
purchasing performed globally. The alignment of all objectives and targets across the entire supply chain management was completed during the year. The Group currently
expects to meet its savings target of 8% of £3.3
billion external network spend this coming year, as planned.•
    The IT operations initiative has created a shared service organisation to support the business with innovative and customer focused IT services. This organisation will consolidate localised data centres into regionalised northern and southern European centres and consolidate hardware, software,
maintenance and system integration suppliers to provide high quality IT infrastructure, services and solutions. Consolidation is progressing well, with the centre in
Southern Europe complete and the centre in


Northern Europe expected to be complete by April 2008. The Groupcurrently expects to meet its cost savings target of 25-30% of data centre spend within one to two years.•
    The Group has commenced a three year business transformation programme to implement a single integrated operating model, supported by a single
enterprise resource planning (ERP) system covering human resources, finance and supply chain functions. The programme is expected to provide improved information
for decision making and reduced operating costs in the longer term, though additional investment, including restructuring expenditure, will be required.•
    The network team continues to focus on network sharing deals in a number of operating companies, with the principal objectives of cost saving and faster network rollout. Implementation is under way in Spain with Orange, the UK has announced its intention to sign a deal with Orange and other deals are
being explored and evaluated in a number of other European operating companies.•
    Many of the Groups operating companies have participated in external cost benchmarking studies and are using the results to target local cost reductions. Initiatives that have been implemented to date include reductions to planned network rollout, outsourcing and off-shoring of customer services
operations, property rationalisation, replacing leased lines with owned transmission, network site sharing and renegotiation of supplier contracts and service
agreements.




|Vodafone Group Plc Annual Report
        2007 | 39
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Operating Resultscontinued

EMAPA

|                                          | Eastern |   | Middle East,  |   |         |   | Associates | Associates |   |        |   |       |   | % change | 
|----------------------------------------- | ------- | - | ------------- | - | ------- | - | ---------- | ---------- | - | ------ | - | ----- | - | -------- | 
|                                          | Europe  |   | Africa & Asia |   | Pacific |   | US         | Other      |   | EMAPA  |   |       |   |          | 
|                                          | £m      |   | £m            |   | £m      |   | £m         | £m         |   | £m     |   | £     |   | Organic  | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|Year ended 31 March 2007                  |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|Voice revenue                             | 2,051   |   | 2,096         |   | 942     |   |            |            |   | 5,089  |   | 40.0  |   |          | 
|Messaging revenue                         | 271     |   | 142           |   | 254     |   |            |            |   | 667    |   | 46.9  |   |          | 
|Data revenue                              | 70      |   | 26            |   | 42      |   |            |            |   | 138    |   | 60.5  |   |          | 
|Fixed line operator and DSL
      revenue | –       |   | 68            |   | 7       |   |            |            |   | 75     |   | 294.7 |   |          | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|Total service revenue                     | 2,392   |   | 2,332         |   | 1,245   |   |            |            |   | 5,969  |   | 42.3  |   | 20.4     | 
|Acquisition revenue                       | 53      |   | 223           |   | 105     |   |            |            |   | 381    |   | 37.5  |   |          | 
|Retention revenue                         | 19      |   | –             |   | 2       |   |            |            |   | 21     |   | 50.0  |   |          | 
|Other revenue                             | 13      |   | 10            |   | 47      |   |            |            |   | 70     |   | 2.9   |   |          | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|Total revenue                             | 2,477   |   | 2,565         |   | 1,399   |   |            |            |   | 6,441  |   | 41.4  |   | 21.1     | 
|Interconnect costs                        | (433    | ) | (364          | ) | (248    | ) |            |            |   | (1,045 | ) | 31.6  |   |          | 
|Other direct costs                        | (314    | ) | (246          | ) | (224    | ) |            |            |   | (784   | ) | 77.4  |   |          | 
|Acquisition costs                         | (219    | ) | (291          | ) | (167    | ) |            |            |   | (677   | ) | 45.0  |   |          | 
|Retention costs                           | (78     | ) | (84           | ) | (50     | ) |            |            |   | (212   | ) | 52.5  |   |          | 
|Operating expenses                        | (614    | ) | (509          | ) | (349    | ) |            |            |   | (1,472 | ) | 39.8  |   |          | 
|Acquired intangibles amortisation         | (285    | ) | (105          | ) | (2      | ) |            |            |   | (392   | ) | 152.9 |   |          | 
|Purchased licence amortisation            | (19     | ) | (17           | ) | (7      | ) |            |            |   | (43    | ) | (31.7 | ) |          | 
|Depreciation and other amortisation       | (331    | ) | (255          | ) | (193    | ) |            |            |   | (779   | ) | 29.4  |   |          | 
|Share of result in associates             | –       |   | –             |   | –       |   | 2,077      | 642        |   | 2,719  |   | 13.4  |   |          | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|Adjusted operating profit                 | 184     |   | 694           |   | 159     |   | 2,077      | 642        |   | 3,756  |   | 16.0  |   | 24.3     | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|Year ended 31 March 2006                  |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|Voice revenue                             | 1,176   |   | 1,503         |   | 957     |   |            |            |   | 3,636  |   |       |   |          | 
|Messaging revenue                         | 146     |   | 91            |   | 217     |   |            |            |   | 454    |   |       |   |          | 
|Data revenue                              | 36      |   | 12            |   | 38      |   |            |            |   | 86     |   |       |   |          | 
|Fixed line operators and DSL revenue      | –       |   | 19            |   | –       |   |            |            |   | 19     |   |       |   |          | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|Total service revenue                     | 1,358   |   | 1,625         |   | 1,212   |   |            |            |   | 4,195  |   |       |   |          | 
|Acquisition revenue                       | 54      |   | 147           |   | 76      |   |            |            |   | 277    |   |       |   |          | 
|Retention revenue                         | 13      |   | –             |   | 1       |   |            |            |   | 14     |   |       |   |          | 
|Other revenue                             | 10      |   | 12            |   | 46      |   |            |            |   | 68     |   |       |   |          | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|Total revenue                             | 1,435   |   | 1,784         |   | 1,335   |   |            |            |   | 4,554  |   |       |   |          | 
|Interconnect costs                        | (296    | ) | (251          | ) | (247    | ) |            |            |   | (794   | ) |       |   |          | 
|Other direct costs                        | (77     | ) | (159          | ) | (206    | ) |            |            |   | (442   | ) |       |   |          | 
|Acquisition costs                         | (148    | ) | (198          | ) | (121    | ) |            |            |   | (467   | ) |       |   |          | 
|Retention costs                           | (51     | ) | (48           | ) | (40     | ) |            |            |   | (139   | ) |       |   |          | 
|Operating expenses                        | (335    | ) | (359          | ) | (359    | ) |            |            |   | (1,053 | ) |       |   |          | 
|Acquired intangibles amortisation         | (121    | ) | (33           | ) | (1      | ) |            |            |   | (155   | ) |       |   |          | 
|Purchased licence amortisation            | (13     | ) | (34           | ) | (16     | ) |            |            |   | (63    | ) |       |   |          | 
|Depreciation and other amortisation       | (218    | ) | (179          | ) | (205    | ) |            |            |   | (602   | ) |       |   |          | 
|Share of result in associates             | –       |   | –             |   | –       |   | 1,732      | 666        |   | 2,398  |   |       |   |          | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|Adjusted operating profit                 | 176     |   | 523           |   | 140     |   | 1,732      | 666        |   | 3,237  |   |       |   |          | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|Change at constant exchange rates         | %       |   | %             |   | %       |   | %          | %          |   |        |   |       |   |          | 
|Voice revenue                             | 80.3    |   | 56.7          |   | 5.3     |   |            |            |   |        |   |       |   |          | 
|Messaging revenue                         | 88.7    |   | 74.8          |   | 25.4    |   |            |            |   |        |   |       |   |          | 
|Data revenue                              | 100.1   |   | 142.6         |   | 17.2    |   |            |            |   |        |   |       |   |          | 
|Fixed line operators and DSL revenue      |        |   | 294.3         |   |        |   |            |            |   |        |   |       |   |          | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|Total service revenue                     | 81.7    |   | 61.2          |   | 10.0    |   |            |            |   |        |   |       |   |          | 
|Acquisition revenue                       | 1.4     |   | 78.0          |   | 43.0    |   |            |            |   |        |   |       |   |          | 
|Retention revenue                         | 50.0    |   |              |   | 217.5   |   |            |            |   |        |   |       |   |          | 
|Other revenue                             | 15.4    |   | (7.8          | ) | 12.8    |   |            |            |   |        |   |       |   |          | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|Total revenue                             | 78.0    |   | 62.1          |   | 12.1    |   |            |            |   |        |   |       |   |          | 
|Interconnect costs                        | 49.8    |   | 62.3          |   | 7.1     |   |            |            |   |        |   |       |   |          | 
|Other direct costs                        | 316.4   |   | 73.2          |   | 15.8    |   |            |            |   |        |   |       |   |          | 
|Acquisition costs                         | 53.9    |   | 70.8          |   | 45.0    |   |            |            |   |        |   |       |   |          | 
|Retention costs                           | 59.3    |   | 106.7         |   | 31.1    |   |            |            |   |        |   |       |   |          | 
|Operating expenses                        | 88.4    |   | 61.0          |   | 3.4     |   |            |            |   |        |   |       |   |          | 
|Acquired intangibles amortisation         | 135.5   |   | 222.2         |   | 78.6    |   |            |            |   |        |   |       |   |          | 
|Purchased licence amortisation            | 48.0    |   | (47.1         | ) | (49.8   | ) |            |            |   |        |   |       |   |          | 
|Depreciation and other amortisation       | 55.9    |   | 56.1          |   | 1.6     |   |            |            |   |        |   |       |   |          | 
|Share of result in associates             |        |   |              |   |        |   | 27.6       | (2.3       | ) |        |   |       |   |          | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 
|Adjusted operating profit                 | 12.1    |   | 49.8          |   | 25.4    |   | 27.6       | (2.3       | ) |        |   |       |   |          | 
|                                          |         |   |               |   |         |   |            |            |   |        |   |       |   |          | 



|40 | Vodafone Group PlcAnnual
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| | Performance
| | -----------
| |            



Mobile telecommunications KPIs

|                                     |  |         |  |               |  |         |  | 2007   |  |  |         |  |               |  |         |  | 2006   | 
|------------------------------------ |  | ------- |  | ------------- |  | ------- |  | ------ |  |  | ------- |  | ------------- |  | ------- |  | ------ | 
|                                     |  |         |  |               |  |         |  |        |  |  |         |  |               |  |         |  |        | 
|                                     |  | Eastern |  | Middle East,  |  |         |  |        |  |  | Eastern |  | Middle East,  |  |         |  |        | 
|                                     |  | Europe  |  | Africa & Asia |  | Pacific |  | EMAPA  |  |  | Europe  |  | Africa & Asia |  | Pacific |  | EMAPA  | 
|                                     |  |         |  |               |  |         |  |        |  |  |         |  |               |  |         |  |        | 
|Closing customers (000)             |  | 28,975  |  | 27,160        |  | 5,750   |  | 61,885 |  |  | 12,579  |  | 21,884        |  | 5,346   |  | 39,809 | 
|Average monthly ARPU                 |  | £8.1    |  | £7.3          |  | £18.8   |  |        |  |  | £10.8   |  | £9.0          |  | £19.7   |  |        | 
|Annualised blended churn (%)         |  | 28.1%   |  | 38.8%         |  | 38.7%   |  |        |  |  | 23.6%   |  | 34.6%         |  | 39.2%   |  |        | 
|Closing 3G devices (000)            |  | 347     |  | 65            |  | 758     |  | 1,170  |  |  | 135     |  | –             |  | 281     |  | 416    | 
|Voice usage (millions of minutes)    |  | 39,658  |  | 37,449        |  | 11,371  |  | 88,478 |  |  | 13,302  |  | 18,300        |  | 9,811   |  | 41,413 | 
|                                     |  |         |  |               |  |         |  |        |  |  |         |  |               |  |         |  |        | 
|See page 159 for definition of terms |  |         |  |               |  |         |  |        |  |  |         |  |               |  |         |  |        | 



A part of Vodafones strategy is to build on the Groups
  track record of creating value in emerging markets. Vodafone has continued
  to execute on this strategy, with strong performances in the Czech Republic,
Egypt, Romania and South Africa. The Group is successfully building its emerging
    markets portfolio through acquisitions in Turkey and, subsequent to the year
    end, India. Since its acquisition on 24 May 2006, Vodafone Turkey has shown
    a performance in excess of the acquisition plan. The Group has made a further
    significant step in delivering its strategic objective of delivering strong
    growth in emerging markets with the acquisition on 8 May 2007 of companies
    with interests in Hutchison Essar, a leading operator in the fast growing
    Indian mobile market, following which the Group controls Hutchison Essar.
    The Group also signed a memorandum of understanding with Bharti Airtel Limited
    (Bharti Airtel), the Groups former joint venture in India,
    on infrastructure sharing and has granted an option to a Bharti group company
    to buy its 5.60% direct interest in Bharti Airtel. On 9 May 2007, a Bharti
    group company agreed to acquire the Groups 5.60% direct interest in
    Bharti Airtel. Following the completion of this sale, the Group will continue
    to hold an indirect stake of 4.39% in Bharti Airtel. In December 2006, the Group increased its
    equity interest in Vodafone Egypt from 50.1% to 54.9%, positioning the Group
    to capture further growth in this lower penetrated market. The Group also
    entered into a new strategic partnership with Telecom Egypt, the minority
    shareholder in Vodafone Egypt, to increase cooperation between both parties
    and jointly develop a range of products and services for the Egyptian market. EMAPAs growth has benefited from the
    prior year acquisitions in the Czech Republic and the stake in Bharti Airtel
    in India, as well as the stake increases in Romania and South Africa and the
    current year acquisition in Turkey. Bharti Airtel was accounted for as a joint
    venture until 11 February 2007, following which the Groups interest
    has been accounted for as an investment. RevenueTotal revenue increased
    by 41.4%, or 21.1% on an organic basis, driven by organic service revenue
    growth of 20.4% . The impact of acquisitions, disposal and exchange rates
    on service revenue and total revenue growth is shown below. Impact of
	
	Impact ofexchange
	
	acquisitionsOrganic
	
	rates
	
	and disposal
    (1)
    Reportedgrowth
	
	Percentage
	
	Percentage
	
	growth%
	
	points
	
	points
	
	%Service revenueEastern Europe
	20.0
	
	(5.6
	)
	61.7
	
	76.1Middle East, Africa and Asia
	27.7
	
	(17.7
	)
	33.5
	
	43.5Pacific
	10.0
	
	(7.3
	)
	
	
	2.7EMAPA
	20.4
	
	(10.9
	)
	32.8
	
	42.3Total revenueEMAPA
	21.1
	
	(11.2
	)
	31.5
	
	41.4 Note:(1)
    Impact of acquisitions and disposal includes
        the impact of the change in consolidation status of Bharti Airtel from
        a joint
venture to an investment. Organic service revenue growth was driven by the 30.2% organic increase in the average mobile customer base and the success of usage stimulation initiatives, partially offset by declining ARPU in a number of markets
due to the higher proportion of lower usage prepaid customer additions.


Particularly strong customer growth was achieved
    in Eastern Europe and the Middle East, Africa and Asia, where markets are
    typically less penetrated than in Western Europe or the Pacific area. Non-service revenue increased by 31.5%, or
    28.9% on an organic basis, primarily due to an increase in the level of gross
    additions in a number of countries. Eastern EuropeIn Eastern Europe, service revenue
    grew by 76.1%, with the key driver of growth being the acquisitions in the
    Czech Republic and Turkey, as well as the stake increase in Romania. Good
    customer growth in all Eastern European markets contributed to the organic
    service revenue growth. Organic service revenue growth in Eastern
    Europe was principally driven by Romania. As a result of the growth in the
    customer base and a promotional offer of lower tariffs, which led to higher
    voice usage, local currency service revenue in Romania grew by 29.3%, calculated
    by applying the Groups current equity interest to the whole of the 2006
    financial year. The continued expansion of 3G network coverage, the successful
    launch of 3G broadband, together with introductory promotional offers, and
    increased sales of Vodafone Mobile Connect data cards, resulted in data revenue
    growth of 64.9% in local currency. In the Czech Republic, a focus on existing
    customers, including a Christmas campaign of free weekend text messages available
    to all existing as well as new customers, and the success of a business offering
    allowing unlimited on and off net calls within a customers virtual private
    network for a fixed monthly fee, had a positive impact on gross additions
    and drove the increase in average mobile customers. This led to growth of
    11.1% in local currency service revenue, calculated by applying the Groups
    current equity interest to the whole of the 2006 financial year. Vodafone Turkey has performed ahead of the
    expectations the Group had at the time of the completion of the acquisition,
    with customer numbers, usage and adjusted operating profit ahead of plan.
    Improvements in network reliability and coverage have contributed to strong
    customer growth and allowed an increase in prepaid tariffs, resulting in service
    revenue growth. Telsim was rebranded to Vodafone in March 2007, with the launch
    of a new tariff with inclusive on and off net calls, a first for the Turkish
    market. Middle East, Africa and AsiaThe service revenue growth of
    43.5% in the Middle East, Africa and Asia resulted primarily from the stake
    increases in South Africa in February 2006 and Egypt in December 2006, together
    with the acquisition of the Groups interest in Bharti Airtel in India
    in December 2005, offset by an adverse movement in exchange rates. Strong
    organic growth was achieved in all markets, particularly in Egypt and South
    Africa, driven by the 40.2% increase in the average mobile customer base compared
    to the prior year. Strong customer growth, driven by prepaid
    tariff reductions, the availability of lower cost handsets and high customer
    satisfaction with the Vodafone service, contributed to the 39.5% local currency
    service revenue growth in Egypt. Innovative new products and services, including
    a new hybrid tariff offering guaranteed airtime credit every month with the
    ability to top up as required, and successful promotions, led to an increase
    in the average mobile customer base and 21.9% local currency organic service
    revenue growth in




|Vodafone
            Group Plc Annual Report 2007 | 41
|------------------------------------------------- | --

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Back to Contents

Operating Resultscontinued

South Africa, whilst the continued rollout of the 3G network led to strong growth in data revenue. Bharti Airtel continued to perform well with
    strong growth in customers and revenue, demonstrating the growth potential
    in the Indian market. PacificService revenue increased by 2.7%,
    with the impact of adverse foreign exchange movements reducing reported growth
    by 7.3 percentage points. In Australia, a continued focus on higher value
    customers delivered local currency service revenue growth of 13.7%, with improvements
    in both prepaid and contract ARPU. The performance in Australia more than
    offset the reduced growth in local currency service revenue in New Zealand,
    where local currency service revenue growth was 2.6% following a cut in termination
    rates, which reduced reported service revenue growth by 4.1% . After the negative
    impact of foreign exchange movements, reported service revenue in New Zealand
    declined by 7.9%. Adjusted operating profitThe impact of acquisitions,
    disposal and exchange rates on adjusted operating profit is shown below. Impact of



Impact ofexchange



acquisitionsOrganic



rates



and disposal

(1)

Reportedgrowth



Percentage



Percentage



growth%



points



points



%Adjusted operating profitEastern Europe
	49.2
	
	(7.6
	)
	(37.1
	)
	4.5Middle East, Africa and Asia
	18.5
	
	(16.9
	)
	31.1
	
	32.7Pacific
	25.4
	
	(11.8
	)
	
	
	13.6EMAPA
	24.3
	
	(7.2
	)
	(1.1
	)
	16.0 Note:(1)
    Impact of acquisitions and disposal includes
    the impact of the change in consolidation status of Bharti Airtel from a
    joint venture to an investment Adjusted operating profit increased by 16.0%
    . On an organic basis, growth was 24.3%, as the acquisitions and stake increases
    led to the rise in acquired intangible asset amortisation reducing reported
    growth in operating profit. These acquisitions, combined with the continued
    expansion of network infrastructure in the region, including 3G and HSDPA
    upgrades, resulted in higher depreciation charges. Organic growth in adjusted
    operating profit was driven by
a strong performance in Romania, Egypt, South Africa and the Groups associated
undertaking in the US. Eastern EuropeInterconnect costs increased by
    46.3%, or 23.8% on an organic basis, principally as a result of the higher
    usage in Romania. An ongoing regulatory fee in Turkey amounting to 15% of
    revenue has increased other direct costs compared to the 2006 financial year. Acquisition costs fell as a percentage of
    service revenue throughout most of Eastern Europe, with increased investment
    in the direct distribution channel in Romania resulting in lower subsidies
    on handsets. Retention costs decreased as a percentage of service revenue,
    but increased on an organic basis due to a focus on retaining customers through
    loyalty programmes in response to the increasing competition in Romania, which
    had a positive impact on contract and prepaid churn. Operating expenses increased by 1.0 percentage
    point as a percentage of service revenue, primarily as a result of inflationary
    pressures in Romania and investment in Turkey. Middle East, Africa and AsiaInterconnect costs increased by
    45.0%, or 26.8% on an organic basis, due to the usage stimulation initiatives
    throughout the region. Acquisition costs remained stable as a percentage
    of service revenue, whilst retention costs increased, principally due to increased
    investment in retaining customers in Egypt ahead of the forthcoming launch
    of services by a new operator and in South Africa in response to the introduction
    of mobile number portability during the year, with the provision of 3G and
    data


enabled device upgrades for contract customers
    and a loyalty point scheme. Operating expenses remained stable as a percentage
    of service revenue. PacificThe improved profitability in
    Australia was more than offset by the lower profitability in New Zealand resulting
    from the increased cost of telecommunications service obligation regulation,
    the impact of the acquisition of ihug and adverse foreign exchange rates. Acquisition and retention costs increased
    as a percentage of service revenue due to the investment in higher value customers
    in Australia, which also had a favourable impact on contract churn and were
    partially offset by savings in network costs and operating expenses. Associates 2007
      
      
      
      
      % changeVerizon
      
      
      
      
      
      
      
      
      VerizonWireless
      
      Other
      
      Total
      
      
      
      
      WirelessShare of result of associates
      £m
      
      £m
      
      £m
      
      
      £
      
      $Operating profit
      2,442
      
      940
      
      3,382
      
      
      15.6
      
      22.9Interest
      (179
      )
      (27
      )
      (206
      )
      
      (12.3
      )
      (7.0
      )Tax
      (125
      )
      (271
      )
      (396
      )
      
      7.8
      
      14.6Minority interest
      (61
      )
      
      
      (61
      )
      
      1.7
      
      6.72,077
      
      642
      
      2,719
      
      
      19.9
      
      27.6  2006VerizonWireless
      
      Other
      
      TotalShare of result of associates
      £m
      
      £m
      
      £mOperating profit
      2,112
      
      1,010
      
      3,122Interest
      (204
      )
      (23
      )
      (227
      )Tax
      (116
      )
      (329
      )
      (445
      )Minority interest
      (60
      )
      8
      
      (52
      )1,732
      
      666
      
      2,398  % changeVerizonWirelessVerizon Wireless (100% basis)
	2007
	
	
	2006
	
	£
	
	$Total revenue (£m)
	20,860
	
	
	18,875
	
	10.5
	
	17.4Closing customers (000)
	60,716
	
	
	53,020Average monthly ARPU ($)
	52.5
	
	
	51.4Blended churn (%)
	13.9%
	  
	
	14.7%Mobile non-voice service revenueas a percentage of mobile servicerevenue (%)
	14.4%
	  
	
	8.9% Verizon Wireless produced another year of record
    growth in organic net additions, increasing its customer base by 7.7 million
    in the year ended31 March 2007. The
    performance was particularly robust in the higher value contract segment and
    was achieved in a market where the estimated closing mobile penetration reached
    80%. The strong customer growth was achieved
    through a combination of higher gross additions and improvements in Verizon
    Wirelesss customer loyalty, with the latter evidenced through lower
    levels of churn. The 15.4% growth in the average mobile customer base combined
    with a 2.1% increase in ARPU resulted in a 17.8% increase in service revenue.
    ARPU growth was achieved through the continued success of data services, driven
    predominantly by data cards, wireless e-mail and messaging services.Verizon
    Wirelesss operating profit also improved due to efficiencies in other
    direct costs and operating expenses, partly offset by a higher level of customer
    acquisition and retention activity. Verizon Wireless continued to lay the foundations
    for future data revenue growth through the launch of both CDMA EV-DO Rev A,
    an enhanced wireless broadband service, and broadcast mobile TV services during
    the first calendar quarter of 2007. In addition, Verizon Wireless consolidated
    its spectrum position during the year with the acquisition of spectrum through
    the FCCs Advanced Wireless Services auction for $2.8 billion.




|42 | Vodafone
            Group PlcAnnual Report
            2007
|-- | ------------------------------------------------------------

---



Back to Contents

| | Performance
| | -----------
| |            



The Groups share of the tax attributable to Verizon Wireless for the year ended 31 March 2007 relates only to the corporate entities held by the Verizon Wireless partnership. The tax attributable to the
Groups share of the partnerships pre-tax profit is included within the Group tax charge. In a patent infringement action
    before the United States International Trade Commission (ITC) entitled Baseband
    Processor Chips and Chipsets, Transmitter and Receiver (Radio) Chips, Power
    Control Chips, and Products Containing Same, Including Cellular Telephone
    Handsets, Broadcom Corporation was seeking to bar the importation of certain
    chips and chip sets manufactured by Qualcomm Corporation and wireless devices
    containing those chips and chipsets. All major U.S. wireless carriers, including
    Verizon Wireless, use Qualcomm chips to some degree. On 7 June 2007, the ITC issued
    a “limited exclusion order” that bars the import of infringing
    chips and chipsets manufactured by or on behalf of Qualcomm and certain wireless
    communication devices containing an infringing chip. Companies may continue
    to import handheld wireless communications devices that are the same models
    as handheld wireless communications devices that were being imported for sale
    to the general public on or before 7 June 2007 and wireless communications
    devices that do not contain a chip that is programmed to infringe. The order
    will go into effect in 60 days unless it is disapproved by the President of
    the United States or stayed by the ITC or U.S. Court of Appeals for the Federal
    Circuit. The effect of the order on
    the range of new models of handsets that will be available to Verizon Wireless’s
    customers in the future will depend upon the extent of the order’s applicability
    to Verizon Wireless, the extent to which reviewing authorities permit the
    order to take effect in its current form, and Qualcomm’s ability to
    provide non-infringing products or alternatives. Qualcomm and other parties,
    including Verizon Wireless, have moved for a stay pending appeal. On 11 June
    2007, the U.S. Court of Appeals for the Federal Circuit ordered the ITC to
    rule within 10 days on the stay motions, and if it denies those motions, to
    file a brief with the court by 27 June in response to the stay motions. The Groups other associated undertakings
    in EMAPA have been impacted by intense competition and reduction in termination
    rates, similar to the experiences of the Groups controlled businesses
    in the Europe region, which have had a negative impact on revenue. The Group
    disposed of its associated undertakings in Belgium and Switzerland on 3 November
    2006 and 20 December 2006, respectively, for a total cash consideration of
    £3.1 billion. Results are included until the respective dates of the
    announcement of disposal.


SFR, the Groups associated undertaking
    in France, achieved an increase of 3.5% in its customer base, higher voice
    usage and strong growth in data services. However, service revenue was stable
    in local currency as the impact of these items was offset by a 5.7% decline
    in ARPU due to the increase in competition and significant termination rate
    cuts imposed by the regulator. The voice termination rate was cut by 24% to
    9.5 eurocents per minute with effect from 1 January 2006 and by a further
    21% to 7.5 eurocents per minute with effect from 1 January 2007. France is
    the first European Union country to impose regulation on SMS termination rates,
    which were cut by 19% with effect from 1 January 2006 and a further 30% with
    effect from mid September 2006 to 3 eurocents per SMS. With effect from July 2007, SFR will be governed
    by the Europe regional management team. Accordingly, for the 2008 financial
    year onwards SFR will be reported as part of the Europe region. InvestmentsChina Mobile, in which
    the Group has a 3.27% stake and is accounted for as an investment, increased
    its customer base by 21.3% in the period to 316.1 million. Dividends of £57
    million were received by the Group in the 2007 financial year. Common functions 2007
	
	
	2006
	
	Change£m
	
	
	£m
	
	%Revenue
	168
	
	
	145
	
	15.9Other direct costs
	(66
	)
	
	
	
	Operating expenses
	206
	
	
	130
	
	58.5Depreciation and amortisation
	(181
	)
	
	(72
	)
	151.4Share of result in associated undertakings
	1
	
	
	8
	
	(87.5
	)Adjusted operating profit
	128
	
	
	211
	
	(39.3
	) Common functions represent the results of Partner Markets and the net result of central Group costs less charges to the Groups operations. Adjusted operating profit has been impacted in the 2007 financial year by
restructuring costs incurred in the central functions, principally marketing and technology, which amounted to £36 million.




|Vodafone Group Plc Annual Report
        2007 | 43
|--------------------------------------------- | --

---




Back to Contents

Operating Resultscontinued

2006 Financial Year Compared
  to 2005 Financial Year

Group

|                                                |         |   |        |   | Common    |   |              |   | 2006    |   | 2005   |   |      |  | % change | 
|----------------------------------------------- | ------- | - | ------ | - | --------- | - | ------------ | - | ------- | - | ------ | - | ---- |  | -------- | 
|                                                | Europe  |   | EMAPA  |   | Functions |   | Eliminations |   | Group   |   | Group  |   |      |  |          | 
|                                                | £m      |   | £m     |   | £m        |   | £m           |   | £m      |   | £m     |   | £    |  | Organic  | 
|                                                |         |   |        |   |           |   |              |   |         |   |        |   |      |  |          | 
|Voice revenue                                   | 17,827  |   | 3,636  |   |          |   | (58          | ) | 21,405  |   | 19,782 |   | 8.2  |  | 5.4      | 
|Messaging revenue(1)                            | 2,836   |   | 454    |   |          |   | (1           | ) | 3,289   |   | 2,925  |   | 12.4 |  | 9.8      | 
|Data revenue(1)                                 | 1,023   |   | 86     |   |          |   | (11          | ) | 1,098   |   | 727    |   | 51.0 |  | 51.8     | 
|Fixed line operators and DSL
      revenue      | 1,271   |   | 19     |   |          |   |             |   | 1,290   |   | 1,044  |   | 23.6 |  | 20.5     | 
|                                                |         |   |        |   |           |   |              |   |         |   |        |   |      |  |          | 
|Total service revenue                           | 22,957  |   | 4,195  |   |          |   | (70          | ) | 27,082  |   | 24,478 |   | 10.6 |  | 7.9      | 
|Acquisition revenue                             | 1,018   |   | 277    |   |          |   |             |   | 1,295   |   | 1,263  |   |      |  |          | 
|Retention revenue                               | 434     |   | 14     |   |          |   |             |   | 448     |   | 393    |   |      |  |          | 
|Other revenue                                   | 324     |   | 68     |   | 145       |   | (12          | ) | 525     |   | 544    |   |      |  |          | 
|                                                |         |   |        |   |           |   |              |   |         |   |        |   |      |  |          | 
|Total revenue                                   | 24,733  |   | 4,554  |   | 145       |   | (82          | ) | 29,350  |   | 26,678 |   | 10.0 |  | 7.5      | 
|Interconnect costs                              | (3,739  | ) | (794   | ) |          |   | 70           |   | (4,463  | ) | (3,991 | ) | 11.8 |  | 8.3      | 
|Other direct costs                              | (1,666  | ) | (442   | ) |          |   | 12           |   | (2,096  | ) | (1,859 | ) | 12.7 |  | 10.2     | 
|Acquisition costs                               | (2,501  | ) | (467   | ) |          |   |             |   | (2,968  | ) | (2,819 | ) | 5.3  |  | 3.4      | 
|Retention costs                                 | (1,752  | ) | (139   | ) |          |   |             |   | (1,891  | ) | (1,627 | ) | 16.2 |  | 15.5     | 
|Operating expenses                              | (5,243  | ) | (1,053 | ) | 130       |   |             |   | (6,166  | ) | (5,649 | ) | 9.2  |  | 6.3      | 
|Acquired intangibles amortisation               | (2      | ) | (155   | ) |          |   |             |   | (157    | ) |       |   |      |  |          | 
|Purchased licence amortisation                  | (884    | ) | (63    | ) |          |   |             |   | (947    | ) | (918   | ) |      |  |          | 
|Depreciation and other amortisation             | (3,000  | ) | (602   | ) | (72       | ) |             |   | (3,674  | ) | (3,446 | ) |      |  |          | 
|Share of result in associates                   | 5       |   | 2,398  |   | 8         |   |             |   | 2,411   |   | 1,984  |   |      |  |          | 
|                                                |         |   |        |   |           |   |              |   |         |   |        |   |      |  |          | 
|Adjusted operating profit                       | 5,951   |   | 3,237  |   | 211       |   |             |   | 9,399   |   | 8,353  |   | 12.5 |  | 11.8     | 
|Adjustments for:                                |         |   |        |   |           |   |              |   |         |   |        |   |      |  |          | 
| Impairment losses                             | (23,515 | ) |       |   |          |   |             |   | (23,515 | ) | (475   | ) |      |  |          | 
| Other income and expense                      | 3       |   |       |   | 12        |   |             |   | 15      |   |       |   |      |  |          | 
| Non-operating income
      of associates      |        |   | 17     |   |          |   |             |   | 17      |   |       |   |      |  |          | 
|                                                |         |   |        |   |           |   |              |   |         |   |        |   |      |  |          | 
|Operating loss                                  | (17,561 | ) | 3,254  |   | 223       |   |             |   | (14,084 | ) | 7,878  |   |      |  |          | 
|Non-operating income and expense                |         |   |        |   |           |   |              |   | (2      | ) | (7     | ) |      |  |          | 
|Investment income                               |         |   |        |   |           |   |              |   | 353     |   | 294    |   |      |  |          | 
|Financing costs                                 |         |   |        |   |           |   |              |   | (1,120  | ) | (880   | ) |      |  |          | 
|                                                |         |   |        |   |           |   |              |   |         |   |        |   |      |  |          | 
|Profit/(loss) before taxation                   |         |   |        |   |           |   |              |   | (14,853 | ) | 7,285  |   |      |  |          | 
|Income tax expense                              |         |   |        |   |           |   |              |   | (2,380  | ) | (1,869 | ) |      |  |          | 
|                                                |         |   |        |   |           |   |              |   |         |   |        |   |      |  |          | 
|(Loss)/profit for the financial
      year from |         |   |        |   |           |   |              |   |         |   |        |   |      |  |          | 
|continuing
      operations                     |         |   |        |   |           |   |              |   | (17,233 | ) | 5,416  |   |      |  |          | 
|(Loss)/profit for the financial
      year from |         |   |        |   |           |   |              |   |         |   |        |   |      |  |          | 
|discontinued
      operations                   |         |   |        |   |           |   |              |   | (4,588  | ) | 1,102  |   |      |  |          | 
|                                                |         |   |        |   |           |   |              |   |         |   |        |   |      |  |          | 
|(Loss)/profit for the financial
      year      |         |   |        |   |           |   |              |   | (21,821 | ) | 6,518  |   |      |  |          | 
|                                                |         |   |        |   |           |   |              |   |         |   |        |   |      |  |          | 

|Note:
|-----
|(1)  



RevenueTotal revenue increased
    by 10.0%, or 7.5% on an organic basis, for the year to 31 March 2006 due to
    a 7.9% increase in service revenue on an organic basis offset by lower growth
    in other revenue. Service revenue growth reflected a 15.2% organic increase
    in the average customer base of the controlled mobile networks and the Groups
    share of jointly controlled mobile networks, offset by the impact of lower
    ARPU in a number of the Groups markets. Competitive pressures have intensified
    following a significant number of new market entrants and greater competition
    from incumbents, specifically in the mature markets of the Europe Region.
    Many of these markets have penetration rates over 100% which, together with
    termination rate cuts and a higher proportion of lower spending prepaid customers
    across the Group, have led to the decline in ARPU. Voice revenue increased by 8.2%, or by 5.4%
    on an organic basis, due to the growth in average customers and a successful
    usage stimulation programme leading to a 24.6% growth in total minutes, offset
    by tariff declines from competition and termination rate cuts. Revenue from
    outgoing calls was the primary driver of voice revenue growth, whilst incoming
    voice revenue increased marginally as a significant increase in the proportion
    of incoming calls from other mobile networks was offset by the impact of termination
    rate cuts, particularly in the second half of the 2006 financial year. Messaging revenue rose by 12.4%, or 9.8%
    on an organic basis, as an increase in the average customer base and the number
    of messages sent per customer was offset by tariff declines.


The success of 3G, Vodafone live! and offerings
    in the business segment, including Vodafone Mobile Connect data cards and
    BlackBerry from Vodafone, were the main contributors to a 51.0% increase,
    or 51.8% on an organic basis, in data revenue. An additional 6,321,000 3G
    devices were registered on the Groups networks in the 2006 financial
    year, bringing the total to 7,721,000 at 31 March 2006, including 660,000
    business devices such as Vodafone Mobile Connect 3G/GPRS data cards. Prior
    to the announcement of the disposal of Vodafone Japan in March 2006, the Group
    registered its ten millionth consumer 3G device, when including 100% of the
    devices in Italy. Fixed line operators and DSL revenue rose
    by 23.6%, primarily a result of Arcor, driven by customer and usage growth,
    partly offset by tariff decreases in the competitive market. Acquisition, retention and other revenue
    increased to £2,268 million, principally due to growth in revenue related
    to acquisition and retention activities in Spain, partially offset by a reduction
    in other revenue, resulting principally from a fall in the number of customers
    connected to non-Vodafone networks in the UK. A 32.5% rise in the number of
    gross mobile customer additions, partially offset by a fall in the average
    revenue for handset sales to new prepaid customers and a 24.3% increase in
    the number of upgrades, led to a 5.3% growth in revenue related to acquisition
    and retention activities to £1,743 million.




|44 | Vodafone
            Group PlcAnnual Report
            2007
|-- | ------------------------------------------------------------

---



Back to Contents

| | Performance
| | -----------
| |            



Adjusted operating profitAdjusted operating profit increased
    by 12.5% to £9,399 million, comprising organic growth of 11.8%, favourable
    exchange rate movements of 1.1% partly offset by a 0.4% decline due to the
    acquisition and disposal activity during the year. Interconnect costs increased by 8.3% on an
    organic basis, as strong growth in outgoing voice usage was partially offset
    by cuts in termination rates in a number of markets and an increased proportion
    of outgoing traffic being to other Vodafone customers, which did not result
    in interconnect expense. The rise in the number of upgrades and the increased
    cost of upgrading customers to 3G were the primary contributors to a 7.7%
    organic growth in acquisition and retention costs, to £4,859 million.
    Operating expenses as a percentage of service revenue for the 2006 financial
    year were comparable to the 2005 financial year at 22.8%. The charge relating to the amortisation of
    acquired intangible assets was £157 million following acquisitions in
    the Czech Republic, India, Romania and South Africa in the 2006 financial
    year. Depreciation and other amortisation increased, principally due to the
    net impact of the acquisitions and disposal in the 2006 financial year and
    the ongoing expansion of 3G networks. The Groups share of the results in
    associated undertakings, before amounts related to business acquisitions and
    disposals, grew by 21.5% after the deduction of interest, tax and minority
    interest, primarily due to growth at Verizon Wireless in the US. The Groups
    share of the result in Verizon Wireless increased by 25.5% to £2,112
    million, before deduction of interest, tax and minority interest, with a particularly
    strong performance in the second half of the 2006 financial year. Impairment lossesThe Group recorded an impairment
    charge to the carrying value of goodwill in the 2006 financial year of £23,515
    million in respect of the Groups operations in Germany (£19,400
    million) and Italy (£3,600 million) reflecting a revision of the Groups
    view of the prospects for these businesses, particularly in the medium to
    long term, and a further £515 million in respect of the Swedish business
    following the announcement of its disposal. An impairment loss was recognised
    in the 2005 financial year of £475 million in respect of the Groups
    Swedish operations and reflected fierce competition along with onerous 3G
    licence obligations. Investment income and financing costs 2006
	
	2005
	
	Change£m
	
	£m
	
	%Net financing costs before dividendsfrom investments
	(318
	)
	(293
	)
	8.5Potential interest charges arising onsettlement of outstanding tax issues
	(329
	)
	(245
	)
	34.3Changes in the fair value of equity putrights and similar arrangements
	(161
	)
	(67
	)
	140.3Dividends from investments
	41
	
	19
	
	115.8Net financing costs
	(767
	)
	(586
	)
	30.9 Net financing costs before dividends from investments increased by 8.5% to £318 million as an increase in average net debt compared to the 2005 financial year was partially offset by gains on mark to market
adjustments on financial instruments in the 2006 financial year. Potential interest charges arising on the
    settlement of outstanding tax issues represents the Groups estimate
    of any interest that may be due to tax authorities when the issues are settled.
    This charge varies due to the interest rates applied by the tax authorities,
    the timing of tax payments and the status of discussions on tax issues with
    the relevant tax authorities. At 31 March 2006, the provision for potential
    interest charges arising on settlement of outstanding tax issues was £896
    million. The change in the fair value of equity put
    rights and similar arrangements comprised the fair value movement in relation
    to the potential put rights held by Telecom Egypt over its 25.5% interest
    in Vodafone Egypt and the fair


value of a financial liability in relation
    to the minority partners of Arcor, the Groups non-mobile operation in
    Germany. Further details in respect of these arrangements are provided in
    the section titled Performance  Financial Position and Resources
    and in note 24 to the Consolidated Financial Statements. TaxationThe effective tax rate
    for the year to 31 March 2006 was (16.0)% compared to 25.7% for the 2005 financial
    year. The negative effective tax rate arose as a result of the £23,515
    million impairment losses recognised in the 2006 financial year. These losses
    were not expected to be deductible for tax purposes so were not expected to
    create a future benefit. The effective tax rate, exclusive of the impairment
    losses, was 27.5% for the 2006 financial year, which is lower than the Groups
    weighted average tax rate as a result of the repurchase of shares in Vodafone
    Italy and favourable tax settlements, but had increased compared to the 2005
    financial year as the 2005 financial year benefited from finalising the reorganisation
    of the Groups German operations. Basic loss per shareBasic earnings per share
    from continuing operations fell from 8.12 pence to a loss per share of 27.66
    pence for the 2006 year. The basic loss per share was after a charge of 37.56
    pence per share in relation to an impairment of the carrying value of goodwill,
    a further charge of 0.26 pence per share for the change in fair value of equity
    put rights and similar arrangements, and a credit of 0.05 pence per share
    for amounts relating to business acquisitions and disposals. (Loss)/profit for the financial year from
discontinued operations 2006
	
	2005
	
	Change£m
	
	£m
	
	%Revenue
	7,268
	
	7,395
	
	(1.7
	)Adjusted operating profit
	455
	
	664Impairment loss
	(4,900
	)
	Operating (loss)/profit
	(4,445
	)
	664Non-operating income and expense
	
	
	13Net financing costs
	(3
	)
	(11
	)(Loss)/profit before taxation
	(4,448
	)
	666Income tax (expense)/income(1)
	(140
	)
	436(Loss)/profit for the financial year
	(4,588
	)
	1,102 Note:(1)
	Included a deferred tax credit of £599 million in the year to 31 March 2005 in respect of losses in Vodafone Holdings K.K. which became eligible for offset against profits of Vodafone K.K. following the merger of
the two entities on 1 October 2004. On 17 March 2006, the Group announced that an agreement had been reached to sell its 97.68% interest in Vodafone Japan to SoftBank. This resulted in the Groups operations in Japan being classified as an asset
held for sale and being presented as a discontinued operation. The disposal was completed on 27 April 2006. Following the announcement on 17 March 2006,
    the Group recognised an impairment loss of £4,900 million in respect
    of Vodafone Japan. The recoverable amount of Vodafone Japan was determined
    as the fair value less costs to sell.




|Vodafone Group Plc Annual Report
        2007 | 45
|--------------------------------------------- | --

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|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  | % change | 
|----------------------------------- | ------- | - | ----- | - | ----- | - | ------ | - | ----- | - | ------ | - | ------------ | - | ------ | - | ---- |  | -------- | 
|                                    | Germany |   | Italy |   | Spain |   | UK     |   | Arcor |   | Other  |   | Eliminations |   | Europe |   |      |  |          | 
|                                    | £m      |   | £m    |   | £m    |   | £m     |   | £m    |   | £m     |   | £m           |   | £m     |   | £    |  | Organic  | 
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 
|Year ended 31 March 2006            |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 
|Voice revenue                       | 4,304   |   | 3,472 |   | 3,093 |   | 3,642  |   | –     |   | 3,672  |   | (356         | ) | 17,827 |   | 2.3  |  | 3.2      | 
|Messaging revenue                   | 815     |   | 526   |   | 328   |   | 674    |   | –     |   | 507    |   | (14          | ) | 2,836  |   | 7.2  |  | 7.6      | 
|Data revenue                        | 275     |   | 172   |   | 194   |   | 252    |   | –     |   | 170    |   | (40          | ) | 1,023  |   | 46.4 |  | 48.8     | 
|Fixed line operator and DSL revenue | –       |   | –     |   | –     |   | –      |   | 1,305 |   | –      |   | (34          | ) | 1,271  |   | 21.7 |  | 16.7     | 
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 
|Total service revenue               | 5,394   |   | 4,170 |   | 3,615 |   | 4,568  |   | 1,305 |   | 4,349  |   | (444         | ) | 22,957 |   | 5.2  |  | 5.9      | 
|Acquisition revenue                 | 185     |   | 94    |   | 269   |   | 285    |   | 15    |   | 170    |   | –            |   | 1,018  |   |      |  |          | 
|Retention revenue                   | 61      |   | 84    |   | 105   |   | 60     |   | –     |   | 124    |   | –            |   | 434    |   |      |  |          | 
|Other revenue                       | 114     |   | 15    |   | 6     |   | 135    |   | –     |   | 54     |   | –            |   | 324    |   |      |  |          | 
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 
|Total revenue                       | 5,754   |   | 4,363 |   | 3,995 |   | 5,048  |   | 1,320 |   | 4,697  |   | (444         | ) | 24,733 |   | 4.7  |  | 5.6      | 
|Interconnect costs                  | (732    | ) | (681  | ) | (634  | ) | (862   | ) | (368  | ) | (906   | ) | 444          |   | (3,739 | ) | 4.9  |  | 4.8      | 
|Other direct costs                  | (281    | ) | (241  | ) | (329  | ) | (355   | ) | (187  | ) | (273   | ) | –            |   | (1,666 | ) | 6.5  |  | 7.0      | 
|Acquisition costs                   | (551    | ) | (172  | ) | (543  | ) | (665   | ) | (147  | ) | (423   | ) | –            |   | (2,501 | ) | 1.9  |  | 2.7      | 
|Retention costs                     | (410    | ) | (177  | ) | (354  | ) | (455   | ) | -     |   | (356   | ) | –            |   | (1,752 | ) | 14.4 |  | 15.9     | 
|Operating expenses                  | (1,077  | ) | (822  | ) | (762  | ) | (1,088 | ) | (390  | ) | (1,104 | ) | –            |   | (5,243 | ) | 8.1  |  | 9.3      | 
|Acquired intangibles amortisation   | –       |   | –     |   | –     |   | –      |   | –     |   | (2     | ) | –            |   | (2     | ) |      |  |          | 
|Purchased licence amortisation      | (342    | ) | (74   | ) | (69   | ) | (333   | ) | –     |   | (66    | ) | –            |   | (884   | ) |      |  |          | 
|Depreciation and other amortisation | (865    | ) | (524  | ) | (336  | ) | (592   | ) | (89   | ) | (594   | ) | –            |   | (3,000 | ) |      |  |          | 
|Share of result in associates       | –       |   | –     |   | –     |   | –      |   | –     |   | 5      |   | –            |   | 5      |   |      |  |          | 
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 
|Adjusted operating profit           | 1,496   |   | 1,672 |   | 968   |   | 698    |   | 139   |   | 978    |   | -            |   | 5,951  |   | 2.7  |  | 3.5      | 
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 
|Year ended 31 March 2005            |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 
|Voice revenue                       | 4,358   |   | 3,492 |   | 2,558 |   | 3,672  |   | –     |   | 3,673  |   | (329         | ) | 17,424 |   |      |  |          | 
|Messaging revenue                   | 774     |   | 467   |   | 269   |   | 671    |   | –     |   | 466    |   | (2           | ) | 2,645  |   |      |  |          | 
|Data revenue                        | 188     |   | 132   |   | 136   |   | 155    |   | –     |   | 119    |   | (31          | ) | 699    |   |      |  |          | 
|Fixed line operator and DSL revenue | –       |   | –     |   | –     |   | –      |   | 1,090 |   | –      |   | (46          | ) | 1,044  |   |      |  |          | 
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 
|Total service revenue               | 5,320   |   | 4,091 |   | 2,963 |   | 4,498  |   | 1,090 |   | 4,258  |   | (408         | ) | 21,812 |   |      |  |          | 
|Acquisition revenue                 | 186     |   | 108   |   | 221   |   | 322    |   | 5     |   | 200    |   | –            |   | 1,042  |   |      |  |          | 
|Retention revenue                   | 56      |   | 60    |   | 75    |   | 68     |   | –     |   | 130    |   | –            |   | 389    |   |      |  |          | 
|Other revenue                       | 122     |   | 14    |   | 2     |   | 177    |   | –     |   | 56     |   | –            |   | 371    |   |      |  |          | 
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 
|Total revenue                       | 5,684   |   | 4,273 |   | 3,261 |   | 5,065  |   | 1,095 |   | 4,644  |   | (408         | ) | 23,614 |   |      |  |          | 
|Interconnect costs                  | (734    | ) | (701  | ) | (540  | ) | (771   | ) | (334  | ) | (894   | ) | 408          |   | (3,566 | ) |      |  |          | 
|Other direct costs                  | (314    | ) | (232  | ) | (263  | ) | (367   | ) | (119  | ) | (270   | ) | –            |   | (1,565 | ) |      |  |          | 
|Acquisition costs                   | (534    | ) | (179  | ) | (467  | ) | (710   | ) | (113  | ) | (452   | ) | –            |   | (2,455 | ) |      |  |          | 
|Retention costs                     | (386    | ) | (134  | ) | (247  | ) | (459   | ) | -     |   | (305   | ) | –            |   | (1,531 | ) |      |  |          | 
|Operating expenses                  | (1,071  | ) | (747  | ) | (608  | ) | (1,049 | ) | (360  | ) | (1,016 | ) | –            |   | (4,851 | ) |      |  |          | 
|Acquired intangibles amortisation   | –       |   | –     |   | –     |   | –      |   | –     |   | –      |   | –            |   | –      |   |      |  |          | 
|Purchased licence amortisation      | (342    | ) | (74   | ) | (69   | ) | (333   | ) | –     |   | (65    | ) | –            |   | (883   | ) |      |  |          | 
|Depreciation and other amortisation | (830    | ) | (512  | ) | (292  | ) | (597   | ) | (105  | ) | (634   | ) | –            |   | (2,970 | ) |      |  |          | 
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 
|Adjusted operating profit           | 1,473   |   | 1,694 |   | 775   |   | 779    |   | 64    |   | 1,008  |   | –            |   | 5,793  |   |      |  |          | 
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 
|Change at constant exchange rates   | %       |   | %     |   | %     |   | %      |   | %     |   | %      |   |              |   |        |   |      |  |          | 
|Voice revenue                       | (1.3    | ) | (0.7  | ) | 20.9  |   | (0.8   | ) | –     |   | 0.2    |   |              |   |        |   |      |  |          | 
|Messaging revenue                   | 5.2     |   | 12.7  |   | 22.0  |   | 0.4    |   | –     |   | 9.0    |   |              |   |        |   |      |  |          | 
|Data revenue                        | 47.0    |   | 29.9  |   | 43.7  |   | 62.6   |   | –     |   | 42.9   |   |              |   |        |   |      |  |          | 
|Fixed line and DSL revenue          | –       |   | –     |   | –     |   | –      |   | 19.9  |   | –      |   |              |   |        |   |      |  |          | 
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 
|Total service revenue               | 1.4     |   | 1.8   |   | 22.0  |   | 1.6    |   | 19.9  |   | 2.3    |   |              |   |        |   |      |  |          | 
|Acquisition revenue                 | –       |   | (12.7 | ) | 22.4  |   | (11.5  | ) | 187.5 |   | (14.6  | ) |              |   |        |   |      |  |          | 
|Retention revenue                   | 10.0    |   | 41.4  |   | 40.2  |   | (11.8  | ) | –     |   | (3.9   | ) |              |   |        |   |      |  |          | 
|Other revenue                       | (6.9    | ) | 2.6   |   | 150.0 |   | (23.7  | ) | –     |   | (3.6   | ) |              |   |        |   |      |  |          | 
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 
|Total revenue                       | 1.2     |   | 2.0   |   | 22.6  |   | (0.3   | ) | 20.7  |   | 1.4    |   |              |   |        |   |      |  |          | 
|Interconnect costs                  | (0.3    | ) | (3.1  | ) | 17.5  |   | 11.8   |   | 10.0  |   | 1.5    |   |              |   |        |   |      |  |          | 
|Other direct costs                  | (10.3   | ) | 3.8   |   | 25.4  |   | (3.3   | ) | 56.6  |   | 1.5    |   |              |   |        |   |      |  |          | 
|Acquisition costs                   | 3.4     |   | (3.9  | ) | 16.8  |   | (6.3   | ) | 30.3  |   | (5.8   | ) |              |   |        |   |      |  |          | 
|Retention costs                     | 6.3     |   | 32.4  |   | 43.8  |   | (0.9   | ) | –     |   | 17.5   |   |              |   |        |   |      |  |          | 
|Operating expenses                  | 0.7     |   | 10.1  |   | 25.6  |   | 3.7    |   | 8.1   |   | 9.0    |   |              |   |        |   |      |  |          | 
|Acquired intangibles amortisation   | –       |   | –     |   | –     |   | –      |   | –     |   | –      |   |              |   |        |   |      |  |          | 
|Purchased licence amortisation      | –       |   | –     |   | –     |   | –      |   | –     |   | 1.5    |   |              |   |        |   |      |  |          | 
|Depreciation and other amortisation | 4.3     |   | 2.0   |   | 14.8  |   | (0.8   | ) | (14.2 | ) | (5.7   | ) |              |   |        |   |      |  |          | 
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 
|Adjusted operating profit           | 1.3     |   | (1.3  | ) | 24.6  |   | (10.4  | ) | 122.8 |   | (3.4   | ) |              |   |        |   |      |  |          | 
|                                    |         |   |       |   |       |   |        |   |       |   |        |   |              |   |        |   |      |  |          | 



|46 | Vodafone Group PlcAnnual
        Report 2007
|-- | --------------------------------------------

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| | Performance
| | -----------
| |            



|Mobile telecommunications
          KPIs  |      |  |         |  |        |  |        |  |        |  |        |  |         | 
|----------------------------------------- | ---- |  | ------- |  | ------ |  | ------ |  | ------ |  | ------ |  | ------- | 
|                                          |      |  | Germany |  | Italy  |  | Spain  |  | UK     |  | Other  |  | Europe  | 
|                                          |      |  |         |  |        |  |        |  |        |  |        |  |         | 
|Closing customers
        (000)          | 2006 |  | 29,191  |  | 18,490 |  | 13,521 |  | 16,304 |  | 15,692 |  | 93,198  | 
|                                          | 2005 |  | 27,223  |  | 17,280 |  | 11,472 |  | 15,324 |  | 15,691 |  | 86,990  | 
|                                          |      |  |         |  |        |  |        |  |        |  |        |  |         | 
|Average monthly
        ARPU              | 2006 |  | 23.3   |  | 28.5  |  | 35.6  |  | £24.0  |  | £22.0  |  |         | 
|                                          | 2005 |  | 24.9   |  | 29.9  |  | 34.5  |  | £25.5  |  | £23.3  |  |         | 
|                                          |      |  |         |  |        |  |        |  |        |  |        |  |         | 
|Annualised blended
        churn (%)      | 2006 |  | 20.2%   |  | 18.7%  |  | 20.9%  |  | 32.1%  |  | 24.2%  |  |         | 
|                                          | 2005 |  | 18.3%   |  | 17.2%  |  | 21.9%  |  | 29.7%  |  | 24.8%  |  |         | 
|                                          |      |  |         |  |        |  |        |  |        |  |        |  |         | 
|Closing 3G devices
        (000)         | 2006 |  | 2,025   |  | 2,250  |  | 902    |  | 1,033  |  | 1,230  |  | 7,440   | 
|                                          | 2005 |  | 358     |  | 511    |  | 88     |  | 190    |  | 253    |  | 1,400   | 
|                                          |      |  |         |  |        |  |        |  |        |  |        |  |         | 
|Voice usage (millions
        of minutes) | 2006 |  | 26,787  |  | 29,604 |  | 23,835 |  | 28,059 |  | 27,648 |  | 135,933 | 
|                                          | 2005 |  | 23,560  |  | 28,170 |  | 17,793 |  | 25,486 |  | 24,894 |  | 119,903 | 
|                                          |      |  |         |  |        |  |        |  |        |  |        |  |         | 
|See page 159 for definition
    of terms  |      |  |         |  |        |  |        |  |        |  |        |  |         | 



The Europe region experienced increased competition during the 2006 financial year, with many markets impacted by new market entrants whilst penetration rates were close to, or exceeding, 100% in many of the European
markets. Regulator-imposed rate reductions on incoming calls were also announced in all European markets except Albania. In the Europe region, total revenue increased by 4.7%, or by 5.6% on an organic
basis. This was mainly due to a 7.1% increase in the customer base since 31 March
2005, a 13.4% increase in total voice usage and strong data growth, driven by
successful usage stimulation programmes and innovative services, partially offset
by pressures on pricing and termination rate cuts. Service revenue increased in the Europe region by 5.2%, or by 5.9% on an organic
basis, mainly due to growth in the customer base which was partially offset by
a decline in ARPU, with Spain and Arcor achieving particularly strong growth.
In Spain, the launch of attractive tariffs, successful promotional campaigns
and the offer of an appealing handset portfolio increased the average customer
base and encouraged growth of 44.0% in total voice usage, which contributed to
a rise in service revenue of 22.0%, in local currency. In Arcor, service revenue
increased by 20.7% in local currency due to customer and usage growth, partially
offset by tariff decreases in a competitive market. In Germany, service revenue increased by 1.4% in local currency as the benefits
of a larger customer base and increases in messaging and data revenue were partly
offset by the effect of termination rate cuts and reduced voice pricing as a
result of aggressive competition. In Italy, local currency service revenue rose
by 1.8%, reflecting the continuing growth in non-voice services as voice revenue
declined marginally following a termination rate cut. Excluding the impact of
the termination rate cut, service revenue increased by 5.2% in local currency.
In the UK, service revenue increased by 1.6%, benefiting from an increase in
the average customer base of 7.8%, partially offset by falling ARPU and the effect
of a termination rate cut, notwithstanding a rise in voice usage. Excluding the
impact of the termination rate cut, service revenue increased by 3.2% . In Other
Europe, service revenue increased by 2.1%, or by 5.4% on an organic basis, mainly
driven by Greece where service revenue increased by 9.4% due to a 13.6% increase
in the average customer base, offset by falling ARPU mainly due to a termination
rate cut of 16.8% in September 2004, and in Ireland, where service revenue increased
by 5.9% due to a 5.9% increase in the average customer base and a 9.2% increase
in total voice usage. Voice revenueVoice revenue rose by 2.3%, or by
3.2% on an organic basis, with Spain as the main contributor. Spain experienced
a 20.9% increase in voice revenue in local currency which was driven by the increase
in the customer base and the increase in total voice usage, which was encouraged
by the launch of attractive tariffs and successful promotional campaigns, partially
offset by the impact of the 10.6% cut in the termination rate in November 2005. In Germany, voice revenue decreased by 1.3%, driven by a termination rate cut
in December 2005 from 13.2 to 11.0 eurocents per minute, and by reduced voice
pricing resulting from increasing competition, partly offset by increased voice
usage by 13.7% which was driven by new prepaid tariffs,


including a low priced internet only offer, and ongoing promotional activity
such as an offer which allowed prepaid customers to pay a fixed charge for calls
to fixed lines and other Vodafone customers which was taken up by more than one
and a quarter million customers. These offers and promotions also assisted in
increasing the average customer base by 8.4%. In Italy, voice revenue in local currency decreased by 0.7% driven by an average
20.5% reduction in termination rates from September 2005, partly offset by a
5.1% increase in voice usage, which was the result of strong promotional activities
such as free calls after the first minute and the increase in the customer base. In the UK, the effect of the termination rate cut in September 2004 was a decline
in voice revenue of 0.8%, although this was partially offset by a rise in total
voice usage of 10.1% driven by new customer promotions such as Stop the Clock
and a rise in the average customer base of 7.8%. In Other Europe, voice revenue remained stable as the effect of the sale of the
Groups operations in Sweden was offset by organic
growth of 3.4%. Non-voice revenueMessaging revenue rose by 7.2%, or
7.6% on an organic basis. The increase was mainly driven by Italy and Spain,
where strong promotional activities, which encouraged usage growth, and the increased
customer bases,
increased messaging revenue by 12.7% and 22.0% respectively. Data revenue increased by 46.4%, or 48.8% on an organic basis, with the primary
driver being the additional 6.0 million 3G devices registered
on the Groups networks in the Europe region since 31 March 2005, bringing
the total to 7.4 million devices at 31 March 2006. In Germany, data revenue increased by 47.0% in local currency, with Vodafone
maintaining its leadership in the 3G market, demonstrated by Vodafone live! with
3G customers generating over 3.1 million full track music downloads in the 2006
financial year for Vodafone, more than any other mobile network operator in Germany.
The number of active Vodafone live! devices continued to increase, with 28.3%
growth in the 2006 financial year. In the business segment, there were 241,000
Vodafone Mobile Connect 3G/GPRS data cards and 226,000 wireless push e-mail enabled
devices registered on the network at 31 March 2006. In Italy, increased penetration of 3G devices, a focus on retaining high value
customers, increased usage of Vodafone live! and Vodafone Mobile Connect data
cards and attractive data promotions were the main contributors to 29.9% growth
in data revenue in local currency. In Spain, the growth of 43.7% in data revenue in local currency was due to an
increase of 814,000 in the number of registered 3G devices and the success of
data solutions, which have contributed to Vodafone leading the 3G market in Spain,
along with an 84.3% increase in the number of Vodafone live! devices. In the UK, growth of 843,000 over the financial year in registered 3G devices
and the continued success of Vodafone Mobile Connect data cards and


|Vodafone Group Plc Annual Report
        2007 | 47
|--------------------------------------------- | --

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Operating Resultscontinued

wireless push e-mail devices contributed to data revenue increasing by 62.6% . In Other Europe, data revenue increased by 42.9% mainly as a result of increased
penetration of data services in Greece, Ireland, the Netherlands and Portugal. Adjusted operating profitAdjusted operating profit in the
Europe region increased by 2.7%, or by 3.5% on an organic basis, with the disposal
of Sweden and foreign exchange movements being the primary differences. In Germany, overall cost efficiencies, counteracted by investments in customer
acquisition and retention and an increase in Group charges for the use of the
brand and related trademarks, led to an increase in adjusted operating profit
of 1.3% in local currency. Acquisition costs increased by 3.4% due to increased
total gross additions and the growth in 3G customers. Interconnect costs decreased
by 0.3%, as the termination rate cuts in the 2006 and 2005 financial years more
than offset the effect of higher voice usage. An increase in the number of customer
upgrades resulted in a 6.3% increase in retention costs. Adjusted operating profit
was further impacted by additional depreciation charges from continued 3G network
deployment. In Italy, adjusted operating profit fell by 1.3% in local currency due to the
impact of an increase in Group charges for the use of brand and related trademarks,
investment in customer acquisition and retention and higher marketing spend in
response to the competitive pressures, along with the increased costs from the
continued roll out of the 3G network. Strong upgrade activities and a focus on
high value customers in response to aggressive competition led to the rise in
retention costs, whilst handset promotions adversely impacted acquisition costs,
especially in the first half of the 2006 financial year. Interconnect costs fell
due to the cut in termination rates combined with promotions focusing on calls
to other Vodafone and fixed-line numbers, which incurred lower interconnect costs,
especially in the second half of the 2006 financial year. Other direct costs
increased 3.8%, primarily as a result of an increase in content provision costs
arising from the increase in data service usage.


In Spain, adjusted operating profit increased as a percentage of service revenue,
as cost reductions were only partially offset by the impact of the increased
Group charge for use of the brand and related trademarks. Interconnect costs
fell as a proportion of service revenue, due to promotions which encouraged calls
to be made to Vodafone and fixed-line numbers, which incur lower interconnect
costs, and the cut in termination rates. A higher proportion of prepaid gross
customer additions, which had a lower per unit acquisition cost, particularly
in the first half of the 2006 financial year, led to acquisition costs falling
as a proportion of service revenue compared to the 2005 financial year. These
relative cost reductions were offset by the cost of upgrading customers to 3G
handsets, migrating prepaid customers to contract tariffs and a larger customer
base, reflected in a 43.8% increase in retention costs. Other direct costs increased,
mainly due to increased content provision costs resulting from higher usage of
the expanded offering on the Vodafone live! platform. In the UK, the rise in interconnect costs and the cost of one-off call centre
closures, as well as an increase in Group charges for use of the brand and related
trademarks, were partially offset by efficiencies in overheads and acquisition
and retention costs, leading to a fall in adjusted operating profit of 10.4%
.. Interconnect costs increased by 11.8%, following an increase in total usage,
combined with an increase in the proportion of voice calls made to customers
of other mobile network operators, as customers optimise cross-network bundled
tariffs, partially offset by the termination rate cut. Despite higher gross additions
and upgrades, especially in the first half of the 2006 financial year, and a
higher proportion of 3G connections, acquisition costs decreased by 6.3% and
retention costs were kept stable with the 2005 financial year, mainly due to
an increase in direct sales activity, SIM only promotions and a higher proportion
of prepaid additions with lower subsidies. Operating expenses were lower than
the 2005 financial year, excluding one-off call centre closures and the increase
in Group charges for use of the brand and related trademarks, driven by the continued
benefits of a
structured cost reduction plan. In Other Europe, adjusted operating profit decreased by 3.0%, driven by a decline
of 4.1% due to the disposal of the Groups operations in Sweden, partially
offset by a 0.4% favourable movement in exchange rates, and a 0.7% increase in
organic adjusted operating profit.


|48 | Vodafone
            Group PlcAnnual Report
            2007
|-- | ------------------------------------------------------------

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| | Performance
| | -----------
| |            



|EMAPA                               |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|----------------------------------- | ------- | - | ------------- | - | ------- | - | ---------- |  | ---------- |  | ------ | - | ----- |  | -------- | 
|                                    |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|                                    | Eastern |   | Middle East,  |   |         |   | Associates |  | Associates |  |        |   |       |  | % change | 
|                                    | Europe  |   | Africa & Asia |   | Pacific |   | US         |  | Other      |  | EMAPA  |   |       |  |          | 
|                                    | £m      |   | £m            |   | £m      |   | £m         |  | £m         |  | £m     |   | £     |  | Organic  | 
|                                    |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|Year ended 31 March 2006            |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|Voice revenue                       | 1,176   |   | 1,503         |   | 957     |   |            |  |            |  | 3,636  |   | 52.0  |  | 19.3     | 
|Messaging revenue                   | 146     |   | 91            |   | 217     |   |            |  |            |  | 454    |   | 62.1  |  | 27.8     | 
|Data revenue                        | 36      |   | 12            |   | 38      |   |            |  |            |  | 86     |   | 132.4 |  | 95.0     | 
|Fixed line operator and DSL revenue | –       |   | 19            |   | –       |   |            |  |            |  | 19     |   |       |  |          | 
|                                    |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|Total service revenue               | 1,358   |   | 1,625         |   | 1,212   |   |            |  |            |  | 4,195  |   | 54.9  |  | 20.9     | 
|Acquisition revenue                 | 54      |   | 147           |   | 76      |   |            |  |            |  | 277    |   |       |  |          | 
|Retention revenue                   | 13      |   | –             |   | 1       |   |            |  |            |  | 14     |   |       |  |          | 
|Other revenue                       | 10      |   | 12            |   | 46      |   |            |  |            |  | 68     |   |       |  |          | 
|                                    |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|Total revenue                       | 1,435   |   | 1,784         |   | 1,335   |   |            |  |            |  | 4,554  |   | 52.5  |  | 19.4     | 
|Interconnect costs                  | (296    | ) | (251          | ) | (247    | ) |            |  |            |  | (794   | ) | 69.7  |  | 31.0     | 
|Other direct costs                  | (77     | ) | (159          | ) | (206    | ) |            |  |            |  | (442   | ) | 48.8  |  | 26.2     | 
|Acquisition costs                   | (148    | ) | (198          | ) | (121    | ) |            |  |            |  | (467   | ) | 28.3  |  | 6.7      | 
|Retention costs                     | (51     | ) | (48           | ) | (40     | ) |            |  |            |  | (139   | ) | 44.8  |  | 10.2     | 
|Operating expenses                  | (335    | ) | (359          | ) | (359    | ) |            |  |            |  | (1,053 | ) | 61.5  |  | 24.5     | 
|Acquired intangibles amortisation   | (121    | ) | (33           | ) | (1      | ) |            |  |            |  | (155   | ) |       |  |          | 
|Purchased licence amortisation      | (13     | ) | (34           | ) | (16     | ) |            |  |            |  | (63    | ) |       |  |          | 
|Depreciation and other amortisation | (218    | ) | (179          | ) | (205    | ) |            |  |            |  | (602   | ) |       |  |          | 
|Share of result in associates       | –       |   | –             |   | –       |   | 1,732      |  | 666        |  | 2,398  |   |       |  |          | 
|                                    |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|Adjusted operating profit           | 176     |   | 523           |   | 140     |   | 1,732      |  | 666        |  | 3,237  |   | 22.4  |  | 18.0     | 
|                                    |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|Year ended 31 March 2005            |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|Voice revenue                       | 472     |   | 1,064         |   | 856     |   |            |  |            |  | 2,392  |   |       |  |          | 
|Messaging revenue                   | 55      |   | 62            |   | 163     |   |            |  |            |  | 280    |   |       |  |          | 
|Data revenue                        | 9       |   | 5             |   | 23      |   |            |  |            |  | 37     |   |       |  |          | 
|Fixed line operator and DSL revenue | –       |   | –             |   | –       |   |            |  |            |  |        |   |       |  |          | 
|                                    |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|Total service revenue               | 536     |   | 1,131         |   | 1,042   |   |            |  |            |  | 2,709  |   |       |  |          | 
|Acquisition revenue                 | 31      |   | 126           |   | 64      |   |            |  |            |  | 221    |   |       |  |          | 
|Retention revenue                   | 3       |   | –             |   | 1       |   |            |  |            |  | 4      |   |       |  |          | 
|Other revenue                       | 3       |   | 11            |   | 39      |   |            |  |            |  | 53     |   |       |  |          | 
|                                    |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|Total revenue                       | 573     |   | 1,268         |   | 1,146   |   |            |  |            |  | 2,987  |   |       |  |          | 
|Interconnect costs                  | (121    | ) | (174          | ) | (173    | ) |            |  |            |  | (468   | ) |       |  |          | 
|Other direct costs                  | (33     | ) | (113          | ) | (151    | ) |            |  |            |  | (297   | ) |       |  |          | 
|Acquisition costs                   | (98     | ) | (151          | ) | (115    | ) |            |  |            |  | (364   | ) |       |  |          | 
|Retention costs                     | (16     | ) | (55           | ) | (25     | ) |            |  |            |  | (96    | ) |       |  |          | 
|Operating expenses                  | (127    | ) | (240          | ) | (285    | ) |            |  |            |  | (652   | ) |       |  |          | 
|Acquired intangibles amortisation   | –       |   | –             |   | –       |   |            |  |            |  | –      |   |       |  |          | 
|Purchased licence amortisation      | (10     | ) | (18           | ) | (7      | ) |            |  |            |  | (35    | ) |       |  |          | 
|Depreciation and other amortisation | (78     | ) | (142          | ) | (190    | ) |            |  |            |  | (410   | ) |       |  |          | 
|Share of result in associates       | –       |   | –             |   | –       |   | 1,354      |  | 626        |  | 1,980  |   |       |  |          | 
|                                    |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|Adjusted operating profit           | 90      |   | 375           |   | 200     |   | 1,354      |  | 626        |  | 2,645  |   |       |  |          | 
|                                    |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|Change at constant exchange rates   | %       |   | %             |   | %       |   | %          |  | %          |  |        |   |       |  |          | 
|Voice revenue                       | 142.0   |   | 35.3          |   | 6.0     |   |            |  |            |  |        |   |       |  |          | 
|Messaging revenue                   | 156.1   |   | 40.0          |   | 26.2    |   |            |  |            |  |        |   |       |  |          | 
|Data revenue                        | 300.0   |   | 140.0         |   | 58.3    |   |            |  |            |  |        |   |       |  |          | 
|Fixed line operator and DSL revenue | –       |   | –             |   | –       |   |            |  |            |  |        |   |       |  |          | 
|                                    |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|Total service revenue               | 146.0   |   | 37.6          |   | 10.3    |   |            |  |            |  |        |   |       |  |          | 
|Acquisition revenue                 | 74.2    |   | 14.0          |   | 11.8    |   |            |  |            |  |        |   |       |  |          | 
|Retention revenue                   | 333.3   |   | –             |   | –       |   |            |  |            |  |        |   |       |  |          | 
|Other revenue                       | 233.3   |   | –             |   | 9.5     |   |            |  |            |  |        |   |       |  |          | 
|                                    |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|Total revenue                       | 143.6   |   | 34.9          |   | 10.3    |   |            |  |            |  |        |   |       |  |          | 
|Interconnect costs                  | 138.7   |   | 38.7          |   | 35.7    |   |            |  |            |  |        |   |       |  |          | 
|Other direct costs                  | 133.3   |   | 33.6          |   | 29.6    |   |            |  |            |  |        |   |       |  |          | 
|Acquisition costs                   | 48.0    |   | 29.4          |   | –       |   |            |  |            |  |        |   |       |  |          | 
|Retention costs                     | 200.0   |   | (14.3         | ) | 48.1    |   |            |  |            |  |        |   |       |  |          | 
|Operating expenses                  | 157.7   |   | 44.2          |   | 19.3    |   |            |  |            |  |        |   |       |  |          | 
|Acquired intangibles amortisation   | –       |   | –             |   | –       |   |            |  |            |  |        |   |       |  |          | 
|Purchased licence amortisation      | 30.0    |   | 78.9          |   | 128.6   |   |            |  |            |  |        |   |       |  |          | 
|Depreciation and other amortisation | 175.9   |   | 20.1          |   | 2.0     |   |            |  |            |  |        |   |       |  |          | 
|                                    |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 
|Adjusted operating profit           | 83.3    |   | 32.1          |   | (32.9   | ) | 23.9       |  | 7.8        |  |        |   |       |  |          | 
|                                    |         |   |               |   |         |   |            |  |            |  |        |   |       |  |          | 



|Vodafone Group Plc Annual Report
        2007 | 49
|--------------------------------------------- | --

---



Back to Contents

Operating Resultscontinued

|Mobile telecommunications
          KPIs  |         |  |               |  |         |  |        |  |         |  |               |  |         |  |        | 
|----------------------------------------- | ------- |  | ------------- |  | ------- |  | ------ |  | ------- |  | ------------- |  | ------- |  | ------ | 
|                                          |         |  |               |  |         |  | 2006   |  |         |  |               |  |         |  | 2005   | 
|                                          |         |  |               |  |         |  |        |  |         |  |               |  |         |  |        | 
|                                          | Eastern |  | Middle East,  |  |         |  |        |  | Eastern |  | Middle East,  |  |         |  |        | 
|                                          | Europe  |  | Africa & Asia |  | Pacific |  | EMAPA  |  | Europe  |  | Africa & Asia |  | Pacific |  | EMAPA  | 
|                                          |         |  |               |  |         |  |        |  |         |  |               |  |         |  |        | 
|Closing customers
        (000)          | 12,579  |  | 21,884        |  | 5,346   |  | 39,809 |  | 4,188   |  | 10,560        |  | 4,698   |  | 19,446 | 
|Average monthly
        ARPU              | £10.8   |  | £9.0          |  | £19.7   |  |        |  | £11.7   |  | £10.7         |  | £19.6   |  |        | 
|Annualised blended
        churn (%)      | 23.6%   |  | 34.6%         |  | 39.2%   |  |        |  | 24.3%   |  | 23.3%         |  | 36.7%   |  |        | 
|Closing 3G devices
        (000)         | 135     |  | –             |  | 281     |  | 416    |  | –       |  | –             |  | –       |  | –      | 
|Voice usage (millions
        of minutes) | 13,302  |  | 18,300        |  | 9,811   |  | 41,413 |  | 4,500   |  | 11,658        |  | 7,078   |  | 23,236 | 
|                                          |         |  |               |  |         |  |        |  |         |  |               |  |         |  |        | 
|See page 159 for definition
    of terms  |         |  |               |  |         |  |        |  |         |  |               |  |         |  |        | 



The EMAPA region continued to grow strongly due to a combination of a focus on existing operations where the potential for creating additional value is strong, as well as the contribution of stake increases in South
Africa and Romania and acquisitions during the 2006 financial year in India and the Czech Republic. RevenueTotal revenue increased by 52.5%,
or by 19.4% on an organic basis, driven by organic service revenue growth of
20.9% . The stake increases in Romania and South Africa and the acquisitions
in India and the Czech Republic increased reported total revenue by 26.5%, while
favourable exchange rates increased total revenue growth by 6.6%. Eastern EuropeThe key drivers behind the growth
in service revenue in Eastern Europe were the acquisitions in the Czech Republic
and the increase in the Groups stake in Romania. On an organic basis, service
revenue growth of 25.7% was achieved, primarily due to strong service revenue
growth of 39.0% in local currency in Romania, which assumes the Groups
increased equity interest was reflected in the whole of the 2006 and 2005 financial
years. Middle East, Africa and AsiaService revenue growth was 43.7%,
or 26.0% on an organic basis. The increased stake in South Africa and the acquisition
in India were responsible for an 11.6% increase in service revenue. The organic
increase was predominantly a result of a rise in the average prepaid customer
base of 82.0% in Egypt, which was driven by new innovative tariffs improving
access and affordability in the market place, and resulted in service revenue
growth in Egypt of 36.2% . Organic growth in South Africa was 21.8%, mostly a
result of significant prepaid additions which contributed to an increase in total
voice usage of 23.6%. PacificService revenue growth was 16.3%,
or 10.3% on an organic basis. In Australia the popularity of the capped plans
had resulted in a significant 49.0% increase in total voice usage and an increase
in its customer base of 16.0%, resulting in local currency service revenue growth
of 11.8% . 3G services were launched on 31 October 2005, with strong uptake resulting
in 171,000 consumer 3G devices being registered on the network by 31 March 2006. New Zealand achieved service revenue growth of 8.5%, driven by a 12.3% growth
in the average customer base, due principally to the launch of competitive promotions
during the 2006 financial year. 3G services were launched on 10 August 2005,
with 103,000 3G devices registered by the end of the financial year. Adjusted operating profitAdjusted operating profit increased
by 22.4%, or by 18.0% on an organic basis. Favourable exchange rates increased
growth by 3.5%, while the impact of the increased stakes in Romania and South
Africa and the acquisitions in India and the Czech Republic increased growth
by 0.9%. Eastern EuropeAdjusted operating profit increased
by 95.6%, or by 30.5% on an organic basis. The acquisition in the Czech Republic
and the increased stake in Romania contributed 52.8% of the growth in the region,
whereas
the


organic increase was a consequence of the rapid growth in the Groups operations
in Eastern Europe. Middle East, Africa and AsiaAdjusted operating profit increased
by 39.5%, or by 31.8% on an organic basis. This increase was largely a result
of the growth experienced in Egypt and South Africa. In the Middle East, Africa
and Asia region, total costs fell to 69.0% of total revenue compared to 71.0%
in the 2005 financial year. PacificAdjusted operating profit in the
Pacific region declined by 30.0% largely due to increased competition in Australia,
where the launch of capped price plans led to a large increase in voice usage
which impacted interconnect costs. Additionally, higher depreciation and purchased
licence amortisation charges were incurred during the year ended 31 March 2006
due to the launch of 3G services in Australia and New Zealand. Associates2006
	
	
	
	% changeVerizon
	
	
	
	
	
	
	
	VerizonWireless
	
	Other
	
	Total
	
	
	
	WirelessShare of result of associates
	£m
	
	£m
	
	£m
	
	£
	
	$Operating profit
	2,112
	
	1,010
	
	3,122
	
	25.5
	
	21.5Interest
	(204
	)
	(23
	)
	(227
	)
	9.1
	
	5.4Tax
	(116
	)
	(329
	)
	(445
	)
	27.5
	
	22.5Minority interest
	(60
	)
	8
	
	(52
	)
	17.6
	
	14.91,732
	
	666
	
	2,398
	
	27.9
	
	23.82005VerizonWireless
	
	Other
	
	TotalShare of result of associates
	
	
	
	
	£m
	
	£m
	
	£mOperating profit
	
	
	
	
	1,683
	
	985
	
	2,668Interest
	
	
	
	
	(187
	)
	(10
	)
	(197
	)Tax
	
	
	
	
	(91
	)
	(357
	)
	(448
	)Minority interest
	
	
	
	
	(51
	)
	8
	
	(43
	)1,354
	
	626
	
	1,980 The US mobile telecommunications market saw continued significant growth in customer
numbers in the 2006 financial year, with penetration reaching an estimated 72%
at 31 March 2006. In this environment, Verizon Wireless continued to increase
its market share and improve its market leading margin performance. Verizon Wireless outperformed its competitors with record net additions, increasing
the proportionate customer base by 16.6% over the 2006 financial year to 23,530,000
and improving customer market share to approximately 25% whilst also maintaining
the proportion of contract customers at 94.5% of the total customer base at 31
March 2006. The strong customer performance benefited from continuing improvements
in customer loyalty, with a reduction in blended churn of 2.5 percentage points
to 14.7% compared with the 2005 financial year, the lowest in the US mobile telecommunications
industry. In local currency, Verizon Wireless revenue increased by 14.9% due to the
strong customer growth, partially offset by a fall in ARPU of 1.9% . The ARPU
decline primarily resulted from an increase in the proportion of family share
customers and voice tariff pricing changes implemented early in 2005, which included
increases in the size of bundled minute plans.




|50 | Vodafone Group PlcAnnual
        Report 2007
|-- | --------------------------------------------

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Back to Contents

| | Performance
| | -----------
| |            



Non-voice service revenue increased by more than 100% compared with the 2005 financial year and represented 8.9% of service revenue for the 2006 financial year. Continued increases in messaging revenue were augmented
by strong growth from data products, including Verizon Wireless consumer broadband multimedia offering, wireless email and broadband data card service. At the end of the 2006 financial year, Verizon Wireless next-generation EV-DO network
was available to about 150 million people, approximately half the US population. This investment paved the way for the launch of innovative new data services in areas such as full track music downloads and location based services. In local currency, the Groups share of Verizon Wireless operating profit increased by 21.5%, driven by revenue growth and a leading cost efficiency position in the US market. The Groups share of the
tax attributable to Verizon Wireless of £116 million for the year ended 31 March 2006 relates only to the corporate entities held by the Verizon Wireless partnership. The tax attributable to the Groups share of the partnerships
pre-tax profit is included within the Group tax charge. Vodafone and Verizon Wireless were engaged in a number of joint projects, predominantly focusing upon bringing global services to their customers. The 2006 financial year saw the introduction of two new data roaming
services for Verizon Wireless customers, in addition to the launch of new handsets for the global phone proposition, all of which leverage the Vodafone footprint. Verizon Wireless continued to strengthen its spectrum position with the completion of the purchase of several key spectrum licences, including licences from Nextwave, Leap Wireless and Metro PCS and through
participation in the FCCs Auction 58, which took place in February 2005, with licences being granted in May 2005. The other associates in the EMAPA region achieved growth of 6.4% in the share of results of associates which was primarily driven by SFR, the Groups associated undertaking in France, which reported strong growth
in revenue and operating profit, principally as a result of an 8.1% increase in average customers compared with the 2005 financial year. Usage of both voice and non-voice services increased in the year and SFR had a total of 5,268,000 Vodafone live!
customers at 31 March 2006. SFR continues to grow its 3G base and at 31 March 2006 had registered 1,352,000 3G devices on its network. On 30 November 2005, the French competition authority fined SFR 220 million for engaging in anti-competitive agreements that distorted market competition.


InvestmentsChina Mobile, in which the
  Group has a 3.27% stake, and is accounted for as an investment, grew its customer
  base by 21.9% in the year to 260.6 million at 31 March 2006. Dividends of £41
  million were received in the 2006 financial year. Common Functions 2006
      
      2005
      
      Change£m
      
      £m
      
      %Revenue
      145
      
      123
      
      17.9Adjusted operating profit/(loss)
      211
      
      (85
      ) Common functions include the results of Partner Markets and unallocated central Group costs and charges. Adjusted operating profit increased primarily due to a revision of the charges made to Vodafone operating
companies for the use of the Vodafone brand and related trademarks which took effect from 1 April 2005. US GAAP ReconciliationThe principal differences between US GAAP
  and IFRS, as they relate to the Consolidated Financial Statements, are the accounting
  for goodwill and intangible assets before 29 September 2004, the accounting
  for income taxes, the capitalisation of interest and the timing of recognition
  of connection revenue and expenses. In the year ended 31 March 2007, revenue from continuing operations under US GAAP was £25,359 million compared with revenue from continuing operations under IFRS of £31,104 million for the same period. The
difference relates to the equity accounting of Vodafone Italy under US GAAP compared to proportionate consolidation under IFRS and the release of connection revenue deferred prior to the adoption of EITF 00-21 on 1 October 2003, which is required to
be recognised over the period a customer is expected to remain connected to the network under US GAAP. Net loss under US GAAP for the year ended 31 March 2007 was £4,325 million, compared with a loss for the financial year under IFRS of £5,297 million for the same period. The lower net loss under US GAAP was
mainly driven by higher amortisation charges of other intangible assets and share of results in equity method investments, more than offset by income taxes and the reversal of impairment losses. The reconciliation of the differences between
    IFRS and US GAAP is provided in note 38 to the Consolidated Financial Statements.




|Vodafone Group Plc Annual Report
      2007 | 51
|------------------------------------------- | --

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Back to Contents

Financial Position and
  Resources

Balance Sheet 2007
      
      
      2006
      
      Change£m
      
      
      £m
      
      %Non-current assetsIntangible assets
      56,272
      
      
      69,118
      
      (18.6
      )Property, plant and equipment
      13,444
      
      
      13,660
      
      (1.6
      )Investments in associated
        undertakings
      20,227
      
      
      23,197
      
      (12.8
      )Other non-current assets
      6,861
      
      
      2,639
      
      160.096,804
      
      
      108,614
      
      (10.9
      )Current assets
      12,813
      
      
      7,532
      
      70.1Assets included in disposalgroup held for sale
      
      
      
      10,592
      
      Total assets
      109,617
      
      
      126,738
      
      (13.5
      )Total equity
      67,293
      
      
      85,312
      
      (21.1
      )LiabilitiesBorrowings Long term
      17,798
      
      
      16,750
      
      6.3 Short term
      4,817
      
      
      3,448
      
      39.7Taxation liabilities Deferred tax liabilities
      4,626
      
      
      5,670
      
      (18.4
      ) Current taxation liabilities
      5,088
      
      
      4,448
      
      14.4Other non-current liabilities
      954
      
      
      951
      
      0.3Other current liabilities
      9,041
      
      
      7,616
      
      18.742,324
      
      
      38,883
      
      8.8Liabilities
          included in disposal group held for sale
      
      
      
      2,543
      
      Total equity and liabilities
      109,617
      
      
      126,738
      
      (13.5
      ) Non-current assetsIntangible assetsAt 31 March 2007, the Groups
  intangible assets were £56.3 billion, with goodwill comprising the largest
  element at £40.6 billion (2006: £52.6 billion). The balance has decreased
  from £69.1 billion at 31 March 2006 mainly as a result of an £11.6
  billion impairment charge in the 2007 financial year in respect of the carrying
  value of goodwill of Germany and Italy. Refer to note 10 to the Consolidated
  Financial Statements for further information on the impairment losses. Property, plant
  and equipmentProperty, plant and equipment
  decreased from £13.7 billion at 31 March 2006 to £13.4 billion at
  31 March 2007, predominantly as a result of £3.4 billion of additions and
  a £0.2 billion increase due to acquisitions during the year, more than
  offset by £3.0 billion of depreciation charges, £0.5 billion of unfavourable
  foreign exchange movements, a £0.3 billion decrease to the change in the
  consolidation status in Bharti in India, and £0.1 billion due to disposals. Investments in associated
  undertakingsThe Groups investments
  in associated undertakings decreased from£23.2
  billion at 31 March 2006 to £20.2 billion at 31 March 2007, as a result
  of the £2.6 billion impact of the disposals of the Groups associated
  undertakings in Belgium and Switzerland during the 2007 financial year, unfavourable
  foreign exchange movements of £2.3 billion and £0.8 billion of dividends
  received, partly offset by the £2.7 billion increase from the Groups
  share of the results of its associates after the deductions of interest, tax
  and minority interest. Other non-current
  assetsOther non-current assets mainly
  relates to other investments held by the Group, which totalled £5.9 billion
  at 31 March 2007 compared to £2.1 billion at 31 March 2006. The movement
  primarily represents a £1.6 billion increase


due to the change in consolidation status of the Groups investment in Bharti Airtel in India, an increase of £1.0 billion in the listed share price of China Mobile in which the Group has an equity
investment, and investments in SoftBank, which arose on the disposal of Vodafone Japan. Current assetsCurrent assets increased to £12.8
  billion at 31 March 2007 from £7.5 billion at 31 March 2006, mainly as
  a result of increased cash holdings pending the completion of the Hutchison
  Essar acquisition. Equity shareholders fundsTotal equity shareholders funds
  decreased from £85.3 billion at 31 March 2006 to £67.3 billion at
  31 March 2007. The decrease comprises primarily of redemptions under the B share
  scheme of £9.0 billion, equity dividends of £3.6 billion and the loss
  for the year of £5.3 billion. The decrease in equity resulting from the
  impact of unfavourable exchange rate movements was partly offset by unrealised
  holding gains on other investments discussed above. BorrowingsLong term borrowings and short
  term borrowings increased to £22.6 billion from £20.2 billion mainly
  as a result of funding required for the completion of the Hutchison Essar acquisition. Taxation liabilitiesThe deferred tax liability
  decreased from £5.7 billion at 31 March 2006 to £4.6 billion at 31
  March 2007, which together with the £0.3 billion increase in deferred tax
  assets, arose mainly from a £0.7 billion tax credit to the income statement,
  a net £0.3 billion in relation to discontinued and deconsolidated operations,
  and £0.4 billion of favourable foreign exchange movements. Refer to note
  6 of the Consolidated Financial Statements for further details. Contractual ObligationsA summary of the Groups principal
  contractual financial obligations is shown below. Further details on the items
  included can be found in the notes to the Consolidated Financial Statements. Payments
      due by period £mContractual obligations(1)(2)
    Total
    
    <1 year
    
    1-3 years
    
    3-5 years
    
    >5 yearsBorrowings(3)
    29,824
    
    5,712
    
    7,005
    
    4,573
    
    12,534Operating lease commitments(4)
    3,775
    
    718
    
    1,009
    
    688
    
    1,360Capital commitments(4)(5)
    1,149
    
    827
    
    235
    
    42
    
    45Purchase commitments(4)
    1,281
    
    885
    
    261
    
    110
    
    25Total contractual cash obligations(1)
    36,029
    
    8,142
    
    8,510
    
    5,413
    
    13,964 Notes:
      :(1)
      The above table
        of contractual obligations excludes commitments in respect of options
        over interests in Group businesses held by minority shareholders (see
        Option agreements and similar arrangements) and obligations
        to pay dividends to minority shareholders (see Dividends from associated
        undertakings and investments, and dividends to minority shareholders).
        Disclosures required by Financial Accounting Standards Board (FASB)
        Interpretation No. 45, Guarantors Accounting and Disclosure
        Requirements for Guarantees, Including Indirect Guarantees of Indebtedness
        of Others, are provided in note 31 to the Consolidated Financial
        Statements. The table also excludes deferred tax liabilities and obligations
        under post employment benefit schemes, details of which are provided in
        notes 6 and 25 to the Consolidated Financial Statements, respectively.(2)
      On 8 May 2007,
        the Group acquired companies with interests in Hutchison Essar. See page
        136 for further details.(3)
      See note 24
        to the Consolidated Financial Statements.(4)
      See note 30
        to the Consolidated Financial Statements.(5)
      Primarily related
        to network infrastructure.




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| | Performance
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ContingenciesDetails of the Groups contingent
  liabilities are included in note 31 of the Consolidated Financial Statements. A number of Vodafone subsidiaries acquired
    3G licences through auctions in 2000 and 2001. An appeal was filed by Vodafone
    Group Services Limited on behalf of Vodafone Limited, along with appeals filed
    by other UK mobile network operators which were granted a 3G licence, with
    the VAT and Duties Tribunal on 18 October 2003 for recovery of VAT on the
    basis that the amount of the licence fee was inclusive of VAT. The amount
    claimed by Vodafone Limited is approximately £888 million. In August
    2004, these claims were referred, jointly, to the ECJ and a hearing took place
    on7 February 2006. On 7 September 2006,
    the Advocate Generals opinion was released rejecting Vodafones
    claim. Whilst the Advocate Generals decision is not binding on the ECJ
    it is likely it will follow his opinion. A decision by the ECJ is expected
    this year. The Group has not recognised any amounts in respect of this matter
    to date. In addition, the Group has made claims for recovery of VAT in relation
    to 3G licence fees in other European jurisdictions. Equity DividendsThe table below sets out
  the amounts of interim, final and total cash dividends paid or, in the case
  of the final dividend for the 2007 financial year, proposed, in respect of each
  financial year, indicated both in pence per ordinary share and translated, solely
  for convenience, into cents per ordinary share at the Noon Buying Rate on each
  of the respective payment dates for such interim and final dividends. Pence
      per ordinary share
    
      Cents
        per ordinary shareYear ended 31 March
    Interim
    
    Final
    
    Total
    
    Interim
    
    Final
    
    Total2003
      0.7946
    
      0.8983
    
      1.6929
    
      1.2939
    
      1.4445
    
      2.73842004
    0.9535
    
    1.0780
    
    2.0315
    
    1.7601
    
    1.9899
    
    3.75002005
    1.91
    
    2.16
    
    4.07
    
    3.60
    
    4.08
    
    7.682006
    2.20
    
    3.87
    
    6.07
    
    3.83
    
    6.73
    
    10.562007
      2.35
    
      4.41
      (1)
    6.76
    
      4.61
    
      8.68
      (1)
    13.28 Note:  (1)

The final
        dividend for the year was proposed on 29 May 2007 and is payable on 3
        August 2007 to holders of record as of 8 June 2007. This dividend has
        been translated into US dollars at the Noon Buying Rate at 30 March 2007
        for ADS holders, but will be payable in US dollars under the terms of
        the ADS depository agreement. The Company has historically paid dividends
  semi-annually, with a regular interim dividend in respect of the first six months
  of the financial year payable in February and a final dividend payable in August.
  The Board of directors expect that the Company will continue to pay dividends
  semi-annually. In November 2006, the directors announced an interim dividend
  of 2.35 pence per share, representing a 6.8% increase over last years
  interim dividend. In considering the level of dividends, the
  Board takes account of the outlook for earnings growth, operating cash flow
  generation, capital expenditure requirements, acquisitions and divestments,
  together with the amount of debt and share purchases. Accordingly, the directors announced a final
  dividend of 4.41 pence per share, representing a 14.0% increase on last years
  final dividend. The Board remains committed to its existing
  policy of distributing 60% of adjusted earnings per share by way of dividend
  but, in recognition of the earnings dilution arising from the acquisition of
  Hutchison Essar, it has decided that it will target modest increases in dividend
  per share in the near term until the payout ratio returns to 60%. Cash dividends, if any, will be paid by the
  Company in respect of ordinary shares in pounds sterling or, to holders of ordinary
  shares with a registered


address in a country which has adopted the
  euro as its national currency, in euro, unless shareholders wish to elect to
  continue to receive dividends in sterling, are participating in the Companys
  Dividend Reinvestment Plan, or have mandated their dividend payment to be paid
  directly into a bank or building society account in the United Kingdom. In accordance
  with the Companys Articles of Association, the sterling: euro exchange
  rate will be determined by the Company shortly before the payment date. The Company will pay the ADS Depositary, The
  Bank of New York, its dividend in US dollars. The sterling: US dollar exchange
  rate for this purpose will be determined by the Company shortly before the payment
  date. Cash dividends to ADS holders will be paid by the ADS Depositary in US
  dollars. Liquidity and Capital Resources Cash flowsThe major sources of Group liquidity
    for the 2007 and 2006 financial years were cash generated from operations,
    dividends from associated undertakings, borrowings through short term and
    long term issuances in the capital markets and, particularly in the 2007 financial
    year, investment and business disposals. The Group does not use off-balance
    sheet special purpose entities as a source of liquidity or for other financing
    purposes. The Groups key sources of liquidity
    for the foreseeable future are likely to be cash generated from operations
    and borrowings through long term and short term issuances in the capital
    markets, as well as committed bank facilities. Additionally, the Group has
    a put option in relation to its interest in Verizon Wireless which, if exercised,
    could provide a material cash inflow. Please see Option agreements
    and similar arrangements at the end of this section. The Groups liquidity and working capital
    may be affected by a material decrease in cash flow due to factors such as
    reduced operating cash flow resulting from further possible business disposals,
    increased competition, litigation, timing of tax payments and the resolution
    of outstanding tax issues, regulatory rulings, delays in development of new
    services and networks, licences and spectrum payments, inability to receive
    expected revenue from the introduction of new services, reduced dividends
    from associates and investments or increased dividend payments to minority
    shareholders. Please see the section titled Performance  Risk
    Factors, Seasonality and Outlook, on pages 58 to 60. In particular,
    the Group anticipates a significant increase in cash tax payments and associated
    interest payments over the next two years due to the resolution of long standing
    tax issues. The Group is also party to a number of agreements
    that may result in a cash outflow in future periods. These agreements are
    discussed further in Option agreements and similar arrangements at
    the end of this section. Wherever possible, surplus funds in the Group
    (except in Albania, Egypt and Turkey) are transferred to the centralised
    treasury department through repayment of borrowings, deposits and dividends.
    These are then on-lent or contributed as equity to fund Group operations,
    used to retire external debt or invested externally. Increase in cash
  in the yearDuring the 2007 financial year,
  the Group decreased its net cash inflow from operating activities by 12.8% to
  £10,328 million, including £10,193 million from continuing operations.
  The Group generated £6,127 million of free cash flow from continuing operations,
  a reduction of 4.5% on the previous financial year, and experienced an additional
  outflow of £8 million from discontinued operations. Free cash flow from
  continuing operations decreased from the prior financial year due to an increase
  in capital expenditure and higher interest payments.




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Financial Position and Resourcescontinued

2007
    
    
    2006£m
    
    
    £mNet cash flows
      from operating activities
    10,328
    
    
    11,841Continuing operations
    10,193
    
    
    10,190Discontinued operations
    135
    
    
    1,651Taxation
    2,243
    
    
    1,682Purchase of
      intangible fixed assets
    (899
    )
    
    (690
    )Purchase of
      property, plant and equipment
    (3,633
    )
    
    (4,481
    )Disposal of
      property, plant and equipment
    34
    
    
    26Operating free
      cash flow
    8,073
    
    
    8,378Taxation
    (2,243
    )
    
    (1,682
    )Dividends from
      associated undertakings
    791
    
    
    835Dividends paid
      to minority shareholdersin subsidiary
      undertakings
    (34
    )
    
    (51
    )Dividends from
      investments
    57
    
    
    41Interest received
    526
    
    
    319Interest paid
    (1,051
    )
    
    (721
    )Free cash flow
    6,119
    
    
    7,119Continuing operations
    6,127
    
    
    6,418Discontinued operations
    (8
    )
    
    701Net cash inflow/(outflow)
      from acquisitions and disposals
    7,081
    
    
    (3,587
    )Other cash
      flows from investing activities
    (92
    )
    
    (56
    )Equity dividends
      paid
    (3,555
    )
    
    (2,749
    )Other cash
      flows from financing activities
    (4,712
    )
    
    (1,555
    )Increase/(decrease)
      in cash in the year
    4,841
    
    
    (828
    ) Capital expenditureDuring the 2007 financial year, £3,633
  million was spent on property, plant and equipment, a decrease of 18.9% from
  the previous financial year. The net cash outflow in intangible assets increased from £690 million in the previous financial year to £899 million in the current financial year, with the largest element being expenditure on computer
software. Dividends from associated undertakings
    and investments, and dividends to minority shareholdersDividends from the Groups
    associated undertakings are generally paid at the discretion of the Board
    of directors or shareholders of the individual operating companies and Vodafone
    has no rights to receive dividends, except where specified within certain
    of the companies shareholders agreements, such as with SFR, the
    Groups associated undertaking in France. Similarly, the Group does not
    have existing obligations under shareholders agreements to pay dividends
    to minority interest partners of Group subsidiaries or joint ventures, except
    as specified below. Included in the dividends received from associated undertakings and investments was an amount of £328 million (2006: £195 million) received from Verizon Wireless. Until April 2005, Verizon Wireless
distributions were determined by the terms of the partnership agreement distribution policy and comprised income distributions and tax distributions. Since April 2005, tax distributions have continued. Current projections forecast that tax
distributions will not be sufficient to cover the US tax liabilities arising from the Groups partnership interest in Verizon Wireless until 2015 and, in the absence of additional distributions above the level of tax distributions during this
period, will result in a net cash outflow for the Group. Under the terms of the partnership agreement, the board of directors has no obligation to provide for additional distributions above the level of the tax distributions. It is the current
expectation that Verizon Wireless will continue to re-invest free cash flow in the business and reduce indebtedness. During the year ended 31 March 2007, cash dividends
  totalling £450 million (2006: £511 million) were received from SFR
  in accordance with the shareholders agreement.


Verizon Communications Inc. (Verizon Communications) has an indirect 23.1% shareholding in Vodafone Italy and, under the shareholders agreement, the shareholders have agreed to take steps to cause
Vodafone Italy to pay dividends at least annually, provided that such dividends would not impair the financial condition or prospects of Vodafone Italy including, without limitation, its credit rating. Vodafone Italys board of directors is
considering the level of a dividend that may be paid during the 2008 financial year. No dividends were or have been proposed or paid by Vodafone Italy during or since the year ended 31 March 2007. The Hutchison Essar shareholders agreement provides for the payment of dividends to minority partners under certain circumstances (see page 136 for further details on the Hutchison Essar acquisition). Acquisitions and disposalsThe Group received a net £6,989
    million cash and cash equivalents from acquisition and disposal activities,
    including a net cash outflow of £92 million from the purchase and disposal
    of investments, in the year to31 March
    2007. The acquisitions are described in more detail under Business 
    Business Overview  How We Developed. An analysis of the main transactions in the 2007 financial year, including the changes in the Groups effective shareholding, is shown below: £mAcquisitions:Telsim Mobil Telekomunikasyon
      Hizmetleri(from nil to 100% of trade
      and assets)
(2,569
)Disposals:Vodafone Japan (from 97.7%
      to nil)(1)
6,810Belgacom Mobile (25% to nil)
1,343Swisscom Mobile (25% to nil)
1,776Other
          net acquisitions and disposals, including investments(1)
(371
)Total
6,989 Note:(1)
    Amounts are shown net of cash
      and cash equivalents acquired or disposed. On disposal of Vodafone Japan to SoftBank on 27 April 2006, the Group received non-cash consideration with a fair value of approximately ¥0.23 trillion (£1.1 billion), comprised of preferred equity and a
subordinated loan. Softbank also assumed external debt of approximately ¥0.13 trillion (£0.6 billion). In December 2006, the subordinated loan was partly repaid by SoftBank, with the remaining portion refinanced with a new subordinated loan, and the terms of the preferred equity were improved. As a result of this
refinancing, the Group recorded a gain of £86 million, which is reported in investment income. Special distribution of £9 billionOn 17 March 2006, following the
    announcement of the sale of Vodafone Japan, the Group stated that it would
    make a special distribution to shareholders of approximately £6 billion.
    Consistent with the Groups strategy of targeting a low single A credit
    rating over the long term, on30 May
    2006 the Group announced that it would return a further £3 billion to
    shareholders, resulting in a total distribution of approximately £9 billion
    in the form of a B share arrangement. The B share arrangement was approved at an
  Extraordinary General Meeting of the Company on 25 July 2006. Payment in respect
  of redemption of the B share arrangement was made in August 2006 and February
  2007 and all but £20 million of the total amount payable had been settled
  as at




|54 | Vodafone Group PlcAnnual Report 2007
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| | Performance
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31 March 2007. During such time that the remaining
  B shares are outstanding, they will accrue a non-cumulative dividend at the
  rate of 75% of sterling LIBOR, payable semi-annually in arrears until redemption.
  The Company has the right to redeem all remaining B shares by 5 August 2008. Other returnsAs a result of targeting a lower
    credit rating in May 2006 and the £9 billion special distribution, the
    Group has no current plans for further share purchases or other one-off shareholder
    returns. The Board will periodically review the free cash flow, anticipated
    cash requirements, dividends, credit profile and gearing of the Group and
    consider additional shareholder returns. Treasury sharesThe Companies Act 1985 permits companies
    to purchase their own shares out of distributable reserves and to hold shares
    with a nominal value not to exceed 10% of the nominal value of their issued
    share capital in treasury. If shares in excess of this limit are purchased
    they must be cancelled. Whilst held in treasury, no voting rights or pre-emption
    rights accrue and no dividends are paid in respect of treasury shares. Treasury
    shares may be sold for cash, transferred (in certain circumstances) for the
    purposes of an employee share scheme, or cancelled. If treasury shares are
    sold, such sales are deemed to be a new issue of shares and will accordingly
    count towards the 5% of share capital which the Company is permitted to issue
    on a non pre-emptive basis in any one year as approved by its shareholders
    at the AGM. The proceeds of any sale of treasury shares up to the amount of
    the original purchase price, calculated on a weighted average price method,
    is attributed to distributable profits which would not occur in the case of
    the sale of non-treasury shares. Any excess above the original purchase price
    must be transferred to the share premium account. The Company did not repurchase
    any of its own shares, between 1 April 2006 and 31 March 2007. Shares purchased are held in treasury in accordance
  with section 162 of the Companies Act 1985. The movement in treasury shares
  during the financial year is shown below: Numbermillion
    
    £m1 April 2006
    6,133
    
    8,198Consolidation of shares
    (762
    )
    Re-issue of shares
    (120
    )
    (151
    )31 March 2007
    5,251
    
    8,047 Funding The Groups consolidated net debt position
  for continuing operations is as follows: 2007
      
      
      2006£m
      
      
      £mCash
          and cash equivalents (as presented in the consolidated cash flow statement)
      7,458
      
      
      2,932Bank overdrafts
      23
      
      
      18Cash and cash equivalents
        for discontinued operations
      
      
      
      (161
      )Cash
          and cash equivalents (as presented in the consolidated balance sheet)
      7,481
      
      
      2,789Trade and other receivables(1)
      304
      
      
      310Trade and other payables(1)
      (219
      )
      
      (219
      )Short term borrowings
      (4,817
      )
      
      (3,448
      )Long term borrowings
      (17,798
      )
      
      (16,750
      )(22,530
      )
      
      (20,107
      )Net
      debt as extracted from the consolidated balance sheet
      (15,049
      )
      
      (17,318
      ) Note:  (1)
Trade and other receivables and payables
      include certain derivative financial instruments (see notes 17 and 27 to
      the Consolidated Financial Statements).


At 31 March 2007, the Group had £7.5 billion
  of cash and cash equivalents, with the increase since 31 March 2006 being due
  to the funding requirements in relation to the completion of the Hutchison Essar
  transaction, which occurred on 8 May 2007. Cash and cash equivalents are held
  in accordance with the Group treasury policy. The Group holds its cash and liquid investments
  in accordance with the counterparty and settlement risk limits of the Board
  approved treasury policy. The main forms of liquid investments at 31 March 2007
  were money market funds, commercial paper and bank deposits. Net debt decreased to £15,049 million,
  from £17,318 million at 31 March 2006, principally as a result of the
  cash flow items noted above, partly offset by equity dividend payments and £367
  million of adverse foreign exchange movements. This represented approximately
  16% of the Groups market capitalisation at 31 March 2007 compared with
  24% at 31 March 2006. Average net debt at month end accounting dates over the
  12 month period ended 31 March 2007 was £15,631 million, and ranged between
  £9,835 million and £20,229 million during the year. Consistent with the development of its strategy,
  the Group targets low single A long term credit ratings, with its current credit
  ratings being P-2/F2/A-2 short term and Baa1 stable/A- stable/A- stable long
  term from Moodys, Fitch Ratings and Standard & Poors respectively.
  Following the acquisition of Hutchison Essar, Moodys downgraded their
  long term credit rating for the Group from A3 to Baa1 on 16 May 2007. Credit
  ratings are not a recommendation to purchase, hold or sell securities, in as
  much as ratings do not comment on market price or suitability for a particular
  investor, and are subject to revision or withdrawal at any time by the assigning
  rating organisation. Each rating should be evaluated independently. The Groups credit ratings enable it to
  have access to a wide range of debt finance, including commercial paper, bonds
  and committed bank facilities. Commercial paper
    programmesThe Group currently has US
    and euro commercial paper programmes of $15 billion and £5 billion,
    respectively, which are available to be used to meet short term liquidity
    requirements. At 31 March 2007, $26 million (£13 million) was drawn
    under the US commercial paper programme and €1,531
    million (£1,040 million) and £50 million were drawn under the
    euro commercial paper programme. At 31 March 2006, $696 million (£400
    million) was drawn under the US commercial paper programme and $80 million
    (£46 million) and £285 million were drawn under the euro commercial
    paper programme. The commercial paper facilities were supported by $10.9 billion
    (£5.6 billion) of committed bank facilities (see Committed facilities
    below), comprised of a $5.9 billion Revolving Credit Facility that matures
    on 24 June 2009 and a $5.0 billion Revolving Credit Facility that matures
    on 22 June 2012. At 31 March 2007 and 31 March 2006, no amounts had been drawn
    under either bank facility. On 8 May 2007, the Groups $5.9 billion Revolving
    Credit Facility was extended to $6.1 billion and the $5.0 billion Revolving
    Credit Facility was extended to $5.2 billion. BondsThe Group has a €25 billion
  Euro Medium Term Note programme and a $12 billion US shelf programme, which
  are used to meet medium to long term funding requirements. At 31 March 2007,
  the total amounts in issue under these programmes split by currency were $16.5
  billion, £1.5 billion, €9.3
  billion and AUD 0.3 billion.




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Financial Position and Resourcescontinued

In the year to 31 March 2007, bonds with a nominal value of £4.2 billion were issued under the US shelf and the Euro Medium Term Note programme. The bonds issued during the year were: US shelf/EuroMedium TermAmount
	
	Note (EMTN)Date of bond issue
	
	Maturity of bond
	
	Currency
	
	Million
	
	programme14 June 2006
	
	14 June 2016
	
	EUR
	
	300
	
	EMTN14 June 2006
	
	13 January 2012
	
	EUR
	
	1,000
	
	EMTN10 August 2006
	
	10 January 2013
	
	AUD
	
	265
	
	EMTN29 August 2006
	
	13 January 2012
	
	EUR
	
	300
	
	EMTN5 September 2006
	
	5 September 2013
	
	EUR
	
	850
	
	EMTN27 November 2006
	
	14 June 2016
	
	EUR
	
	200
	
	EMTN30 January 2007
	
	30 January 2009
	
	EUR
	
	300
	
	EMTN5 February 2007
	
	5 February 2009
	
	EUR
	
	150
	
	EMTN15 February 2007
	
	15 February 2010
	
	EUR
	
	300
	
	EMTN27 February 2007
	
	27 February 2012
	
	USD
	
	500
	
	US shelf27 February 2007
	
	27 February 2012
	
	USD
	
	500
	
	US shelf27 February 2007
	
	27 February 2017
	
	USD
	
	1,300
	
	US shelf27 February 2007
	
	27 February 2037
	
	USD
	
	1,200
	
	US shelf At 31 March 2007, the Group had bonds outstanding
    with a nominal value of £17,101 million. On 31 May 2007 the Company agreed to issue
    €1,250m of bonds due on 6 June 2014 and €500m of bonds due on
    6 June 2022 under the Euro Medium Term Note programme. The bonds were issued
    on 6 June 2007. Committed facilitiesThe following table summarises the
committed bank facilities available to the Group at 31 March 2007: Committed Bank Facilities
    
    Amounts drawn24 June 2004$5.9 billion Revolving Credit Facility,
    maturing 24 June 2009.
    
    No drawings have been
        made against this facility. The facility supports the Groups commercial
        paper programmes and may be used for general corporate purposes including
      acquisitions.24 June 2005$5.0 billion Revolving Credit Facility,
    maturing 22 June 2012.
    
    No drawings have been
        made against this facility. The facility supports the Groups commercial
        paper programmes and may be used for general corporate purposes including
      acquisitions.21 December 2005¥258.5 billion Term Credit Facility,
        maturing 16 March 2011, entered into by Vodafone Finance K.K. and guaranteed
    by the Company.
    
    The facility was drawn
        down in full on 21 December 2005. The facility is available for general
      corporate purposes, although amounts drawn must be on-lent to the Company.16 November 20060.4
    billion Loan Facility, maturing 14 February 2014
    
    The facility was drawn
        down in full on 14 February 2007. The facility is available for financing
      capital expenditure in the Groups Turkish operating company. Under the terms and conditions of the $10.9
billion committed bank facilities, lenders have the right, but not the obligation,
to cancel their commitments and have outstanding advances repaid no sooner
than30 days after notification of a
change of control of the Company. 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.


Substantially the same terms and conditions apply in the case of Vodafone Finance
K.K.s ¥258.5 billion term credit facility, although the change of
control provision is applicable to any guarantor of borrowings under the term
credit facility. As of 31 March 2007, the Company was the sole guarantor. The terms and conditions of the0.4 billion loan facility are similar to those of the $10.9 billion committed bank facilities, with
the addition that, should the Groups Turkish operating company spend less than the equivalent of $0.8 billion on capital expenditure, the Group will be required to repay the drawn amount of the facility that exceeds 50% of the capital
expenditure. Furthermore, two of the Groups subsidiary undertakings are funded by external
facilities which are non-recourse to any member of the Group other than the borrower,
due to the level of country risk involved. These facilities may only be used
to fund their operations. Vodafone Egypt has a partly drawn (EGP 1 billion (£89
million)) syndicated bank facility of EGP 3 billion (£268 million) that
matures in March 2014. Vodafone Romania has a fully drawn156 million (£106 million) syndicated bank facility that matures at various dates up to October 2010. In aggregate, the Group has committed facilities of approximately£7,982
million, of which £5,842 million was undrawn and £2,140 million was
drawn at 31 March 2007. On 8 May 2007, the Groups $5.9 billion Revolving
Credit Facility was extended to $6.1
billion and the $5.0 billion Revolving Credit Facility was extended to $5.2
billion. The Group believes that it has sufficient funding for its expected working capital
requirements. Further details regarding the maturity, currency and interest rates
of the Groups gross borrowings at 31 March 2007 are included in note 24
of the Consolidated Financial Statements. Financial assets and liabilitiesAnalyses
of financial assets and liabilities, including the maturity profile of debt,
currency and interest rate structure, are included in notes 18 and 24 to the
Consolidated Financial Statements. Details of the
Groups treasury management and policies are included within note 24 to
the Consolidated Financial Statements. Option agreements and similar arrangementsPotential cash inflowsAs part of the agreements entered
into upon the formation of Verizon Wireless, the Company entered into an Investment
Agreement with Verizon Communications, formerly Bell Atlantic Corporation, and
Verizon Wireless. Under this agreement, dated 3 April 2000, the Company has the
right to require Verizon Communications or Verizon Wireless to acquire interests
in the Verizon Wireless partnership from the Company with an aggregate market
value of up to $20 billion during certain periods up to August 2007, dependent
on the value of the Companys 45% stake in Verizon Wireless. This represents
a potential source of liquidity
to the Group. Exercise of the option could have occurred in either one or both of two phases.
The Phase I option expired in August 2004 without being exercised. The Phase
II option may be exercised during the period commencing 30 days before and ending
30 days after 10 July 2007. Similar arrangements for 10 July 2006 expired unexercised.
The Phase II option also limits the aggregate amount paid to $20 billion
and caps the payments under single exercises to $10 billion. Determination
of the market value of the Companys interests will be by mutual agreement
of the parties to the transaction or, if no such agreement is reached within
30 days of the




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valuation date, by appraisal. If an initial public offering takes place and the common stock trades in a regular and active market, the market value of the Companys interest will be determined by reference to the
trading price of common stock. In conjunction with the acquisition of Hutchison Essar, the Group entered into
a share sale and purchase agreement with a Bharti group company regarding the
Groups 5.60% direct shareholding in Bharti Airtel. On 9 May 2007, a Bharti
group company irrevocably agreed to purchase this shareholding and the Group
expects to receive $1.6 billion in cash consideration for such shareholding
by November 2008. The shareholding will be transferred in two tranches, the first
before 31 March 2008 and the second by November 2008. Following the completion
of this sale, the Group will continue to hold an indirect stake of 4.39% in Bharti
Airtel. Potential cash outflowsIn
respect of the Groups interest in the Verizon Wireless partnership, an
option granted to Price Communications, Inc. by Verizon Communications Inc. was
exercised on 15 August 2006. Under the option agreement, Price Communications,
Inc. exchanged its preferred limited partnership interest in Verizon Wireless
of the East LP for 29.5 million shares of common stock in Verizon Communications
Inc. Verizon Communications Inc. has the right, but not the obligation, to contribute
the preferred interest to the Verizon Wireless partnership, diluting the Groups
interest. However, the Group also has the right to contribute further capital
to the Verizon Wireless partnership in order to maintain its percentage partnership
interest. Such amount, if contributed, would be $0.9
billion.


In respect of Arcor, the Groups non-mobile operation in Germany, the capital
structure provides all partners, including the Group, the right to withdraw capital
from 31 December 2026 onwards and this right in relation to the minority partners
has been recognised as a financial liability. During the year, the Group entered into an agreement with the Essar Group, conditional
on the completion of the Groups acquisition of a controlling stake in Hutchison
Essar. Under this agreement, the Essar Group was granted two put options over
its interest in Hutchison Essar that may result in significant cash outflows
for the Group (see page 136). Off-balance sheet arrangementsThe Group does not have any material
off-balance sheet arrangements, as defined by the SEC. Please refer to notes
30 and 31 to the Consolidated Financial Statements
for a discussion of the Groups commitments and
contingent liabilities. Quantitative and qualitative disclosures about
market
riskA
discussion of the Groups financial risk management objectives and policies
and the exposure of the Group to liquidity, market and credit risk is included
within note 24 to the Consolidated Financial
Statements.




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Risk Factors, Seasonality
  and Outlook

Risk Factors Regulatory decisions and changes in the regulatory environment could adversely affect the Groups business.Because
the Group has ventures in a large number of geographic areas, it must comply
with an extensive range of requirements that regulate and supervise the licensing,
construction and operation of its telecommunications networks and services. In
particular, there are agencies which regulate and supervise the allocation of
frequency spectrum and which monitor and enforce regulation and competition laws
which apply to the mobile telecommunications
industry. Decisions by regulators regarding the granting, amendment or renewal
of licences, to the Group or to third parties, could adversely affect the Groups future operations in these geographic areas. The Group cannot provide any
assurances that governments in the countries in which it operates will not issue telecommunications licences to new operators whose services will compete with it. In addition, other changes in the regulatory environment concerning the use of mobile
phones may lead to a reduction in the usage of mobile phones or otherwise adversely affect the Group. Additionally, decisions by regulators and new legislation, such as those relating to international roaming charges and call termination rates,
could affect the pricing for, or adversely affect the revenue from, the services the Group offers. Further details on the regulatory framework in certain countries and regions in which the Group operates, and on regulatory proceedings can be found
in Business  Regulation. Increased competition may reduce market share or revenue.The
Group faces intensifying competition. Competition could lead to a reduction in
the rate at which the Group adds new customers and to a decrease in the size
of the Groups market share as customers choose to
receive telecommunications services, or other competing services, from other
providers. Examples include, but are not limited to, competition from internet-based
services and MVNOs. The focus of competition in many of the Groups markets continues to shift
from customer acquisition to customer retention as the market for mobile telecommunications
has become increasingly penetrated. Customer deactivations are measured by the
Groups churn rate. There can be no assurance that the Group will not experience
increases in churn rates, particularly as competition intensifies. An increase
in churn rates could adversely affect profitability because the Group would experience
lower revenue and additional selling costs to replace customers. Increased competition has also led to declines in the prices the Group charges
for its mobile services and is expected to lead to further price declines in
the future. Competition could also lead to an increase in the level at which
the Group must provide subsidies for handsets. Additionally, the Group could
face increased competition should there be an award of additional licences in
jurisdictions in which a member of the Group already has a licence. Delays in the development of handsets and network compatibility and components may hinder the deployment of new technologies.The
Groups operations depend in part upon the successful deployment of continuously evolving telecommunications technologies. The Group uses technologies from a number of vendors and makes significant capital
expenditures in connection with the deployment of such technologies. There can be no assurance that common standards and specifications will be achieved, that there will be inter-operability across Group and other networks, that technologies will be
developed according to anticipated schedules, that they will perform according to expectations or that they will achieve commercial acceptance. The introduction of software and other network components may also be delayed. The failure of vendor
performance or technology performance to meet the Groups expectations or
the failure of a technology to achieve commercial acceptance could result in
additional capital expenditures by the Group or a reduction in profitability.


Expected benefits from cost reduction initiatives may not be realised.The Group has entered into several cost reduction initiatives principally relating to the outsourcing of IT application development and maintenance, data centre consolidation, supply chain management and a business
transformation programme to implement a single, integrated operating model using one ERP system. However, there is no assurance that the full extent of the anticipated benefits will be realised. Changes in assumptions underlying the carrying value of certain Group assets could result in impairment.Vodafone
completes a review of the carrying value of its assets annually, or more frequently
where the circumstances require, to assess whether those carrying values can
be supported by the net present value of future cash flows derived from such
assets. This review examines the continued appropriateness of the assumptions
in respect of highly uncertain matters upon which the carrying values of certain
of the Groups assets are based. This includes an
assessment of discount rates and long term growth rates, future technological developments and timing and quantum of future capital expenditure, as well as several factors which may affect revenues and profitability identified within other Risk
Factors in this section such as intensifying competition, pricing pressures, regulatory changes and the timing for introducing new products or services. Due to the Groups substantial carrying value of goodwill under IFRS and licences under US
GAAP, the revision of any of these assumptions to reflect current or anticipated changes in operations or the financial condition of the Group could lead to an impairment in the carrying value of certain assets in the Group. Whilst impairment does
not impact reported cash flows, it does result in a non-cash charge on the income statement, and thus no assurance can be given that any future impairments would not affect the Companys reported distributable reserves and therefore its ability
to make distributions to its shareholders or repurchase its shares. See Performance  Critical Accounting Estimates. The Groups geographic expansion may increase exposure to unpredictable economic, political and legal risks.Political,
economic and legal systems in emerging markets historically are less predictable
than in countries with more developed institutional structures. As the Group
increasingly enters into emerging markets, the
value of the Groups investments may be adversely affected by political, economic and legal developments which are beyond the Groups
control. Expected benefits from acquisitions may not be realised.The Group has made significant acquisitions which are expected to deliver benefits resulting from the anticipated growth potential of the relevant markets. However, there is no assurance as to the successful
integration of companies acquired by the Group or the extent to which the anticipated benefits resulting from the acquisitions will be achieved. The Companys strategic objectives may be impeded by the fact that it does not have a controlling interest in some of its ventures.Some
of the Groups interests in mobile licences are held through entities in which it is a significant but not controlling owner. Under the governing documents for some of these partnerships and corporations,
certain key matters such as the approval of business plans and decisions as to the timing and amount of cash distributions require the consent of the partners. In others, these matters may be approved without the Companys consent. The Company
may enter into similar arrangements as it participates in ventures formed to pursue additional opportunities. Although the Group has not been materially constrained by the nature of its mobile ownership interests, no assurance can be given that its
partners will not exercise their power of veto or their controlling influence in any of the Groups ventures in a way that will hinder the Groups
corporate objectives and reduce any anticipated cost savings or revenue enhancement
resulting from these ventures.




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Expected benefits from investment in networks, licences and new technology may not be realised.The
Group has made substantial investments in the acquisition of licences and in
its mobile networks, including the roll out of 3G networks. The Group expects
to continue to make significant investments in its mobile networks due to increased
usage and the need to offer new services and greater functionality afforded by
new or evolving telecommunications technologies. Accordingly, the rate of the
Groups capital expenditures in future years could remain
high or exceed that which it has experienced to date. There can be no assurance that the introduction of new services will proceed
according to anticipated schedules or that the level of demand for new services
will justify the cost of setting up and providing new services. Failure or a
delay in the completion of networks and the launch of new services, or increases
in the associated costs, could have a material adverse effect on the Groups
operations. The Group may experience a decline in revenue or profitability notwithstanding its efforts to increase revenue from the introduction of new services.As part of its strategy, the Group will continue to offer new services to its existing customers and seek to increase non-voice service revenue as a percentage of total service revenue. However, the Group may not be
able to introduce commercially these new services, or may experience significant delays due to problems such as the availability of new mobile handsets, higher than anticipated prices of new handsets or availability of new content services. In
addition, even if these services are introduced in accordance with expected time schedules, there is no assurance that revenue from such services will increase ARPU or maintain profit margins. The Groups business and its ability to retain customers and attract new customers may be impaired by actual or perceived health risks associated with the transmission of radiowaves from mobile telephones, transmitters
and associated equipment.Concerns have
been expressed in some countries where the Group operates that the electromagnetic
signals emitted by mobile telephone handsets and base stations may pose health
risks at exposure levels below existing guideline levels and may interfere with
the operation of electronic equipment. In addition, as described under the heading Legal proceedings in note 31 to the Consolidated Financial Statements, several mobile industry participants,
including the Company and Verizon Wireless, have had lawsuits filed against them alleging various health consequences as a result of mobile phone usage, including brain cancer. While the Company is not aware that such health risks have been
substantiated, there can be no assurance that the actual, or perceived, risks associated with radiowave transmission will not impair its ability to retain customers and attract new customers, reduce mobile telecommunications usage or result in
further litigation. In such event, because of the Groups strategic focus
on mobile telecommunications, its business and results of operations may be more
adversely affected than those of other companies in the telecommunications
sector. The Groups business would be adversely affected by the non-supply of equipment and support services by a major supplier.Companies
within the Group source their network infrastructure and related support services
from third party suppliers. The removal from the market of one or more of these
third party suppliers would adversely affect
the Groups operations and could result in additional capital expenditures
by the Group. SeasonalityThe
Groups financial results have not, historically, been subject to significant
seasonal trends.






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Risk Factors, Seasonality and Outlookcontinued

OutlookThe
measures presented in the Groups outlook have been derived from amounts calculated in accordance with IFRS but are not themselves IFRS measures. Further disclosures are provided in Performance 
Non-GAAP Information on pages to 62 to 63 and below for proportionate measures. 2007 financial yearThe
following sets out the outlook provided by the Group in respect of the 2007 financial
year and the Groups actual performance: 2007
      
      2007Actual Performance
      
      OutlookFree cash flow
      
      £6.1 billion
      (1)
      £4.7 to £5.2 billionCapitalised fixed asset additions
      
      £4.2 billion
      
      £4.2 to £4.6 billion Note:(1)
      Amount includes £0.5 billion benefit
        from timing differences and the deferral of payments originally expected
        in the year and is stated after £0.4 billion of tax payments, including
        associated interest, in respect of a number of long standing tax issues. 2008 financial yearThe
following sets out the Groups outlook for the 2008 financial year: 2008 Outlook
    (1)(2)Revenue growth
	£33.3 billion to £34.1 billionAdjusted operating profit
	£9.3 billion to £9.8 billionCapitalised fixed asset additions
	£4.7 billion to £5.1 billionFree cash flow
	£4.0 billion to £4.5 billion Notes:(1)
    This Outlook section contains forward
        looking statements within the meaning of the US Private Securities Litigation
        Reform
Act of 1995. Please refer to Cautionary Statement Regarding Forward-Looking
Statements set out on page 61.(2)
    Includes assumption of average foreign
        exchange rates for the 2008 financial year of approximately Euro 1.47:£1
        and US$1.98:£1. A substantial majority of the Groups revenue,
        adjusted operating profit, capitalised fixed asset additions and free
        cash flow is denominated in currencies other than sterling, the Groups
    reporting currency. The Groups outlook statement now reflects only statutory financial measures. Following completion of the Hutchison Essar transaction in India on 8 May 2007, its results will be fully consolidated into the
Groups results from that date and are therefore reflected in the outlook measures set out below. The Groups
outlook ranges reflect current expectations for average foreign exchange rates
for the 2008 financial year. Operating conditions are expected to continue to be challenging in Europe, with
competition remaining intense and ongoing regulatory pressure, notwithstanding
continued positive trends in data revenue and voice usage growth. Increasing
market penetration continues to result in overall strong growth prospects for
the EMAPA region. Group revenue is expected to be in the range of £33.3
billion to£34.1 billion. Adjusted
operating profit is expected to be in the range of £9.3 billion to £9.8
billion, with the Group EBITDA margin lower year on year. Total depreciation
and amortisation charges are
anticipated to be around £5.8 billion to £5.9 billion, higher than
the 2007 financial year, primarily as a result of the Hutchison Essar acquisition. The Group expects capitalised fixed asset additions to be in the range of £4.7 billion to £5.1 billion, including in excess of £1.0 billion in India. Reported free cash flow is expected to be in the range of £4.0 billion to £4.5
billion. This is after taking into account £0.6 billion of expected tax
payments and associated interest in respect of the potential settlement of a
number of long standing tax issues, a net cash outflow of approximately £0.8
billion anticipated in respect of India and £0.5 billion from deferred payments
and the reversal of certain timing differences that benefited the 2007 financial
year. The outlook for free cash flow is stated including the impact of known
spectrum or licence payments only. The Group still expects that significant cash tax and associated interest payments
may be made in the next two years in respect of long standing tax issues, although
the timing of such payments remains uncertain. Within this timeframe, the Group
continues to anticipate possible resolution to the application of the UK Controlled
Foreign Company legislation to the Group. The adjusted effective tax rate percentage is expected to be in the low 30s,
slightly higher than the 2007 financial year and consistent with the Groups
longer term expectations. Revenue stimulation and cost reduction
in EuropeThe Group continues to target delivering
benefits equivalent to at least 1% additional revenue market share in the year
compared with the 2005 financial year. Capitalised mobile fixed asset additions
are expected to be 10% of mobile revenue for the year for the total of the Europe
region and common functions. The Group also expects mobile operating expenses to be broadly stable for the
total of the Europe region and common functions when compared with the 2006 financial
year on an organic basis, excluding the potential impact from developing and
delivering new services and from any business restructuring costs.






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Cautionary Statement Regarding
  Forward-Looking Statements

This document contains forward-looking
    statements within the meaning of the US Private Securities Litigation
    Reform Act of 1995 with respect to the Groups financial condition, results
    of operations and businesses and certain of the Groups plans and objectives.
    In particular, such forward-looking statements include statements with respect
    to Vodafones expectations as to launch and roll out dates for products,
    services or technologies offered by Vodafone; intentions regarding the development
    of products and services introduced by Vodafone or by Vodafone in conjunction
    with initiatives with third parties, including Yahoo! and Microsoft; the ability
    to integrate all operations throughout the Group and the ability to be operationally
    efficient; the benefits of acquisitions, including the Hutchison Essar acquisition;
    the development and impact of new mobile technology; growth in customers and
    usage, including growth in emerging markets; the Groups expectations
    for revenue, adjusted operating profit, capitalised fixed asset additions
    and free cash flow for the 2008 financial year contained within the outlook
    statement on page 60 of this document, and expectations for the Groups
    future performance generally, including average revenue per user (ARPU),
    costs, capital expenditures, operating expenditures and margins and non-voice
    services and their revenue contribution; share purchases; the rate of dividend
    growth by the Group or its existing investments; expectations regarding the
    Groups access to adequate funding for its working capital requirements;
    expected effective tax rates and expected tax payments; the ability to realise
    synergies through revenue stimulation activities in Europe and cost reduction
    initiatives, including the IT AD&M programme, supply chain centralisation,
    data centre consolidation, network sharing and enterprise resource planning
    initiatives; future acquisitions and future disposals; contractual obligations;
    mobile penetration and coverage rates; the impact of regulatory and legal
    proceedings involving Vodafone; expectations with respect to long-term shareholder
    value growth; Vodafones ability to be a market leader in providing voice
    and data communications; overall market trends and other trend projections. Forward-looking statements are sometimes, but not always, identified by their
use of a date in the future or such words as anticipates, aims, could, may, should, expects, believes, intends, plans or targets.
By their nature, forward-looking statements are inherently predictive, speculative
and involve risk and uncertainty because they relate to events and depend on
circumstances that will occur in the future. There are a number of factors that
could cause actual results and developments to differ materially from those expressed
or implied by these forward-looking statements. These factors include, but are
not limited to, the following: •
    changes in economic or political conditions in markets served by operations of the Group that would adversely affect the level of demand for mobile services;•
    greater than anticipated competitive activity, from both existing competitors and new market entrants, including Mobile Virtual Network Operators (MVNOs), which could require changes to the Groups pricing models, lead to customer churn and make it more difficult to acquire new customers and reduce profitability;•
    the impact of investment in network capacity and the deployment of new technologies, or the rapid obsolescence of existing technology;•
    slower than expected customer growth and reduced customer retention;•
    changes in spending patterns of existing customers;•
    the possibility that new products and services will not be commercially accepted or perform according to expectations or that vendors performance in marketing these technologies will not meet the Groups requirements;•
    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;•
    the ability of the Group to harmonise mobile platforms and delays, impediments or other problems associated with the roll out and scope of new
or existing products, services or technologies in new markets;•
    the ability of the Group to offer new services and secure the timely delivery of high quality, reliable network equipment and other key products from suppliers;


•
    the Groups ability to develop competitive data content and services that will attract new customers and increase average usage;•
    future revenue contributions of both voice and non-voice services;•
    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 Groups ability to achieve meaningful cost savings and revenue improvements as a result of its cost reduction initiatives;•
    the ability to realise benefits from entering into partnerships for developing data and internet services and entering into service franchising and brand licensing;•
    the possibility that the pursuit of new, unexpected strategic opportunities may have a negative impact on the Groups financial performance;•
    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;•
    any unfavourable conditions, regulatory or otherwise, imposed in connection with pending or future acquisitions or disposals and the integration of acquired companies in the Groups existing obligations;•
    the risk that, upon obtaining control of certain investments, the Group discovers additional information relating to the businesses of that investment leading to restructuring charges or write-offs or other negative implications;•
    changes in the regulatory framework in which the Group operates, including possible action by regulators in markets in which the Group operates or by the EU regulating rates the Group is permitted to charge;•
    the impact of legal or other proceedings against the Group or other companies in the mobile telecommunications industry;•
    the possibility that new marketing or usage stimulation campaigns or efforts and customer retention schemes are not an effective expenditure;•
    the possibility that the Groups integration efforts do not reduce the time to market for new products or improve the Groups cost position;•
    loss of suppliers or disruption of supply chains;•
    the Groups ability to satisfy working capital requirements through borrowing in capital markets, bank facilities and operations;•
    changes in exchange rates, including particularly the exchange rate of pounds sterling to the euro and the US dollar;•
    changes in statutory tax rates and profit mix which would impact the weighted average tax rate;•
    changes in tax legislation in the jurisdictions in which the Group operates;•
    final resolution of open issues which might impact the effective tax rate; and•
    timing of tax payments relating to the resolution of open issues. Furthermore, 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 Performance  Risk Factors, Seasonality
and Outlook on pages 58 to 60. 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. Neither Vodafone nor any of its affiliates
intends to update these forward-looking statements.




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Non-GAAP Information

Adjusted Operating ProfitThe Group presents operating profit excluding non-operating income of associates, impairment losses and other income and expense for the Group and the Group's reported segments. The Group believes that it is both
useful and necessary to report these measures for the following reasons:

|• | these measures are used by the Group for internal performance analysis;                                                                                                                                                                                    
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                            
|• | the presentation by the Group's reported business segments of these measures facilitates comparability with other companies, although the Group's measures may not be comparable
with similarly titled profit measurements reported by other companies; and
|  |                                                                                                                                                                                                                                                            
|• | it is useful in connection with discussion with the investment analyst community
    and debt rating agencies.                                                                                                                                             

Reconciliation of these measures to the closest
    equivalent GAAP measure, operating (loss)/profit, is provided in Performance  Operating
Results beginning on page 34.

Organic GrowthThe Group believes that organic growth,
    which is not intended to be a substitute, or superior to, reported growth,
    provides useful and necessary information to investors and other interested
    parties for the following reasons:

|• | it provides additional information on underlying growth of the business without the effect of factors unrelated to the operating performance of the business;                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                            
|• | it is used by the Group 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, or US GAAP, and may not, therefore,
be comparable with similarly titled measures reported by other companies.

Reconciliation of organic growth to reported
growth is shown below:

|                                              |         |   | Impact of |   | Impact of        |   |          |  
|--------------------------------------------- | ------- | - | --------- | - | ---------------- | - | -------- | -
|                                              | Organic |   | foreign   |   | acquisitions and |   | Reported |  
|                                              | growth  |   | exchange  |   | disposals        |   | growth   |  
|                                              | %       |   | %         |   | %                |   | %        |  
|                                              |         |   |           |   |                  |   |          |  
|Group                                         |         |   |           |   |                  |   |          |  
|Voice revenue                                 | 2.5     |   | (1.7      | ) | 3.7              |   | 4.5      |  
|Messaging revenue                             | 7.0     |   | (1.3      | ) | 3.4              |   | 9.1      |  
|Data revenue                                  | 30.7    |   | (0.8      | ) | 0.2              |   | 30.1     |  
|Total service revenue                         | 4.7     |   | (1.6      | ) | 3.5              |   | 6.6      |  
|Total revenue                                 | 4.3     |   | (1.6      | ) | 3.3              |   | 6.0      |  
|                                              |         |   |           |   |                  |   |          |  
|Europe                                        |         |   |           |   |                  |   |          |  
|Voice revenue                                 | (0.7    | ) | (0.4      | ) | (1.5             | ) | (2.6     | )
|Messaging revenue                             | 4.6     |   | (0.5      | ) | (1.0             | ) | 3.1      |  
|Data revenue                                  | 29.5    |   | (0.7      | ) | (1.7             | ) | 27.1     |  
|Operating expenses                            | 7.4     |   | (0.4      | ) | (2.8             | ) | 4.2      |  
|Adjusted operating profit                     | (4.7    | ) | (0.5      | ) | 0.1              |   | (5.1     | )
|                                              |         |   |           |   |                  |   |          |  
|EMAPA                                         |         |   |           |   |                  |   |          |  
|Interconnect costs - Eastern Europe           | 23.8    |   | (3.2      | ) | 25.7             |   | 46.3     |  
|Interconnect costs - Middle East, Africa Asia | 26.8    |   | (19.0     | ) | 37.2             |   | 45.0     |  
|                                              |         |   |           |   |                  |   |          |  

|                          |         |  |           |   |               |   |           |  | Impact of impairment |   |                 |  
|------------------------- | ------- |  | --------- | - | ------------- | - | --------- |  | -------------------- | - | --------------- | -
|                          |         |  |           |   |               |   | Reported  |  | losses and amounts   |   |                 |  
|                          |         |  | Impact of |   | Impact of     |   | growth in |  | related to business  |   | Reported growth |  
|                          | Organic |  | foreign   |   | acquisitions  |   | non-GAAP  |  | acquisitions         |   | in equivalent   |  
|                          | growth  |  | exchange  |   | and disposals |   | measure   |  | and disposals        |   | GAAP measure(1) |  
|                          | %       |  | %         |   | %             |   | %         |  | %                    |   | %               |  
|                          |         |  |           |   |               |   |           |  |                      |   |                 |  
|Adjusted operating profit | 4.2     |  | (2.5      | ) | (0.3          | ) | 1.4       |  | (90.3                | ) | (88.9           | )
|                          |         |  |           |   |               |   |           |  |                      |   |                 |  

|Note:
|-----
|(1)  



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| | Performance
| | -----------
| |            



Cash Flow MeasuresIn presenting and discussing the Group's reported
results, free cash flow and operating free cash flow are calculated and presented
on the basis of methodologies other than in accordance with IFRS. The Group believes
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 the Company and external parties to evaluate the Group's liquidity and the cash generated by the Group's operations. Free cash flow does not include 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 the Group has an obligation to incur. However, it does reflect the cash available for such discretionary activities, to strengthen the balance sheet 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 the Group's measure of free cash flow may not be directly comparable to similarly titled measures
used by other companies;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|• | it is used by management for planning, reporting and incentive purposes;
    and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|• | it is useful in connection with discussion with the investment analyst community
    and debt rating agencies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

The Group believes that the presentation of operating free cash flow is useful
and necessary for investors and other interested parties as it provides the quantitative
basis for the cash flow targets of the cost reduction initiatives outlined on
pages 38 to 39. This measure may not be directly comparable to similarly titled
measures used by other companies.

A reconciliation of net cash inflow from operating activities, the closest equivalent
GAAP measure, to operating free cash flow and free cash
flow, is provided in Performance - Financial Position and
Resources on page 52.

Net DebtIn presenting and discussing the Group's indebtedness and liquidity position, net debt is calculated. There is no definition of net debt within IFRS. The Group believes that it is both useful and necessary to
communicate net debt to investors and other interested parties, for the following reasons:

|• | net debt assists the Company and
          external parties in evaluating the Group's overall indebtedness and
    liquidity position;                                                                              
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                     
|• | net debt facilitates comparability of indebtedness and liquidity with other companies, although the Group's measure of net debt may not be directly comparable to similarly titled
measures used by other companies;
|  |                                                                                                                                                                                                                     
|• | it is used by management for planning and reporting purposes; and                                                                                                                                                   
|  |                                                                                                                                                                                                                     
|• | it is used in discussions with the investment analyst community and the debt rating agencies.                                                                                                                       

A reconciliation of short term and long term borrowings, the closest equivalent GAAP measures, to net debt is shown on page 55.

OtherCertain
of the statements within the section titled Strategy - Chief Executive's Review on pages 6 to 7 and the section titled Performance - Cost reduction initiatives,
on pages 38 to 39, contain forward-looking non-GAAP financial information for
which at this time there is no comparable GAAP measure and which at this time
cannot be quantitatively reconciled to comparable GAAP financial information.

Certain of the statements within the section titled Performance - Risk
Factors, Seasonality and Outlook on pages 58 to 60, contain forward-looking
non-GAAP financial information which at this time cannot be quantitatively reconciled
to comparable GAAP financial information.



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Board of Directors and Group Management

Directors and Senior ManagementThe
business of the Company is managed by its board of directors (the Board).
Biographical details of the directors and senior management at the date of this
report are as follows: DirectorsChairman1. Sir John Bondbecame Chairman of Vodafone Group Plc in July 2006 having previously served as a non-executive director of the Board, and is Chairman of the Nominations and
Governance Committee. Sir John is a non-executive director of Ford Motor Company, USA and a director of Shui On Land Limited (Hong Kong SAR). He retired from the position of Group Chairman of HSBC Holdings plc in May 2006, after 45 years of service.
Other previous roles include Chairman of HSBC Bank plc and director of The Hong Kong and Shanghai Banking Corporation and HSBC North America Holdings Inc. Previous non-executive directorships include the London Stock Exchange, Orange plc, British
Steel plc and the Court of the Bank of England. Executive Directors2. Arun Sarin,Chief Executive, became a member of the Board in June 1999. He was appointed Chief Executive in July 2003 and is a member of the Nominations and Governance
Committee. Arun joined Pacific Telesis Group in San Francisco in 1984 and has served in many executive positions in his 20 year career in telecommunications. He was a director of AirTouch Communications, Inc. from July 1995 and was President and
Chief Operating Officer from February 1997 to June 1999. He was Chief Executive Officer for the Vodafone United States and Asia Pacific region until 15 April 2000, when he became a non-executive director. He has served as a director of The Gap,
Inc., The Charles Schwab Corporation and Cisco Systems, Inc., and is a non-executive director of the Court of the Bank of England.


3. Vittorio Colao,Deputy Chief Executive, joined the Board in October 2006. He spent the early part of his career as a Partner in the Milan office of McKinsey & Co
working on media, telecommunications and industrial goods and was responsible for recruitment. In 1996, he joined Omnitel Pronto Italia, which subsequently became Vodafone Italy, and he was appointed Chief Executive in 1999. He was then appointed
Regional Chief Executive Officer, Southern Europe for Vodafone Group Plc in 2001, became a member of the Board in 2002 and was appointed to the role of Regional Chief Executive Officer for Southern Europe, Middle East and Africa for Vodafone in
2003. In 2004, he left Vodafone to join RCS MediaGroup, the leading Italian publishing company, where he was Chief Executive until he rejoined Vodafone. 4. Andy Halford,Chief Financial Officer, joined the Board in July 2005. Andy joined Vodafone in 1999 as Financial Director for Vodafone Limited, the UK operating company,
and in 2001 he became Financial Director for Vodafones Northern Europe, Middle East and Africa Region. In 2002, he was appointed Chief Financial Officer of Verizon Wireless in the US and is currently a member of the Board of Representatives of
the Verizon Wireless partnership. Prior to joining Vodafone, he was Group Finance Director at East Midlands Electricity Plc. Andy holds a bachelors degree in Industrial Economics from Nottingham University and is a Fellow of the Institute of
Chartered Accountants in England and Wales.




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| | Governance
| | ----------
| |           



Deputy Chairman and senior independent director5. John Buchananbecame
Deputy Chairman and senior independent director in July 2006 and has been a member
of the Board since April 2003. He is a member of the Nominations and Governance
Committee and the Audit Committee and, solely for the purposes of relevant legislation,
is the Boards appointed financial expert on that Committee. He retired from the board of directors of BP Plc in 2002 after six years as
Group Chief Financial Officer and executive director, following a wide-ranging career with the company. He was a member of the United Kingdom Accounting Standards Board from 1997 to 2001. He is Chairman of Smith & Nephew
plc, a non-executive director of AstraZeneca PLC and senior independent director
of BHP Billiton Plc. Non-executive directors6. Dr Michael Boskinbecame
a member of the Board in June 1999 on completion of the merger with AirTouch
Communications, Inc. and is Chairman of the Audit Committee and a member of the
Remuneration Committee. He was a director of AirTouch from August 1996 to June
1999. He has been a Professor of Economics at Stanford University since 1971
and was Chairman of the Presidents Council of Economic Advisers from
February 1989 until January 1993. Michael is President and Chief Executive Officer of Boskin & Co.,
an economic consulting company, and is also a director of Exxon Mobil Corporation,
Shinsei Bank Limited and Oracle Corporation. 7. Lord Broersjoined the Board in January 1998 and is a member of the Audit Committee and the Nominations and Governance Committee. He was President of the Royal Academy of
Engineering until 2006 and is a former Vice-Chancellor of Cambridge University. He spent many years with IBM, in senior roles within the research and development function, and is a Fellow of the Royal Society, the Institute of Electrical Engineers
and the Institute of Physics. Lord Broers is also a Foreign Associate of the US National Academy of Engineering, a trustee of the British Museum and Chairman of the House of Lords Science and Technology Select Committee. He chairs the Companys
UK pension trustee company. Lord Broers will retire from the Board at the conclusion of the Companys AGM on 24 July 2007. 8. Alan Jebsonjoined the Board in December 2006. He retired in May 2006 from his role as Group Chief Operating Officer of HSBC Holdings Plc, a position which included
responsibility for IT and Global Resourcing. During a long career with HSBC, Alan held various positions in IT, including the position of Group Chief Information Officer. His roles included responsibility for the groups international systems,
including the consolidation of HSBC and Midland systems following the acquisition of Midland Bank in 1993. He originally joined HSBC as Head of IT Audit in 1978 where, building upon his qualification as a chartered accountant, he built an
international audit team and implemented controls in the groups application systems. He is also a non-executive director of Experian Group plc and McDonald Dettweiler in Canada. 9. Nick Landjoined the Board in December 2006 and is a member of the Audit Committee. In June 2006, he retired as Chairman of Ernst & Young LLP after a distinguished
career spanning 36 years with the firm. He became an audit partner in 1978 and held a number of management appointments before becoming Managing Partner in 1992. He was appointed Chairman and joined the Global Executive Board of Ernst & Young
Global LLP in 1995. He is a non-executive director of Royal Dutch Shell, BBA Aviation and the Ashmore Group. He also sits on the Advisory Boards of Three Delta and the Cambridge Judge Business School, is a member of the National Gallerys
Finance and Audit Committees and is Chairman of the Practices Advisory Board of the Institute of Chartered Accountants in England and Wales. 10. Anne Lauvergeonjoined the Board in November 2005 and is a member of the Audit Committee. She is Chief Executive Officer of AREVA group, the leading French energy
company, having been appointed to that role in July


2001. She started her professional career in 1983 in the iron and steel industry
and in 1990 she was named Adviser for Economic International Affairs at the French
Presidency and Deputy Chief of its Staff in 1991. In 1995, she became a Partner
of Lazard Frères & Cie, subsequently joining Alcatel Telecom as Senior
Executive Vice President in March 1997. She was responsible for international
activities and the groups industrial shareholdings in the energy and nuclear
fields. In 1999, she was appointed Chairman and Chief Executive Officer of COGEMA.
Anne is currently also Vice Chairman of the Supervisory Board of Safran and a
non-executive director of Total and Suez. 11. Professor Jürgen Schrempphas been a member of the Board since May 2000 and is a member of the Remuneration Committee and the Nominations and Governance Committee.
He is a former Chairman of the Board of Management of DaimlerChrysler and one of the principal architects of Daimler-Benzs merger with Chrysler in 1998. He became Chairman of Daimler-Benz in 1995. Jürgen continues to hold the position of
Non-Executive Chairman of DaimlerChrysler South Africa Limited and is a non-executive director of the South African Coal, Oil and Gas Corporation (SASOL), Compagnie Financière Richemont SA, Switzerland and South African Airways. Jürgen
is Chairman Emeritus of the Global Business Coalition on HIV/AIDS and holds South Africas highest civilian award, the Order of Good Hope, conferred upon him by President Nelson Mandela. 12. Luc Vandeveldejoined the Board in September 2003 and is Chairman of the Remuneration Committee and a member of the Nominations and Governance Committee. He is a
director of Société Générale. He is the Founder and Managing Director of Change Capital Partners LLP, a private equity fund. Luc was formerly Chairman of the Supervisory Board of Carrefour SA, Chairman of Marks &
Spencer Group Plc and Chief Executive Officer of Promodes, and he has held senior European and international roles with Kraft General Foods. 13. Anthony Watsonwas appointed to the Board in May 2006 and is a member of the Remuneration Committee. Prior to joining Vodafone, he was Chief Executive of Hermes Pensions
Management Limited, a position he had held since 2002. Previously he was Hermes Chief Investment Officer, having been Managing Director of AMP Asset Management and the Chief International Investment Officer of Citicorp Investment Management
from 1991 until joining Hermes in 1998. He is Chairman of Marks & Spencer Pension Trust Ltd, the Strategic Investment Board in Northern Ireland and the Asian Infrastructure Fund. He is also a non-executive director of Hammerson Group Plc and
Witan Investment Trust Plc and a member of the Financial Reporting Council. 14. Philip Yeabecame a member of the Board in September 2005 and is a member of the Remuneration Committee. He is the Chief Executive Officer of 3i Group plc, having been
appointed to that role in July 2004. Prior to joining 3i, he was Managing Director of Investcorp and, from 1997 to 1999, the Group Finance Director of Diageo plc following the merger of Guinness plc, where he was Finance Director, and Grand
Metropolitan plc. He has previously held non-executive roles at HBOS plc and Manchester United plc. Appointed since 31 March 2007Simon Murrayhas
been appointed to the Board with effect from 1 July 2007. His career has been
largely based in Asia, where he has held positions with Jardine Matheson, Deutsche
Bank and Hutchison Whampoa where, as Group Managing Director, he oversaw the
development and launch of mobile telecommunications networks in many parts of
the world. He remains on the Boards of Cheung Kong Holdings Limited, Compagnie
Financière Richemont SA, Macquarie (HK) Limited and Orient Overseas (International)
Limited and is an Advisory Board Member of the China National Offshore Oil Corporation.
He also sits on the Advisory Board of Imperial College in
London.




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Board of Directors and Group Managementcontinued

Senior ManagementMembers of the Executive Committee who are
    not also executive directors are regarded as senior managers of the Company. Executive CommitteeChaired by Arun Sarin, this committee focuses
    on the Groups strategy, financial structure and planning, succession
    planning, organisational development and Group-wide policies. The Executive
    Committee membership comprises the Executive Directors, details of whom are
    shown on page 64, and the senior managers who are listed below: Paul Donovan,Chief Executive Officer, EMAPA (Eastern Europe, Middle East, Africa, Asia, Pacific and Affiliates) was appointed to this position in May 2006. He joined
Vodafone in 1999 as Managing Director  Commercial, was appointed Chief Executive of Vodafone Ireland in 2001 and became Chief Executive Officer, Other Vodafone Subsidiaries, in January 2005, managing 15 markets in which Vodafone operates. He
has over 15 years experience in the telecommunications and IT industries and has held senior roles at BT, One2One, Optus Communications, Apple Computer and, prior to that, marketing roles at the Mars Group, Coca Cola and Schweppes
Beverages. Warren Finegold,Chief Executive, Global Business Development, was appointed to this position and joined the Executive Committee in April 2006. He was previously a Managing
Director of UBS Investment Bank and head of its technology team in Europe. He is responsible for Business Development, Mergers and Acquisitions and Partner Networks. Alan Harper,Group Strategy and New Business Director, was appointed to this position in July 2000. He is responsible for overall strategy and new business development, the
Group Public Policy activities, Research and Development, and Fraud, Risk and Security. He is also a member of the Investment Board of Vodafone Ventures, has been a Trustee of the Vodafone UK Foundation since July 2002 and was appointed Chairman of
the Trustees in March 2004. Prior to taking up his current post, Alan was Managing Director of Vodafone Limited, the UK network operator. He is also a Board member of the GSM Association. Prior to joining Vodafone in 1995, Alan was Strategy Director
of Unitel PCN (which became One2One and subsequently T-Mobile UK) and held senior roles with BBC Enterprises, Infotec, Mercury Communications and STC Communications. Terry Kramer,Group Human Resources Director and Chief of Staff, joined Vodafone in January 2005 as Chief of Staff and was appointed Group Human Resources Director in
December 2006. Prior to his appointment, he was Chief Executive Officer of Q Comm International, a publicly traded provider of transaction processing services for the telecommunications industry. He also worked for 12 years at PacTel/AirTouch
Communications in a variety of roles including President AirTouch Paging, Vice President Human Resources-AirTouch Communications, Vice President Business Development-AirTouch Europe and Vice President & General Manager-AirTouch Cellular
Southwest Market. Prior to that, he was an Associate with Booz Allen & Hamilton, a management consulting firm. Simon Lewis,Group Corporate Affairs Director, joined Vodafone in November 2004. He previously held senior roles at Centrica Plc including Managing Director, Europe, and
Group Director of Communications and Public Policy. Prior to that, he was Director of Corporate Affairs at NatWest Group and the Head of Public Relations at S.G. Warburg plc. He was President of the Institute of Public Relations in 1997 and is a
Visiting Professor at the Cardiff School of Journalism. In 1998, he was seconded to Buckingham Palace for two years as the first Communications Secretary to The Queen. He is a Fulbright Commissioner and a trustee of The Vodafone Group
Foundation. Stephen Pusey,Chief Technology Officer, joined Vodafone Group Plc in September 2006 and is responsible for all aspects of Vodafones networks, IT capability and supply
chain management. Prior to joining Vodafone, he held the positions of Executive Vice President, and President, Nortel EMEA, having joined Nortel in 1982, gaining a wealth of international experience across both the wireline and wireless industries
and in enterprise applications and solutions. Prior to Nortel, he spent several years with British Telecom.


Frank Rovekamp,Global Chief Marketing Officer, was appointed to this position and joined the Executive Committee in May 2006. He joined Vodafone in 2002 as Marketing
Director and a member of the Management Board of Vodafone Netherlands and later moved to Vodafone Germany as Chief Marketing Officer and a member of the Management Board. Before joining Vodafone, he held roles as President and Chief Executive
Officer of Beyoo and Chief Marketing Officer with KLM Royal Dutch Airlines. Stephen Scott,Group General Counsel and Company Secretary, was appointed to this position in 1991, prior to which he was employed in the Racal Group legal department, which
he joined in 1980 from private law practice in London. He is a director of the Companys UK pension trustee company and of ShareGift (the Orr Mackintosh Foundation Limited) and is a director and trustee of LawWorks (the Solicitors Pro Bono
Group Limited). Strategy BoardThe Strategy Board meets three times each
    year to discuss strategy. This is attended by Executive Committee members
    and the Chief Executive Officers of the major operating companies and other
    selected individuals based on Strategy Board topics. Other Board and Executive Committee membersThe following members also served on the
    Board or the Executive Committee during the 2007 financial year: Lord MacLaurin of Knebworth,DL, was Chairman of the Board and Chairman of the Nominations and Governance Committee until the conclusion of the AGM on 25 July
2006. Paul Hazenwas the Deputy Chairman and senior independent director of the Board and a member of Nominations and Governance Committee until the conclusion of the AGM on 25
July 2006. Sir Julian Horn-Smithwas Deputy Chief Executive of the Company until the conclusion of the AGM on 25 July 2006. Thomas Geitnerwas an executive director until 31 December 2006. Penny Hugheswas a non-executive director and a member of the Audit Committee until the conclusion of the AGM on 25 July 2006. Brian Clarkwas Group Human Resources Director and was a member of the Executive Committee until 31 December 2006. Pietro Guindani,Chief Executive, Vodafone Italy, was a member of the Executive Committee until 1 May 2006. Fritz Joussen,Chief Executive, Vodafone Germany, was a member of the Executive Committee until 1 May 2006. Tim Miles,was Global Chief Technology Officer and a member of the Executive Committee until 1 September 2006. Bill Morrowwas Chief Executive Officer, Europe and a member of the Executive Committee until 31 July 2006. Shiro Tsudawas Executive Chairman and Chairman of the Board, Vodafone K.K. and a member of the Executive Committee until 27 April 2006.




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| | Governance
| | ----------
| |           



ContentsPageCorporate Governance
	67 Introduction
	67 Directors
	67 Board Committees
	69 Statement on Internal Control
	70 Control Environment
	71 Review of Effectiveness
	71 Relations with Shareholders
	71 Political Donations
	72 Auditors
	72 US Listing Requirements
	72 Differences from the New
York Stock Exchange
           Corporate Governance Practices
	72 The Sarbanes-Oxley Act 2002
	73 Corporate Governance Rating
	73 Report from the Audit Committee
	74Corporate Responsibility and Environmental Issues
	75 Corporate Responsibility
	75 Environmental Issues
	76 Environmental Performance Indicators
	77Boards Report to Shareholders on Directors Remuneration
	78 Remuneration Committee
	78 Remuneration Policy
	78 Report on Executive Directors Remuneration
for the 2007Financial
        Year and Subsequent Periods
	79 Audited Information
	83Directors Statement of Responsibility
	88 Disclosure of Information to Auditors
	88 Going Concern
	88 Managements
        Report on Internal Controlover
        Financial Reporting
	88 Corporate Governance IntroductionThe
Board of the Company is committed to high standards of corporate governance,
which it considers are critical to business integrity and to maintaining investors trust
in the Company. The Group expects all its directors and employees to act with
honesty, integrity and fairness. The Group will strive to act in accordance with
the laws and customs of the countries in which it operates; adopt proper standards
of business practice and procedure; operate with
integrity; and observe and respect the culture of every country in which it does
business. The Combined CodeThe
Companys ordinary shares are listed in the UK on the London Stock Exchange. In accordance with the Listing Rules of the UK Listing Authority, the Company is required to state whether it has complied with the
provisions set out in Section 1 of the 2003 FRC Combined Code on Corporate Governance (the Combined Code).
The FRC issued a revised Combined Code in 2006, applicable for financial years
beginning on or after 1 November 2006. If it was now to be applicable, the Company
would be in compliance with the revised Combined Code. Statement of Compliance with the Combined CodeThroughout
the year ended 31 March 2007 and as at the date of this Annual Report, the Board
confirms that the Company was compliant with the provisions of, and applied the
principles of Section 1, of the Combined Code of 2003. The paragraphs below,
together with the Directors Remuneration Report on pages 78 to 87, provide
details of how the Company applies the principles and complies with the provisions
of the Combined Code.


Directors The BoardThe
    Board is responsible for the overall conduct of the Groups business and has the powers, authorities and duties vested in it by and pursuant to the relevant laws of England and Wales and the Articles of
Association. The Board has final responsibility for the management, direction and performance of the Group and its businesses. The Board is required to exercise objective judgement on all corporate matters, independent from executive management, and
is accountable to shareholders for the proper conduct of the business. The Board is also responsible for ensuring the effectiveness of and reporting on the Groups
system of corporate governance. The Board has a formal schedule of matters
    reserved to it for its decision and these include: •
    group strategy;•
    major capital projects, acquisitions
    or divestments;•
    annual budget and operating plan;•
    group financial structure, including
    tax and treasury;•
    annual and interim financial results and
    shareholder communications;•
    system of internal control and risk management;
    and•
    senior management structure, responsibilities
    and succession plans. The schedule is reviewed periodically. It was last formally reviewed by the Nominations and Governance Committee in September 2005, at which time it was determined that no amendments were required. Its continued
validity was assessed as part of the performance evaluations conducted in the 2007 financial year. Other specific responsibilities are delegated
    to Board Committees which operate within clearly defined terms of reference.
    Details of the responsibilities delegated to the Board Committees are given
    on pages 69 to 70. The Board meets at least eight times a year
    and the meetings are structured to allow open discussion. All directors participate
    in discussing the strategy, trading and financial performance and risk management
    of the Company. All substantive agenda items have comprehensive briefing papers
    which are circulated one week before the meeting.




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Corporate Governancecontinued

The following table shows the number of years directors have been on the Board as at 1 April 2007 and their attendance at Board meetings they were eligible to attend during the 2007 financial year: MeetingsYears on Board
	attendedSir John Bond
	2
	7/8John Buchanan
	4
	8/8Arun Sarin
	7
	8/8Vittorio Colao (from 9 October 2006)
	<1
	5/5Andy Halford
	1
	8/8Dr Michael Boskin
	7
	7/8Lord Broers
	9
	8/8Alan Jebson (from 1 December 2006)
	<1
	4/4Nick Land (from 1 December 2006)
	<1
	4/4Anne Lauvergeon
	1
	7/8Professor Jürgen Schrempp
	6
	8/8Luc Vandevelde
	3
	7/8Anthony Watson
	1
	8/8Philip Yea
	1
	8/8Thomas Geitner (until 31 December 2006)
	n/a
	5/5Lord MacLaurin (until 25 July 2006)
	n/a
	2/2Paul Hazen (until 25 July 2006)
	n/a
	2/2Sir Julian Horn-Smith (until 25 July 2006)
	n/a
	2/2Penny Hughes (until 25 July 2006)
	n/a
	2/2 In addition to regular Board meetings, there are a number of other meetings to deal with specific matters. Directors unable to attend a Board meeting because of another engagement, as was the case for a number of
directors in the year, are nevertheless provided with all the papers and information relevant for such meetings and are able to discuss issues arising in the meeting with the Chairman or the Chief Executive. Chairman and Chief ExecutiveThe roles of the Chairman and Chief Executive are separate and there is a clear division of responsibilities that is clearly established, set out in writing and agreed by the Board to ensure that no one person has
unfettered powers of decision. The Chairman is responsible for the leadership of the Board, ensuring its effectiveness and setting its agenda, and the Chief Executive is responsible for day-to-day running of the business and for ensuring the
implementation of Board strategy and policy. Board balance and independenceThe
Companys Board consists of 14 directors, 11 of whom served throughout the
2007 financial year. At 31 March 2007, in addition to the Chairman, Sir John
Bond, there were three executive directors and ten non-executive directors. The
Deputy Chairman, John Buchanan, is the nominated Senior Independent Director
and his role includes being available for approach or representation by directors
or significant shareholders who may feel inhibited from
raising issues with the Chairman. He is also responsible for conducting an annual
review of the performance of the Chairman and, in the event it should be necessary,
convening a meeting of the non-executive directors. Sir John Bond became the Chairman of the Company following the retirement of Lord MacLaurin and John Buchanan succeeded Paul Hazen as the Deputy Chairman and Senior Independent Director. The Company considers all of
its present non-executive directors to be fully independent. The executive directors are Arun Sarin (Chief Executive), Vittorio Colao and Andy Halford. The Board is aware of the other commitments
    of its directors and is satisfied that these do not conflict with their duties
    as directors of the Company. The names and biographical details of the current
    directors are given on pages 64 to 65. Changes to the commitments of the directors
    are reported to the Board. Under the laws of England and Wales, the
    executive and non-executive directors are equal members of the Board and have
    overall collective responsibility for the direction of the Company. Non-executive
    directors have


a particular responsibility to constructively challenge the strategy proposed by the Chief Executive and executive directors, to scrutinise and challenge performance, to assess risk and the integrity of financial
information and controls and to ensure appropriate remuneration and succession planning arrangements are in place in relation to executive directors and other senior executive roles. Appointments to the BoardThere
is a formal, rigorous and transparent procedure, which is based on merit and
against objective criteria, for the appointment of new directors to the Board.
This is described in the section on the Nominations and Governance Committee
set out on page 70. Individual non-executive directors are generally expected
to serve two three-year terms. At the end of the second three-year term, a rigorous
and detailed analysis is undertaken and only then is a
non-executive director invited to serve a third term. Our non-executive directors
are generally not expected to serve for a period exceeding nine years. The terms
and conditions of appointment of the non-executive directors are available for
inspection at the Companys registered office and will be available for
inspection at the AGM from 15 minutes before the meeting until it ends. Vittorio Colao, Alan Jebson and Nick Land were appointed during the year ended 31 March 2007. Since the end of the 2007 financial year a further non-executive director, Simon Murray, has been appointed to the Board
with effect from 1 July 2007. Biographical details of Mr Murray are given on page 65. Information and professional developmentEach
member of the Board has immediate access to a dedicated online team room and
can access monthly information including actual financial results, reports from
the executive directors in respect of their areas of responsibility and the Chief
Executives report which deals, amongst other things, with investor relations,
giving Board members an opportunity to develop an understanding of the views
of major investors. These matters are discussed at each Board meeting. From time
to time, the Board receives detailed presentations from non-Board members on
matters of significance or on new opportunities for the Group. Financial plans,
including budgets and forecasts, are regularly discussed at Board
meetings. The non-executive directors periodically visit different parts of the
Group and are provided with briefings and information to assist them in performing
their duties. The Chairman is responsible for ensuring
    that induction and training programmes are provided and the Company Secretary
    organises the programmes. Individual directors are also expected to take responsibility
    for identifying their individual needs and to take steps to ensure that they
    are adequately informed about the Company and their responsibilities as a
    director. The Board is confident that all its members have the knowledge,
    ability and experience to perform the functions required of a director of
    a listed company. On appointment, individual directors undergo
    an induction programme covering, amongst other things, the business of the
    Group, their legal and regulatory responsibilities as directors of the Company,
    briefings and presentations from relevant executives and opportunities to
    visit business operations. If appropriate, the induction will also include
    briefings on the scope of the Internal Audit function and the role of the
    Audit Committee, meetings with the external auditor and other areas the Company
    Secretary deems fit, considering the directors area of responsibility.
    The induction process is designed to: build an understanding of the Group,
    its businesses and the markets and regulatory environments in which it operates;
    provide an overview of the responsibilities of a non-executive director of
    the Company; establish links to Groups employees; and develop an understanding
    of the Groups main relationships. The Company Secretary provides a programme
    of on-going training for the directors, which covers a number of sector specific
    and business issues, as well as legal, accounting and regulatory changes and
    developments relevant to individual directors areas of responsibility.
    Throughout their period in office, the directors are continually updated on
    the Groups businesses and the regulatory and industry specific environments
    in which it operates. These updates are by way of written briefings and meetings
    with senior executives and, where appropriate, external sources.




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The Company Secretary ensures that the programme to familiarise the non-executive directors with the business is maintained over time and kept relevant to the needs of the individuals involved. The Company Secretary
confers with the Chairman and Senior Independent Director to ensure that this is the case. Performance evaluationPerformance evaluation of the Board, its
    Committees and individual directors takes place on an annual basis and is
    conducted within the terms of reference of the Nominations and Governance
    Committee with the aim of improving individual contributions, the effectiveness
    of the Board and its Committees and the Groups performance. In previous
    years, the evaluation was internally facilitated. During the year, the Board conducted, with
    the assistance of an independent external facilitator, MWM Consulting, a formal
    evaluation of its own performance. The evaluation was designed to determine
    that the Board was capable of providing the high level judgement required
    and that, as a Board, the directors were informed and up to date with the
    business and its goals and understood the context within which it operates.
    The process adopted involved the external facilitator separately interviewing
    each of the directors and the Company Secretary, with the output from those
    interviews compiled into a report prepared by the external facilitator. The
    Board will continue to review its procedures, its effectiveness and development
    in the year ahead. The Chairman leads the assessment of the
    Chief Executive and the non-executive directors, the Chief Executive undertakes
    the performance reviews for the executive directors and the Senior Independent
    Director conducts the review of the performance of the Chairman. Each Board
    Committee undertakes a review of its own work. The evaluations found the performance of
    each director to be effective and concluded that the Board provides the effective
    leadership and control required for a listed company. The Nominations and
    Governance Committee confirmed to the Board that the contributions made by
    the directors offering themselves for re-election at the AGM in July 2007
    continued to be effective and that the Company should support their re-election. Re-election of directorsAlthough not required by the Articles, in
    the interests of good corporate governance, the directors have resolved that
    they will all submit themselves for annual re-election at each Annual General
    Meeting of the Company. Accordingly, at the AGM to be held on 24 July 2007,
    all the directors will be retiring and, with the exception of Lord Broers
    who will not offer himself for re-election, being eligible and on the recommendation
    of the Nominations and Governance Committee, will offer themselves for re-election.
    Vittorio Colao, Alan Jebson and Nick Land having been appointed to the Board
    during the 2007 financial year, and Simon Murray who was recently appointed
    with effect from 1 July 2007, are required under the Articles of Association
    to submit themselves for election by the Shareholders at the first AGM following
    appointment and therefore, being eligible and on the recommendation of the
    Nominations and Governance Committee, will retire and offer themselves for
    election at the AGM on 24 July 2007. Independent adviceThe Board recognises that there may be occasions
    when one or more of the directors feel it is necessary to take independent
    legal and/or financial advice at the Companys expense. There is an agreed
    procedure to enable them to do so. Indemnification of directorsIn accordance with the Companys Articles
    of Association and to the extent permitted by the law of England and Wales,
    directors are granted an indemnity from the Company in respect of liabilities
    incurred as a result of their office. In respect of those matters for which
    the directors may not be indemnified, the Company maintained a directors
    and officers liability insurance policy throughout the financial year.
    This policy has been renewed for the next financial year. Neither the Companys
    indemnity nor the insurance provides cover in the event that the director
    is proven to have acted dishonestly or fraudulently.


Company SecretaryThe Company Secretary acts as Secretary to
    the Board and to the committees of the Board, but the consent of the Board
    may delegate responsibility for the administration of the Committees to other
    suitably qualified staff. He assists the Chairman in ensuring that all directors
    have full and timely access to all relevant information. The Company Secretary
    is responsible for ensuring that the correct Board procedures are followed
    and advises the Board on corporate governance matters. He also administers
    the procedure under which directors can, where appropriate, obtain independent
    professional advice at the Companys expense. The appointment or removal
    of the Company Secretary is a matter for the Board as a whole. Board CommitteesThe Board has established an Audit Committee,
    a Nominations and Governance Committee and a Remuneration Committee, each
    of which has formal terms of reference approved by the Board. The Board is
    satisfied that the terms of reference for each of these committees satisfy
    the requirements of the Combined Code and are reviewed internally on an ongoing
    basis by the Board. The terms of reference for all Board committees can be
    found on the Companys website at www.vodafone.com or a copy can be obtained
    by application to the Company Secretary at the Companys registered office. The committees are provided with all necessary
    resources to enable them to undertake their duties in an effective manner.
    The Company Secretary acts as secretary to the Nominations and Governance
    Committee and the Deputy Group Company Secretary acts as secretary to the
    Audit Committee and the Remuneration Committee. The minutes of committee meetings
    are circulated to all directors. Each committee has access to such information
    and advice, both from within the Group and externally, at the cost of the
    Company as it deems necessary. This may include the appointment of external
    consultants, where appropriate. Each committee undertakes an annual review
    of the effectiveness of its terms of reference and makes recommendations to
    the Board for changes where appropriate. Audit CommitteeThe members of the Audit Committee during
    the year, together with a record of their attendance at meetings which they
    were eligible to attend, are set out below: Meetings attendedDr Michael Boskin, Chairman
    4/4Lord Broers
    4/4John Buchanan
    4/4Nick Land (from 1 December 2006)
    1/1Anne Lauvergeon
    3/4Penny Hughes (until 25 July 2006)
    1/1 The Audit Committee is comprised of financially
    literate members having the necessary ability and experience to understand
    financial statements. Solely for the purpose of fulfilling the requirements
    of the Sarbanes-Oxley Act and the Combined Code, the Board has designated
    John Buchanan, who is an independent non-executive director satisfying the
    independence requirements of Rule 10A-3 of the US Securities Exchange Act
    1934, as its financial expert on the Audit Committee. Further details of John
    Buchanan can be found in Governance  Board of Directors and Group
    Management.




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Under its terms of reference, the Audit Committee is required, amongst other things, to oversee the relationship with the external auditors, to review the Companys preliminary results announcement, interim
results and annual financial statements, to monitor compliance with statutory and listing requirements for any exchange on which the Companys shares and debt instruments are quoted, to review the scope, extent and effectiveness of the activity
of the Group Internal Audit Department, to engage independent advisers as it determines is necessary and to perform investigations. The Audit Committee reports to the Board
    on the quality and acceptability of the Companys accounting policies
    and practices, including without limitation, critical accounting policies
    and practices. The Audit Committee also plays an active role in monitoring
    the Companys compliance efforts for Section 404 of the Sarbanes-Oxley
    Act and receives progress updates at each of its meetings. At least twice a year, the Audit Committee
    meets separately with the external auditors and the Group Audit Director without
    management being present. Further details on the work of the Audit Committee
    and its oversight of the relationships with the external auditors can be found
    under Auditors and the Report from the Audit Committee
    which are set out on pages 72 and 74. Nominations and Governance CommitteeThe members of the Nominations and Governance
    Committee during the year, together with a record of their attendance at meetings
    which they were eligible to attend, are set out below: Meetings attendedSir John Bond, Chairman
	2/2John Buchanan
	1/2Arun Sarin
	2/2Lord Broers
	2/2Professor Jürgen Schrempp
	2/2Luc Vandevelde (from 30 January 2007)
	1/1 The Nominations and Governance Committees key objective is to ensure that the Board comprises individuals with the requisite skills, knowledge and experience to ensure that it is effective in discharging its
responsibilities. The Nominations and Governance Committee leads the process for identifying and making recommendations to the Board of candidates for appointment as directors of the Company, giving full consideration to succession planning and the
leadership needs of the Group. It also makes recommendations to the Board on the composition of the Nominations and Governance Committee and the composition and chairmanship of the Audit and Remuneration Committees. It regularly reviews the
structure, size and composition of the Board, including the balance of skills, knowledge and experience and the independence of the non-executive directors, and makes recommendations to the Board with regard to any changes. It is also responsible
for the oversight of all matters relating to corporate governance, bringing any issues to the attention of the Board. The Nominations and Governance Committee
    meets periodically when required. No-one other than members of the Nominations
    and Governance Committee is entitled to be present at its meetings. Other
    non-executive directors and external advisers may be invited to attend. The Nominations and Governance Committee
    recommended Vittorio Colao for appointment as an executive director and Alan
    Jebson and Nick Land for appointment as non-executive directors during 2006.
    Since the end of the 2007 financial year it has recommended the appointment
    of Simon Murray as a non-executive director with effect from 1 July 2007.


Remuneration CommitteeThe members of the Remuneration Committee
    during the year, together with a record of their attendance at meetings which
    they were eligible to attend, are set out below: Meetings attendedLuc Vandevelde, Chairman
	  9/9Dr Michael Boskin
	  9/9Professor Jürgen Schrempp
	  6/9Anthony Watson (from 26 September
        2006)
	  4/5Philip Yea
	  9/9Sir John Bond (until 26 September
        2006)
	  3/4 The Remuneration Committee determines, on
    behalf of the Board, the Companys policy on the remuneration of the
    Chairman, the executive directors and the senior management team of the Company.
    The Remuneration Committee determines the total remuneration packages for
    these individuals, including any compensation on termination of office. The
    Chairman and Chief Executive may attend the Remuneration Committees
    meetings by invitation. They do not attend when their individual remuneration
    is discussed and no director is involved in deciding his own remuneration. The Remuneration Committee is responsible
    for appointing any consultants in respect of executive directors remuneration.
    Further information on the Remuneration Committees activities is contained
    in Governance  Boards Report to Shareholders on Directors
    Remuneration on pages 78 to 87. Executive ManagementThe executive directors, together with certain
    other Group functional heads and regional chief executives, meet 12 times
    a year as the Executive Committee under the chairmanship of the Chief Executive.
    The Executive Committee is responsible for the day-to-day management of the
    Groups businesses, the overall financial performance of the Group in
    fulfilment of strategy, plans and budgets and Group capital structure and
    funding. It also reviews major acquisitions and disposals. The members of
    the Executive Committee and their biographical details are set out on pages
    64 to 66. Statement on Internal Control IntroductionThe Board has established procedures that
    implement in full the Turnbull Guidance, Internal Control: Revised Guidance
    for Directors on the Combined Code, for the year under review and to
    the date of approval of the Annual Report. These procedures, which are subject
    to regular review, provide an ongoing process for identifying, evaluating
    and managing the significant risks faced by the Group. See page 88 for Managements
    Report on Internal Control over Financial Reporting. ResponsibilityThe Board has overall responsibility for
    the system of internal control. A sound system of internal control is designed
    to manage rather than eliminate the risk of failure to achieve business objectives,
    and can only provide reasonable and not absolute assurance against material
    misstatement or loss. The process of managing the risks associated with social,
    environmental and ethical impacts is also discussed under Governance
     Corporate Responsibility and Environmental Issues on pages 75
    to 76. Control structureThe Board sets the policy on internal control
    that is implemented by management. This is achieved through a clearly defined
    operating structure with lines of responsibility and delegated authority.
    The Executive Committee, chaired by the Chief Executive, manages this on a
    day-to-day basis.




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The Groups brand essence, which encapsulates the Groups commitment to integrity and continuous improvement, in combination with the Groups
    Business Principles, sets the tone of the Group and reflects the control
consciousness of management. Written policies and procedures have been
    issued which clearly define the limits of delegated authority and provide
    a framework for management to deal with areas of significant business risk.
    These policies and procedures are reviewed and, where necessary, updated at
    Executive Committee meetings. Control EnvironmentThe Groups operating procedures
    include a comprehensive system for reporting information to the directors.
    This system is properly documented and regularly reviewed. Budgets are prepared by subsidiary management
    and subject to review by both regional management and the directors. Forecasts
    are revised on a quarterly basis and compared against budget. When setting
    budgets and forecasts, management identifies, evaluates and reports on the
    potential significant business risks. The Executive Committee and the Board review
    management reports on the financial results and key operating statistics. Emphasis is placed on the quality and abilities
    of the Groups employees with continuing education, training and development
    actively encouraged through a wide variety of schemes and programmes. The
    Group has adopted a set of values to act as a framework for its people to
    exercise judgement and make decisions on a consistent basis. Directors are appointed to associated undertakings
    and joint ventures and attend the board meetings and review the key financial
    information of those undertakings. Clear guidance is given to those directors
    on the preparation that should take place before these board meetings and
    their activity at the board meeting. It is the Groups policy, where
    possible, that its auditors are appointed as auditors of associated companies
    and joint ventures. The acquisition of any business requires
    a rigorous analysis of the financial implications of the acquisition and key
    performance figures. A sensitivity analysis takes place of the key assumptions
    made in the analysis. Post investment appraisals of the Groups investments
    are conducted on a periodic and timely basis. The Groups policy is to
    bring acquired companies within its governance procedures as soon as is practicable
    and, in any event, by the end of the first full year of operation. The Board reviews a half-yearly report detailing
    any significant legal actions faced by Group companies. The Executive Committee monitors legal, environmental
    and regulatory matters and approves appropriate responses or amendments to
    existing policy. Monitoring and review activitiesThere are clear processes for monitoring
    the system of internal control and reporting any significant control failings
    or weaknesses together with details of corrective action. A formal annual confirmation is provided
    by the chief executive officer and chief financial officer of each Group company
    certifying the operation of their control systems and highlighting any weaknesses.
    Regional management, the Audit Committee and the Board review the results
    of this confirmation. The Chief Executive and the Chief Financial
    Officer undertake a review of the quality and timeliness of disclosures that
    includes formal annual meetings with the operating company or regional chief
    executives and chief financial officers and the Disclosure Committee. The Group Internal Audit Department, reporting
    directly to the AuditCommittee, undertakes
    periodic examination of business processes on a risk basis and reports on
    controls throughout the Group.


Reports from the external auditors, Deloitte
    & Touche LLP, on certain internal controls and relevant financial reporting
    matters, are presented to the Audit Committee and management. Review of EffectivenessAny controls and procedures, no matter
    how well designed and operated, can provide only reasonable and not absolute
    assurance of achieving the desired control objectives. Management is required
    to apply judgement in evaluating the risks facing the Group in achieving its
    objectives, in determining the risks that are considered acceptable to bear,
    in assessing the likelihood of the risks concerned materialising, in identifying
    the Companys ability to reduce the incidence and impact on the business
    of risks that do materialise and in ensuring the costs of operating particular
    controls are proportionate to the benefit. The directors, the Chief Executive and the
    Chief Financial Officer confirm that they have reviewed the effectiveness
    of the system of internal control and the disclosure controls and procedures
    through the monitoring process set out above. The directors, the Chief Executive
    and the Chief Financial Officer have evaluated the effectiveness of the disclosure
    controls and procedures and, based on that evaluation, have concluded that
    the disclosure controls and procedures are effective as at the end of the
    period covered by this Annual Report. The process followed by the Board in
    reviewing the system of internal controls accords with the Internal
    Control Revised Guidance for Directors in the Combined Code (Turnbull). During the period covered by this Annual
    Report, there were no changes in the Company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. Relations with ShareholdersThe Company is committed to communicating
    its strategy and activities clearly to its shareholders and, to that end,
    maintains an active dialogue with investors through a planned programme of
    investor relations activities. The investor relations programme includes formal
    presentations of full year and interim results and quarterly statements on
    key performance indicators. The Company holds briefing meetings with its major
    institutional shareholders in the UK, the US and in Continental Europe, after
    the interim results and preliminary announcement, to ensure that the investor
    community receives a balanced and complete view of the Groups performance
    and the issues faced by the Group. Telecommunications analysts are invited
    to presentations of the financial results and senior executives across the
    business attend relevant meetings and conferences throughout the year. During the year, the Company hosts investors
    and analysts sessions at which senior management from its largest operating
    subsidiaries, its largest joint venture and certain associated undertakings
    deliver presentations which provide an overview of each of the individual
    businesses. The Company, through its Investor Relations team, responds to
    enquiries from shareholders. The Chief Executive and the Chief Financial Officer
    meet regularly with institutional investors and analysts to discuss business
    performance. Overall responsibility for ensuring that there is effective communication
    with investors and that the Board understands the views of major shareholders
    on matters such as governance and strategy rests with the Chairman, who makes
    himself available to meet shareholders for this purpose. The Senior Independent Director and other
    members of the Board are also available to meet major investors on request.
    The Senior Independent Director has a specific responsibility to be available
    to shareholders who have concerns, for whom contact with the Chairman, Chief
    Executive or Chief Financial Officer has either failed to resolve their concerns,
    or for whom such contact is inappropriate. Shareholders have the opportunity to receive
    documents such as the Notice of meeting, form of proxy, the Annual Report
    and Annual Review in electronic form via the internet rather than in paper
    through the post. Shareholders choosing or deemed to have chosen this option
    will receive a notification




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Corporate Governancecontinued

each time the Company publishes such documentation on its website. Shareholders may also appoint proxies and give voting instructions electronically. The principal communication with private
    investors is through the provision of the Annual Review and Summary Financial
    Statement and the AGM, an occasion which is attended by all the Companys
    directors and at which all shareholders present are given the opportunity
    to question the Chairman and the Board as well as the Chairmen of the Audit,
    Remuneration and Nominations and Governance Committees. After the AGM, shareholders
    can meet informally with directors. A summary presentation of results and development
    plans is also given at the AGM before the Chairman deals with the formal business
    of the meeting. The AGM is broadcast live on the Groups website, www.vodafone.com,
    and a recording of the webcast can subsequently be viewed on the website.
    All substantive resolutions at the Companys AGMs are decided on a poll.
    The poll is conducted by the Companys Registrars and scrutinised by
    Electoral Reform Services. The proxy votes cast in relation to all resolutions
    are disclosed to those in attendance at the meeting and the results of the
    poll are published on the Companys website and announced via the regulatory
    news service. Financial and other information is made available on the Companys
    website, www.vodafone.com, which is regularly updated. Political DonationsPrior to the 2006 AGM, the Board annually
    sought and obtained shareholders approval to enable the Group to make
    donations to EU Political Organisations or incur EU Political Expenditure,
    under the relevant provisions of the Political Parties, Elections and Referendums
    Act 2000 (PPERA). The approval given restricted such expenditure
    to an aggregate limit of £100,000 in the period of 12 months following
    the date of the AGM. At last years AGM, held on 25 July
    2006, the directors sought and received a renewal of shareholders approval
    for a period of three years (until the AGM in 2009) to enable the Group to
    make donations to EU Political Organisations or incur EU Political Expenditure,
    under the PPERA. The approval given restricted such expenditure for each year
    until the AGM in 2009 to an aggregate amount of £100,000 (£50,000
    in respect of donations to EU Political Organisations and £50,000 in
    respect of EU Political Expenditure). The Group has made no political donations
    during the year. Although the directors have received shareholders
    approval for a three-year period, as with previous annual approvals, the Group
    has no intention of changing its current policy and practice of not making
    political donations and will not do so without the specific endorsement of
    shareholders. The Board obtained the approval on a precautionary basis to
    avoid any possibility of unintentionally breaching the PPERA. AuditorsFollowing a recommendation by the Audit
    Committee and, in accordance with Section 384 of the Companies Act 1985, a
    resolution proposing the reappointment of Deloitte & Touche LLP as auditors
    to the Company will be put to the 2007 AGM. In their assessment of the independence of
    the auditors and in accordance with the US Independence Standards Board Standard
    No. 1, Independence Discussions with Audit Committees, the Audit
    Committee receives in writing details of relationships between Deloitte &
    Touche LLP and the Company 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 SEC.


In addition, the Audit Committee pre-approves the audit fee after a review of both the level of the audit fee against other comparable companies, including those in the telecommunications industry, and the level and
nature of non-audit fees, as part of its review of the adequacy and objectivity of the audit process. In a further measure to ensure auditor independence
    is not compromised, policies were in place throughout the year to provide
    for the pre-approval by the Audit Committee of permitted non-audit services
    by Deloitte & Touche LLP. Where there was an immediate requirement for
    permitted non-audit services to be provided by Deloitte & Touche LLP which
    were not pre-approved by the Audit Committee, the policies provided that the
    Group consulted with the Chairman of the Audit Committee, or in his absence
    another member, for pre-approval. Since the year end, the Audit Committee
    has amended the pre-approval policies and procedures for the engagement of
    the Groups auditors to provide non-audit services. The Audit Committee
    has pre-approved certain specific permitted services that can be engaged by
    Group management subject to specified fee limits for individual engagements
    and fee limits for each type of specific service permitted. The provision
    under the policy for the Chairman of the Audit Committee, or in his absence
    another member, to pre-approve services which were not pre-approved by the
    Audit Committee remains. In addition to their statutory duties, Deloitte
    & Touche LLP are also employed where, as a result of their position as
    auditors, they either must, or are best placed to, perform the work in question.
    This is primarily work in relation to matters such as shareholder circulars,
    Group borrowings, regulatory filings and certain business acquisitions and
    disposals. Other work is awarded on the basis of competitive tender. During the year, Deloitte & Touche LLP
    and its affiliates charged the Group £7 million (2006: £4 million)
    for audit and audit-related services and a further £3 million (2006:
    £4 million) for non-audit assignments. An analysis of these fees can
    be found in note 4 to the Consolidated Financial Statements. US Listing RequirementsThe Companys ADS are listed on
    the NYSE and the Company is, therefore, subject to the rules of the NYSE as
    well as US securities laws and the rules of the SEC. The NYSE requires US
    companies listed on the exchange to comply with the NYSEs corporate
    governance rules but foreign private issuers, such as the Company, are exempt
    from most of those rules. However, pursuant to NYSE Rule 303A.11, the Company
    is required to disclose a summary of any significant ways in which the corporate
    governance practices it follows differ from those required by the NYSE for
    US companies. A summary of such differences is set out below. The Company has also adopted a corporate
    Code of Ethics for senior executive, financial and accounting officers, separate
    from and additional to its Business Principles. A copy of this code is available
    on the Groups website at www.vodafone.com. Differences from the New York Stock Exchange Corporate Governance Practices IndependenceThe
NYSE rules require that a majority of the Board must be comprised of independent
directors and the rules include detailed tests that US companies must use for
determining independence. The Combined Code requires a
companys board of directors to assess and make a determination as to the independence of its directors. While the Board does not explicitly take into consideration the NYSEs
detailed tests, it has carried out an assessment based on the requirements of
the Combined Code and has determined in its judgement that all of the non-executive
directors are independent within those requirements. As at the date of this Annual
Report, the Board comprised the Chairman, three executive
directors and ten non-executive directors.


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CommitteesUnder NYSE rules, US companies are required
    to have a nominating and corporate governance committee and a compensation
    committee, each composed entirely of independent directors with a written
    charter that addresses the Committees purpose and responsibilities.
    The Companys Nominations and Governance Committee and Remuneration Committee
    have terms of reference and composition that comply with the Combined Code
    requirements. The Nominations and Governance Committee is chaired by the Chairman
    of the Board, and its other members are non-executive directors of the Company
    and the Chief Executive. The Remuneration Committee is composed entirely of
    non executive directors whom the Board has determined to be independent. The
    Companys Audit Committee is composed entirely of non-executive directors
    whom the Board has determined to be independent and who meet the requirements
    of Rule 10A-3 of the Securities Exchange Act. The Company considers that the
    terms of reference of these committees, which are available on its website
    at www.vodafone.com, are generally responsive to the relevant NYSE rules but
    may not address all aspects of these rules. Corporate governance guidelinesUnder NYSE rules, US companies must
    adopt and disclose corporate governance guidelines. Vodafone has posted its
    statement of compliance with the Combined Code on its website at www.vodafone.com.
    The Company also has adopted a Group Governance Manual which provides the
    first level of the framework within which its businesses operate. The manual
    is a reference for Chief Executives and their teams and applies to all directors
    and employees. The Company considers that its corporate governance guidelines
    are generally responsive to, but may not address all aspects of, the relevant
    NYSE rules. The Sarbanes-Oxley Act 2002The Sarbanes-Oxley Act 2002 (the Act)
    was passed by the US Congress in July 2002 to establish new or enhanced standards
    for corporate accountability in the US. As a result of the listing of its
    securities on the NYSE, the Company must comply with relevant provisions of
    the Act. The Company has adopted procedures to comply with all applicable
    provisions of the Act. Section 302: Corporate responsibility for financial reportsIn relation to Section 302 of the Act,
    which covers disclosure controls and procedures, the Company established a
    Disclosure Committee reporting to the Chief Executive and Chief Financial
    Officer. It is chaired by the Group General Counsel and comprises members
    of senior management from finance, legal, global business development and
    corporate communications. The Committee has responsibility for reviewing and
    approving controls and procedures over the public disclosure of financial
    and related information, and other procedures necessary to enable the Chief
    Executive and Chief Financial Officer to provide their Certifications of the
    Annual Report on Form 20-F that is filed with the SEC. In completing their certifications, Section
    302 requires the Chief Executive and the Chief Financial Officer to confirm
    that: •
    they have each reviewed the Annual Report and Form 20-F;•
    based on their knowledge, it contains no material misstatements or omissions;


•
    based on their knowledge, the financial statements
    and other financial information fairly present,
    in all material respects, the financial condition, results of perations and cash flows as of the dates, and for
    the periods, presented in the Annual Report
    and Form 20-F;•
    they are responsible for establishing
          and maintaining disclosure controls and
          procedures that ensure that material information is made known to
          them, have evaluated the effectiveness of these controls and
          procedures as at the year end, the results
          of such evaluation being contained in the Annual
          Report and Form20-F;•
    they are responsible for establishing and maintaining internal control over financial reporting that provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;•
    they have disclosed in the Annual Report and Form 20-F any changes in internal controls over financial reporting during the period covered by the Annual Report and Form 20-F that have materially affected, or are reasonably
    likely to affect materially, the companys internal control over financial reporting; and•
    they have disclosed, based on their most recent evaluation of internal control over financial reporting, to the external auditors and the Audit Committee all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
    likely to affect adversely the Companys ability to record, process, summarise and report financial information and any fraud (regardless of materiality) involving
persons that have a significant role in the Companys
internal control over financial reporting. The Company has carried out an evaluation under
    the supervision and with the participation of management, including the Chief
    Executive and Chief Financial Officer, of the effectiveness of the design
    and operation of the Groups disclosure controls and procedures as at
    31 March 2007. There are inherent limitations to the effectiveness of any
    system of disclosure controls and procedures, including the possibility of
    human error and the circumvention or overriding of the controls and procedures.
    Accordingly, even effective disclosure controls and procedures can only provide
    reasonable assurance of achieving their control objectives. The Chief Executive and Chief Financial Officer
    expect to complete these certifications and report their conclusions on the
    effectiveness of disclosure controls and procedures on 14 June 2007, following
    which the certificates will be filed with the SEC as part of the Companys
    Form 20-F. Corporate Governance RatingIn each of the annual reports issued since
    2004 by Governance Metrics International, a global corporate governance ratings
    agency, the Company was ranked amongst the top UK companies, with an overall
    global corporate governance rating of ten out of a possible ten.


|Vodafone
            Group Plc Annual Report 2007 | 73
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Corporate Governancecontinued

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Report from the Audit Committee The composition of the Audit Committee
          is shown in the table on page 69 and its terms of reference are discussed
      under Board Committees  Audit Committee.
      During the year ended 31 March 2007,
      the principal activities of the Committee were as follows:
      Financial statements The
          Committee considered reports from the Chief Financial Officer and the Director
          of Financial Reporting on
              the half-year and annual financial statements. It also considered reports
              from the external auditors,
      Deloitte & Touche LLP, on the scope and outcome of the interim review and
      annual audit.
      The financial statements were reviewed
                in the light of these reports and the results of that review reported
      to the Board.
      Risk management and internal controlThe
              Committee reviewed the process by which the Group evaluated its control
              environment, its risk assessment
                  process and the way in which significant business risks were managed.
                  It also considered the Group Audit
          departments reports on the effectiveness of internal controls, significant
          frauds and any fraud that involved management or employees with a significant
          role in internal controls. The Committee was also responsible for oversight of
          the
          Groups compliance activities in relation to section 404 of the Sarbanes-Oxley
      Act.
      The Committee also reviewed and approved
                    arrangements by which staff could, in confidence, raise concerns about
                    possible improprieties in matters of financial reporting or other matters.
                    This was achieved through using existing reporting procedures and a website
    with a dedicated anonymous email feature. |  | External auditors The Committee reviewed the letter from
          Deloitte & Touche LLP confirming their independence and objectivity.
          It also reviewed and approved the scope of non-audit services provided
          by Deloitte & Touche LLP to ensure that there was no impairment
          of independence.
      The Committee
            approved the scope and fees for audit services provided by Deloitte & Touche
            LLP and confirmed the wording of the recommendations put by the Board
            to the shareholders
            on the appointment and retention
    of the external auditors.
      Private meetings
      were held with Deloitte & Touche
              LLP to ensure that there were no restrictions on the scope of their
      audit and to discuss any items the auditors did not wish to raise with
      management present.
      Internal audit The
            Committee engaged in discussion and review of the Group Audit Departments
            audit plan for the year, together with its resource requirements. Private
            meetings were held with
      the Group Audit Director.

Audit Committee effectiveness
        The Audit Committee conducts a formal
                  review of its effectiveness annually and concluded this year that it
    was effective and able to fulfil its terms of reference.
    Dr Michael BoskinOn behalf of the Audit Committee
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 



|74 | Vodafone Group PlcAnnual
        Report 2007
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Corporate Responsibility
  and Environmental Issues

Corporate Responsibility Vodafone sees corporate responsibility (CR) as the process of understanding the expectations of stakeholders in the Group and taking appropriate action to meet those expectations where they are realistic and
legitimate. Stakeholders include customers, investors, employees, suppliers, the communities where the Group operates and where networks are based, governments and regulators and representatives of civil society. CR is relevant across all
    aspects of Vodafones business and being a responsible business is one
    of the Groups long term, strategic goals. Vodafones CR strategy
    has the objective by 2010 to be one of the most trusted companies in the markets
    where the Group is represented by an operating subsidiary. The strategy sets
    clear priorities to: •
      Maintain high
        ethical standards and understand and respond
        to stakeholders priorities;•
      Ensure our operating
        standards are consistent across the Group;•
      Deliver on our
        promises in three key areas: responsibility
        to our customers; reuse and recycling of
        mobile phones; and climate change; and•
      Capture the
        potential of mobile to bring socio-economic
        value through access to communications. Vodafones approach to CR is underpinned
  by its Business Principles which cover, amongst other things, the environment,
  employees, individual conduct and community and society. The Business Principles
  are available on www.vodafone.com/responsibility/businessprinciples and are
  communicated to employees in a number of ways, including induction processes,
websites and briefings. The Executive Committee, chaired by the Chief
    Executive, receives regular information on CR and for the last four years,
    the Board has had an annual session on CR. A CR management structure is established
    in each mobile operating company, with each one having a representative on
    their management board with responsibility for CR. For the purposes of this
    section of the Annual Report, all mobile operating companies refers to the
    Groups mobile operating subsidiaries and the Groups joint venture
    in Italy. It excludes the newly acquired operations in Turkey and India. Systems
    for data collection on corporate responsibility and environmental issues are
    being put in place for the 2008 financial year for Turkey and Arcor, Vodafones
    fixed-line business in Germany.


CR performance is closely monitored and reported
    to most mobile operating company boards on a regular basis. CR is also integrated
    into Vodafones risk management processes such as the formal annual
    confirmation provided by each mobile operating company detailing the operation
of their controls system. These processes are supported by stakeholder
    engagement, which helps to ensure Vodafone is aware of the issues relevant
    to the business and to provide a clear understanding of expectations of performance.
    The Group engages with stakeholders in a variety of different ways and this
    year has focused on carrying out in-depth discussions on specific, emerging
    issues through the Vodafone CR Dialogues programme. For example, during the
    financial year, opinion former meetings were held on privacy and climate change.
    In addition, the Group held meetings relating to CR issues with 12 investors
    and face to face meetings were held with nongovernmental organisations and
    opinion formers. This is covered in more detail in the Groups CR Report
    for the 2007 financial year, which can be found at www.vodafone.com/responsibility. Vodafone has increased last years level
    of independent assessment and assurance of the CR programme and performance
    to reasonable assurance. The scope of work for the Groups auditors includes
    a review of the progress achieved against commitments set out in the 2006
    Group CR report and the management and reporting of CR matters against the
    requirements of the assurance standard AA1000 AS, issued by AccountAbility.
    This identifies, in all material respects, whether reporting reflects the
    material CR issues of the Group as defined by the standard, whether processes
    are in place to ensure a complete understanding of the issues, and whether
    Vodafone is responding adequately to identified stakeholders expectations.
    The assurance statement is published in the Groups CR Report. Over the last year, progress has been made
    in responding to the Groups stakeholders expectations. The most
    significant developments are summarised below and further details are provided
    in the Groups CR Report and on www.vodafone.com/responsibility. In addition
    to the Groups CR Report, 11 operating subsidiaries have produced their
    own CR report. During the year, Vodafone was ranked first
    in the Accountability Rating published by Fortune magazine and Vodafones
    2006 CR report won the Association of Chartered Certified Accountants (ACCA)
    Best Report Award 2006. Vodafone is included in the FTSE4Good and Dow Jones
    Sustainability Index. Access to communicationsAccess to communications offers the single
    greatest opportunity for Vodafone to make a strong contribution to society.
    The Vodafone Social Investment Fund, launched in 2006, has invested in a
range of projects during the course of the year. A considerable pool of research shows that
    telecommunications  and mobile telecommunications in particular 
    has the potential to change peoples lives for the better by promoting
    economic development. During the 2007 financial year, Vodafones focus
    has been on mobile payment services: •
      M-PESA was launched
        in February 2007 by Safaricom, Vodafones joint venture
        in Kenya. Customers can deposit and withdraw cash at local M-PESA agents, transfer money to other mobile users via SMS
        and buy prepaid airtime credit.




|Vodafone Group Plc Annual Report
        2007 | 75
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Corporate Responsibility
  and Environmental Issuescontinued



•
      Building on M-PESA, Vodafone is piloting
        an international transfer service with
        Citigroup, enabling people to send money abroad and collect remittances
        via their mobile phones.•
      Vodafone and HSBC launched Vodafone
        Cash in Egypt in February 2007. This
        links a prepaid bank card to mobile phone air-time. The Vodafone
        Cash service is designed to give customers
        with no bank account an easy way
        to deposit, transfer and withdraw cash. Parental controlsAll mobile operating companies that
    offer age-restricted content have implemented parental controls. These block
    access to age-restricted content on the Vodafone live! domain to those under
    18 years of age. Internet filters are offered by five operating companies.
    This enables parents to prevent their children accessing inappropriate age-restricted
    content on the internet via their mobile phones. The mobile operating companies
    that have not implemented the filter will remove individual access to the
    internet completely on request. Vodafone has signed the European Framework for safer mobile use by younger teenagers and children. Signatories to the framework are committed to develop national self-regulatory codes on child safety and mobile
phones. Earning the trust of customersVodafones reputation depends on
    earning the trust of its customers. A range of issues are key to maintaining
    trust in Vodafone and our services. These include responsible marketing, clear
    pricing and protecting customers privacy. During the year, Vodafone
    has focused on the clarity of marketing communications and the way in which
    the Group handles customer privacy, particularly in relation to the launch
    of mobile advertising services announced in May 2006 and in response to increasing
    demands from law enforcement agencies relating to the threat of serious crime
    and terrorism. In response to concerns raised about freedom of expression and the internet, Vodafone is participating in a stakeholder engagement to draft principles on privacy and freedom of expression. More than 20 academics,
investors, companies and nongovernmental organisations are also involved in this process. The Group drafted guidelines on its mobile advertising activities to ensure that advertising content in national markets will meet its customers expectations and that customers privacy will be protected, by
ensuring that customers personal information will not be used for advertising services without obtaining customers consent. In January 2007, Vodafone Greece was fined in respect of breaches of communications privacy legislation. Refer to page 26 in the Business Regulation section for further details of the case.


Supply chainThe Group continues to implement Vodafones
  Code of Ethical Purchasing, which sets out environmental and labour standards
  for suppliers. •
      A total of 290 suppliers, including
        approximately 45 strategic global suppliers,
        have been assessed using the Groups supplier evaluation scorecard,
        in which CR accounts for 10% of the total. The scorecard evaluates
        the suppliers CR management systems, public reporting and
        approach to managing their suppliers. 17
        site evaluations of high risk suppliers
        have been completed.•
      A supplier qualification process, incorporating
        CR, has been implemented in all
        mobile operating companies.•
      A Speak Up programme to
        provide suppliers with a means to report any ethical
        concerns has been introduced in all mobile operating companies. Less than
        ten incidents have been reported to date; all have been investigated
        and resolved satisfactorily. Social investmentThe Vodafone Group Foundation and the
  unique network of 19 local operating company and associate foundations have
  continued to implement a global social investment programme. During the 2007 financial year, the Company made a charitable grant of £31.5 million to the Vodafone Group Foundation. The majority of funds were distributed in grants through local operating company foundations
to a variety of local charitable organisations. The Vodafone Group Foundation made additional grants to charitable partners engaged in a variety of global projects, notably for disaster relief and preparedness. In addition, local operating companies
donated a further £13.0 million to their foundations and a further £3.7 million directly to a variety of causes. These donations total £48.2 million and include donations of £0.7 million made as required by the terms of certain
network operating licences. Environmental IssuesThe Group continues to monitor and manage
  the impact of its activities on the environment and is committed to minimising
  adverse impacts in an appropriate manner. Over the last 12 months, progress
  has continued to be made across a series of projects that address environmental
  issues. Mobile phones, masts and healthVodafone recognises that there is public
  concern about the safety of Radio Frequency (RF) fields from mobile
  phones and base stations. The Group contributes to funding independent scientific
  research to resolve scientific uncertainty in areas identified by the World
  Health Organisation (WHO). In the 2007 financial year, the WHO identified
  the main gaps in scientific knowledge, including long-term exposure and issues
  relating to exposure of children. The WHO reported that further research into
  RF fields from mobile base stations is a low priority due to the very low exposure
  levels from this source.




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| | Governance
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| |           



Vodafone requires manufacturers of the mobiles
  it sells to test for SAR (Specific Absorption Rate) compliance when
  used both against the ear and against, or near, the body, using the US FCC Test
  procedure. Vodafone is actively engaged with the IEC Standards Organisation
  in developing a new global protocol for body worn phones. At the end of 2006,
  the operating companies completed a two year implementation programme of the
  Groups Health and Safety of Radio Frequency Fields Policy to ensure all
  its base stations comply with international standards. The Groups long
  term programme of engagement, with a range of stakeholders, aims to reduce levels
  of concern amongst the public and to demonstrate that Vodafone is acting responsibly. Responsible network deploymentVodafones mobile services rely on
  a network of base stations that transmit and receive calls. The Group recognises
  that network roll out can cause concern to communities, usually about the visual
  impact of base stations or health issues concerning RF fields. Vodafone has
  continued to implement its policy and guidelines on responsible network deployment.
  In addition, seven mobile operating companies have signed up to national industry
  codes of best practice on network deployment. During the 2007 financial year, Vodafone was found in breach of planning regulations relating to 423 mast sitings. Fines levied by regulatory bodies or courts in relation to offences under environmental law or
regulations were approximately £16,500. By cooperating with other mobile operators to share sites, the Group can reduce the total number of base stations required. This lowers costs, enables faster network deployment and reduces the environmental footprint
of the network without loss of quality or coverage. During the year, Vodafone announced the intention to participate in a number of network sharing agreements in the Czech Republic, Spain and the UK. Energy use and efficiencyClimate change is widely recognised as
  the greatest global environmental challenge and limiting the Groups contribution
  is a priority. One of the Groups significant areas of impact is the energy
  use associated with the operation of the network, which accounts for more than
  80% of the Groups carbon dioxide emissions. In the 2007 financial year: •
    energy use was 2,690 GWh, equating to
      1.23 million tonnes of carbon dioxide;
      and•
    network carbon dioxide emissions per unit
      of data transmitted decreased by 29%. Other environmental impacts include ozone-depleting substances, paper use and water use. These are reported at www.vodafone.com/responsibility.


Reuse and recyclingMobile phones, accessories and the networks
  on which they operate require upgrading, replacement and decommissioning. Whilst
  Vodafone does not manufacture equipment, the Group does purchase it. New European
  legislation on electronic waste came into force during the 2007 financial year.
  The Group complies with the EUs Waste Electronic and Electrical Equipment
  (WEEE) directive through its handset recycling programmes in all
  operating companies where it applies. The Group has also worked with suppliers
  to ensure substances prohibited by the Restriction of the use of certain Hazardous
  Substances directive are phased out. During the 2007 financial year: •
    Over one million phones were collected
      for reuse and recycling through collection
      programmes in 16 mobile operating companies. This exceeds our
      target of increasing our handset collection by 50% from 2005 levels
      (the target figure was adjusted to take into
      account the disposal of the operations
      in Japan); and•
    9,960 tonnes of network equipment waste
      was generated, with 97% of this sent
      for reuse or recycling, exceeding our target of 95%. Environmental Performance
        Indicators2007
      (1)(2)
      2006
      (1)(3)
      2005
      (1)Number of mobile operating
        subsidiariesundertaking independent RF
        field monitoring
      15
      
      15
      
      14Total energy use (GWh) (direct
        and indirect)(4)
      2,690
      
      2,900
      (5)
      2,600Total carbon dioxide emissions(millions of tonnes)(4)
      1.23
      
      1.31
      
      1.2% of energy sourced from
        renewables
      17
      
      12
      
      11Number of phones collected
        for reuse andrecycling (million)
      1.03
      
      1.37
      
      1.14
      (5)Network equipment waste generated
        (tonnes)
      9,960
      
      2,950
      
      3,404% network equipment waste
        sent for reuseor recycling
      97
      
      97
      
      96 Notes:(1)
    These performance indicators were calculated
      using actual or estimated data collected by the Groups mobile operating
      companies. The data is sourced from invoices, purchasing requisitions, direct
      data measurement and estimations where required. The carbon dioxide emissions
      figure is calculated using the kWh/CO2 conversion factor for the electricity
      provided by the national grid and for other energy sources in each operating
      company. The data collection and reporting process is within the assurance
      undertaken by Deloitte & Touche LLP on the Companys CR Report.
      The Groups joint venture in Italy is included in all years.(2)
    The data for the 2007 financial year excludes
      the newly acquired operations in Turkey and the operations in Japan that
      were sold during the 2007 financial year.(3)
    The data for the 2006 financial year excludes
      the Czech Republic, Romania and the operations in Sweden that were sold
      during the 2006 financial year, but does include operations in Japan that
      were disposed of during the 2007 financial year.(4)
    The 2007 figure includes Arcor.(5)
    Figures corrected after further analysis
      of data obtained during the last financial year.




|Vodafone Group Plc Annual Report
      2007 | 77
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Boards Report to
  Shareholders on Directors Remuneration



Dear ShareholderSince the introduction of the current
  Executive Remuneration Policy in 2002 (the Policy), the Remuneration
  Committee has conducted annual reviews to ensure that the Policy continues to
  serve the Company and shareholders. As a result of this years review, the Remuneration Committee has concluded that the existing Policy remains appropriate but intends to make four changes. These are as follows: •
    the comparator group for the Relative
      Total Shareholder Return (TSR) performance
      condition on the Group Long Term Incentive Plan (GLTI)
      Shares will be changed from all the companies
      in the FTSE Global Telecommunications
      Index to the top 50% of companies in the FTSEGlobal
      Telecommunications Index by market capitalisation, which will allow
      us to calculate the ranking on an unweighted basis;•
    the vesting curve on the relative TSR
      performance condition will be changed
      to a straight line between threshold and maximum;•
    a fifth performance measure will be added
      to the Group Short Term Incentive Plan (GSTIP), which will focus
      participants on the development of
      total communication services; and•
    the performance condition on the Deferred
      Share Bonus (DSB) has changed
      from a two year adjusted EPS to a two year cumulative adjusted free
      cash flow target. The key principles of the Policy,
      which are being maintained, are:•
    the expected value of total remuneration
      will be benchmarked against the relevant
      market;•
    a high proportion of total remuneration
      will be delivered through performance
      related payments;•
    performance measures will be balanced
      between absolute financial measures
      and sector comparative measures to achieve maximum alignment
      between executive and shareholder objectives;•
    the majority of performance related remuneration
      will be provided in the form of equity;
      and•
    share ownership requirements will be applied
      to executive directors.The Remuneration Committee
      continues to monitor how well incentive awards made in previous years align
      with the Companys performance. The Policy continues to work well and
      forecast rewards are commensurate with actual performance. I am confident
      that the Policy continues to align executives and shareholders
      interests, whilst enabling the Company to engage a high calibre team to
      successfully lead the Company. I hope that we receive your support at the
      AGM on 24 July 2007.Luc VandeveldeChairman of the Remuneration Committee
      29 May 2007 Remuneration CommitteeThe Remuneration Committee is comprised
  to exercise independent judgement and consists only of independent non-executive
  directors. Luc Vandevelde (Chairman), Dr Michael Boskin, Professor Jürgen
  Schrempp and Philip Yea continue as members. Anthony Watson joined the Remuneration


Committee on 26 September 2006. The Chief Executive and Chairman are invited to attend meetings of the Remuneration Committee, other than when their own remuneration is being discussed. The Remuneration Committee met on nine occasions during the year. The Remuneration Committee appointed and received advice from Towers Perrin (market data and advice on market practice and governance) and Kepler
Associates (performance analysis and advice on performance measures and market practice) and received advice from the Group Human Resources Director, the Group Reward and Recognition Director and, on occasion, the Group Chief Financial Officer. The
advisers also provided advice to the Company on general human resource and compensation related matters. Remuneration PolicyThe Policy was approved by shareholders
  in July 2002. The Policy is set out below: The overriding objective of the Policy
      on incentives is to ensure that Vodafone is able to attract, retain and
      motivate executives of the highest calibre essential to the successful leadership
      and effective management of a global company at the leading edge of the
      telecommunications industry. To achieve this objective, Vodafone, from the
      context of its UK domicile, takes into account both the UK regulatory framework,
      including best practice in corporate governance, shareholder views, political
      opinion and the appropriate geographic and nationality basis for determining
      competitive remuneration, recognising that this may be subject to change
      over time as the business evolves.The total remuneration will be benchmarked
      against the relevant market. Vodafone is one of the largest companies in
      Europe and is a global business; Vodafones policy will be to provide
      executive directors with remuneration generally at levels that are competitive
      with the largest companies in Europe. A high proportion of the total remuneration
      will be awarded through performance related remuneration, with phased delivery
      over the short, medium and long term. For executive directors, approximately
      80% of the total expected remuneration will be performance related. Performance
      measures will be balanced between absolute financial measures and sector
      comparative measures to achieve maximum alignment between executive and
      shareholder objectives.All medium and long term incentives are
      delivered in the form of Vodafone shares and options. Executive directors
      are required to comply with share ownership guidelines. The structure of remuneration for executive directors under the Policy (excluding pensions) is illustrated below:  The Policys key objective is to ensure
  that there is a strong linkage between pay and performance. This is achieved
  by approximately 80% of the total package (excluding pensions) being delivered
  through performance-linked short, medium and long term incentive plans. Therefore,
  the only guaranteed payment to executive directors is their base salary and
  pension. The Remuneration Committee selects performance
  measures for incentive plans that provide the greatest degree of alignment with
  the Companys strategic goals and that are clear and transparent to both
  directors and shareholders. The performance measures adopted incentivise both
  operational performance and share price growth. Each element of the reward package focuses
  on supporting different Company objectives, which are illustrated overleaf:




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| | Governance
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Summary of the components of executive directors
  remuneration

|                 |  |   |                         |  |   |                                    |  |   | 2006/07 Performance         |  |   | 2007/08 Performance                 | 
|---------------- |  | - | ----------------------- |  | - | ---------------------------------- |  | - | --------------------------- |  | - | ----------------------------------- | 
|                 |  |   | Purpose                 |  |   | Grant policy                       |  |   | Measure(s)                  |  |   | Measure(s)                          | 
|                 |  |   |                         |  |   |                                    |  |   |                             |  |   |                                     | 
|Base salary      |  | • | Reflects competitive    |  | • | Benchmarked against top            |  | • | Individual                  |  | • | Individual                          | 
|                 |  |   | market level, role      |  |   | European companies                 |  |   | contribution                |  |   | contribution                        | 
|                 |  |   | and individual          |  |   |                                    |  |   |                             |  |   |                                     | 
|                 |  |   | achievement             |  |   |                                    |  |   |                             |  |   |                                     | 
|                 |  |   |                         |  |   |                                    |  |   |                             |  |   |                                     | 
|Group Short Term |  | • | Motivates achievement   |  | • | 100% on target bonus, 200%         |  | • | Adjusted operating          |  | • | Adjusted operating                  | 
|Incentive Plan   |  |   | of annual business KPIs |  |   | maximum bonus for all Main         |  |   | profit (30%)                |  |   | profit (30%)                        | 
|(GSTIP)        |  | • | Aligns with new         |  |   | Board executive directors          |  | • | Free cash flow (20%)        |  | • | Free cash flow (20%)                | 
|                 |  |   | business strategy       |  | • | Bonus can be taken in cash or      |  | • | Revenue (35%)               |  | • | Total service revenue (25%)         | 
|                 |  |   |                         |  |   | deferred into shares for two years |  | • | Customer satisfaction (15%) |  | • | Total communications revenues (10%) | 
|                 |  |   |                         |  |   |                                    |  |   |                             |  | • | Customer satisfaction (15%)         | 
|                 |  |   |                         |  |   |                                    |  |   |                             |  |   |                                     | 
|Deferred Share   |  | • | Provides incentive      |  | • | The entire bonus must be           |  | • | Two year adjusted           |  | • | Two year adjusted free              | 
|Bonus (DSB)    |  |   | to co-invest            |  |   | deferred into shares to            |  |   | EPS growth (for the         |  |   | cash flow (for the award to         | 
|                 |  | • | Motivates achievement   |  |   | participate in the DSB             |  |   | award granted in            |  |   | be granted in July 2007             | 
|                 |  |   | of medium term KPIs     |  | • | 50% of the value of                |  |   | July 2006 based on          |  |   | based on the 06/07 GSTIP)           | 
|                 |  | • | Aligns executives and  |  |   | the deferred bonus                 |  |   | the 05/06 GSTIP)            |  |   |                                     | 
|                 |  |   | shareholders interests |  |   | conditionally awarded in shares    |  |   |                             |  |   |                                     | 
|                 |  |   |                         |  |   |                                    |  |   |                             |  |   |                                     | 
|Global Long Term |  | • | Incentivise earnings    |  | • | CEO  250% of base                 |  | • | Three year adjusted         |  | • | Three year adjusted EPS             | 
|Incentive Plan   |  |   | growth and share        |  |   | salary expected value              |  |   | EPS growth                  |  |   | growth                              | 
|(GLTI) Options |  |   | price growth            |  |   | for overall GLTI (options and      |  |   |                             |  |   |                                     | 
|                 |  | • | Aligns executives and  |  |   | performance shares)                |  |   |                             |  |   |                                     | 
|                 |  |   | shareholders interests |  | • | Main Board executives             |  |   |                             |  |   |                                     | 
|                 |  |   |                         |  |   | 200% of base salary expected       |  |   |                             |  |   |                                     | 
|                 |  |   |                         |  |   | value for overall GLTI             |  |   |                             |  |   |                                     | 
|                 |  |   |                         |  |   | (options and performance shares)   |  |   |                             |  |   |                                     | 
|                 |  |   |                         |  |   |                                    |  |   |                             |  |   |                                     | 
|Global Long Term |  | • | Incentivise share price |  | • | CEO  250% of base salary          |  | • | Relative Total              |  | • | Relative Total                      | 
|Incentive Plan   |  |   | and dividend growth     |  |   | expected value for overall         |  |   | Shareholder Return          |  |   | Shareholder Return                  | 
|(GLTI) Shares  |  | • | Aligns executives and  |  |   | GLTI (options and                  |  |   | (TSR) against the         |  |   | (TSR) against the                 | 
|                 |  |   | shareholders interests |  |   | performance shares)                |  |   | companies in                |  |   | top 50% of companies                | 
|                 |  |   |                         |  | • | Main Board executives             |  |   | the FTSE Global             |  |   | in the FTSE Global                  | 
|                 |  |   |                         |  |   | 200% of base salary expected       |  |   | Telecommunications          |  |   | Telecommunications                  | 
|                 |  |   |                         |  |   | value for overall GLTI (options    |  |   | Index                       |  |   | Index by market                     | 
|                 |  |   |                         |  |   | and performance shares)            |  |   |                             |  |   | capitalisation                      | 
|                 |  |   |                         |  |   |                                    |  |   |                             |  |   |                                     | 
|                 |  |   |                         |  |   |                                    |  |   |                             |  |   |                                     | 

The principles of the Policy are cascaded, where
  appropriate, to executives below Board level as set out below: Cascade
        of policy to Executive CommitteeBase salary
      
      Set against
        national marketAnnual
      
      Target bonus
        level competitive in local market, withdeferred
      
      payout conditional
        on business performance relevantshare
        bonus
      
      to individual
        executiveOpportunity
        to defer bonus in order to receive thedeferred
        share bonus matching awardLong term
      
      Annual awards
        of performance shares and shareincentive
      
      options with performance conditions Report on Executive Directors Remuneration for the 2007 Financial Year and Subsequent Periods Total remuneration levelsIn accordance with the Policy, the Company
  benchmarks total remuneration levels against other large European domiciled
  companies, using externally provided pay data. Total remuneration for these
  purposes means the sum of base salary and short, medium and long term incentives
  calculated on an expected value basis. The European focus was selected because
  Europe continues to be Vodafones major market and the Company is one of
  the top ten companies in Europe by market capitalisation. The competitive data
  is used as one input to determine the remuneration level of the Chief


Executive and Board. The Remuneration Committee also takes into account other factors, including personal and Company performance, in determining the target remuneration level. Components of executive directors remunerationExecutive directors receive base salary,
  short and medium term incentive (annual deferred share bonus), long term incentives
  (performance shares and share options) and pension benefits. Vesting of all
  incentives is dependent on the achievement of performance targets that are set
  by the Remuneration Committee prior to the awards being granted. Base salarySalaries are reviewed annually and
  adjustments may be made to reflect competitive national pay levels, the prevailing
  level of salary reviews of employees within the Group, changes in responsibilities
  and Group and individual performance. External remuneration consultants provide
  data about market salary levels and advise the Remuneration Committee accordingly.
  Pension entitlements are based only on base salary. In July 2006, the Chief
  Executives base salary was set at £1,272,000. Incentive awardsShort and medium term incentiveThe purpose of the Group Short Term
  Incentive Plan (GSTIP) is to focus and motivate executive directors
  to achieve annual business KPIs that will further the Companys medium
  term objectives. The Deferred Share Bonus offers an incentive for executives
  to co-invest. Share awards made in




|Vodafone Group Plc Annual Report
      2007 | 79
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Boards Report
  to Shareholders on Directors Remunerationcontinued



July 2004 under the Vodafone Short Term Incentive Plan (STIP) (the predecessor to the Deferred Share Bonus) vested in July 2006. Details of STIP awards are given in the table on page 84. Annual bonus (GSTIP)The annual bonus is earned by achievement
  of one years KPI linked performance targets and is either delivered in
  cash or shares. If the bonus is delivered in shares they will be deferred for
  a two year period and the executive will be eligible to receive 50% of the gross
  bonus under the Deferred Share Bonus Plan, which is detailed below. The target base award level for the 2007 financial year was 100% of salary, with a maximum of 200% of salary available for exceptional performance. The Remuneration Committee reviews and sets the GSTIP performance targets on an annual basis, taking into account business strategy. The performance measures for the 2007 financial year were adjusted operating profit,
revenue, free cash flow and customer delight. Each element is weighted according to the responsibilities of the relevant director. For the Chief Executive, in the 2007 financial year, the adjusted operating profit target was 30% of the total,
revenue 35%, free cash flow 20% and customer delight 15%, and the payout achieved was 151.6% . The targets are not disclosed, as they are commercially sensitive. The target base award level for the 2008 financial year will continue to be 100% of salary, with a maximum of 200% of salary available for exceptional performance. For the 2008 financial year, the Group performance measures will be changed to include the development of total communications revenue with a 10% weighting, and the revenue measure will be changed to total service
revenue with a 25% weighting. More information on KPIs, against which Group performance is measured, can be found in Performance  Key Performance Indicators on page 33. Deferred Share Bonus (DSB)If executives choose to defer their annual
  bonus into shares, then they will be eligible for an award under the DSB arrangement
  of matching shares equal to 50% of the number of shares comprised in the pre-tax
  base award. The award is earned by achievement of a subsequent two year performance
  target following the initial 12 month period. For awards made in 2006, which will vest in July 2008, the performance measure is growth in adjusted EPS. Three quarters of the DSB award will vest for achievement of EPS growth of 11%, rising to full vesting for
achievement of EPS growth of 15% over the two year performance period. For awards made in 2007, which will vest in July 2009, the performance measure will be free cash flow. The target itself will be set by the Remuneration Committee at the time of the award based on the Groups
long-range plan with reference to market expectations. Long term incentivesAwards of performance shares and share
  options were made to executive directors following the 2006 AGM on 25 July 2006.
  The awards for the 2007 financial year will be also be made following the AGM
  and will be made under the Vodafone Global Incentive Plan. Awards are delivered in the form of ordinary shares of the Company. All awards are made under plans that incorporate dilution limits as set out in the Guidelines for Share Incentive Schemes published by the Association
of British Insurers. The current estimated dilution from subsisting awards, including executive and all-employee share awards, is approximately 2.9% of the Companys share capital at 31 March 2007 (2.6% as at 31 March 2006). Performance sharesPerformance shares are awarded annually
  to executive directors. Vesting of the performance shares depends upon the Companys
  relative TSR


performance. TSR measures the change in value of a share and reinvested dividends over the period of measurement. For the award made in the 2007 financial year, the Companys TSR performance is compared to that of other companies in the FTSE Global Telecommunications index as at the date of grant, over a three-year
performance period. In the 2007 financial year, the Chief Executive received an award of performance shares with a face value of 227% of base salary; other executive directors received 182% of base salary. Performance shares will vest only if the Company ranks in the top half of the ranking table; maximum vesting will only occur if the Company is in the top 20%. Vesting is also conditional on underlying improvement in
the performance of the Company. Awards will vest to the extent that the performance condition has been satisfied at the end of the three-year performance period. To the extent that the performance target is not met, the awards will be forfeited. For awards made in the 2008 financial year, the TSR comparator group will be changed to the top 50% of companies in the FTSE Global Telecommunications Index by market capitalisation. This removes the smaller companies
from the group and allows us to move from a weighted to an unweighted ranking system. In addition, the vesting curve has been straightened between threshold and maximum performance. The following chart shows the basis on which the performance shares
will vest:  Previously disclosed performance share awards granted in the 2004 financial year vested in the 2007 financial year. Details are given in the table on page 85. Share optionsShare options are granted annually to
  executive directors. The exercise of share options is subject to the achievement
  of a three year adjusted EPS performance condition set prior to grant. For the award made in the 2007 financial year,
  one quarter of the option award will vest for achievement of EPS growth of 5%
  p.a., rising to full vesting for achievement of EPS growth of 10% p.a. over
  the performance period. In setting this target, the Remuneration Committee has
  taken the internal long range plan and market expectations into account. The Remuneration Committee has decided that for the 2008 financial year grants, the performance range will be 5%  8% p.a. As in previous years, 25% vests at threshold (5% p.a.) with a straight line up to 100%
vesting at maximum (8% p.a.). The following chart illustrates the basis on which share options granted in the 2007 and 2008 financial years will vest:




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| | Governance
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Options have a ten year term and will vest after three years, subject to performance achievement. To the extent that the performance target is not met, the options will lapse. Re-testing of performance is not
permitted. The price at which shares can be acquired on option exercise will be no lower
than the market value of the shares on the day prior to the date of grant of
the options. Therefore, scheme participants only benefit if the share price increases
and vesting conditions are achieved. In July 2006, the Chief Executive received an award of options with a face value
of 735% of base salary, while other executive directors received awards of options
with a face value of 588% of their base
salary. Share ownership guidelinesExecutive directors participating in
long term incentive
plans must comply with the Companys share ownership guidelines. These guidelines,
which were first introduced in 2000, require the Chief Executive to have a shareholding
in the Company of four times base salary and other executive directors to have
a shareholding of three times base salary. It is intended that these ownership levels will be attained within five years
from the director first becoming subject to the guidelines and be achieved through
the retention of shares awarded under incentive plans. PensionsThe Chief Executive, Arun Sarin, is provided with a defined contribution pension arrangement to which the Company contributes 30% of base salary. Vittorio Colao has elected to take a cash allowance of 30% of base salary in
lieu of pension contributions. Andy Halford, being a UK based director, was a contributing member of the Vodafone
Group Pension Scheme, which is a UK defined benefit scheme approved by HM Revenue & Customs.
The scheme provides a benefit of two-thirds of pensionable salary after a minimum
of 20 years service. The normal retirement age is 60, but directors may
retire from age 55 with a pension proportionately reduced to account for their
shorter service but with no actuarial
reduction. Andy Halfords pensionable salary is capped in-line with the
Vodafone Group Pension Scheme Rules at £110,000. The Company has paid a
cash allowance of 30% of base salary in excess of pensionable salary. Sir Julian Horn-Smith elected to receive his pension from 6 April 2006, prior
to his actual retirement from the Company, in accordance with the new UK pension
rules effective from April 2006. Sir Julian retired at the end of the 2006 AGM
in July. In addition to his pension, the Remuneration Committee authorised a
pension allowance of 30% of base salary for the four months from the date he
took his pension to the date of his retirement. Thomas Geitner was entitled to a defined benefit pension of 40% of salary from
a normal retirement age of 60. On early retirement, the pension may be reduced
if he has accrued less than ten years of Board
service.


Thomas Geitner left the Company on 31 December 2006 with a contractual entitlement
to a pension, representing 30% of his final base salary. This pension can be
paid in full with effect from 1 January 2008 providing Mr Geitner does not commence
employment with a competitor. Should he commence employment with a competitor,
then, in accordance with his employment contract, the above pension will be suspended
until his 55th birthday, at which point the pension
payments will recommence. The increase in the transfer value amount of Mr Geitners pension between
31 March 2006 and 31 March 2007 is to take account of the fact that he has chosen
to retire before the standard retirement age of 60. According to the terms of
his contract, his stepped pension promise is completely protected
and payable immediately, without reduction. In previous years the pension promise
was valued on the basis of a retirement age of 60, a pension of 40% of final
base salary and that his whole pension would accrue uniformly over the period
to his 60th birthday. These factors combined have resulted in the increase in
the transfer value that is now disclosed. There have been no enhancements awarded
in the last year beyond the contractual promise. The valuation of his pension
promise to date follows normal actuarial practice in Germany. All the plans referred to above provide benefits in the event of death in service. Further details of the pension benefits earned by the directors in the year ended
31 March 2007 can be found on page 84. Liabilities in respect of the pension
schemes in which the executive directors participate are funded to the extent
described in note 25 to the Consolidated Financial Statements, Post employment
benefits. All-employee share incentive schemesGlobal All Employee Share PlanAs in the 2006 financial year, the
Remuneration Committee has approved that an award of shares based on the achievement
of performance conditions be made to all employees in the Vodafone Group. The
2007 award will be made on 2 July 2007. SharesaveThe Vodafone Group 1998 Sharesave
Scheme is a HM Revenue & Customs approved scheme open to all UK permanent
employees. The maximum that can be saved each month
    is £250 and savings plus interest may be used to acquire shares by exercising
    the related option. The options have been granted at up to a 20% discount
    to market value. UK based executive directors are eligible to participate
    in the scheme and details of their participation are given in the table on
    page 86. Share Incentive PlanThe Vodafone Share Incentive Plan
(SIP) is a HM Revenue & Customs approved plan open to all UK
permanent employees. Eligible employees may contribute up to £125 each month
and the trustee of the plan uses the money 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 in the SIP
and details of their share interests under these plans are given in the table
on page 87. Non-executive directors remunerationThe remuneration of non-executive directors is periodically reviewed by the Board, excluding the non-executive directors. The fees payable are as follows: Fees payablefrom 1 April 2006£000Chairman
	475Deputy Chairman and Senior Independent Director
	130Basic Non-Executive Director fee
	95Chairmanship of Audit Committee
	20Chairmanship of Remuneration Committee
	15Chairmanship of Nominations and Governance Committee
	10




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        2007 | 81
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Boards Report to Shareholders on Directors Remunerationcontinued

In addition, an allowance of £6,000 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. A full review of non-executive directors fees was carried out in February
2007 taking into account market data and current market trends provided by Towers
Perrin. The previous review was in 2005. As a result of this review the revised
fees payable from 1 April 2007 are as follows: Fees payablefrom 1 April 2007£000Chairman
	525Deputy Chairman and Senior Independent Director
	145Basic Non-Executive Director fee
	105Chairmanship of Audit Committee
	25Chairmanship of Remuneration Committee
	20Chairmanship of Nominations and Governance Committee
	15 Details of each non-executive directors remuneration for the 2007 financial year are included in the table on page 83. Non-executive directors do not participate in any incentive or benefit plans.
The Company does not provide any contribution to their pension arrangements.
The Chairman is entitled to use of a car and a driver whenever and wherever he
is providing his services to or representing the Company. Service contracts and appointments of directorsExecutive directorsThe Remuneration Committee has determined
that, after an initial term that may be
of up to two years duration, executive directors contracts should
thereafter have rolling terms and be terminable on no more
than one years notice. All current executive directors contracts
have an indefinite term (to normal retirement date) and one year notice periods.
No payments should normally be payable on termination other than the salary due
for the notice period and such entitlements under incentive plans and benefits
that are consistent with the terms of such plans. All the UK based executive directors have, whilst in service, 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. Vittorio ColaoVittorio Colao was appointed as the
Companys Deputy Chief Executive with effect
from 9 October 2006. Thomas GeitnerThomas Geitner left the Company on
31 December 2006 and received salary and compensation for loss of office in accordance
with his legal entitlement. The total payment
was £1.7 million. His pro-rated annual bonus for the 2007 financial year
was waived in return for a series of six equal monthly payments of £95,723.
These payments are contingent on Mr Geitner not joining a competitor. The Remuneration
Committee has exercised discretion to allow him access to long term incentive
awards, pro-rated for time and performance. He is eligible to draw his pension
from 1 January 2008 as set out in the pensions section of this report on page
84. Sir Julian Horn-SmithSir Julian Horn-Smith retired after
the AGM on 25 July 2006. He received his bonus for the year to date of retirement,
payment in lieu of holiday accrued and awards vested under his long term incentive
plans under the
normal rules for retirement. Peter BamfordPeter
Bamford left the Companys on 1 April 2006. He received compensation for
loss of office in accordance with his legal entitlement of £1.06
million. Fees retained for non-executive directorships in other companiesSome executive directors hold positions
in other companies as non-executive directors. The fees received in respect of
the 2007 financial year and retained by directors were as follows:


Fees retained by theCompany in which
	individual in the 2007non-executive directorship is held
	financial year £000(1)Arun Sarin
	The Bank of England
	6.0Thomas Geitner(2)
	Singulus Technologies AG
	7.7Sir Julian Horn-Smith(3)
	Smiths Group plc
	17.0Lloyds TSB Group plc
	28.6Sage Group plc
	14.0 Notes:(1)
	Fees were retained in accordance with Company policy.(2)
	Fees were retained in the period to 31 December 2006.(3)
	An option over 400,000 shares granted to Sir Julian in November 2005 by China Mobile Limited
for his duties as non-executive director, and held for the benefit of the Company,
lapsed on his retirement on 25 July 2006. Fees shown are for the period 1 April
to 25 July
2006. Chairman and non-executive directorsLord
MacLaurin retired as the Companys Chairman following the AGM on25
July 2006. Lord MacLaurin continued to receive fees in accordance with his service
contract until 31 December 2006. The Company has entered into an agreement with
Lord MacLaurin that he will provide advisory services to the Company for a period
of three years following his retirement. During this period he will receive an
annual fee of £125,000, which he has confirmed to the Company he intends
to donate to charity. Sir John Bond was appointed as Chairman of the Company with effect from the AGM
on 25 July 2006. As Chairman for 2006 he received a pro-rated fee equivalent
to £475,000 per annum having received standard non-executive director fees
up to the date of appointment. His appointment is indefinite and may be terminated
by either party on one years notice. Paul Hazen stepped down from the role of Deputy Chairman following the AGM on
25 July 2006. John Buchanan was appointed into this role on the same date. Penny Hughes stepped down from the Board on 25 July 2006. Anthony Watson, Alan Jebson and Nick Land were appointed to the Board as non-executive
directors with effect from 1 May 2006, 1 December 2006 and 1 December 2006 respectively,
and hold office on the same terms as other
non-executive directors. Non-executive directors, including the Deputy Chairman, are engaged on letters
of appointment that set out their duties and responsibilities. The appointment
of non-executive directors may be terminated without
compensation. The terms and conditions of appointment of non-executive directors are available
for inspection by any person at the Companys registered office during normal
business hours and at the AGM (for 15 minutes prior to the meeting and during
the meeting). TSR performanceThe following chart shows the performance of the Company relative to the FTSE100 index and the FTSE Global Telecommunications index, which are the most relevant indices for the Company. Historical TSR PerformanceGrowth
in the value of a hypothetical £100 holding up to March 2007 FTSE Global
Telecoms and FTSE 100 comparison based on spot values.   Graph provided by Towers Perrin and calculated according to a methodology that is compliant with the requirements of Schedule 7A of the Companies Act of 1985. Data Sources: FTSE and DatastreamNote: Performance of the Company shown
by the graph is not indicative of vesting levels
under the Companys various incentive plans.




|82 | Vodafone Group PlcAnnual
        Report 2007
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| | Governance
| | ----------
| |           

Audited Information

Remuneration for the year ended 31 March 2007

The remuneration of the directors serving during the year ended 31 March 2007 was as follows:

|                              | Salary/fees |  | Incentive schemes | (1) | Benefits |  | Other  | (2) | Total | 
|----------------------------- | ----------- |  | ----------------- | --- | -------- |  | ------ | --- | ----- | 
|                              |             |  |                   |     |          |  |        |     |       | 
|                              | 2007        |  | 2006              |     | 2007     |  | 2006   |     | 2007  | 
|                              | £000       |  | £ 000            |     | £ 000   |  | £ 000 |     | £000 | 
|                              |             |  |                   |     |          |  |        |     |       | 
|Chairman                      |             |  |                   |     |          |  |        |     |       | 
|Lord MacLaurin                | 390         |  | 520               |     |         |  |       |     | 37    | 
|Sir John Bond                 | 363         |  | 95                |     |         |  |       |     | 11    | 
|Deputy Chairman               |             |  |                   |     |          |  |        |     |       | 
|Paul Hazen                    | 59          |  | 173               |     |         |  |       |     | 157   | 
|John Buchanan                 | 119         |  | 95                |     |         |  |       |     | 15    | 
|Chief Executive               |             |  |                   |     |          |  |        |     |       | 
|Arun Sarin                    | 1,272       |  | 1,254             |     | 1,928    |  | 1,424  |     | 49    | 
|Executive directors           |             |  |                   |     |          |  |        |     |       | 
|Vittorio Colao                | 383         |  |                  |     | 500      |  |       |     | 58    | 
|Andy Halford                  | 592         |  | 342               |     | 897      |  | 396    |     | 56    | 
|Thomas Geitner(3)             | 574         |  | 734               |     |         |  | 851    |     | 186   | 
|Sir Julian Horn-Smith         | 345         |  | 1,022             |     | 345      |  | 1,169  |     | 102   | 
|Non-executive directors       |             |  |                   |     |          |  |        |     |       | 
|Dr Michael Boskin             | 139         |  | 144               |     |         |  |       |     |      | 
|Lord Broers                   | 95          |  | 95                |     |         |  |       |     | 14    | 
|Anne Lauvergeon               | 95          |  | 40                |     |         |  |       |     |      | 
|Professor
    Jürgen Schrempp | 95          |  | 95                |     |         |  |       |     |      | 
|Luc Vandevelde                | 110         |  | 105               |     |         |  |       |     | 1     | 
|Philip Yea                    | 95          |  | 55                |     |         |  |       |     |      | 
|Anthony Watson                | 87          |  |                  |     |         |  |       |     |      | 
|Nick Land                     | 32          |  |                  |     |         |  |       |     |      | 
|Alan Jebson                   | 32          |  |                  |     |         |  |       |     |      | 
|Penny Hughes                  | 30          |  | 100               |     |         |  |       |     |      | 
|Former directors(4)           |            |  |                  |     |         |  |       |     |      | 
|                              |             |  |                   |     |          |  |        |     |       | 
|                              | 4,907       |  | 4,869             |     | 3,670    |  | 3,840  |     | 686   | 
|                              |             |  |                   |     |          |  |        |     |       | 
|                              |             |  |                   |     |          |  |        |     |       | 

|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   

The aggregate compensation paid by the Company to its collective senior management(1)for
services for the year ended 31 March 2007, is set out below. The aggregate number
of senior management as at 31 March 2007 was eight, two fewer than at 31 March
2006.

|                     | 2007   |  | 2006   | 
|-------------------- | ------ |  | ------ | 
|                     | £000  |  | £000  | 
|                     |        |  |        | 
|Salaries and fees    | 3,817  |  | 4,555  | 
|Incentive schemes(2) | 4,752  |  | 5,155  | 
|Benefits / Other(3)  | 7,228  |  | 3,125  | 
|                     |        |  |        | 
|                     | 15,797 |  | 12,835 | 
|                     |        |  |        | 

|      
|------
|Notes:
|(1)   
|(2)   
|(3)   



|Vodafone Group Plc Annual Report
        2007 | 83
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Boards Report to Shareholders on Directors Remunerationcontinued

PensionsPension benefits earned by the directors serving during the year ended 31 March 2007 were:

|                         |                       |     |                   |     |                   |     |                   |     | Change in      |  | Change in    |  | Transfer value of |  | Employer           | 
|------------------------ | --------------------- | --- | ----------------- | --- | ----------------- | --- | ----------------- | --- | -------------- |  | ------------ |  | ----------------- |  | ------------------ | 
|                         |                       |     |                   |     |                   |     |                   |     | transfer value |  | accrued      |  | change in         |  | allocation/        | 
|                         |                       |     | Change in accrued |     |                   |     |                   |     | over year      |  | benefit      |  | accrued benefit   |  | contribution to    | 
|                         | Total accrued benefit |     | benefit over      |     | Transfer value at |     | Transfer value at |     | less member    |  | in excess of |  | net of member     |  | defined            | 
|                         | at 31 March 2007      | (1) | the year          | (1) | 31 March 2006     | (2) | 31 March 2007     | (2) | contributions  |  | inflation    |  | contributions     |  | contribution plans | 
|Name of Director         | £000                 |     | £000             |     | £000             |     | £000             |     | £000          |  | £000        |  | £000             |  | £000              | 
|                         |                       |     |                   |     |                   |     |                   |     |                |  |              |  |                   |  |                    | 
|Arun Sarin               |                      |     |                  |     |                  |     |                  |     |               |  |             |  |                  |  | 382.0              | 
|Vittorio Colao(3)        |                      |     |                  |     |                  |     |                  |     |               |  |             |  |                  |  |                   | 
|Andy Halford(4)          | 17.0                  |     | 3.7               |     | 182.8             |     | 223.4             |     | 36.7           |  | 3.2          |  | 38.1              |  |                   | 
|Thomas Geitner(5)        | 232.1                 |     | 116.3             |     | 1,971.4           |     | 5,138.9           |     | 3,167.5        |  | 112.1        |  | 2,482.0           |  |                   | 
|Sir Julian Horn-Smith(6) | 605.2                 |     |                  |     | 13,231.0          |     | 15,186.5          |     | 1,955.5        |  |             |  |                  |  |                   | 
|                         |                       |     |                   |     |                   |     |                   |     |                |  |              |  |                   |  |                    | 
|                         |                       |     |                   |     |                   |     |                   |     |                |  |              |  |                   |  |                    | 

|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   
|(5)   
|(6)   

In respect of senior management, the Group has made aggregate contributions of £0.89 million into pension schemes.

Directors interests in the shares of the CompanyShort term incentivesConditional awards of ordinary shares
made to executive directors under the STIP/Deferred Share Bonus, and dividends
on those shares paid under the terms of the Companys dividend reinvestment
plan, are shown below. STIP shares which vested and were sold or transferred
during the year ended31 March 2007 are also shown below.

|                      |                 |  | Shares conditionally awarded  |                  |                                       |               |                                     |               |                                    |               |               |               |  |           |  |            
|--------------------- | --------------- |  | ----------------------------- | ---------------- | ------------------------------------- | ------------- | ----------------------------------- | ------------- | ---------------------------------- | ------------- | ------------- | ------------- |  | --------- |  | -----------
|                      |                 |  | during the year as matching   |                  |                                       |               |                                     |               |                                    |               |               |               |  |           |  |            
|                      | Total interest  |  | shares in respect of DSB      |                  | Shares sold or transferred during the |               |                                     |               |                                    |               |               |               |  |          
|                      | in STIP at      |  | awards for the 2006 financial |                  | year in respect of the 2004 financial |               | Shares forfeited during the year in |               | Total interest in STIP/DSB as at   |              
|                      | 1 April 2006    |  | year                          |                  |                                       |               | year                                | (1)           | respect of the 2004 financial year |               | 31 March 2007 |              
|                      |                 |  |                               |                  |                                       |               |                                     |               |                                    |               |               |               |  |           |  |            
|                      |                 |  |                               | Value at date of |                                       |               |                                     | In respect of |                                    |               |               | In respect of |  |           |  |            
|                      | Total number of |  |                               | award            | (2)(3)                                | In respect of |                                     | enhancement   |                                    | In respect of |               | enhancement   |  | Number    |  | Total Value
|                      | shares          |  | Number                        | £000            |                                       | base awards   |                                     | shares        |                                    | base awards   |               | shares        |  | of shares |  | £000      
|                      |                 |  |                               |                  |                                       |               |                                     |               |                                    |               |               |               |  |           |  |            
|Arun Sarin            | 2,781,347       |  | 619,304                       | 712              |                                       | 1,013,733     |                                     | 506,867       |                                    |              |               |              |  | 1,880,051 |  | 2,547      
|Vittorio Colao        |                |  |                              |                 |                                       |              |                                     |              |                                    |              |               |              |  |          |  |           
|Andy Halford          | 292,299         |  | 240,840                       | 277              |                                       | 194,866       |                                     | 97,433        |                                    |              |               |              |  | 240,840   |  | 326        
|Thomas Geitner        | 428,179         |  |                              |                 |                                       | 285,453       |                                     |              |                                    |              |               | 142,726       |  |          |  |           
|Sir Julian Horn-Smith |                |  |                              |                 |                                       |              |                                     |              |                                    |              |               |              |  |          |  |           
|                      |                 |  |                               |                  |                                       |               |                                     |               |                                    |               |               |               |  |           |  |            
|                      |                 |  |                               |                  |                                       |               |                                     |               |                                    |               |               |               |  |           |  |            

|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   

The aggregate number of shares conditionally awarded during the year under the Deferred Share Bonus to the Companys senior management, other than executive directors, is 304,325. For a description of the
performance and vesting conditions, see Short and medium term incentive: Deferred Share Bonus on page 80.



|84 | Vodafone Group PlcAnnual
        Report 2007
|-- | --------------------------------------------

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| | Governance
| | ----------
| |           

Long term incentivesPerformance sharesConditional awards of ordinary shares
made to executive directors under the Vodafone Group Plc 1999 Long Term Stock
Incentive Plan and the Vodafone Global Incentive Plan are shown below. Long Term
Incentive shares that vested and were sold or transferred during the year ended
31 March 2007 are also shown below:

|                      |                         |     |                                |  |                  |     | Shares forfeited |     | Shares sold or              |     |                        |  |             |    
|--------------------- | ----------------------- | --- | ------------------------------ |  | ---------------- | --- | ---------------- | --- | --------------------------- | --- | ---------------------- |  | ----------- | ---
|                      |                         |     |                                |  |                  |     | in respect       |     | transferred in              |     |                        |  |             |    
|                      | Total interest          |     |                                |  |                  |     | of awards for    |     | respect of awards           |     |                        |  |             |    
|                      | in long term incentives |     |                                |  |                  |     | the 2004, 2005   |     | for the 2004, 2005          |     | Total interest in long | 
|                      | at 1 April 2006 or date |     | Shares conditionally awarded   |  | 2006 and 2007    |     | 2006 and 2007    |     | term incentives at 31 March |    
|                      | of appointment          | (1) | during the 2007 financial year |  | financial years  |     | financial years  |     |                             |     | 2007                   | 
|                      |                         |     |                                |  |                  |     |                  |     |                             |     |                        |  |             |    
|                      |                         |     |                                |  | Value at date of |     |                  |     |                             |     |                        |  |             |    
|                      |                         |     |                                |  | award            | (2) |                  |     |                             |     | Number                 |  | Total value | (5)
|                      | Number                  |     | Number                         |  | £000            |     | Number           | (3) | Number                      | (3) | of shares              |  | £000       |    
|                      |                         |     |                                |  |                  |     |                  |     |                             |     |                        |  |             |    
|Arun Sarin            | 5,578,789               |     | 2,508,380                      |  | 2,891            |     | 1,363,354        |     | 481,509                     |     | 6,242,306              |  | 8,427       |    
|Vittorio Colao        |                        |     | 1,073,465                      |  | 1,455            |     |                 |     |                            |     | 1,073,465              |  | 1,449       |    
|Andy Halford          | 841,562                 |     | 946,558                        |  | 1,091            |     | 122,652          |     | 43,318                      |     | 1,662,150              |  | 2,190       |    
|Thomas Geitner(4)     | 2,422,198               |     | 1,227,587                      |  | 1,415            |     | 3,292,331        |     | 357,454                     |     |                       |  |            |    
|Sir Julian Horn-Smith | 3,438,834               |     |                               |  |                 |     | 3,156,954        |     | 281,880                     |     |                       |  |            |    
|                      |                         |     |                                |  |                  |     |                  |     |                             |     |                        |  |             |    
|                      |                         |     |                                |  |                  |     |                  |     |                             |     |                        |  |             |    

|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   
|(5)   
|(6)   

The aggregate number of shares conditionally awarded during the year to the Companys senior management is 4,431,962 shares. For a description of the performance and vesting conditions see Long term
incentives on pages 80 to 81. In some cases local performance conditions attach to the awards.

Share optionsThe following information summarises
the directors options under the Vodafone Group 1998 Sharesave Scheme, the
Vodafone Group Plc Executive Share Option Scheme and the Vodafone Group 1998
Company Share Option
Scheme, which are all HM Revenue & Customs approved schemes. The table also
summarises the directors options under the Vodafone Group 1998 Executive
Share Option Scheme, Vodafone Group Plc 1999 Long Term Stock Incentive Plan and
the
Vodafone Global Incentive Plan, which are not HM Revenue & Customs approved.
No other directors have options under any of these schemes.

Only under the Vodafone Group 1998 Sharesave
    Scheme may shares be offered at a discount in future grants of options. For
a description of the
    performance and vesting conditions see Long
term incentives on pages 80 to 81.

|                         |                 |        |                 |                  |                |               | Weighted      |             |           | 
|------------------------ | --------------- | ------ | --------------- | ---------------- | -------------- | ------------- | ------------- | ----------- | --------- | 
|                         | Options held at |        |                 | Options          | Options        |               | average       |             |           | 
|                         | 1 April 2006    |        | Options granted | exercised during | lapsed during  | Options       | exercise      | Earliest    |           | 
|                         | or date of      |        | during the 2007 | the 2007         | the 2007       | held at       | price at      | date from   | Latest    | 
|                         | appointment     | (1)(2) | financial year  | financial year   | financial year | 31 March 2007 | 31 March 2007 | which       | expiry    | 
|                         | Number          |        | Number          | Number           | Number         | Number        | Pence         | exercisable | date      | 
|                         |                 |        |                 |                  |                |               |               |             |           | 
|Arun Sarin               | 26,416,279      |        | 8,115,350       |                 | 6,250,000      | 28,281,629    | 123.3         | July 2006   | July 2016 | 
|Vittorio Colao           |                |        | 3,472,975       |                 |               | 3,472,975     | 135.5         | Nov 2009    | Nov 2016  | 
|Andy Halford             | 2,704,093       |        | 3,072,598       |                 | 8,705          | 5,767,986     | 130.4         | July 2002   | July 2016 | 
|Thomas Geitner(3)        | 18,396,960      |        | 3,971,607       | 5,497,618        | 5,329,579      | 11,541,370    | 139.3         | July 2003   | Dec 2007  | 
|Sir Julian Horn-Smith(3) | 25,200,598      |        |                | 2,337,104        | 9,126,792      | 13,736,702    | 136.1         | July 2002   | July 2007 | 
|                         |                 |        |                 |                  |                |               |               |             |           | 
|                         | 72,717,930      |        | 18,632,530      | 7,834,722        | 20,715,076     | 62,800,662    |               |             |           | 
|                         |                 |        |                 |                  |                |               |               |             |           | 
|                         |                 |        |                 |                  |                |               |               |             |           | 

|Notes:
|------
|(1)   
|(2)   
|(3)   

The aggregate number of options granted during the year to the Companys senior management, other than executive directors, is 14,712,424. The weighted average exercise price of the options granted to senior
management during the year is 115.96 pence. The earliest date from which they are exercisable is July 2009 and the latest expiry date is 13 February 2017.



|Vodafone Group Plc Annual Report
        2007 | 85
|--------------------------------------------- | --

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Boards Report to Shareholders on Directors Remunerationcontinued

Further details of options outstanding at 31 March 2007 are as follows:

|                      | Exercisable Market price       |     | Exercisable Option price       |     |                         | 
|--------------------- | ------------------------------ | --- | ------------------------------ | --- | ----------------------- | 
|                      | greater than option
	    price | (1) | greater than market
	    price | (1) | Not
    yet exercisable | 
|                      |                                |     |                                |     |                         | 
|                      |                                |     | Weighted                       |     |                         | 
|                      |                                |     | average                        |     |                         | 
|                      | Options                        |     | exercise                       |     | Latest                  | 
|                      | held                           |     | price                          |     | expiry                  | 
|                      | Number                         |     | Pence                          |     | date                    | 
|                      |                                |     |                                |     |                         | 
|Arun Sarin            | 7,379,454                      |     | 119.3                          |     | July 2013               | 
|Vittorio Colao        |                               |     |                               |     |                        | 
|Andy Halford          | 327,777                        |     | 110.8                          |     | July 2013               | 
|Thomas Geitner        | 7,157,573                      |     | 106.0                          |     | Dec 2007                | 
|Sir Julian Horn-Smith | 9,451,790                      |     | 109.8                          |     | July 2007               | 
|                      |                                |     |                                |     |                         | 
|                      | 24,316,594                     |     |                                |     |                         | 
|                      |                                |     |                                |     |                         | 

|Note:
|-----
|(1)  

The Companys register of directors interests (which is open to inspection) contains full details of directors shareholdings and options to subscribe. These options by exercise price were:

|                                                                   |        |     | Options      |  | Options        |  | Options        |  | Options        |  |               | 
|------------------------------------------------------------------ | ------ | --- | ------------ |  | -------------- |  | -------------- |  | -------------- |  | ------------- | 
|                                                                   |        |     | held at      |  | granted        |  | exercised      |  | lapsed         |  |               | 
|                                                                   |        |     | 1 April 2006 |  | during the     |  | during the     |  | during the     |  | Options       | 
|                                                                   | Option |     | or date of   |  | 2007 financial |  | 2007 financial |  | 2007 financial |  | held at       | 
|                                                                   | price  |     | appointment  |  | year           |  | year           |  | year           |  | 31 March 2007 | 
|                                                                   | Pence  |     | Number       |  | Number         |  | Number         |  | Number         |  | Number        | 
|                                                                   |        |     |              |  |                |  |                |  |                |  |               | 
|Vodafone Group Plc Executive Share Option Scheme (Approved  1988) | 255.00 |     | 233,500      |  |               |  |               |  |               |  | 233,500       | 
|Vodafone Group 1998 Company Share Option Scheme (Approved)         | 282.30 |     | 631,700      |  |               |  |               |  |               |  | 631,700       | 
|Vodafone Group 1998 Sharesave Scheme                               | 70.92  |     | 23,336       |  |               |  | 19,511         |  | 3,825          |  |              | 
|                                                                   | 91.64  |     |             |  | 10,202         |  |               |  |               |  | 10,202        | 
|                                                                   | 95.30  |     | 16,710       |  |               |  |               |  |               |  | 16,710        | 
|                                                                   | 108.84 |     | 8,705        |  |               |  |               |  | 8,705          |  |              | 
|Vodafone Group Plc 1999 Long Term Stock Incentive Plan             | 90.00  |     | 94,444       |  |               |  |               |  |               |  | 94,444        | 
|Vodafone Group Plc Global Incentive Plan                           | 97.00  |     | 9,260,683    |  |               |  | 1,753,505      |  |               |  | 7,507,178     | 
|                                                                   | 115.25 |     |             |  | 15,149,353     |  | 496,450        |  | 55,162         |  | 14,597,741    | 
|                                                                   | 119.00 |     | 14,189,604   |  |               |  | 1,072,048      |  | 4,239,735      |  | 8,877,821     | 
|                                                                   | 119.25 |     | 15,640,457   |  |               |  | 3,937,670      |  |               |  | 11,702,787    | 
|                                                                   | 135.50 |     |             |  | 3,472,975      |  |               |  |               |  | 3,472,975     | 
|                                                                   | 145.25 |     | 13,920,682   |  |               |  | 555,538        |  | 4,150,810      |  | 9,214,334     | 
|                                                                   | 151.56 |     | 1,015,400    |  |               |  |               |  |               |  | 1,015,400     | 
|                                                                   | 157.50 |     | 9,519,551    |  |               |  |               |  | 6,006,839      |  | 3,512,712     | 
|                                                                   | 208.78 | (1) | 6,250,000    |  |               |  |               |  | 6,250,000      |  |              | 
|                                                                   | 291.50 |     | 1,913,158    |  |               |  |               |  |               |  | 1,913,158     | 
|                                                                   |        |     |              |  |                |  |                |  |                |  |               | 
|                                                                   |        |     | 72,717,930   |  | 18,632,530     |  | 7,834,722      |  | 20,715,076     |  | 62,800,662    | 
|                                                                   |        |     |              |  |                |  |                |  |                |  |               | 

|Note:
|-----
|(1)  



|86 | Vodafone Group PlcAnnual
        Report 2007
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| | Governance
| | ----------
| |           

Beneficial interestsThe
directors beneficial interests in the ordinary shares of the Company, which
includes interests in the Vodafone Share Incentive Plan, but which excludes interests
in the Vodafone Group share option schemes, and the Vodafone Group short term
or long term incentives, are shown below:

|                          |              |  |               |     | 1 April 2006 or date of | 
|------------------------- | ------------ |  | ------------- | --- | ----------------------- | 
|                          | 6 April 2007 |  | 31 March 2007 |     | appointment             | 
|                          |              |  |               |     |                         | 
|Sir John Bond             | 207,620      |  | 207,620       |     | 134,423                 | 
|Dr John Buchanan          | 191,913      |  | 191,913       | (4) | 208,124                 | 
|Arun Sarin(1)             | 5,994,854    |  | 5,994,854     |     | 4,932,560               | 
|Vittorio Colao(2)         |             |  |              |     |                        | 
|Andy Halford              | 350,632      |  | 350,632       |     | 107,895                 | 
|Dr Michael Boskin         | 10,000       |  | 10,000        |     | 212,500                 | 
|Lord Broers               | 18,887       |  | 18,887        | (4) | 20,483                  | 
|Anne Lauvergeon           | 27,125       |  | 27,125        | (4) | 31,000                  | 
|Professor Jürgen Schrempp | 8,750        |  | 8,750         | (4) | 10,000                  | 
|Luc Vandevelde            | 17,500       |  | 17,500        | (4) | 20,000                  | 
|Philip Yea                | 61,250       |  | 61,250        | (4) | 70,000                  | 
|Anthony Watson(3)         | 100,000      |  | 100,000       |     |                        | 
|Nick Land(3)              | 25,000       |  | 25,000        |     |                        | 
|Alan Jebson(3)            | 75,000       |  | 75,000        |     |                        | 
|                          |              |  |               |     |                         | 

|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   

There were no changes to the interests of the directors of the Company in the ordinary shares of the Company during the period from 1 April 2007 to 6 April 2007. As at 31 March 2007, and during the period from 1 April
2007 to 6 April 2007, no director had any interest in the shares of any subsidiary company.

Other than those individuals included in the table above who were Board members
as at 31 March 2007, members of the Groups Executive Committee, as at 31
March 2007, had an aggregate beneficial interest in 2,042,154 ordinary shares
of the Company. As at 6 April 2007, Executive Committee members at that date
had an aggregate beneficial interest in 2,042,154 ordinary shares of the Company,
none of whom had an individual beneficial interest amounting to greater than
1% of the Companys ordinary shares.

Interests in share options of the Company at 6 April 2007At 6 April 2007, there had been no change to
the directors interests in share
options from 31 March 2007.

Other than those individuals included in the table above, at 6 April 2007, members
of the Groups Executive Committee at that date held options for 28,516,664 ordinary shares at prices ranging from 70.92 pence to 293.7 pence
per ordinary share, with a weighted average exercise price of 134.04 pence per
ordinary share exercisable at dates ranging from July 2002 to
February 2017.

Sir John Bond, John Buchanan, Dr Michael Boskin, Lord Broers, Alan Jebson, Anne
Lauvergeon, Nick Land, Professor Jürgen Schrempp, Luc Vandevelde, Philip
Yea and Anthony Watson held no options at 6 April
2007.

Directors interests in contractsNone of the current directors had a material interest in any contract of significance to which the Company or any of its subsidiary undertakings was a party during the financial year.



|Vodafone Group Plc Annual Report
        2007 | 87
|--------------------------------------------- | --

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Directors Statement
  of Responsibility

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 the Group as 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;•
    state whether the Consolidated Financial Statements have been preparedin
      accordance with IFRS as adopted for use in the EU;•
    for the Company Financial Statements, state whether applicable UKaccounting
      standards have been followed; and•
    prepare the financial statements on a going concern basis unless it isinappropriate to presume that the Company and the Group will continue in business. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the
financial statements comply with the Companies Act 1985 and 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. Disclosure of Information to AuditorsHaving made the requisite enquiries, so far
as the directors are aware, there is no relevant audit information (as defined
by Section 234ZA
of the Companies Act 1985) of which the Companys auditors are 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
auditors are aware of that information. Going ConcernAfter
reviewing the Groups and Companys budget for the next financial year,
and other longer term plans, the directors are satisfied that, at the time of
approving the financial statements, it is appropriate to adopt the going concern
basis in preparing the financial statements. Managements Report on Internal Control over Financial
ReportingAs required by section 404 of the Sarbanes-Oxley
Act of 2002, management is responsible for establishing and maintaining adequate
internal control over financial reporting for the Group. The Company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;
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with IFRS, including the reconciliations to US GAAP, 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 Company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 as at 31 March 2007 based on the Internal Control Integrated
Framework, issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). The assessment excluded the internal controls
over financial reporting relating to Vodafone Telekomunikasyon A.S. (Vodafone
Turkey) because the entity was acquired on 24 May 2006, as described in
note 28 to the
Consolidated Financial Statements. Management has not evaluated the internal controls of Vodacom Group (Pty) Limited
(Vodacom), which is accounted for using proportionate consolidation.
The conclusion regarding the effectiveness of internal control over financial
reporting does not extend to the internal controls of Vodacom. Management is
unable to assess the effectiveness of internal control at Vodacom due to the
fact that it does not have the ability to dictate or modify its controls and
does not have the ability, in practice, to assess those controls. Key sub-totals that result from the consolidation of Vodafone Turkey and the
proportionate consolidation of Vodacom, whose internal controls have not been
assessed, are set out below. VodafoneTurkey
	
	Vodacom2007
	
	2007£m
	
	£mTotal assets
	607
	
	1,008Net assets
	150
	
	477Revenue
	698
	
	1,478Profit for the financial year
	71
	
	242 Management is not required to evaluate the internal controls of entities accounted
for under the equity method. Accordingly, the internal controls of these entities,
which contributed a net profit of £2,728 million to the loss for the financial
year, have not been assessed, except relating to controls over the recording
of amounts relating to the investments that are recorded in the Groups
consolidated financial statement. Based on managements assessment, management has concluded that the internal
control over financial reporting was effective as
at 31 March 2007. Managements assessment of the effectiveness of internal control over financial
reporting, as at 31 March 2007, has been audited by Deloitte & Touche 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 89. By Order of the Board Stephen ScottSecretary
29 May 2007




|88 | Vodafone Group PlcAnnual
        Report 2007
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| | Governance
| | ----------
| |           

Report of Independent Registered Public Accounting Firm to the Members of Vodafone Group Plc

We have audited managements assessment, included in the accompanying Managements Report on Internal Control over Financial Reporting, that Vodafone Group Plc together with its subsidiaries and applicable
joint ventures (the Group) maintained effective internal control over financial reporting as of 31 March 2007, based on criteria established in Internal Control  Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. As described in Managements Report on Internal Control over Financial Reporting,
management excluded from its assessment the internal control over financial reporting
at Vodafone Telekomunikasyon A.S.
(Vodafone Turkey), which was acquired on 24 May 2006 and whose financial
statements constitute 0.2 percent and 0.6 percent of net and total assets, respectively,
2.2 percent of revenues, and 1.3 percent profit of net loss of the consolidated
financial statement amounts as of and for the year ended 31 March 2007. As also
described in Managements Report on Internal Control over Financial Reporting,
management excluded from its assessment the Internal Controls over Financial
Reporting at Vodacom Group (Pty) Limited (Vodacom), as the Group
does not have the ability to dictate, modify or assess the controls at this entity.
Vodacom constitutes, 0.7 percent and 0.9 percent of net and total assets, respectively,
4.8 percent of revenues, and 4.6 percent profit of net loss of the consolidated
financial statement amounts as of and for the year ended 31 March 2007.Accordingly, our audit did not include the internal control over financial reporting
at Vodafone Turkey or Vodacom. The Groups management is responsible for
maintaining effective internal control over financial reporting and for its assessment
of the effectiveness of internal control over financial reporting. Our responsibility
is to express an opinion on managements assessment and an opinion on the
effectiveness of the Groups internal control over financial reporting based
on our audit. We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial
reporting, evaluating managements assessment, testing and evaluating the
design and operating effectiveness of internal control, and performing such other
procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinions. A companys internal control over financial reporting is a process designed
by, or under the supervision of, the companys principal executive and principal
financial officers, or persons performing similar functions, and effected by
the companys board of directors, management, and other personnel 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 (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) 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 authorisations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorised
acquisition, use, or disposition of the companys assets that could have
a material effect on the financial statements. Because of the inherent limitations of internal control over financial reporting,
including the possibility of collusion or improper management override of controls,
material misstatements due to error or fraud may not be prevented or detected
on a timely basis. Also, projections of any evaluation of the effectiveness of
the internal control over financial reporting to future periods are subject to
the risk that the controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.


In our opinion, managements assessment that the Group maintained effective
internal control over financial reporting as of 31 March 2007 is fairly stated,
in all material respects, based on the criteria
established in Internal Control  Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission. Also in our opinion,
the Group maintained, in all material respects, effective internal control over
financial reporting as of 31 March 2007, based on the criteria established in
Internal Control  Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated financial statements
as of and for the year ended 31 March 2007 of the Group and our report dated
29 May 2007 expressed an unqualified opinion on those financial statements and
included an explanatory paragraph relating to the nature and effect of differences
between International Financial Reporting Standards and accounting principles
generally accepted in the United States of America.  Deloitte & Touche LLPChartered Accountants and Registered Auditors
London
United Kingdom
29 May 2007




|Vodafone Group Plc Annual Report
        2007 | 89
|--------------------------------------------- | --

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Contents
PageReport
	      of the Independent Registered Public Accounting Firm to the Members
    of Vodafone Group Plc
91Consolidated Financial Statements Consolidated
      Income Statement for the years ended 31 March
92 Consolidated
	      Statement of Recognised Incomeand
      Expense for the years ended 31 March
92 Consolidated
      Balance Sheet at 31 March
93 Consolidated
      Cash Flow Statement for the years ended 31 March
94Notes to the Consolidated Financial
    Statements:
951.
Basis of preparation
952.
Significant accounting policies
953.
Segmental analysis
1004.
Operating (loss)/profit
1025.
Investment income and financing costs
1036.
Taxation
1047.
Equity dividends
1068.
(Loss)/earnings per share
1079.
Intangible assets
10810.
Impairment
10911.
Property, plant and equipment
11112.
Principal subsidiary undertakings
11213.
Investments in joint ventures
11314.
Investments in associated undertakings
11415.
Other investments
11416.
Inventory
11517.
Trade and other receivables
11518.
Cash and cash equivalents
11619.
Called up share capital
11620.
Share-based payments
11721.
Transactions with equity shareholders
12022.
Movements in
      accumulated other recognised                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        income and expense
12023.
Movements in retained losses
12024.
Borrowings
12125.
Post employment benefits
12626.
Provisions
12927.
Trade and other payables
12928.
Acquisitions
13029.
Discontinued operations and disposals
13130.
Commitments
13331.
Contingent liabilities
13432.
Reconciliation of net cash flows to operating activities
13533.
Directors and key management compensation
13534.
Employees
13635.
Subsequent events
13636.
Related party transactions
13737.
Financial information of joint ventures and associatedundertakings
13738.
US GAAP information
13839.
New accounting standards
142


PageCompany
        Financial Statements of Vodafone Group Plc at 31 March
      143Notes
        to the Company Financial Statements
      1441.
      Basis of
        preparation
      1442.
      Significant
        accounting policies
      1443.
      Fixed assets
      1454.
      Debtors
      1455.
      Creditors
      1466.
      Share capital
      1467.
      Share based
        payments
      1478.
      Reserves
          and reconciliation of movements in equityshareholders funds
      1479.
      Equity dividends
      14810.
      Contingent
        liabilities
      148Independent
        Auditors Report to the Members of Vodafone Group Plc
      149Separate
        financial statements required by rule 3-09 of Regulation S-X
      A-1Report of Independent Registered Public Accounting Firm

      A-25




|90 | Vodafone Group PlcAnnual
        Report 2007
|-- | --------------------------------------------

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| | Financials
| | ----------
| |           



Report of Independent
  Registered Public Accounting Firm to the Members of Vodafone Group Plc

We have audited the Consolidated Financial
    Statements of Vodafone Group Plc which comprise the consolidated balance
    sheet at 31 March 2007 and 2006, the consolidated income statement, the consolidated
    cash flow statement, the consolidated statement of recognised income and
    expenses for each of the three years in the period ended 31 March 2007 and
    the related notes numbered 1 to 39. These Consolidated Financial Statements
    have been prepared under the
accounting policies set out therein. We have also audited the information in
    the directors remuneration report that is described as having been
  audited. We have reported separately on the individual Company Financial Statements of
Vodafone Group Plc for the year ended 31 March 2007. Respective Responsibilities of Directors and AuditorsThe
directors responsibilities for preparing the annual report, the directors remuneration report and the Consolidated Financial Statements in accordance with applicable law and International Financial
Reporting Standards (IFRS) as adopted for use in the European Union are set out in the statement of directors responsibilities. Our responsibility is to audit the Consolidated Financial Statements and the
part of the directors remuneration report described as having been audited
in accordance with relevant United Kingdom legal and regulatory requirements
and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the Consolidated FinancialStatements
give a true and fair view in accordance with the relevant financial reporting
framework and whether the
Consolidated Financial Statements and the part of the
directors remuneration report described as having been audited have been
properly prepared in accordance with the Companies Act 1985 and Article 4 of
the IAS Regulation. We report to you whether in our opinion the information given
in the directors report is consistent with the Consolidated Financial Statements.
We also report to you if we have not received all the information and explanations
we require for our audit, or if information specified by law regarding directors transactions
with the Company and other
members of the Group is not disclosed. We also report to you if, in our opinion, the Company has not complied with any
of the four directors remuneration disclosure requirements specified for
our review by the Listing Rules of the Financial Services Authority. These comprise
the amount of each element in the remuneration package and information on share
options, details of long term incentive schemes, and money purchase and defined
benefit schemes. We give a statement, to the extent possible, of details of any
non-compliance. We review whether the corporate governance statement
reflects theCompanys compliance
with the nine provisions of the 2003 FRC Combined Code specified for our review
by the Listing
Rules of the Financial Services Authority, and we report if it does not. We are
not required to consider whether the boards statement on internal control
covers all risks and controls, or form an opinion on the effectiveness of the
Groups
corporate governance procedures or its risk and control procedures. We read the directors report and the other information contained in the
annual report for the above year as described in the contents section including
the unaudited part of the directors remuneration report and we consider
the implications for our report if we become aware of any apparent misstatements
or material inconsistencies with the Consolidated Financial Statements. Basis of Audit OpinionWe
    conducted our audit in accordance with International Standards on Auditing
    (UK and Ireland) issued by the Auditing Practices Board
      and with the standards of the Public Company Accounting Oversight Board
    (United States). An audit includes examination, on a test basis, of evidence
    relevant
      to the amounts and disclosures in the Consolidated Financial Statements
    and the part of the directors remuneration report described as having
    been audited. It also includes an assessment of the significant estimates
    and
      judgements made by the directors in the preparation of the Consolidated
  Financial


Statements, and of whether the accounting policies are appropriate to the Groups
circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations
which we considered necessary in order to provide us with sufficient evidence
to give reasonable assurance that the Consolidated Financial Statements and the
part of the directors remuneration report described as having been audited
are free from material misstatement, whether caused by fraud or other irregularity
or error. In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the Consolidated Financial Statements and the
part of the directors remuneration report described as having been audited. Opinions UK opinionIn our opinion: •
    the Consolidated Financial Statements give a true and fair view, in accordance with IFRS as adopted for use in the European Union, of the state of the Groups affairs as at 31 March 2007 and of its
    loss for the year then ended;•
    the Consolidated Financial Statements and the part
    of the directors remuneration report described as having been audited have been properly prepared in accordance with the Companies Act 1985 and Article 4 of the IAS Regulation; and•
    the information given in the directors report
    is consistent with the Consolidated Financial Statements. As explained in note 1 of the Consolidated Financial Statements, the Group, in addition to complying with its legal obligation to comply with IFRS as adopted for use in the European Union, has also complied with the
IFRS as issued by the International Accounting Standards Board. Accordingly, in our opinion the Consolidated Financial Statements give a true and fair view, in accordance with IFRS, of the state of the Groups affairs as at 31 March 2007 and of
its loss for the year then ended. US opinionIn our opinion the Consolidated Financial
Statements present fairly, in all material respects, the consolidated financial
position of the Group at31 March 2007
and 2006 and the consolidated results of its operations and cash flows for each
of the three years in the period ended 31 March 2007 in conformity with IFRS
as adopted for use in the European Union and as issued by the International Accounting
Standards Board. IFRS vary in significant respects from the accounting principles generally accepted
in the United States of America. Information relating to the nature and effect
of such differences is presented in note 38 to the
Consolidated Financial Statements. We have also audited, in accordance with the standards of the Public Company
Oversight Board (United States), the effectiveness of the Groups internal
control over financial reporting as of 31 March 2007, based on the criteria established
in the Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Our report including our opinions on
managements assessment of the Groups internal control over financial
reporting and on the effectiveness of the Groups internal control over
financial reporting is set out on page 90.  Deloitte & Touche LLPChartered Accountants and Registered Auditors 
London 
United Kingdom29 May 2007




|Vodafone Group Plc Annual Report
        2007 | 91
|--------------------------------------------- | --

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Consolidated Income Statement
  for the years ended 31 March

|                                                                  |       |  | 2007    |    | 2007    |    | 2006    |    | 2005    |  
|----------------------------------------------------------------- | ----- |  | ------- | -- | ------- | -- | ------- | -- | ------- | -
|                                                                  | Note  |  | $m      |    | £m      |    | £m      |    | £m      |  
|                                                                  |       |  |         |    |         |    |         |    |         |  
|Revenue                                                           | 3     |  | 61,228  |    | 31,104  |    | 29,350  |    | 26,678  |  
|Cost of sales                                                     |       |  | (36,860 | )  | (18,725 | )  | (17,070 | )  | (15,800 | )
|                                                                  |       |  |         |    |         |    |         |    |         |  
|Gross profit                                                      |       |  | 24,368  |    | 12,379  |    | 12,280  |    | 10,878  |  
|Selling and distribution expenses                                 |       |  | (4,205  | )  | (2,136  | )  | (1,876  | )  | (1,649  | )
|Administrative expenses                                           |       |  | (6,765  | )  | (3,437  | )  | (3,416  | )  | (2,856  | )
|Share of result in associated undertakings                        | 14    |  | 5,370   |    | 2,728   |    | 2,428   |    | 1,980   |  
|Impairment losses                                                 | 10    |  | (22,835 | )  | (11,600 | )  | (23,515 | )  | (475    | )
|Other income and expense                                          | 29    |  | 988     |    | 502     |    | 15      |    |        |  
|                                                                  |       |  |         |    |         |    |         |    |         |  
|Operating (loss)/profit                                           | 3,4   |  | (3,079  | )  | (1,564  | )  | (14,084 | )  | 7,878   |  
|Non-operating income and expense                                  |       |  | 8       |    | 4       |    | (2      | )  | (7      | )
|Investment income                                                 | 5     |  | 1,553   |    | 789     |    | 353     |    | 294     |  
|Financing costs                                                   | 5     |  | (3,173  | )  | (1,612  | )  | (1,120  | )  | (880    | )
|                                                                  |       |  |         |    |         |    |         |    |         |  
|(Loss)/profit before taxation                                     |       |  | (4,691  | )  | (2,383  | )  | (14,853 | )  | 7,285   |  
|Income tax expense                                                | 6     |  | (4,770  | )  | (2,423  | )  | (2,380  | )  | (1,869  | )
|                                                                  |       |  |         |    |         |    |         |    |         |  
|(Loss)/profit for the financial year from continuing operations   |       |  | (9,461  | )  | (4,806  | )  | (17,233 | )  | 5,416   |  
|(Loss)/profit for the financial year from discontinued operations | 29    |  | (966    | )  | (491    | )  | (4,588  | )  | 1,102   |  
|                                                                  |       |  |         |    |         |    |         |    |         |  
|(Loss)/profit for the financial year                              |       |  | (10,427 | )  | (5,297  | )  | (21,821 | )  | 6,518   |  
|                                                                  |       |  |         |    |         |    |         |    |         |  
|Attributable to:                                                  |       |  |         |    |         |    |         |    |         |  
|Equity shareholders                                               |       |  | (10,681 | )  | (5,426  | )  | (21,916 | )  | 6,410   |  
|Minority interests                                                |       |  | 254     |    | 129     |    | 95      |    | 108     |  
|                                                                  |       |  |         |    |         |    |         |    |         |  
|                                                                  |       |  | (10,427 | )  | (5,297  | )  | (21,821 | )  | 6,518   |  
|                                                                  |       |  |         |    |         |    |         |    |         |  
|Basic (loss)/earnings per share                                   |       |  |         |    |         |    |         |    |         |  
|(Loss)/profit from continuing operations                          | 8     |  | (17.60  | )¢ | (8.94   | )p | (27.66  | )p | 8.12    | p
|(Loss)/profit from discontinued operations                        | 8, 29 |  | (1.77   | )¢ | (0.90   | )p | (7.35   | )p | 1.56    | p
|                                                                  |       |  |         |    |         |    |         |    |         |  
|(Loss)/profit for the financial year                              | 8     |  | (19.37  | )¢ | (9.84   | )p | (35.01  | )p | 9.68    | p
|                                                                  |       |  |         |    |         |    |         |    |         |  
|Diluted (loss)/earnings per share                                 |       |  |         |    |         |    |         |    |         |  
|(Loss)/profit from continuing operations                          | 8     |  | (17.60  | )¢ | (8.94   | )p | (27.66  | )p | 8.09    | p
|(Loss)/profit from discontinued operations                        | 8, 29 |  | (1.77   | )¢ | (0.90   | )p | (7.35   | )p | 1.56    | p
|                                                                  |       |  |         |    |         |    |         |    |         |  
|(Loss)/profit for the financial year                              | 8     |  | (19.37  | )¢ | (9.84   | )p | (35.01  | )p | 9.65    | p
|                                                                  |       |  |         |    |         |    |         |    |         |  

Consolidated Statement of Recognised Income and Expense for the years ended 31 March

|                                                                        |      |  | 2007    |   | 2007   |   | 2006    |   | 2005  |  
|----------------------------------------------------------------------- | ---- |  | ------- | - | ------ | - | ------- | - | ----- | -
|                                                                        | Note |  | $m      |   | £m     |   | £m      |   | £m    |  
|                                                                        |      |  |         |   |        |   |         |   |       |  
|Gains on revaluation of available-for-sale investments, net of tax      | 22   |  | 4,150   |   | 2,108  |   | 705     |   | 106   |  
|Exchange differences on translation of foreign operations, net of tax   | 22   |  | (7,488  | ) | (3,804 | ) | 1,494   |   | 1,488 |  
|Actuarial gains/(losses) on defined benefit pension schemes, net of tax | 22   |  | 98      |   | 50     |   | (30     | ) | (79   | )
|Revaluation gain                                                        | 22   |  |        |   |       |   | 112     |   |      |  
|Transfer to the income statement on disposal of foreign operations      | 22   |  | 1,650   |   | 838    |   | 36      |   |      |  
|                                                                        |      |  |         |   |        |   |         |   |       |  
|Net (expense)/income recognised directly in equity                      |      |  | (1,590  | ) | (808   | ) | 2,317   |   | 1,515 |  
|(Loss)/profit for the financial year                                    | 23   |  | (10,427 | ) | (5,297 | ) | (21,821 | ) | 6,518 |  
|                                                                        |      |  |         |   |        |   |         |   |       |  
|Total recognised income and expense relating to the year                |      |  | (12,017 | ) | (6,105 | ) | (19,504 | ) | 8,033 |  
|                                                                        |      |  |         |   |        |   |         |   |       |  
|Attributable to:                                                        |      |  |         |   |        |   |         |   |       |  
|Equity shareholders                                                     |      |  | (12,224 | ) | (6,210 | ) | (19,607 | ) | 7,958 |  
|Minority interests                                                      |      |  | 207     |   | 105    |   | 103     |   | 75    |  
|                                                                        |      |  |         |   |        |   |         |   |       |  
|                                                                        |      |  | (12,017 | ) | (6,105 | ) | (19,504 | ) | 8,033 |  
|                                                                        |      |  |         |   |        |   |         |   |       |  

The accompanying notes are an integral part of these Consolidated Financial Statements.

The unaudited US dollar amounts are prepared on the basis set out in note 1.



|92 | Vodafone Group PlcAnnual
        Report 2007
|-- | --------------------------------------------

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| | Financials
| | ----------
| |           



Consolidated Balance Sheet
  at 31 March

|                                                     |        |  | 2007     |   | 2007    |   | 2006    |  
|---------------------------------------------------- | ------ |  | -------- | - | ------- | - | ------- | -
|                                                     | Note   |  | $m       |   | £m      |   | £m      |  
|                                                     |        |  |          |   |         |   |         |  
|Non-current assets                                   |        |  |          |   |         |   |         |  
|Goodwill                                             | 9      |  | 79,856   |   | 40,567  |   | 52,606  |  
|Other intangible assets                              | 9      |  | 30,915   |   | 15,705  |   | 16,512  |  
|Property, plant and equipment                        | 11     |  | 26,465   |   | 13,444  |   | 13,660  |  
|Investments in associated undertakings               | 14     |  | 39,817   |   | 20,227  |   | 23,197  |  
|Other investments                                    | 15     |  | 11,565   |   | 5,875   |   | 2,119   |  
|Deferred tax assets                                  | 6      |  | 807      |   | 410     |   | 140     |  
|Post employment benefits                             | 25     |  | 161      |   | 82      |   | 19      |  
|Trade and other receivables                          | 17     |  | 972      |   | 494     |   | 361     |  
|                                                     |        |  |          |   |         |   |         |  
|                                                     |        |  | 190,558  |   | 96,804  |   | 108,614 |  
|                                                     |        |  |          |   |         |   |         |  
|Current assets                                       |        |  |          |   |         |   |         |  
|Inventory                                            | 16     |  | 567      |   | 288     |   | 297     |  
|Taxation recoverable                                 |        |  | 41       |   | 21      |   | 8       |  
|Trade and other receivables                          | 17     |  | 9,888    |   | 5,023   |   | 4,438   |  
|Cash and cash equivalents                            | 18     |  | 14,726   |   | 7,481   |   | 2,789   |  
|                                                     |        |  |          |   |         |   |         |  
|                                                     |        |  | 25,222   |   | 12,813  |   | 7,532   |  
|                                                     |        |  |          |   |         |   |         |  
|Assets included in disposal group held for sale      | 29     |  |         |   |        |   | 10,592  |  
|                                                     |        |  |          |   |         |   |         |  
|Total assets                                         |        |  | 215,780  |   | 109,617 |   | 126,738 |  
|                                                     |        |  |          |   |         |   |         |  
|                                                     |        |  |          |   |         |   |         |  
|Equity                                               |        |  |          |   |         |   |         |  
|Called up share capital                              | 19     |  | 8,213    |   | 4,172   |   | 4,165   |  
|Share premium account                                | 21     |  | 85,771   |   | 43,572  |   | 52,444  |  
|Own shares held                                      | 21     |  | (15,841  | ) | (8,047  | ) | (8,198  | )
|Additional paid-in capital                           | 21     |  | 197,214  |   | 100,185 |   | 100,152 |  
|Capital redemption reserve                           | 21     |  | 17,976   |   | 9,132   |   | 128     |  
|Accumulated other recognised income and expense      | 22     |  | 6,508    |   | 3,306   |   | 4,090   |  
|Retained losses                                      | 23     |  | (167,820 | ) | (85,253 | ) | (67,356 | )
|                                                     |        |  |          |   |         |   |         |  
|Total equity shareholders funds                     |        |  | 132,021  |   | 67,067  |   | 85,425  |  
|Minority interests                                   |        |  | 445      |   | 226     |   | (113    | )
|                                                     |        |  |          |   |         |   |         |  
|Total equity                                         |        |  | 132,466  |   | 67,293  |   | 85,312  |  
|                                                     |        |  |          |   |         |   |         |  
|Non-current liabilities                              |        |  |          |   |         |   |         |  
|Long term borrowings                                 | 24     |  | 35,035   |   | 17,798  |   | 16,750  |  
|Deferred tax liabilities                             | 6      |  | 9,106    |   | 4,626   |   | 5,670   |  
|Post employment benefits                             | 25     |  | 242      |   | 123     |   | 120     |  
|Provisions                                           | 26     |  | 583      |   | 296     |   | 265     |  
|Trade and other payables                             | 27     |  | 1,053    |   | 535     |   | 566     |  
|                                                     |        |  |          |   |         |   |         |  
|                                                     |        |  | 46,019   |   | 23,378  |   | 23,371  |  
|                                                     |        |  |          |   |         |   |         |  
|Current liabilities                                  |        |  |          |   |         |   |         |  
|Short term borrowings:                               |        |  |          |   |         |   |         |  
|Third parties                                        | 24     |  | 7,825    |   | 3,975   |   | 3,070   |  
|Related parties                                      | 24, 36 |  | 1,657    |   | 842     |   | 378     |  
|Current taxation liabilities                         |        |  | 10,016   |   | 5,088   |   | 4,448   |  
|Trade and other payables                             | 27     |  | 17,272   |   | 8,774   |   | 7,477   |  
|Provisions                                           | 26     |  | 525      |   | 267     |   | 139     |  
|                                                     |        |  |          |   |         |   |         |  
|                                                     |        |  | 37,295   |   | 18,946  |   | 15,512  |  
|                                                     |        |  |          |   |         |   |         |  
|Liabilities included in disposal group held for sale | 29     |  |         |   |        |   | 2,543   |  
|                                                     |        |  |          |   |         |   |         |  
|Total equity and liabilities                         |        |  | 215,780  |   | 109,617 |   | 126,738 |  
|                                                     |        |  |          |   |         |   |         |  

The Consolidated Financial Statements were approved by the Board of directors on 29 May 2007 and were signed on its behalf by:

|                          |                                    
|------------------------- | -----------------------------------
|Arun SarinChief Executive | Andy HalfordChief Financial Officer

The accompanying notes are an integral part of these Consolidated Financial Statements.

The unaudited US dollar amounts are prepared on the basis set out in note 1.



|Vodafone Group Plc Annual Report
        2007 | 93
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Consolidated Cash Flow
  Statement for the years ended 31 March

|                                                                                               |       |  | 2007    |   | 2007   |   | 2006   |   | 2005   |  
|---------------------------------------------------------------------------------------------- | ----- |  | ------- | - | ------ | - | ------ | - | ------ | -
|                                                                                               | Note  |  | $m      |   | £m     |   | £m     |   | £m     |  
|                                                                                               |       |  |         |   |        |   |        |   |        |  
|Net cash flows from operating activities                                                       | 29,32 |  | 20,331  |   | 10,328 |   | 11,841 |   | 10,979 |  
|                                                                                               |       |  |         |   |        |   |        |   |        |  
|                                                                                               |       |  |         |   |        |   |        |   |        |  
|Cash flows from investing activities                                                           |       |  |         |   |        |   |        |   |        |  
|Purchase of interests in subsidiary
	    undertakings
and joint ventures, net of cash acquired |       |  | (5,522  | ) | (2,805 | ) | (4,186 | ) | (2,461 | )
|Disposal of interests in subsidiary undertakings, net of cash disposed                         |       |  | 13,321  |   | 6,767  |   | 599    |   | 444    |  
|Disposal of interests in associated undertakings                                               |       |  | 6,140   |   | 3,119  |   |       |   |       |  
|Purchase of intangible assets                                                                  |       |  | (1,770  | ) | (899   | ) | (690   | ) | (699   | )
|Purchase of property, plant and equipment                                                      |       |  | (7,152  | ) | (3,633 | ) | (4,481 | ) | (4,279 | )
|Disposal of property, plant and equipment                                                      |       |  | 67      |   | 34     |   | 26     |   | 68     |  
|Purchase of investments                                                                        |       |  | (339    | ) | (172   | ) | (57    | ) | (19    | )
|Disposal of investments                                                                        |       |  | 157     |   | 80     |   | 1      |   | 22     |  
|Loans to businesses sold or acquired businesses held for sale                                  |       |  |        |   |       |   |       |   | 110    |  
|Dividends received from associated undertakings                                                |       |  | 1,557   |   | 791    |   | 835    |   | 1,896  |  
|Dividends received from investments                                                            |       |  | 112     |   | 57     |   | 41     |   | 19     |  
|Interest received                                                                              |       |  | 1,035   |   | 526    |   | 319    |   | 339    |  
|                                                                                               |       |  |         |   |        |   |        |   |        |  
|Net cash flows from investing activities                                                       | 29    |  | 7,606   |   | 3,865  |   | (7,593 | ) | (4,560 | )
|                                                                                               |       |  |         |   |        |   |        |   |        |  
|                                                                                               |       |  |         |   |        |   |        |   |        |  
|Cash flows from financing activities                                                           |       |  |         |   |        |   |        |   |        |  
|Issue of ordinary share capital and reissue of treasury shares                                 |       |  | 380     |   | 193    |   | 356    |   | 115    |  
|Net movement in short term borrowings                                                          |       |  | 1,876   |   | 953    |   | 708    |   |       |  
|Proceeds from the issue of long term borrowings                                                |       |  | 10,138  |   | 5,150  |   | 5,256  |   |       |  
|Repayment of borrowings                                                                        |       |  | (3,860  | ) | (1,961 | ) | (1,371 | ) | (1,824 | )
|Loans repaid to associated undertakings                                                        |       |  |        |   |       |   | (47    | ) | (2     | )
|Purchase of treasury shares                                                                    |       |  | (85     | ) | (43    | ) | (6,457 | ) | (4,053 | )
|B share capital redemption                                                                     |       |  | (11,246 | ) | (5,713 | ) |       |   |       |  
|B share preference dividends paid                                                              |       |  | (6,478  | ) | (3,291 | ) |       |   |       |  
|Equity dividends paid                                                                          |       |  | (6,998  | ) | (3,555 | ) | (2,749 | ) | (1,991 | )
|Dividends paid to minority shareholders in subsidiary undertakings                             |       |  | (67     | ) | (34    | ) | (51    | ) | (32    | )
|Interest paid                                                                                  |       |  | (2,069  | ) | (1,051 | ) | (721   | ) | (744   | )
|                                                                                               |       |  |         |   |        |   |        |   |        |  
|Net cash flows used in financing activities                                                    | 29    |  | (18,409 | ) | (9,352 | ) | (5,076 | ) | (8,531 | )
|                                                                                               |       |  |         |   |        |   |        |   |        |  
|                                                                                               |       |  |         |   |        |   |        |   |        |  
|Net cash flows                                                                                 |       |  | 9,528   |   | 4,841  |   | (828   | ) | (2,112 | )
|                                                                                               |       |  |         |   |        |   |        |   |        |  
|Cash and cash equivalents at beginning of the financial year                                   | 18    |  | 5,772   |   | 2,932  |   | 3,726  |   | 5,809  |  
|Exchange (loss)/gain on cash and cash equivalents                                              |       |  | (620    | ) | (315   | ) | 34     |   | 29     |  
|                                                                                               |       |  |         |   |        |   |        |   |        |  
|Cash and cash equivalents at end of the financial year                                         | 18    |  | 14,680  |   | 7,458  |   | 2,932  |   | 3,726  |  
|                                                                                               |       |  |         |   |        |   |        |   |        |  

The accompanying notes are an integral part of these Consolidated Financial Statements.

The unaudited US dollar amounts are prepared on the basis set out in note 1.



|94 | Vodafone Group PlcAnnual
        Report 2007
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| | Financials
| | ----------
| |           



Notes to the Consolidated
  Financial Statements

1. Basis of preparationThe
Consolidated Financial Statements are prepared in accordance with International
Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB). The
Consolidated Financial Statements are also prepared in accordance with IFRS adopted
by the European Union (EU), the Companies Act 1985 and Article 4
of the EU IAS Regulations. IFRS and IFRS as adopted by the EU differ in certain
material
respects from US generally accepted accounting principles (US GAAP)  see
note 38. 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. For a discussion on the Groups critical accounting
estimates see Performance  Critical Accounting
Estimates elsewhere in this Annual Report. 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 or
in the period of the revision and future periods if the revision affects both
current and future periods. Amounts in the Consolidated Financial Statements are stated in pounds sterling
(£), the currency of the country in which the Company is incorporated. The
translation into US dollars of the Consolidated Financial Statements as of, and
for the year ended, 31 March 2007, is for convenience only and has been made
at the Noon Buying Rate for cable transfers as announced by the Federal Reserve
Bank of New York for customs purposes on 30 March 2007. This rate was $1.9685: £1.
This translation should not be construed as a representation that the sterling
amounts actually represented have been, or could be, converted into dollars at
this or any other rate. 2. Significant accounting policies Accounting conventionThe 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 consolidationThe Consolidated Financial Statements incorporate the financial statements of the Company and entities controlled, both unilaterally and jointly, by the Company. Accounting for subsidiariesA subsidiary is an entity controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its
activities. The results of subsidiaries acquired or disposed of during the year are included
in the 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. Minority interests in the net assets of consolidated subsidiaries are identified
separately from the Groups equity therein. Minority interests consist of
the amount of those interests at the date of the original business combination
and the minoritys share of changes in equity since the date of the combination.
Losses applicable to the minority in excess of the minoritys share of changes
in equity are allocated against the interests of the Group except to the extent
that the minority has a binding obligation and is able to make an additional
investment to cover the losses.


Business combinationsThe
acquisition of subsidiaries is accounted for using the purchase 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 in exchange for control of the acquiree, plus any costs directly
attributable to the business combination. The acquirees identifiable assets
and liabilities are recognised at their fair
values at the acquisition date. Goodwill arising on acquisition is recognised as an asset and initially measured
at cost, being the excess of the cost of the business combination over the Groups
interest in the net fair value of the identifiable assets, liabilities and contingent
liabilities recognised. The interest of minority shareholders in the acquiree is initially measured at
the minoritys proportion of the net fair value of the assets, liabilities
and contingent liabilities recognised. Previously held identifiable assets, liabilities and contingent liabilities of
the acquired entity are revalued to their fair value at the date of acquisition,
being the date at which the Group achieves control of the acquiree. The movement
in fair value is taken to the asset revaluation surplus. Interests in joint venturesA joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control; that is, when the strategic financial and operating policy decisions
relating to the activities require the unanimous consent of the parties sharing control. The Group reports its interests in jointly controlled entities using proportionate
consolidation. The Groups share of the assets, liabilities, income, expenses
and cash flows of jointly controlled entities are combined with the equivalent
items in the results 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. Investments in associatesAn 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 is not control or joint control over those
policies. 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
balance sheet at cost as adjusted for post-acquisition changes in the Groups
share of the net assets of the associate, less any impairment in the value of
the investment. Losses of an associate in excess of the Groups interest
in that associate are not recognised. Additional losses are provided for, and
a liability is recognised, only to the extent that the Group has incurred legal
or constructive obligations or made payments on behalf of the
associate. 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 recognised at the date of acquisition is recognised as goodwill.
The goodwill is included within the carrying amount of the investment. The licences of the Groups associated undertaking in the US, VerizonWireless, are indefinite lived assets
as they are subject to perfunctory renewal. Accordingly, they are not subject
to amortisation but are tested annually for impairment, or when indicators exist
that the carrying
value is not recoverable.




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        2007 | 95
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Notes to the Consolidated Financial Statementscontinued

2. Significant accounting policiescontinued Intangible
  assetsGoodwillGoodwill 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 held in the currency
  of the acquired entity and revalued to the closing rate at each balance sheet
  date. Goodwill is not subject to amortisation but is tested for impairment. 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. Licence and spectrum feesLicence and spectrum fees are stated
at cost less accumulated amortisation. The amortisation periods range from 3
to 25 years and 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
service of the network. Computer softwareComputer software licences are capitalised
on the basis of the costs incurred to acquire and bring into use the specific
software. These costs are amortised over their estimated useful lives, being
3 to 5
years. Costs that are directly associated with the production of identifiable and unique
software products controlled by the Group, and that are expected to generate
economic benefits exceeding costs beyond one year, are recognised as intangible
assets. Direct costs include software development employee costs and directly
attributable overheads. Software integral to a related item of hardware equipment is accounted for as
property, plant and equipment. Costs associated with maintaining computer software programmes are recognised
as an expense when they are incurred. Research and development expenditureExpenditure on research activities
is recognised as an expense in the period in which it is incurred. An internally-generated intangible asset arising from the Groups development
activity 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. Internally-generated intangible assets are
    amortised on a straight-line basis over their estimated useful lives. Where
    no internally-generated intangible asset can be recognised, development expenditure
    is charged to
the income statement in the period in which it is incurred.


Other intangible assetsOther intangible assets with finite lives are stated at cost less accumulated
amortisation and impairment losses. Amortisation is charged to the income statement
on a straight-line basis over the estimated useful lives of intangible assets
from the date they are available for use. The estimated useful lives are as follows: Brands
	1  10 yearsCustomer bases
	3  8 years Property, plant and equipmentLand and buildings held for use are stated in the balance sheet at their cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Equipment, fixtures and fittings 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 loss. 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 or valuation of assets, other
than land and properties under construction, using the straight-line method,
over their estimated useful lives, as follows: Freehold buildings
	25  50 yearsLeasehold premises
	the term of the leaseEquipment, fixtures and fittings •
    Network infrastructure
    3  25 years•
    Other
    3  10 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 the sales proceeds
and the carrying amount of the asset and is recognised in
the income statement. Impairment of assetsGoodwillGoodwill is not subject to amortisation but is tested for impairment annually or whenever there is an indication that the asset may be impaired. For the purpose of impairment testing, assets are grouped at the lowest levels
for which there are separately identifiable cash flows, known as cash-generating
units. If the recoverable amount of the cash-generating unit is less than the
carrying amount of the unit, the impairment loss is allocated first to reduce
the carrying amount of any goodwill allocated to the unit and then to the other
assets of the unit pro-rata on the basis of the carrying amount of each asset
in the unit. Impairment losses recognised for goodwill are not reversed in a
subsequent period. Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been adjusted.




|96 | Vodafone Group PlcAnnual
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| | Financials
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Property, plant and equipment
and finite lived intangible assetsAt each balance sheet 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. 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. A reversal of an impairment loss is recognised immediately in the income
statement. Disposal groups held for saleDisposal groups held for sale are stated at the lower of carrying value and fair value less costs to sell. RevenueGroup
revenue comprises revenue of the Company and its subsidiary undertakings plus
the Groups share of the revenue of its joint ventures and excludes sales
taxes and discounts. Revenue from mobile telecommunications comprises amounts charged to customers
in respect of monthly access charges, airtime usage, messaging, the provision
of other mobile telecommunications services, including data services and information
provision, fees for connecting users of other fixed line and mobile networks
to the Groups network, revenue from the sale of equipment, including handsets,
and revenue arising from Partner Market agreements. Access charges and airtime used by contract customers are invoiced and recorded
as part of a periodic billing cycle and recognised as revenue over the related
access period, with unbilled revenue resulting from services already provided
from the billing cycle date to the end of each period accrued and unearned revenue
from services provided in periods after each accounting period deferred. Revenue
from the sale of prepaid credit is deferred until such time as the customer uses
the airtime, or the credit expires. Other revenue from mobile telecommunications primarily comprises equipment sales,
which are recognised upon delivery to customers, and customer connection revenue.
Customer connection revenue is recognised together with the related equipment
revenue to the extent that the aggregate equipment and connection revenue does
not exceed the fair value of the equipment delivered to the customer. Any customer
connection revenue not recognised together with related equipment revenue is
deferred and recognised over the period in which services are expected to be
provided to the customer. Revenue from data services and information provision is recognised when the Group
has performed 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. Incentives are provided to customers in various forms and are usually offered
on signing a new contract or as part of a promotional offering. Where such incentives
are provided on connection of a new customer or the upgrade of an existing customer,
revenue representing the fair value of the incentive, relative to other deliverables
provided to the customer as part of the same arrangement, is deferred and recognised
in line with the Groups performance of its obligations relating to the
incentive.


For equipment sales made to intermediaries, revenue is recognised if the significant
risks associated with the equipment are transferred to the intermediary and the
intermediary has no general right of return. If the significant risks are not
transferred, revenue recognition is deferred until sale of the handset to an
end customer by the intermediary or the expiry of the right of return. Intermediaries are incentivised by the Group to connect new customers and upgrade
existing customers. Where such incentives are separable from the initial sale
of equipment to an intermediary, the incentive is accounted for as an expense
upon connection, or upgrade, of the customer. Revenue from other businesses primarily comprises amounts charged to customers
of the Groups fixed line businesses, mainly in respect of access charges
and line usage, invoiced and recorded as part of a periodic
billing cycle. In revenue arrangements including more than one deliverable, the arrangement
consideration is allocated to each deliverable based on the fair value of the
individual element. The Group generally determines the fair value of individual
elements based on prices at which the deliverable is regularly sold on a standalone
basis. InventoryInventory 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. LeasingLeases 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 balance sheet 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. Foreign currenciesIn
preparing the financial statements of the individual entities within the Group,
transactions in currencies other than the entitys functional currency are
recorded at the rates of exchange prevailing on the dates of the transactions.
At each balance sheet date, monetary items denominated in foreign currencies
are retranslated at the rates prevailing on the balance sheet date. Non-monetary
items carried at fair value that are denominated in foreign
currencies are retranslated at the rate prevailing on the date when fair value
was determined. Non-monetary items that are measured in terms of historical cost
in a foreign currency are not retranslated.




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        2007 | 97
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Notes to the Consolidated Financial Statementscontinued

2. Significant accounting policiescontinuedChanges in the fair value of monetary securities denominated in foreign currency classified as available for sale are analysed between translation differences and other changes in the carrying amount of the security.
Translation differences are recognised in the income statement and other changes in carrying amount are recognised in equity. Translation differences on non-monetary financial assets and liabilities are
reported as part of the fair value gain or loss. Translation differences on non-monetary
financial assets, such as investments in equity securities classified as available
for sale, are included in the fair value reserve in equity. For the purpose of presenting Consolidated Financial Statements, the assets and
liabilities of entities with a functional currency other than sterling are expressed
in sterling using exchange rates prevailing on the balance sheet date. Income
and expense items and cash flows are translated at the average exchange rates
for the period and exchange differences arising are recognised directly in equity.
Such translation differences are recognised in the income statement in the period
in which a foreign operation is disposed of. 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. Borrowing costsAll borrowing costs are recognised in the income statement in the period in which they are incurred. Post employment benefitsFor
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 balance sheet. During the year ended 31 March 2006,
the Group early adopted the amendment to IAS 19, Employee Benefits,
issued by the IASB on 16 December 2004 and applied it from 1 April 2004. Accordingly,
actuarial gains and losses are taken to the statement of recognised income and
expense. 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. 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
curtailment or settlements. The interest cost less the expected return 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. The values attributed to plan liabilities are assessed in accordance with the
advice of independent qualified actuaries. The Groups contributions to defined contribution pension plans are charged
to the income statement as they fall due. Cumulative actuarial gains and losses as at 1 April 2004, the date of transition
to IFRS, have been recognised in the balance sheet. TaxationIncome tax expense represents the sum of the current tax payable and deferred tax.


Current tax payable or recoverable is based on taxable profit for the year. Taxable
profit differs from profit as reported in the income statement because some items
of income or expense are taxable or deductible in different years or may never
be taxable or deductible. The Groups liability for current tax is calculated
using UK and foreign tax rates and laws that have been enacted or substantively
enacted by the balance sheet 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 balance sheet 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
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 goodwill or 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 recognised for taxable temporary differences arising
on investments in subsidiaries and associates, and interests in joint ventures,
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 balance sheet
date and reduced to the extent that it is no longer probable 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
balance sheet 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 directly to equity, in which case the tax is also recognised
directly in equity. Financial instrumentsFinancial
assets and financial liabilities, in respect of financial instruments, are recognised
on the Groups balance sheet when the Group becomes a party to the contractual
provisions of the
instrument. The Group has applied the requirements of IFRS to financial instruments for all periods presented and has not taken advantage of any exemptions available to first time adopters of IFRS in this respect. During the year
ended 31 March 2006, the Group early adopted IFRS 7, Financial Instruments: Disclosures, amendments to IAS 39, Financial Instruments: Recognition and Measurement and IFRS 4, Insurance Contracts, regarding
Financial Guarantee Contracts and amendments to IAS 39 regarding The Fair Value Option and Cash Flow Hedge Accounting of Forecast Intragroup Transactions and applied them from 1 April 2004. Trade receivablesTrade 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.




|98 | Vodafone Group PlcAnnual
        Report 2007
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| | Financials
| | ----------
| |           



Other investmentsOther 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 cost, including transaction costs. Other investments are classified as either held for trading or available-for-sale,
and are measured at subsequent reporting dates 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 costs method, is included in the
net profit or loss for the period. Cash and cash equivalentsCash and cash equivalents comprise cash on 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. Trade payablesTrade payables are not interest bearing and are stated at their nominal value. Financial liabilities and equity instrumentsFinancial 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 evidences 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. Capital market and bank borrowingsInterest 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 fair value hedge. Any difference between the proceeds net of transaction costs and the settlement or redemption of borrowings is recognised over the term of the borrowing. Equity instrumentsEquity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs. Derivative financial instruments and hedge accountingThe
  Groups activities expose it to the financial risks of changes in foreign
exchange rates and interest rates. 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. 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 re-measured to fair value at each reporting
date. The Group designates certain derivatives as
either: •
    hedges of the change of fair
          value of recognised assets
and liabilities (fair value 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.


Fair value hedgesThe
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 due
to the hedged risk, to the extent the hedge is effective. The ineffective portion
is recognised immediately in the income statement. Net investment hedgesExchange
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 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 recognised income and expense.
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. During the year ended 31 March 2006, the Group adopted the Amendments to
IAS 21, The Effect of Changes in Foreign Exchange Rates, with effect
from 1
April 2004, being the date of transition to IFRS for the Group. ProvisionsProvisions
are recognised when the Group has a present obligation as a result of a past
event and it is probable that the Group will be required to settle that obligation.
Provisions are measured at the directors best estimate of the expenditure
required to settle the obligation at the balance sheet date and are discounted
to present value where the effect is material. Share-based paymentsThe
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. Fair value is measured using a binomial pricing model which is calibrated using
a Black-Scholes framework. The expected life used in the model has been adjusted,
based on managements best estimate, for the effects of non-transferability,
exercise restrictions and behavioural considerations. Advertising costsExpenditure on advertising is written off in the year in which it is incurred.




|Vodafone Group Plc Annual Report
        2007 | 99
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Notes to the Consolidated Financial Statementscontinued

3. Segmental analysis

The Group has one business segment, being the supply of communications services and products. Primary segmental information is provided on the basis of geographic regions, being the basis on which the Group manages its
worldwide interests. The segmental analysis is provided for the Groups continuing operations. Revenue is determined by location of assets, which is not materially different from revenue by location of customer. Inter-segment sales are charged
at arms length prices. During the 2007 financial year, the Group changed the structure of its organisation. The results for all periods are presented in accordance with the new structure. See note 29 for information on discontinued operations.
Germany and Arcor together form the geographic segment of Germany.

|                                           |         |   |        |   |        |   |       |   |       |     | Other  |   | Total    |   | Eastern |   | Middle East,  |   |         |   | Associates |   | Associates |   | Total   |   | Common    |       |         |  
|------------------------------------------ | ------- | - | ------ | - | ------ | - | ----- | - | ----- | --- | ------ | - | -------- | - | ------- | - | ------------- | - | ------- | - | ---------- | - | ---------- | - | ------- | - | --------- | ----- | ------- | -
|                                           | Germany |   | Italy  |   | Spain  |   | UK    |   | Arcor | (1) | Europe |   |  Europe |   | Europe  |   | Africa & Asia |   | Pacific |   |  US       |   |  Other    |   |  EMAPA |   | Functions |       | Group   |  
|                                           | £m      |   | £m     |   | £m     |   | £m    |   | £m    |     | £m     |   | £m       |   | £m      |   | £m            |   | £m      |   | £m         |   | £m         |   | £m      |   | £m        |       | £m      |  
|                                           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|31 March 2007                              |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Service revenue                            | 5,156   |   | 4,083  |   | 4,062  |   | 4,681 |   | 1,419 |     | 4,018  |   | 23,419   |   | 2,392   |   | 2,332         |   | 1,245   |   |           |   |           |   | 5,969   |   |          |       | 29,388  |  
|Equipment
    and other revenue            | 287     |   | 162    |   | 438    |   | 443   |   | 22    |     | 257    |   | 1,609    |   | 85      |   | 233           |   | 154     |   |           |   |           |   | 472     |   |          |       | 2,081   |  
|                                           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Segment revenue                            | 5,443   |   | 4,245  |   | 4,500  |   | 5,124 |   | 1,441 |     | 4,275  |   | 25,028   |   | 2,477   |   | 2,565         |   | 1,399   |   |           |   |           |   | 6,441   |   |          |       | 31,469  |  
|                                           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Common functions                           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   | 168       |       | 168     |  
|Intra-region
    revenue                   | (123    | ) | (44    | ) | (106   | ) | (54   | ) | (27   | )   | (82    | ) | (436     | ) |        |   |              |   |        |   |           |   |           |   |        |   |          |       | (436    | )
|                                           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Regional revenue                           | 5,320   |   | 4,201  |   | 4,394  |   | 5,070 |   | 1,414 |     | 4,193  |   | 24,592   |   | 2,477   |   | 2,565         |   | 1,399   |   |           |   |           |   | 6,441   |   | 168       |       | 31,201  |  
|Less:
    Inter-region revenue             | (9      | ) | (5     | ) | (3     | ) | (9    | ) |      |     | (4     | ) | (30      | ) | (31     | ) | (9            | ) | (11     | ) |           |   |           |   | (51     | ) | (16       | )     | (97     | )
|                                           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Group revenue                              | 5,311   |   | 4,196  |   | 4,391  |   | 5,061 |   | 1,414 |     | 4,189  |   | 24,562   |   | 2,446   |   | 2,556         |   | 1,388   |   |           |   |           |   | 6,390   |   | 152       |       | 31,104  |  
|                                           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Operating (loss)/profit                    | (5,345  | ) | (3,325 | ) | 1,100  |   | 511   |   | 171   |     | 936    |   | (5,952   | ) | 184     |   | 694           |   | 159     |   | 2,080      |   | 1,150      |   | 4,267   |   | 121       |       | (1,564  | )
|Impairment losses                          | 6,700   |   | 4,900  |   |       |   |      |   |      |     |       |   | 11,600   |   |        |   |              |   |        |   |           |   |           |   |        |   |          |       | 11,600  |  
|Other items                                | (1      | ) |       |   |       |   |      |   |      |     |       |   | (1       | ) |        |   |              |   |        |   | (3         | ) | (508       | ) | (511    | ) | 7         |       | (505    | )
|                                           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Adjusted operating profit                  | 1,354   |   | 1,575  |   | 1,100  |   | 511   |   | 171   |     | 936    |   | 5,647    |   | 184     |   | 694           |   | 159     |   | 2,077      |   | 642        |   | 3,756   |   | 128       |       | 9,531   |  
|                                           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Non-current assets(2)                      | 16,279  |   | 13,754 |   | 12,327 |   | 8,551 |   | 829   |     | 7,328  |   | 59,068   |   | 6,347   |   | 3,160         |   | 1,379   |   |           |   |           |   | 10,886  |   | 5,989     |       | 75,943  |  
|Share
      of associated undertakings     |        |   |       |   |       |   |      |   |      |     | 8      |   | 8        |   |        |   |              |   |        |   | 17,486     |   | 2,697      |   | 20,183  |   | 36        |       | 20,227  |  
|Current assets(2)                          | 779     |   | 849    |   | 483    |   | 884   |   | 238   |     | 698    |   | 3,931    |   | 367     |   | 455           |   | 223     |   |           |   |           |   | 1,045   |   | 255       |       | 5,231   |  
|                                           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Total
    segment assets(2)                | 17,058  |   | 14,603 |   | 12,810 |   | 9,435 |   | 1,067 |     | 8,034  |   | 63,007   |   | 6,714   |   | 3,615         |   | 1,602   |   | 17,486     |   | 2,697      |   | 32,114  |   | 6,280     |       | 101,401 |  
|Unallocatednon-currentassets:              |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Deferred
    tax assets                    |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           | 410   |        
|Trade
    and other receivables            |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           | 224   |        
|Unallocated current assets:                |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |        
|Cash
      and cash equivalents            |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           | 7,481 |        
|Trade
    and other receivables            |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           | 80    |        
|Taxation
    recoverable                   |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           | 21    |        
|                                           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Total assets                               |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       | 109,617 |  
|                                           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Segment liabilities(2)                     | (827    | ) | (1,449 | ) | (1,000 | ) | (940  | ) | (376  | )   | (1,125 | ) | (5,717   | ) | (843    | ) | (886          | ) | (403    | ) |           |   |           |   | (2,132  | ) | (1,927    | )     | (9,776  | )
|Unallocated liabilities:                   |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Current
    taxation liabilities           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       | (5,088  | )
|Deferred
    tax liabilities               |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       | (4,626  | )
|Trade
    and other payables               |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       | (219    | )
|Short
    term borrowings                  |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       | (4,817  | )
|Long
    term borrowings                   |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       | (17,798 | )
|                                           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Total liabilities                          |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       | (42,324 | )
|                                           |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Other segment items:                       |         |   |        |   |        |   |       |   |       |     |        |   |          |   |         |   |               |   |         |   |            |   |            |   |         |   |           |       |         |  
|Capitalised fixed asset additions(3)       | 425     |   | 421    |   | 547    |   | 661   |   | 189   |     | 489    |   | 2,732    |   | 435     |   | 574           |   | 251     |   |           |   |           |   | 1,260   |   | 216       |       | 4,208   |  
|Expenditure on other intangible
    assets |        |   | 26     |   |       |   |      |   |      |     | 6      |   | 32       |   |        |   | 276           |   |        |   |           |   |           |   | 276     |   |          |       | 308     |  
|Depreciation and amortisation              | 1,063   |   | 556    |   | 449    |   | 930   |   | 144   |     | 586    |   | 3,728    |   | 349     |   | 272           |   | 194     |   |           |   |           |   | 815     |   | 568       |       | 5,111   |  
|Impairment
    of goodwill                 | 6,700   |   | 4,900  |   |       |   |      |   |      |     |       |   | 11,600   |   |        |   |              |   |        |   |           |   |           |   |        |   |          |       | 11,600  |  

|       |                                                                                                                                                                                                                                                                      
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Notes: |                                                                                                                                                                                                                                                                      
|(1)    | Within the Europe region, certain revenues
      relating to Arcor have been reclassified between service revenue and equipment
      and other revenue. All prior periods have been adjusted accordingly. The
      reclassification had no
effect on total revenue.
|(2)    | Excluding unallocated items.                                                                                                                                                                                                                                         
|(3)    | Includes additions to property,
    plant and equipment and computer software, included within intangible assets.                                                                                                                                                    



|100 | Vodafone Group PlcAnnual
        Report 2007
|--- | --------------------------------------------

---



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| | Financials
| | ----------
| |           



|                                                                  |         |   |        |   |        |   |       |   |          |   | Other  |   | Total    |   | Eastern |   | Middle East,  |   |         |   | Associates |  | Associates |   | Total   |   | Common    |   |         |  
|----------------------------------------------------------------- | ------- | - | ------ | - | ------ | - | ----- | - | -------- | - | ------ | - | -------- | - | ------- | - | ------------- | - | ------- | - | ---------- |  | ---------- | - | ------- | - | --------- | - | ------- | -
|                                                                  | Germany |   | Italy  |   | Spain  |   | UK    |   | Arcor(1) |   | Europe |   |  Europe |   | Europe  |   | Africa & Asia |   | Pacific |   |  US       |  |  Other    |   |  EMAPA |   | Functions |   | Group   |  
|                                                                  | £m      |   | £m     |   | £m     |   | £m    |   | £m       |   | £m     |   | £m       |   | £m      |   | £m            |   | £m      |   | £m         |  | £m         |   | £m      |   | £m        |   | £m      |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|31 March 2006                                                     |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Service revenue                                                   | 5,394   |   | 4,170  |   | 3,615  |   | 4,568 |   | 1,305    |   | 4,349  |   | 23,401   |   | 1,358   |   | 1,625         |   | 1,212   |   |           |  |           |   | 4,195   |   |          |   | 27,596  |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Equipment
    and other revenue                                   | 360     |   | 193    |   | 380    |   | 480   |   | 15       |   | 348    |   | 1,776    |   | 77      |   | 159           |   | 123     |   |           |  |           |   | 359     |   |          |   | 2,135   |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Segment revenue                                                   | 5,754   |   | 4,363  |   | 3,995  |   | 5,048 |   | 1,320    |   | 4,697  |   | 25,177   |   | 1,435   |   | 1,784         |   | 1,335   |   |           |  |           |   | 4,554   |   |          |   | 29,731  |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Common functions                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   | 145       |   | 145     |  
|Intra-region revenue                                              | (143    | ) | (39    | ) | (100   | ) | (50   | ) | (34      | ) | (78    | ) | (444     | ) |        |   |              |   |        |   |           |  |           |   |        |   |          |   | (444    | )
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Regional revenue                                                  | 5,611   |   | 4,324  |   | 3,895  |   | 4,998 |   | 1,286    |   | 4,619  |   | 24,733   |   | 1,435   |   | 1,784         |   | 1,335   |   |           |  |           |   | 4,554   |   | 145       |   | 29,432  |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Less: Inter-region revenue                                        | (9      | ) | (4     | ) | (2     | ) | (10   | ) |         |   | (3     | ) | (28      | ) | (14     | ) | (15           | ) | (14     | ) |           |  |           |   | (43     | ) | (11       | ) | (82     | )
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Group revenue                                                     | 5,602   |   | 4,320  |   | 3,893  |   | 4,988 |   | 1,286    |   | 4,616  |   | 24,705   |   | 1,421   |   | 1,769         |   | 1,321   |   |           |  |           |   | 4,511   |   | 134       |   | 29,350  |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Operating (loss)/profit                                           | (17,904 | ) | (1,928 | ) | 968    |   | 698   |   | 139      |   | 466    |   | (17,561  | ) | 176     |   | 523           |   | 140     |   | 1,732      |  | 683        |   | 3,254   |   | 223       |   | (14,084 | )
|Impairment losses                                                 | 19,400  |   | 3,600  |   |       |   |      |   |         |   | 515    |   | 23,515   |   |        |   |              |   |        |   |           |  |           |   |        |   |          |   | 23,515  |  
|Other items                                                       |        |   |       |   |       |   |      |   |         |   | (3     | ) | (3       | ) |        |   |              |   |        |   |           |  | (17        | ) | (17     | ) | (12       | ) | (32     | )
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Adjusted operating profit                                         | 1,496   |   | 1,672  |   | 968    |   | 698   |   | 139      |   | 978    |   | 5,951    |   | 176     |   | 523           |   | 140     |   | 1,732      |  | 666        |   | 3,237   |   | 211       |   | 9,399   |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Non-current
    assets(2)                                         | 24,360  |   | 19,422 |   | 12,596 |   | 8,743 |   | 754      |   | 7,653  |   | 73,528   |   | 3,922   |   | 4,390         |   | 1,299   |   |           |  |           |   | 9,611   |   | 1,907     |   | 85,046  |  
|Share of associated undertakings                                  |        |   |       |   |       |   |      |   |         |   | 7      |   | 7        |   |        |   |              |   |        |   | 17,898     |  | 5,255      |   | 23,153  |   | 37        |   | 23,197  |  
|Current assets(2)                                                 | 669     |   | 888    |   | 443    |   | 743   |   | 266      |   | 658    |   | 3,667    |   | 216     |   | 502           |   | 192     |   |           |  |           |   | 910     |   | 79        |   | 4,656   |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Total segment assets(2)                                           | 25,029  |   | 20,310 |   | 13,039 |   | 9,486 |   | 1,020    |   | 8,318  |   | 77,202   |   | 4,138   |   | 4,892         |   | 1,491   |   | 17,898     |  | 5,255      |   | 33,674  |   | 2,023     |   | 112,899 |  
|Unallocated non-current assets:                                   |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Deferred tax assets                                               |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   | 140     |  
|Trade and other receivables                                       |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   | 231     |  
|Unallocated current assets:                                       |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Cash and cash equivalents                                         |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   | 2,789   |  
|Trade and other receivables                                       |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   | 79      |  
|Taxation recoverable                                              |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   | 8       |  
|Assets
    included in disposal group for resale(3)               |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   | 10,592  |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Total assets                                                      |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   | 126,738 |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Segment liabilities(2)                                            | (753    | ) | (1,370 | ) | (914   | ) | (827  | ) | (362     | ) | (1,074 | ) | (5,300   | ) | (392    | ) | (880          | ) | (318    | ) |           |  |           |   | (1,590  | ) | (1,458    | ) | (8,348  | )
|Unallocated liabilities:                                          |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Current
    taxation liabilities                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   | (4,448  | )
|Deferred tax liabilities                                          |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   | (5,670  | )
|Trade
	        and other payables                                 |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   | (219    | )
|Short term borrowings                                             |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   | (3,448  | )
|Long term borrowings                                              |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   | (16,750 | )
|Liabilities
	        included in disposal
    group for resale(3) |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   | (2,543  | )
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Total liabilities                                                 |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   | (41,426 | )
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Other segment items:                                              |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|                                                                  |         |   |        |   |        |   |       |   |          |   |        |   |          |   |         |   |               |   |         |   |            |  |            |   |         |   |           |   |         |  
|Capitalised fixed
    asset additions(4)                          | 592     |   | 541    |   | 502    |   | 665   |   | 129      |   | 511    |   | 2,940    |   | 280     |   | 426           |   | 247     |   |           |  |           |   | 953     |   | 112       |   | 4,005   |  
|Expenditure on other intangible
	      assets                     |        |   | 1      |   |       |   | 11    |   |         |   | 4      |   | 16       |   |        |   |              |   |        |   |           |  |           |   |        |   |          |   | 16      |  
|Depreciation and amortisation                                     | 1,167   |   | 588    |   | 395    |   | 924   |   | 140      |   | 645    |   | 3,859    |   | 231     |   | 216           |   | 209     |   |           |  |           |   | 656     |   | 189       |   | 4,704   |  
|Impairment of goodwill                                            | 19,400  |   | 3,600  |   |       |   |      |   |         |   | 515    |   | 23,515   |   |        |   |              |   |        |   |           |  |           |   |        |   |          |   | 23,515  |  
|                                                                  |        

|       |                                                                                                                                                                                                                                                    
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Notes:
|(1)    | Within the Europe region, certain revenues relating to Arcor have been reclassified between service revenue and equipment and other revenue. All prior periods have been adjusted accordingly. The reclassification had no
effect on total revenue.
|(2)    | Excluding unallocated items.                                                                                                                                                                                                                       
|(3)    | See note 29 for information on discontinued operations.                                                                                                                                                                                            
|(4)    | Includes additions to property, plant and equipment and computer software, included within intangible assets.                                                                                                                                      



|Vodafone Group Plc Annual Report
        2007 | 101
|--------------------------------------------- | ---

---



Back to Contents

Notes to the Consolidated Financial Statementscontinued

3. Segmental analysiscontinued

|                                            |         |   |       |   |       |   |       |   |         |   |        |   |          |   |         |   | Middle       |   |         |   |            |  |            |  |         |   |           |   |            |   | Discon-    |  
|------------------------------------------- | ------- | - | ----- | - | ----- | - | ----- | - | ------- | - | ------ | - | -------- | - | ------- | - | ------------ | - | ------- | - | ---------- |  | ---------- |  | ------- | - | --------- | - | ---------- | - | ---------- | -
|                                            |         |   |       |   |       |   |       |   |         |   | Other  |   | Total    |   | Eastern |   | East, Africa |   |         |   | Associates |  | Associates |  | Total   |   | Common    |   | Continuing |   | tinued     |  
|                                            | Germany |   | Italy |   | Spain |   | UK    |   | Arcor(1 | ) | Europe |   |  Europe |   | Europe  |   | & Asia       |   | Pacific |   |  US       |  |  Other    |  |  EMAPA |   | Functions |   | operations |   | operations |  
|                                            | £m      |   | £m    |   | £m    |   | £m    |   | £m      |   | £m     |   | £m       |   | £m      |   | £m           |   | £m      |   | £m         |  | £m         |  | £m      |   | £m        |   | £m         |   | £m         |  
|                                            |         |   |       |   |       |   |       |   |         |   |        |   |          |   |         |   |              |   |         |   |            |  |            |  |         |   |           |   |            |   |            |  
|31 March 2005                               |         |   |       |   |       |   |       |   |         |   |        |   |          |   |         |   |              |   |         |   |            |  |            |  |         |   |           |   |            |   |            |  
|Service revenue                             | 5,320   |   | 4,091 |   | 2,963 |   | 4,498 |   | 1,090   |   | 4,258  |   | 22,220   |   | 536     |   | 1,131        |   | 1,042   |   |           |  |           |  | 2,709   |   |          |   | 24,929     |   | 5,610      |  
|Equipment and other revenue                 | 364     |   | 182   |   | 298   |   | 567   |   | 5       |   | 386    |   | 1,802    |   | 37      |   | 137          |   | 104     |   |           |  |           |  | 278     |   |          |   | 2,080      |   | 1,786      |  
|                                            |         |   |       |   |       |   |       |   |         |   |        |   |          |   |         |   |              |   |         |   |            |  |            |  |         |   |           |   |            |   |            |  
|Segment revenue                             | 5,684   |   | 4,273 |   | 3,261 |   | 5,065 |   | 1,095   |   | 4,644  |   | 24,022   |   | 573     |   | 1,268        |   | 1,146   |   |           |  |           |  | 2,987   |   |          |   | 27,009     |   | 7,396      |  
|                                            |         |   |       |   |       |   |       |   |         |   |        |   |          |   |         |   |              |   |         |   |            |  |            |  |         |   |           |   |            |   |            |  
|Common functions                            |         |   |       |   |       |   |       |   |         |   |        |   |          |   |         |   |              |   |         |   |            |  |            |  |         |   | 123       |   | 123        |   |            |  
|Intra-region revenue                        | (153    | ) | (32   | ) | (77   | ) | (40   | ) | (45     | ) | (61    | ) | (408     | ) |        |   |             |   |        |   |           |  |           |  |        |   | (2        | ) | (410       | ) | (1         | )
|                                            |         |   |       |   |       |   |       |   |         |   |        |   |          |   |         |   |              |   |         |   |            |  |            |  |         |   |           |   |            |   |            |  
|Regional revenue                            | 5,531   |   | 4,241 |   | 3,184 |   | 5,025 |   | 1,050   |   | 4,583  |   | 23,614   |   | 573     |   | 1,268        |   | 1,146   |   |           |  |           |  | 2,987   |   | 121       |   | 26,722     |   | 7,395      |  
|Less: Inter-region revenue                  | (5      | ) | (3    | ) | (1    | ) | (8    | ) | (2      | ) | (2     | ) | (21      | ) | (5      | ) | (8           | ) | (6      | ) |           |  |           |  | (19     | ) | (4        | ) | (44        | ) |           |  
|                                            |         |   |       |   |       |   |       |   |         |   |        |   |          |   |         |   |              |   |         |   |            |  |            |  |         |   |           |   |            |   |            |  
|Group revenue                               | 5,526   |   | 4,238 |   | 3,183 |   | 5,017 |   | 1,048   |   | 4,581  |   | 23,593   |   | 568     |   | 1,260        |   | 1,140   |   |           |  |           |  | 2,968   |   | 117       |   | 26,678     |   | 7,395      |  
|                                            |         |   |       |   |       |   |       |   |         |   |        |   |          |   |         |   |              |   |         |   |            |  |            |  |         |   |           |   |            |   |            |  
|                                            |         |   |       |   |       |   |       |   |         |   |        |   |          |   |         |   |              |   |         |   |            |  |            |  |         |   |           |   |            |   |            |  
|Operating profit/(loss):                    | 1,473   |   | 1,694 |   | 775   |   | 779   |   | 64      |   | 533    |   | 5,318    |   | 90      |   | 375          |   | 200     |   | 1,354      |  | 626        |  | 2,645   |   | (85       | ) | 7,878      |   | 664        |  
|Impairment losses                           |        |   |      |   |      |   |      |   |        |   | 475    |   | 475      |   |        |   |             |   |        |   |           |  |           |  |        |   |          |   | 475        |   |           |  
|                                            |         |   |       |   |       |   |       |   |         |   |        |   |          |   |         |   |              |   |         |   |            |  |            |  |         |   |           |   |            |   |            |  
|Adjusted operating profit                   | 1,473   |   | 1,694 |   | 775   |   | 779   |   | 64      |   | 1,008  |   | 5,793    |   | 90      |   | 375          |   | 200     |   | 1,354      |  | 626        |  | 2,645   |   | (85       | ) | 8,353      |   | 664        |  
|                                            |         |   |       |   |       |   |       |   |         |   |        |   |          |   |         |   |              |   |         |   |            |  |            |  |         |   |           |   |            |   |            |  
|                                            |         |   |       |   |       |   |       |   |         |   |        |   |          |   |         |   |              |   |         |   |            |  |            |  |         |   |           |   |            |   |            |  
|Other segment items:                        |         |   |       |   |       |   |       |   |         |   |        |   |          |   |         |   |              |   |         |   |            |  |            |  |         |   |           |   |            |   |            |  
|Capitalised fixed asset additions(2)        | 827     |   | 538   |   | 490   |   | 789   |   | 112     |   | 712    |   | 3,468    |   | 140     |   | 235          |   | 246     |   |           |  |           |  | 621     |   | 136       |   | 4,225      |   | 885        |  
|Expenditure on other intangible
	    assets |        |   | 8     |   |      |   |      |   |        |   |       |   | 8        |   | 31      |   | 87           |   |        |   |           |  |           |  | 118     |   |          |   | 126        |   |           |  
|Depreciation and amortisation               | 1,154   |   | 587   |   | 354   |   | 932   |   | 153     |   | 676    |   | 3,856    |   | 87      |   | 160          |   | 180     |   |           |  |           |  | 427     |   | 18        |   | 4,301      |   | 1,214      |  
|Impairment of goodwill                      |        |   |      |   |      |   |      |   |        |   | 475    |   | 475      |   |        |   |             |   |        |   |           |  |           |  |        |   |          |   | 475        |   |           |  

|       |                                                                                                                                                                                                                                                     | 
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Notes:
|(1)    | Within the Europe region, certain revenues relating to Arcor have been reclassified between service revenue and equipment and other revenue. All prior periods have been adjusted accordingly. The reclassification had no
effect on total revenue.
|(2)    | Includes additions to property, plant and equipment and computer software, included within intangible assets.                                                                                                                                      

4. Operating (loss)/profitOperating (loss)/profit has been arrived at after charging/(crediting):

|                                                                                                               | 2007   |   | 2006   |   | 2005  |  
|-------------------------------------------------------------------------------------------------------------- | ------ | - | ------ | - | ----- | -
|                                                                                                               | £m     |   | £m     |   | £m    |  
|                                                                                                               |        |   |        |   |       |  
|Net foreign exchange losses/(gains)                                                                            | 6      |   |       |   | (10   | )
|Depreciation of property, plant and equipment (note 11):                                                       |        |   |        |   |       |  
|Owned assets                                                                                                   | 2,994  |   | 3,069  |   | 2,871 |  
|Leased assets                                                                                                  | 17     |   | 10     |   | 14    |  
|Amortisation of intangible assets (note 9)                                                                     | 2,100  |   | 1,625  |   | 1,416 |  
|Impairment of goodwill                                                                                         | 11,600 |   | 23,515 |   | 475   |  
|Research and development expenditure                                                                           | 222    |   | 206    |   | 198   |  
|Advertising costs                                                                                              | 865    |   | 670    |   | 660   |  
|Staff costs (note 34)                                                                                          | 2,466  |   | 2,310  |   | 2,185 |  
|Operating lease rentals payable:                                                                               |        |   |        |   |       |  
|Plant and machinery                                                                                            | 35     |   | 35     |   | 37    |  
|Other assets including fixed line rentals                                                                      | 984    |   | 933    |   | 873   |  
|Loss on disposal of property, plant and equipment                                                              | 43     |   | 69     |   | 68    |  
|Own costs capitalised
    attributable to the construction or acquisition
    of property, plant and equipment | (244   | ) | (256   | ) | (250  | )
|                                                                                                               |        |   |        |   |       |  

The total remuneration of the Groups auditor, Deloitte & Touche LLP, and its affiliates for services provided to the Groups subsidiary undertakings is analysed below:

|                                             | 2007 |  | 2006 |  | 2005 | 
|-------------------------------------------- | ---- |  | ---- |  | ---- | 
|                                             | £m   |  | £m   |  | £m   | 
|                                             |      |  |      |  |      | 
|Audit fees:                                  |      |  |      |  |      | 
|Parent company                               | 1    |  | 1    |  | 1    | 
|Subsidiary undertakings                      | 4    |  | 3    |  | 3    | 
|                                             |      |  |      |  |      | 
|                                             | 5    |  | 4    |  | 4    | 
|Fees for statutory and regulatory filings(1) | 2    |  |     |  |     | 
|                                             |      |  |      |  |      | 
|Audit and audit-related fees                 | 7    |  | 4    |  | 4    | 
|                                             |      |  |      |  |      | 
|Other fees:                                  |      |  |      |  |      | 
|Taxation                                     | 1    |  | 1    |  | 1    | 
|Corporate finance transactions               |     |  | 1    |  | 1    | 
|Other(2)                                     | 2    |  | 2    |  | 1    | 
|                                             |      |  |      |  |      | 
|                                             | 3    |  | 4    |  | 3    | 
|                                             |      |  |      |  |      | 
|Total fees                                   | 10   |  | 8    |  | 7    | 
|                                             |      |  |      |  |      | 

|      
|------
|Notes:
|(1)   
|(2)   



|102 | Vodafone Group PlcAnnual
        Report 2007
|--- | --------------------------------------------

---



Back to Contents

| | Financials
| | ----------
| |           



The total remuneration includes £nil (2006: £1 million, 2005: £1 million) in respect of the Groups discontinued operations in Japan.

In addition to the above, the Groups joint ventures and associated undertakings
paid fees totalling £2 million (2006: £2 million, 2005: £2 million)
and £4 million (2006: £4 million, 2005: £5 million), respectively,
to Deloitte & Touche LLP and its affiliates during the year.

Deloitte & Touche LLP and its affiliates have also received amounts totalling
less than £1 million in each of the last three years in respect of services
provided to pension schemes and charitable foundations
associated to the Group.

A description of the work performed by the Audit Committee in order to safeguard
auditor independence when non audit services are provided is set out in Governance  Corporate
Governance on page 72. In the year ended 31 March 2007, 2.6% of other fees
were approved in accordance with US SEC Regulation S-X Rule 2-01(c)(7)(i)(C).

5. Investment income and financing costs

|                                                            | 2007  |   | 2006  |   | 2005 |  
|----------------------------------------------------------- | ----- | - | ----- | - | ---- | -
|                                                            | £m    |   | £m    |   | £m   |  
|                                                            |       |   |       |   |      |  
|Investment income                                           |       |   |       |   |      |  
|Available-for-sale investments:                             |       |   |       |   |      |  
|Dividends received                                          | 57    |   | 41    |   | 19   |  
|Loans and receivables at amortised cost(1)                  | 452   |   | 153   |   | 201  |  
|Other(2)                                                    | 86    |   |      |   |     |  
|Fair value through the income statement (held for trading): |       |   |       |   |      |  
|Derivatives  foreign
    exchange contracts                | 160   |   | 159   |   | 74   |  
|Equity put rights and similar arrangements(3)               | 34    |   |      |   |     |  
|                                                            |       |   |       |   |      |  
|                                                            | 789   |   | 353   |   | 294  |  
|                                                            |       |   |       |   |      |  
|Financing costs                                             |       |   |       |   |      |  
|Items in hedge relationships:                               |       |   |       |   |      |  
|Other loans                                                 | 548   |   | 510   |   | 472  |  
|Interest rate swaps                                         | (9    | ) | (118  | ) | (198 | )
|Dividends on redeemable preference shares                   | 45    |   | 48    |   |     |  
|Fair value hedging instrument                               | 42    |   | 213   |   | 231  |  
|Fair value of hedged item                                   | (47   | ) | (186  | ) | (213 | )
|Other financial liabilities held at amortised cost:         |       |   |       |   |      |  
|Bank loans and overdrafts                                   | 126   |   | 126   |   | 129  |  
|Other loans                                                 | 276   |   | 78    |   | 68   |  
|Dividends on redeemable preference shares                   |      |   |      |   | 46   |  
|Potential interest charge on settlement of tax issues       | 406   |   | 329   |   | 245  |  
|Fair value through the income statement (held for trading): |       |   |       |   |      |  
|Derivatives  forward
    starting swaps and futures        | 71    |   | (48   | ) | 25   |  
|Other(4)                                                    | 118   |   |      |   |     |  
|Equity put rights and similar arrangements(3)               | 32    |   | 161   |   | 67   |  
|Finance leases                                              | 4     |   | 7     |   | 8    |  
|                                                            |       |   |       |   |      |  
|                                                            | 1,612 |   | 1,120 |   | 880  |  
|                                                            |       |   |       |   |      |  
|                                                            |       |   |       |   |      |  
|Net financing costs                                         | 823   |   | 767   |   | 586  |  
|                                                            |       |   |       |   |      |  

|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   



|Vodafone Group Plc Annual Report
        2007 | 103
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Notes to the Consolidated Financial Statementscontinued

6. Taxation(Loss)/profit before tax is split as follows:

|                                        | 2007   |   | 2006    |   | 2005  | 
|--------------------------------------- | ------ | - | ------- | - | ----- | 
|                                        | £m     |   | £m      |   | £m    | 
|                                        |        |   |         |   |       | 
|United Kingdom (loss)/profit before tax | (375   | ) | 491     |   | 765   | 
|Overseas (loss)/profit before tax       | (2,008 | ) | (15,344 | ) | 6,520 | 
|                                        |        |   |         |   |       | 
|Total (loss)/profit before tax          | (2,383 | ) | (14,853 | ) | 7,285 | 
|                                        |        |   |         |   |       | 

Income tax expenseIncome tax expense from continuing operations, as shown in the income statement, is as follows:

|                                                                   | 2007  |   | 2006  |   | 2005  |  
|------------------------------------------------------------------ | ----- | - | ----- | - | ----- | -
|                                                                   | £m    |   | £m    |   | £m    |  
|                                                                   |       |   |       |   |       |  
|United Kingdom corporation tax (income)/expense at 30%:            |       |   |       |   |       |  
|Current year                                                       |      |   | 169   |   | 339   |  
|Adjustments in respect of prior years                              | (30   | ) | (15   | ) | (79   | )
|                                                                   |       |   |       |   |       |  
|                                                                   | (30   | ) | 154   |   | 260   |  
|                                                                   |       |   |       |   |       |  
|Overseas current tax expense/(income):                             |       |   |       |   |       |  
|Current year                                                       | 2,928 |   | 2,077 |   | 1,774 |  
|Adjustments in respect of prior years                              | 215   |   | (418  | ) | (154  | )
|                                                                   |       |   |       |   |       |  
|                                                                   | 3,143 |   | 1,659 |   | 1,620 |  
|                                                                   |       |   |       |   |       |  
|Total current tax expense                                          | 3,113 |   | 1,813 |   | 1,880 |  
|                                                                   |       |   |       |   |       |  
|Deferred tax on origination and reversal of temporary differences: |       |   |       |   |       |  
|United Kingdom deferred tax                                        | (49   | ) | 444   |   | 234   |  
|Overseas deferred tax                                              | (641  | ) | 123   |   | (245  | )
|                                                                   |       |   |       |   |       |  
|Total deferred tax (income)/expense                                | (690  | ) | 567   |   | (11   | )
|                                                                   |       |   |       |   |       |  
|Total income tax expense from continuing operations                | 2,423 |   | 2,380 |   | 1,869 |  
|                                                                   |       |   |       |   |       |  

Tax included in the statement of recognised income and expense

|                                                | 2007 |   | 2006 |   | 2005 |  
|----------------------------------------------- | ---- | - | ---- | - | ---- | -
|                                                | £m   |   | £m   |   | £m   |  
|                                                |      |   |      |   |      |  
|Current tax credit                              | (2   | ) | (6   | ) | (10  | )
|Deferred tax charge/(credit)                    | 11   |   | (11  | ) | (35  | )
|                                                |      |   |      |   |      |  
|Total tax charged/(credited) directly to equity | 9    |   | (17  | ) | (45  | )
|                                                |      |   |      |   |      |  

Factors affecting tax expense for the yearThe
table below explains the differences between the expected tax expense on continuing
operations, at the UK statutory tax rate of 30% for 2007, 2006 and 2005, and
the Groups total tax expense for each year.
Further discussion of the current year tax expense can be found in the section
titled Performance  Operating Results.

|                                                                                                                                                   | 2007   |   | 2006    |   | 2005  |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- | ------ | - | ------- | - | ----- | -
|                                                                                                                                                   | £m     |   | £m      |   | £m    |  
|                                                                                                                                                   |        |   |         |   |       |  
|(Loss)/profit before tax on continuing operations as shown in the consolidated income statement                                                    | (2,383 | ) | (14,853 | ) | 7,285 |  
|                                                                                                                                                   |        |   |         |   |       |  
|Expected income tax (income)/expense on profit from continuing operations at UK statutory tax rate                                                 | (715   | ) | (4,456  | ) | 2,186 |  
|Effect of taxation of associated undertakings, reported within operating profit                                                                    | 119    |   | 133     |   | 134   |  
|Impairment losses with no tax effect                                                                                                               | 3,480  |   | 7,055   |   | 143   |  
|                                                                                                                                                   |        |   |         |   |       |  
|Expected income tax expense at
    UK statutory rate on profit from continuing operations, before
    impairment losses and taxation of associates | 2,884  |   | 2,732   |   | 2,463 |  
|Effect of different statutory tax rates of overseas jurisdictions                                                                                  | 346    |   | 411     |   | 433   |  
|Deferred tax on overseas earnings                                                                                                                  | (373   | ) | (78     | ) | (66   | )
|Assets revalued for tax purposes                                                                                                                   | (197   | ) | (142    | ) | (240  | )
|Effect of previously unrecognised temporary differences including losses                                                                           | (562   | ) | (95     | ) | (389  | )
|Adjustments in respect of prior years                                                                                                              | 145    |   | (470    | ) | (315  | )
|Expenses not deductible for tax purposes and other items                                                                                           | 578    |   | 465     |   | 431   |  
|Exclude taxation of associated undertakings                                                                                                        | (398   | ) | (443    | ) | (448  | )
|                                                                                                                                                   |        |   |         |   |       |  
|Income tax expense from continuing operations                                                                                                      | 2,423  |   | 2,380   |   | 1,869 |  
|                                                                                                                                                   |        |   |         |   |       |  



|104 | Vodafone Group PlcAnnual
        Report 2007
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| | Financials
| | ----------
| |           

Deferred taxAnalysis of movements in net deferred tax balance during the year:

|                                                          | 2007   |  
|--------------------------------------------------------- | ------ | -
|                                                          | £m     |  
|                                                          |        |  
|1 April 2006                                              | (5,530 | )
|Credited to the income statement                          | 690    |  
|Charged to the statement of recognised income and expense | (11    | )
|Acquisitions and disposals                                | (5     | )
|Deferred tax relating to discontinued operations          | 145    |  
|Transfer due to deconsolidation                           | 108    |  
|Exchange movements                                        | 387    |  
|                                                          |        |  
|31 March 2007                                             | (4,216 | )
|                                                          |        |  

Deferred tax assets and liabilities in respect of continuing operations, before offset of balances within countries, are as follows:

|                                    |  |                |  | Gross        |   | Less:        |   | Net recognised    |   | Amount credited/ |  
|----------------------------------- |  | -------------- |  | ------------ | - | ------------ | - | ----------------- | - | ---------------- | -
|                                    |  | Gross deferred |  | deferred tax |   | amounts      |   | deferred tax      |   | (charged) in     |  
|                                    |  | tax asset      |  | liability    |   | unrecognised |   | asset/(liability) |   | income statement |  
|31 March 2007:                      |  | £m             |  | £m           |   | £m           |   | £m                |   | £m               |  
|                                    |  |                |  |              |   |              |   |                   |   |                  |  
|Accelerated tax depreciation        |  | 386            |  | (1,720       | ) | (25          | ) | (1,359            | ) | 112              |  
|Tax losses                          |  | 13,619         |  |             |   | (13,334      | ) | 285               |   | (264             | )
|Deferred tax on overseas earnings   |  |               |  | (3,296       | ) |             |   | (3,296            | ) | 373              |  
|Other short term timing differences |  | 4,147          |  | (1,615       | ) | (2,378       | ) | 154               |   | 469              |  
|                                    |  |                |  |              |   |              |   |                   |   |                  |  
|                                    |  | 18,152         |  | (6,631       | ) | (15,737      | ) | (4,216            | ) | 690              |  
|                                    |  |                |  |              |   |              |   |                   |   |                  |  

Analysed in the balance sheet, after offset of balances within countries, as:

|                       | £m     |  
|---------------------- | ------ | -
|                       |        |  
|Deferred tax asset     | 410    |  
|Deferred tax liability | (4,626 | )
|                       |        |  
|                       | (4,216 | )
|                       |        |  
|                       |        |  
|                       |        |  

|                                    |                |  | Gross        |   | Less:        |   | Net recognised    |   | Amount credited/ |  
|----------------------------------- | -------------- |  | ------------ | - | ------------ | - | ----------------- | - | ---------------- | -
|                                    | Gross deferred |  | deferred tax |   | amounts      |   | deferred tax      |   | (charged) in     |  
|                                    | tax asset      |  | liability    |   | unrecognised |   | asset/(liability) |   | income statement |  
|31 March 2006:                      | £m             |  | £m           |   | £m           |   | £m                |   | £m               |  
|                                    |                |  |              |   |              |   |                   |   |                  |  
|Accelerated tax depreciation        | 155            |  | (1,702       | ) | (48          | ) | (1,595            | ) | (91              | )
|Tax losses                          | 9,565          |  |             |   | (9,191       | ) | 374               |   | (85              | )
|Deferred tax on overseas earnings   |               |  | (4,025       | ) |             |   | (4,025            | ) | (318             | )
|Other short term timing differences | 4,073          |  | (1,418       | ) | (2,939       | ) | (284              | ) | (73              | )
|                                    |                |  |              |   |              |   |                   |   |                  |  
|                                    | 13,793         |  | (7,145       | ) | (12,178      | ) | (5,530            | ) | (567             | )
|                                    |                |  |              |   |              |   |                   |   |                  |  

Analysed in the balance sheet, after offset
of balances within countries, as:

|                       | £m     |  
|---------------------- | ------ | -
|                       |        |  
|Deferred tax asset     | 140    |  
|Deferred tax liability | (5,670 | )
|                       |        |  
|                       | (5,530 | )
|                       |        |  

Factors affecting the tax charge in future yearsFactors
that may affect the Groups future tax charge include one-off restructuring
benefits, the resolution of open issues, future planning opportunities, corporate
acquisitions and disposals, changes in tax legislation and rates, and the use
of brought forward tax losses.

In particular, the Groups subsidiary Vodafone 2 is responding to an enquiry
by HM Revenue & Customs (HMRC) with regard to the UK tax treatment
of one of its Luxembourg holding companies under the controlled foreign companies
(CFC) rules. Further details in relation to this enquiry are included
in note 31 Contingent liabilities. At 31 March 2007, the Group holds
provisions of £1,718 million tax and £400 million interest in respect
of the potential UK tax liability that may arise from this enquiry (2006: £1,822
million tax and £276 million interest). In September 2006, ruling in the
case of Cadbury Schweppes, the European Court of Justice provided guidance as
to the allowable application of the UK CFC rules. Considering the facts of the
Vodafone 2 case and the ECJ ruling in Cadbury Schweppes, management considers
these amounts are sufficient to settle any assessments that may result from the
enquiry. However, the amount ultimately paid may differ materially from the amount
accrued and could therefore affect the overall profitability and cash flows of
the Group in future periods.



|Vodafone Group Plc Annual Report
        2007 | 105
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Notes to the Consolidated Financial Statementscontinued

6.Taxationcontinued

At 31 March 2007, the gross amount and expiry dates of losses available for carry forward are as follows:

|                                                    | Expiring within |  | Expiring within |  |           |  |        | 
|--------------------------------------------------- | --------------- |  | --------------- |  | --------- |  | ------ | 
|                                                    | 5 years         |  | 6  10 years    |  | Unlimited |  | Total  | 
|                                                    | £m              |  | £m              |  | £m        |  | £m     | 
|                                                    |                 |  |                 |  |           |  |        | 
|Losses for which a deferred tax asset is recognised | 150             |  | –               |  | 1,048     |  | 1,198  | 
|Losses for which no deferred tax is recognised      | 208             |  | 44              |  | 45,253    |  | 45,505 | 
|                                                    |                 |  |                 |  |           |  |        | 
|                                                    | 358             |  | 44              |  | 46,301    |  | 46,703 | 
|                                                    |                 |  |                 |  |           |  |        | 

Included above are losses amounting to £1,938 million (2006: £1,939 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.

The losses above also include £41,298 million (2006 £27,545 million) that have arisen in overseas holding companies as a result of revaluations of those companies investments for local GAAP purposes.
Since it is uncertain whether these losses will be utilised, no deferred tax asset has been recognised.

In addition to the losses described above, the Group has potential tax losses of £34,292 million (2006: £35,250 million) in respect of a write down in the value of investments in Germany. These losses have to
date been denied by the German tax authorities. Vodafone is in continuing discussions with them regarding the availability of the losses. However, the outcome of these discussions and the timing of the resolution are not yet known. The Group has not
recognised the availability of the losses, nor the income statement benefit arising from them, due to this uncertainty. If upon resolution a benefit is recognised, it may impact both the amount of current income taxes provided since the date of
initial deduction and the amount of the benefit from tax losses the Group will recognise. The recognition of these benefits could affect the overall profitability of the Group in future periods.

The Group holds provisions 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. No deferred tax liability has been recognised in respect of a further £34,946 million (2006: £23,038 million) of unremitted earnings of subsidiaries, associates and joint ventures because the Group is in a position to control
the timing of the reversal of the temporary difference and it is probable that such differences will not reverse in the foreseeable future. It is not practicable to estimate the amount of unrecognised deferred tax liabilities in respect of these
unremitted earnings.

7. Equity
dividends

|                                                                                     | 2007  |  | 2006  |  | 2005  | 
|------------------------------------------------------------------------------------ | ----- |  | ----- |  | ----- | 
|                                                                                     | £m    |  | £m    |  | £m    | 
|                                                                                     |       |  |       |  |       | 
|Declared during the financial year:                                                  |       |  |       |  |       | 
|Final dividend for the year ended 31 March 2006: 3.87 pence per share                |       |  |       |  |       | 
|(2005: 2.16 pence per share, 2004: 1.078 pence per share)                            | 2,328 |  | 1,386 |  | 728   | 
|Interim dividend for the year ended 31 March 2007: 2.35 pence per share              |       |  |       |  |       | 
|(2006: 2.20 pence per share, 2005: 1.91 pence per share)                             | 1,238 |  | 1,367 |  | 1,263 | 
|                                                                                     |       |  |       |  |       | 
|                                                                                     | 3,566 |  | 2,753 |  | 1,991 | 
|                                                                                     |       |  |       |  |       | 
|Proposed or declared after the balance sheet date and not recognised as a liability: |       |  |       |  |       | 
|Final dividend for the year ended 31 March 2007: 4.41 pence per share                |       |  |       |  |       | 
|(2006: 3.87 pence per share, 2005: 2.16 pence per share)                             | 2,331 |  | 2,328 |  | 1,386 | 
|                                                                                     |       |  |       |  |       | 



|106 | Vodafone Group PlcAnnual
    Report 2007
|--- | ----------------------------------------

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| | Financials
| | ----------
| |           



8. (Loss)/earnings per share

|                                                                                                                  |           |   |           |   |           |  
|----------------------------------------------------------------------------------------------------------------- | --------- | - | --------- | - | --------- | -
|                                                                                                                  | 2007      |   | 2006      |   | 2005      |  
|                                                                                                                  | Millions  |   | Millions  |   | Millions  |  
|                                                                                                                  |           |   |           |   |           |  
|Weighted average number of shares for basic (loss)/earnings per share                                             | 55,144    |   | 62,607    |   | 66,196    |  
|Effect of dilutive potential shares: restricted shares and share options                                          |          |   |          |   | 231       |  
|                                                                                                                  |           |   |           |   |           |  
|Weighted average number of shares for diluted (loss)/earnings per share                                           | 55,144    |   | 62,607    |   | 66,427    |  
|                                                                                                                  |           |   |           |   |           |  
|                                                                                                                  |           |   |           |   |           |  
|                                                                                                                  | £m        |   | £m        |   | £m        |  
|                                                                                                                  |           |   |           |   |           |  
|(Loss)/earnings for basic and diluted earnings per share:                                                         |           |   |           |   |           |  
|Continuing operations                                                                                             | (4,932    | ) | (17,318   | ) | 5,375     |  
|Discontinued operations                                                                                           | (494      | ) | (4,598    | ) | 1,035     |  
|                                                                                                                  |           |   |           |   |           |  
|Total                                                                                                             | (5,426    | ) | (21,916   | ) | 6,410     |  
|                                                                                                                  |           |   |           |   |           |  
|                                                                                                                  |           |   |           |   |           |  
|                                                                                                                  | Pence per |   | Pence per |   | Pence per |  
|                                                                                                                  | share     |   | share     |   | share     |  
|                                                                                                                  |           |   |           |   |           |  
|Basic (loss)/earnings per share:                                                                                  |           |   |           |   |           |  
|(Loss)/profit from continuing operations                                                                          | (8.94     | ) | (27.66    | ) | 8.12      |  
|(Loss)/profit from discontinued operations(1)                                                                     | (0.90     | ) | (7.35     | ) | 1.56      |  
|                                                                                                                  |           |   |           |   |           |  
|(Loss)/profit for the financial year                                                                              | (9.84     | ) | (35.01    | ) | 9.68      |  
|                                                                                                                  |           |   |           |   |           |  
|Diluted (loss)/earnings per share:(2)                                                                             |           |   |           |   |           |  
|(Loss)/profit from continuing operations                                                                          | (8.94     | ) | (27.66    | ) | 8.09      |  
|(Loss)/profit from discontinued operations(1)                                                                     | (0.90     | ) | (7.35     | ) | 1.56      |  
|                                                                                                                  |           |   |           |   |           |  
|(Loss)/profit for the financial year                                                                              | (9.84     | ) | (35.01    | ) | 9.65      |  
|                                                                                                                  |           |   |           |   |           |  
|                                                                                                                  |           |   |           |   |           |  
|                                                                                                                  | £m        |   | £m        |   | £m        |  
|                                                                                                                  |           |   |           |   |           |  
|Basic and diluted (loss)/earnings per share for continuing operations is stated inclusive of the following items: |           |   |           |   |           |  
|Impairment losses (note 10)                                                                                       | (11,600   | ) | (23,515   | ) | (475      | )
|Other income and expense                                                                                          | 502       |   | 15        |   |          |  
|Share of associated undertakings non-operating income (note 14)                                                   | 3         |   | 17        |   |          |  
|Non-operating income and expense                                                                                  | 4         |   | (2        | ) | (7        | )
|Changes in the fair value of equity put rights and similar arrangements (note 5)(3)(4)                            | 2         |   | (161      | ) | (67       | )
|Foreign exchange(4)(5)                                                                                            | (41       | ) |          |   |          |  
|Tax on the above items                                                                                            | (13       | ) |          |   | (3        | )
|                                                                                                                  |           |   |           |   |           |  
|                                                                                                                  |           |   |           |   |           |  
|                                                                                                                  | Pence per |   | Pence per |   | Pence per |  
|                                                                                                                  | share     |   | share     |   | share     |  
|                                                                                                                  |           |   |           |   |           |  
|Impairment losses                                                                                                 | (21.04    | ) | (37.56    | ) | (0.72     | )
|Other income and expense                                                                                          | 0.91      |   | 0.02      |   |          |  
|Share of associated undertakings non-operating income                                                             | 0.01      |   | 0.03      |   |          |  
|Non-operating income and expense                                                                                  | 0.01      |   |          |   | (0.01     | )
|Changes in the fair value of equity put rights and similar arrangements (note 5)(3)(4)                            |          |   | (0.26     | ) | (0.10     | )
|Foreign exchange(4)(5)                                                                                            | (0.07     | ) |          |   |          |  
|Tax on the above items                                                                                            | (0.02     | ) |          |   |          |  
|                                                                                                                  |           |   |           |   |           |  

|Notes:
|------
|(1)   
|(2)   
|(3)   
|      
|      
|      
|      
|      
|      
|      
|(4)   
|      
|(5)   



|Vodafone Group Plc Annual Report
        2007 | 107
|--------------------------------------------- | ---

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Notes to the Consolidated Financial Statementscontinued

9. Intangible assets

|                                                |          |   | Licences and  |   | Computer |   |       |   |        |  
|----------------------------------------------- | -------- | - | ------------- | - | -------- | - | ----- | - | ------ | -
|                                                | Goodwill |   | spectrum fees |   | software |   | Other |   | Total  |  
|                                                | £m       |   | £m            |   | £m       |   | £m    |   | £m     |  
|                                                |          |   |               |   |          |   |       |   |        |  
|Cost:                                           |          |   |               |   |          |   |       |   |        |  
|1 April 2005                                    | 73,179   |   | 15,573        |   | 2,928    |   | 29    |   | 91,709 |  
|Exchange movements                              | 1,291    |   | 216           |   | 51       |   | 22    |   | 1,580  |  
|Arising on acquisition                          | 2,802    |   | 1,196         |   | 20       |   | 699   |   | 4,717  |  
|Additions                                       |         |   | 6             |   | 616      |   | 10    |   | 632    |  
|Disposals                                       | (1,142   | ) |              |   | (43      | ) | (5    | ) | (1,190 | )
|                                                |          |   |               |   |          |   |       |   |        |  
|31 March 2006                                   | 76,130   |   | 16,991        |   | 3,572    |   | 755   |   | 97,448 |  
|Exchange movements                              | (2,321   | ) | (431          | ) | (55      | ) | (99   | ) | (2,906 | )
|Arising on acquisition                          | 1,746    |   | 707           |   | 18       |   | 257   |   | 2,728  |  
|Additions                                       |         |   | 308           |   | 799      |   |      |   | 1,107  |  
|Transfer to other investments                   | (487     | ) | (319          | ) |         |   | (48   | ) | (854   | )
|Disposals                                       |         |   |              |   | (29      | ) |      |   | (29    | )
|                                                |          |   |               |   |          |   |       |   |        |  
|31 March 2007                                   | 75,068   |   | 17,256        |   | 4,305    |   | 865   |   | 97,494 |  
|                                                |          |   |               |   |          |   |       |   |        |  
|Accumulated impairment losses and amortisation: |          |   |               |   |          |   |       |   |        |  
|1 April 2005                                    | 475      |   | 1,291         |   | 1,851    |   | 4     |   | 3,621  |  
|Exchange movements                              | 513      |   | 38            |   | 33       |   | 4     |   | 588    |  
|Amortisation charge for the year                |         |   | 1,030         |   | 493      |   | 102   |   | 1,625  |  
|Impairment losses                               | 23,515   |   |              |   |         |   |      |   | 23,515 |  
|Disposals                                       | (979     | ) |              |   | (38      | ) | (2    | ) | (1,019 | )
|                                                |          |   |               |   |          |   |       |   |        |  
|31 March 2006                                   | 23,524   |   | 2,359         |   | 2,339    |   | 108   |   | 28,330 |  
|Exchange movements                              | (623     | ) | (61           | ) | (45      | ) | (14   | ) | (743   | )
|Amortisation charge for the year                |         |   | 1,088         |   | 719      |   | 293   |   | 2,100  |  
|Impairment losses                               | 11,600   |   |              |   |         |   |      |   | 11,600 |  
|Transfer to other investments                   |         |   | (30           | ) |         |   | (11   | ) | (41    | )
|Disposals                                       |         |   |              |   | (24      | ) |      |   | (24    | )
|                                                |          |   |               |   |          |   |       |   |        |  
|31 March 2007                                   | 34,501   |   | 3,356         |   | 2,989    |   | 376   |   | 41,222 |  
|                                                |          |   |               |   |          |   |       |   |        |  
|                                                |          |   |               |   |          |   |       |   |        |  
|Net book value:                                 |          |   |               |   |          |   |       |   |        |  
|31 March 2007                                   | 40,567   |   | 13,900        |   | 1,316    |   | 489   |   | 56,272 |  
|                                                |          |   |               |   |          |   |       |   |        |  
|31 March 2006                                   | 52,606   |   | 14,632        |   | 1,233    |   | 647   |   | 69,118 |  
|                                                |          |   |               |   |          |   |       |   |        |  

For the additions in the year, the weighted average life of licences and spectrum fees is 14 years, the weighted average life of computer software is four years and the weighted average life of total additions is seven
years. For licences and spectrum fees and other intangible assets, amortisation is included within the cost of sales line within the Income Statement.

The net book value at 31 March 2007 and expiry
dates of the most significant purchased licences are as follows:

|        |               |  |       |  |       | 
|------- | ------------- |  | ----- |  | ----- | 
|        |               |  | 2007  |  | 2006  | 
|        | Expiry date   |  | £m    |  | £m    | 
|        |               |  |       |  |       | 
|Germany | December 2020 |  | 4,684 |  | 5,165 | 
|UK      | December 2021 |  | 4,912 |  | 5,245 | 
|        |               |  |       |  |       | 



|108 | Vodafone Group PlcAnnual
    Report 2007
|--- | ----------------------------------------

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Back to Contents

| | Financials
| | ----------
| |           

Goodwill, analysed by reportable segment, is
as follows:

|                               |         |   |        |   |        |   |     |  |       |   |        |   |         |   | Middle       |   |         |   |           |  |        |  
|------------------------------ | ------- | - | ------ | - | ------ | - | --- |  | ----- | - | ------ | - | ------- | - | ------------ | - | ------- | - | --------- |  | ------ | -
|                               |         |   |        |   |        |   |     |  |       |   | Other  |   | Eastern |   | East,        |   |         |   | Common    |  |        |  
|                               | Germany |   | Italy  |   | Spain  |   | UK  |  | Arcor |   | Europe |   | Europe  |   | Africa, Asia |   | Pacific |   | Functions |  | Total  |  
|                               | £m      |   | £m     |   | £m     |   | £m  |  | £m    |   | £m     |   | £m      |   | £m           |   | £m      |   | £m        |  | £m     |  
|                               |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  
|Cost:                          |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  
|1 April 2005                   | 35,765  |   | 19,812 |   | 10,399 |   | 713 |  | 41    |   | 5,624  |   | 376     |   | 211          |   | 208     |   | 30        |  | 73,179 |  
|Exchange movements             | 595     |   | 330    |   | 172    |   |    |  | 2     |   | 51     |   | 110     |   | 37           |   | (6      | ) |          |  | 1,291  |  
|Arising on acquisition         |        |   | 15     |   |       |   | 3   |  |      |   |       |   | 1,367   |   | 1,417        |   |        |   |          |  | 2,802  |  
|Disposals                      |        |   |       |   |       |   |    |  |      |   | (1,142 | ) |        |   |             |   |        |   |          |  | (1,142 | )
|                               |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  
|31 March 2006                  | 36,360  |   | 20,157 |   | 10,571 |   | 716 |  | 43    |   | 4,533  |   | 1,853   |   | 1,665        |   | 202     |   | 30        |  | 76,130 |  
|                               |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  
|Exchange movements             | (989    | ) | (547   | ) | (286   | ) |    |  | (1    | ) | (123   | ) | (57     | ) | (320         | ) | 2       |   |          |  | (2,321 | )
|Arising on acquisition         |        |   |       |   |       |   | 19  |  |      |   | 22     |   | 1,597   |   | 94           |   | 14      |   |          |  | 1,746  |  
|Transfer to other investments  |        |   |       |   |       |   |    |  |      |   |       |   |        |   | (487         | ) |        |   |          |  | (487   | )
|                               |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  
|31 March 2007                  | 35,371  |   | 19,610 |   | 10,285 |   | 735 |  | 42    |   | 4,432  |   | 3,393   |   | 952          |   | 218     |   | 30        |  | 75,068 |  
|                               |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  
|                               |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  
|Accumulated impairment losses: |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  
|1 April 2005                   |        |   |       |   |       |   |    |  |      |   | 475    |   |        |   |             |   |        |   |          |  | 475    |  
|Exchange movements             | 442     |   | 82     |   |       |   |    |  |      |   | (11    | ) |        |   |             |   |        |   |          |  | 513    |  
|Impairment losses              | 19,400  |   | 3,600  |   |       |   |    |  |      |   | 515    |   |        |   |             |   |        |   |          |  | 23,515 |  
|Disposals                      |        |   |       |   |       |   |    |  |      |   | (979   | ) |        |   |             |   |        |   |          |  | (979   | )
|                               |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  
|31 March 2006                  | 19,842  |   | 3,682  |   |       |   |    |  |      |   |       |   |        |   |             |   |        |   |          |  | 23,524 |  
|Exchange movements             | (526    | ) | (97    | ) |       |   |    |  |      |   |       |   |        |   |             |   |        |   |          |  | (623   | )
|Impairment losses              | 6,700   |   | 4,900  |   |       |   |    |  |      |   |       |   |        |   |             |   |        |   |          |  | 11,600 |  
|                               |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  
|31 March 2007                  | 26,016  |   | 8,485  |   |       |   |    |  |      |   |       |   |        |   |             |   |        |   |          |  | 34,501 |  
|                               |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  
|                               |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  
|Net book value:                |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  
|31 March 2007                  | 9,355   |   | 11,125 |   | 10,285 |   | 735 |  | 42    |   | 4,432  |   | 3,393   |   | 952          |   | 218     |   | 30        |  | 40,567 |  
|                               |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  
|31 March 2006                  | 16,518  |   | 16,475 |   | 10,571 |   | 716 |  | 43    |   | 4,533  |   | 1,853   |   | 1,665        |   | 202     |   | 30        |  | 52,606 |  
|                               |         |   |        |   |        |   |     |  |       |   |        |   |         |   |              |   |         |   |           |  |        |  

10. Impairment

Impairment lossesThe impairment losses recognised in the income statement, as a separate line item within operating profit, in respect of goodwill are as follows:

|                      |                     | 2007   |  | 2006   |  | 2005 | 
|--------------------- | ------------------- | ------ |  | ------ |  | ---- | 
|Cash generating unit: | Reportable segment: | £m     |  | £m     |  | £m   | 
|                      |                     |        |  |        |  |      | 
|Germany               | Germany             | 6,700  |  | 19,400 |  |     | 
|Italy                 | Italy               | 4,900  |  | 3,600  |  |     | 
|Sweden                | Other Europe        |       |  | 515    |  | 475  | 
|                      |                     |        |  |        |  |      | 
|                      |                     | 11,600 |  | 23,515 |  | 475  | 
|                      |                     |        |  |        |  |      | 

During the year ended 31 March 2007, the increase
    in long term interest rates, which led to higher discount rates, led to a
reduction in value of £3,700 million in Germany and Italy.

GermanyDuring
      the year ended 31 March 2007, the goodwill in relation to the Groups mobile operation in Germany was impaired
    by £6.7 billion following a test for impairment triggered by an increase
    in long term interest rates and increased price competition in the German
market along with continued regulatory pressures.

The impairment loss for
      the year ended 31 March 2006 of £19.4 billion was determined as part
      of the annual test for impairment and was as a result of the intensification
      in price competition, principally from new market entrants, together with
      high levels of penetration and continued regulated reductions in incoming
  call rates.

The pre-tax risk adjusted discount rate used
    in the testing at 31 March 2007 was 10.6% (31 January 2007: 10.5%, 30 September
    2006: 10.4%, 31 January 2006: 10.1%, 31 March 2005: 9.6%).

ItalyDuring
      the year ended 31 March 2007, the goodwill in relation to the Groups mobile joint venture in Italy was impaired
    by £4.9 billion. During the second half of the 2007 financial year, £3.5
    billion of the impairment loss resulted from the estimated impact of legislation
    cancelling the fixed fees for the top up of prepaid cards and the related
    competitive response in the Italian market. At 30 September 2006, the goodwill
    was impaired by £1.4 billion, following a test for impairment triggered
by an increase in long term interest rates.

The impairment loss for the year ended 31
    March 2006 of £3.6 billion was due to competitive pressures increasing
    with the mobile network operators competing aggressively on subsidies and,
    increasingly, on price.

The pre-tax risk adjusted discount rate used
    in the testing at 31 March 2007 was 11.5% (31 January 2007: 11.2%, 30 September
    2006: 10.9%, 31 January 2006: 10.1%, 31 March 2005: 9.2%).

SwedenThe
      impairment of the carrying value of goodwill of the Groups mobile
      operation in Sweden in the years ended 31 March 2006 and 31 March 2005
      resulted from fierce competition in the Swedish market
combined with onerous 3G licence obligations.

Prior to its disposal in the year ended 31
    March 2006, the carrying value of goodwill was tested for impairment as increased
    competition provided an indicator that the goodwill may have been further
    impaired. The recoverable amount of the goodwill was determined as the fair
    value less costs to sell, reflecting the announcement on 31 October 2005
    that the Groups 100% interest in Vodafone Sweden was to be sold for953 million (£653
    million). The sale completed on 5 January 2006.



|Vodafone Group Plc Annual Report
        2007 | 109
|--------------------------------------------- | ---

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Back to Contents

Notes to the Consolidated Financial Statementscontinued

10. ImpairmentcontinuedIn the year ended 31 March 2005, the impairment
was based on value in use calculations. The pre-tax risk adjusted discount rate
used in the testing at31 March 2005 was
9.7%.

Cash generating unitsThe
following cash-generating units, being the lowest level of asset for which there
are separately identifiable cash flows, have carrying amounts of goodwill that
are considered significant in comparison with the
Groups total goodwill balance:

|                                                                    | 2007   |  | 2006   | 
|------------------------------------------------------------------- | ------ |  | ------ | 
|                                                                    | £m     |  | £m     | 
|                                                                    |        |  |        | 
|Germany                                                             | 9,355  |  | 16,518 | 
|Italy                                                               | 11,125 |  | 16,475 | 
|Spain                                                               | 10,285 |  | 10,571 | 
|                                                                    |        |  |        | 
|                                                                    | 30,765 |  | 43,564 | 
|Multiple units without individually significant amounts of goodwill | 9,802  |  | 9,042  | 
|                                                                    |        |  |        | 
|                                                                    | 40,567 |  | 52,606 | 
|                                                                    |        |  |        | 

Key assumptions used in the value in use calculationsThe Group prepares and internally approves formal ten year management plans for its businesses. For the year ended 31 March 2005, the Group used these plans for its value in use calculations. The plans included cash
flow projections for the mobile businesses which were expected to have growth rates in excess of the long term average growth rates, beyond an initial five year period, for the markets in which they operate.

In the year ended 31 March 2006, the management plans showed the need to reflect a differing growth profile beyond an initial five year period had diminished in a number of the Groups key operating companies, as
the Group revised its view of longer term trends. Accordingly, in the 2006 and 2007 financial years, only the first five years of the ten year management plans were used for the Groups value in use calculations, except for the Groups
operations in India and Turkey (2006: India) where the full ten year management plans were used. For these businesses, the use of ten year management plans reflected the low penetration of mobile telecommunications in these countries and the
expectation of strong revenue growth throughout the ten year period. Long term growth rates are used in the Groups value in use calculations for cash flows into perpetuity beyond the relevant five or ten year periods.

The key assumptions used in determining the value in use are:

|Assumption                          | How determined                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|----------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Budgeted EBITDA                     | Budgeted
        EBITDA, calculated as adjusted operating profit before depreciation and
        amortisation, has been based on past experience adjusted for the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Budgeted capital expenditure        | The
        cash flow forecasts for capital expenditure is based on past experience
        and includes the ongoing capital expenditure required to provide enhanced
        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.                                                                                                                                                                                                                                                                                                                                     
|                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Long term growth rate               | For
        mobile businesses where the first five years of the ten year management
        plan are used for the Group’s value in use calculations, a long
        term growth rate into perpetuity has been determined
as the lower of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                    | For mobile businesses where the full ten 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:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                    | For non-mobile businesses, no growth is expected beyond
        management’s plans
for the initial five year period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Pre-tax risk adjusted discount rate | The
        discount rate applied to the cash flows of each the Group’s operations
        is based on the risk free rate for ten year bonds issued by the government
        in the respective market, 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
        have 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 have 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.                                                                                                                        
|                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 



|110 | Vodafone Group PlcAnnual
    Report 2007
|--- | ----------------------------------------

---



Back to Contents

| | Financials
| | ----------
| |           

Key assumptions for the Groups operations in Germany and Italy are disclosed below under Sensitivity to changes in assumptions. During the year ended 31 March 2007, the most recent value in use
calculation for Groups operations in Spain was based on a pre-tax risk
adjusted discount rate of 9.7% (2006: 9.0%) and long term growth rate of 3.2%
(2006: 3.3%) .

Sensitivity to changes in assumptionsOther 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 exceed its recoverable
amount.

GermanyAt
31 March 2007, the fair value of the Groups operations in Germany equalled
its carrying value (2006: equalled) and consequently, any adverse change in a
key assumption may cause a further impairment loss to be
recognised.

The most recent value in use calculation during the year ended 31 March 2007
was based on the following assumptions:

|• | Pre-tax risk adjusted discount rate of 10.6% (2006: 10.1%).                                                                                                                                              
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                          
|• | Long term growth rate of 1.2% (2006: 1.1%).                                                                                                                                                              
|  |                                                                                                                                                                                                          
|• | Budgeted EBITDA, expressed as the compound annual growth rates in the initial
    five years of the Groups approved financial plans, of (4.2)% (2006:
    0.3%).                                        
|  |                                                                                                                                                                                                          
|• | Budgeted capital expenditure, expressed as the range
    of capital expenditure as a percentage of revenue in the initial five years
    of the Groups approved plans, of 7.5 
7.0% (2006: 9.3  9.0%).

ItalyAt 31 March 2007, the fair value
of the Groups operations in Italy equalled its carrying value (2006: equalled)
and consequently, any adverse change in a key assumption may cause a further
impairment loss to
be
recognised.

The most recent value in use calculation during the year ended 31 March 2007
was based on the following assumptions:

|• | Pre-tax risk adjusted discount rate of 11.5% (2006: 10.1%).                                                                                                                                                 
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                             
|• | Long term growth rate of 1.0% (2006: 1.5%).                                                                                                                                                                 
|  |                                                                                                                                                                                                             
|• | Budgeted EBITDA, expressed as the compound annual growth rates in the initial
    five years of the Groups approved financial plans, of (3.8)% (2006:
    (1.8)%).                                         
|  |                                                                                                                                                                                                             
|• | Budgeted capital expenditure, expressed as the range
    of capital expenditure as a percentage of revenue in the initial five years
    of the Groups approved plans, of 11.4% 
8.7% (2006: 13.4  8.5%).

11. Property, plant and equipment

|                                         |           |   | Equipment,   |   |        |  
|---------------------------------------- | --------- | - | ------------ | - | ------ | -
|                                         | Land and  |   | fixtures     |   |        |  
|                                         | buildings |   | and fittings |   | Total  |  
|                                         | £m        |   | £m           |   | £m     |  
|                                         |           |   |              |   |        |  
|Cost:                                    |           |   |              |   |        |  
|1 April 2005                             | 1,094     |   | 22,672       |   | 23,766 |  
|Exchange movements                       | 11        |   | 451          |   | 462    |  
|Arising on acquisition                   | 3         |   | 896          |   | 899    |  
|Additions                                | 55        |   | 3,334        |   | 3,389  |  
|Disposal of businesses                   | (6        | ) | (931         | ) | (937   | )
|Disposals                                | (67       | ) | (669         | ) | (736   | )
|Reclassifications                        | 22        |   | (22          | ) |       |  
|                                         |           |   |              |   |        |  
|31 March 2006                            | 1,112     |   | 25,731       |   | 26,843 |  
|Exchange movements                       | (22       | ) | (839         | ) | (861   | )
|Arising on acquisition                   |          |   | 172          |   | 172    |  
|Additions                                | 87        |   | 3,322        |   | 3,409  |  
|Transfer to other investments            | (1        | ) | (268         | ) | (269   | )
|Disposals                                | (9        | ) | (692         | ) | (701   | )
|Reclassifications                        | (4        | ) | 4            |   |       |  
|Other                                    | 77        |   |             |   | 77     |  
|                                         |           |   |              |   |        |  
|31 March 2007                            | 1,240     |   | 27,430       |   | 28,670 |  
|                                         |           |   |              |   |        |  
|Accumulated depreciation and impairment: |           |   |              |   |        |  
|1 April 2005                             | 312       |   | 10,529       |   | 10,841 |  
|Exchange movements                       | 3         |   | 222          |   | 225    |  
|Charge for the year                      | 62        |   | 3,017        |   | 3,079  |  
|Disposal of businesses                   | (1        | ) | (356         | ) | (357   | )
|Disposals                                | (26       | ) | (579         | ) | (605   | )
|Reclassifications                        | 3         |   | (3           | ) |       |  
|                                         |           |   |              |   |        |  
|31 March 2006                            | 353       |   | 12,830       |   | 13,183 |  
|Exchange movements                       | (7        | ) | (349         | ) | (356   | )
|Charge for the year                      | 72        |   | 2,939        |   | 3,011  |  
|Transfer to other investments            |          |   | (31          | ) | (31    | )
|Disposals                                | (4        | ) | (605         | ) | (609   | )
|Other                                    | 28        |   |             |   | 28     |  
|                                         |           |   |              |   |        |  
|31 March 2007                            | 442       |   | 14,784       |   | 15,226 |  
|                                         |           |   |              |   |        |  
|                                         |           |   |              |   |        |  
|Net book value:                          |           |   |              |   |        |  
|31 March 2007                            | 798       |   | 12,646       |   | 13,444 |  
|                                         |           |   |              |   |        |  
|31 March 2006                            | 759       |   | 12,901       |   | 13,660 |  
|                                         |           |   |              |   |        |  



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Notes to the Consolidated Financial Statementscontinued

11. Property, plant and equipment continuedThe
    net book value of land and buildings and equipment, fixtures and fittings
    includes £49 million and £116 million, respectively (2006: £nil and £52
    million) in relation to assets held under
finance leases (see note 24).

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 £13 million and £998 million,
respectively (2006: £30 million and £967 million).

Borrowings of £73 million (2006: £426 million) have been secured against
property, plant and equipment.

12. Principal subsidiary undertakingsAt 31 March 2007, the Company had the following subsidiary undertakings carrying on businesses which principally affect the profits and assets of the Group. They have the same year end date as the Company, unless
otherwise stated, and have been included in the Consolidated Financial Statements.

Unless otherwise stated, the Companys principal subsidiary undertakings
all have share capital consisting solely of ordinary shares and are indirectly
held. The country of incorporation or registration of all subsidiary undertakings
is also their principal place of operation.

|                                                          |                                       |  | Country of       |  |               | 
|--------------------------------------------------------- | ------------------------------------- |  | ---------------- |  | ------------- | 
|                                                          |                                       |  | incorporation or |  | Percentage(1) | 
|Name                                                      | Principal activity                    |  | registration     |  | shareholdings | 
|                                                          |                                       |  |                  |  |               | 
|Arcor AG & Co. KG(2)                                      | Fixed line operator                   |  | Germany          |  | 73.7          | 
|Vodafone Albania Sh.A.(3)                                 | Mobile network operator               |  | Albania          |  | 99.9          | 
|Vodafone Americas Inc.(4)                                 | Holding company                       |  | USA              |  | 100.0         | 
|Vodafone Czech Republic a.s.                              | Mobile network operator               |  | Czech Republic   |  | 100.0         | 
|Vodafone D2 GmbH                                          | Mobile network operator               |  | Germany          |  | 100.0         | 
|Vodafone Egypt Telecommunications S.A.E.                  | Mobile network operator               |  | Egypt            |  | 54.9          | 
|Vodafone Espana S.A.(3)                                   | Mobile network operator               |  | Spain            |  | 100.0         | 
|Vodafone Europe B.V.                                      | Holding company                       |  | Netherlands      |  | 100.0         | 
|Vodafone Group Services Limited(5)                        | Global products and services provider |  | England          |  | 100.0         | 
|Vodafone Holding GmbH(3)                                  | Holding company                       |  | Germany          |  | 100.0         | 
|Vodafone Holdings Europe S.L.(3)                          | Holding company                       |  | Spain            |  | 100.0         | 
|Vodafone Hungary Mobile Telecommunications Limited        | Mobile network operator               |  | Hungary          |  | 100.0         | 
|Vodafone International Holdings B.V.                      | Holding company                       |  | Netherlands      |  | 100.0         | 
|Vodafone Investments Luxembourg S.a.r.l.                  | Holding company                       |  | Luxembourg       |  | 100.0         | 
|Vodafone Ireland Limited                                  | Mobile network operator               |  | Ireland          |  | 100.0         | 
|Vodafone Libertel B.V.                                    | Mobile network operator               |  | Netherlands      |  | 100.0         | 
|Vodafone Limited                                          | Mobile network operator               |  | England          |  | 100.0         | 
|Vodafone Malta Limited                                    | Mobile network operator               |  | Malta            |  | 100.0         | 
|Vodafone Marketing S.a.r.l.                               | Provider of Partner Network services  |  | Luxembourg       |  | 100.0         | 
|Vodafone Network Pty Limited                              | Mobile network operator               |  | Australia        |  | 100.0         | 
|Vodafone New Zealand Limited                              | Mobile network operator               |  | New Zealand      |  | 100.0         | 
|Vodafone-Panafon Hellenic Telecommunications Company S.A. | Mobile network operator               |  | Greece           |  | 99.9          | 
|Vodafone Portugal-Comunicações Pessoais,
S.A.(6)          | Mobile network operator               |  | Portugal         |  | 100.0         | 
|Vodafone Romania S.A.(3)                                  | Mobile network operator               |  | Romania          |  | 100.0         | 
|Vodafone Telekomunikasyon A.S.                            | Mobile network operator               |  | Turkey           |  | 100.0         | 
|                                                          |                                       |  |                  |  |               | 

|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   
|(5)   
|(6)   



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| | Financials
| | ----------
| |           



13. Investments in joint ventures

Principal joint venturesUnless
    otherwise stated, the Companys principal joint ventures all have share capital consisting solely of ordinary shares, which are indirectly held, and the country of incorporation or registration is also
their principal place of operation. They have the same year end date as the Company, unless otherwise stated, and have been included in the Consolidated Financial Statements. Summarised financial information of joint ventures is disclosed in note
37. On 11 February, the Group announced its intention to acquire a controlling interest in Hutchison Essar Limited (Hutchison Essar)
and to grant an option to a Bharti Group company to buy its 5.60% direct interest
in Bharti. As a result of the terms of this agreement, the Group considers that
it does not have the power to exercise joint control and, consequently, has transferred
its investment in Bharti Airtel Limited to Other Investments.

|                            |                         |  | Country of       |  |               |    
|--------------------------- | ----------------------- |  | ---------------- |  | ------------- | ---
|                            |                         |  | incorporation or |  | Percentage(1) |    
|Name                        | Principal activity      |  | registration     |  | shareholdings |    
|                            |                         |  |                  |  |               |    
|Polkomtel S.A.(3)           | Mobile network operator |  | Poland           |  | 19.6          |    
|Safaricom Limited(4)        | Mobile network operator |  | Kenya            |  | 35.0          | (2)
|Vodacom Group (Pty) Limited | Holding company         |  | South Africa     |  | 50.0          |    
|Vodafone Fiji Limited       | Mobile network operator |  | Fiji             |  | 49.0          | (2)
|Vodafone Omnitel N.V.(5)    | Mobile network operator |  | Netherlands      |  | 76.9          | (6)
|                            |                         |  |                  |  |               |    

|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   
|(5)   
|(6)   

Effect of proportionate consolidation of joint venturesThe following presents, on a condensed basis, the effect of including joint ventures in the Consolidated Financial Statements using proportionate consolidation:

|                                                  | 2007   |   | 2006   |   | 2005   |  
|------------------------------------------------- | ------ | - | ------ | - | ------ | -
|                                                  | £m     |   | £m     |   | £m     |  
|                                                  |        |   |        |   |        |  
|Revenue                                           | 6,232  |   | 5,756  |   | 5,423  |  
|Cost of sales                                     | (3,077 | ) | (2,832 | ) | (2,805 | )
|                                                  |        |   |        |   |        |  
|Gross profit                                      | 3,155  |   | 2,924  |   | 2,618  |  
|Selling, distribution and administrative expenses | (1,121 | ) | (885   | ) | (619   | )
|Impairment losses                                 | (4,900 | ) | (3,600 | ) |       |  
|                                                  |        |   |        |   |        |  
|Operating (loss)/profit                           | (2,866 | ) | (1,561 | ) | 1,999  |  
|Net financing costs                               | 46     |   | 27     |   | 64     |  
|                                                  |        |   |        |   |        |  
|(Loss)/profit before tax                          | (2,820 | ) | (1,534 | ) | 2,063  |  
|Income tax expense                                | (614   | ) | (711   | ) | (782   | )
|                                                  |        |   |        |   |        |  
|(Loss)/profit for the financial year              | (3,434 | ) | (2,245 | ) | 1,281  |  
|                                                  |        |   |        |   |        |  



|                                 | 2007   |   | 2006   | 
|-------------------------------- | ------ | - | ------ | 
|                                 | £m     |   | £m     | 
|                                 |        |   |        | 
|Intangible assets                | 14,137 |   | 20,985 | 
|Property, plant and equipment    | 2,166  |   | 2,506  | 
|Other non-current assets         | 291    |   | 27     | 
|                                 |        |   |        | 
|Non-current assets               | 16,594 |   | 23,518 | 
|                                 |        |   |        | 
|Cash and cash equivalents        | 47     |   | 87     | 
|Other current assets             | 1,015  |   | 1,148  | 
|                                 |        |   |        | 
|Current assets                   | 1,062  |   | 1,235  | 
|                                 |        |   |        | 
|Total assets                     | 17,656 |   | 24,753 | 
|                                 |        |   |        | 
|                                 |        |   |        | 
|Total equity shareholders funds | 17,754 |   | 23,402 | 
|Minority interests               | 8      |   | 15     | 
|                                 |        |   |        | 
|Total equity                     | 17,762 |   | 23,417 | 
|                                 |        |   |        | 
|Non-current liabilities          | 333    |   | 535    | 
|Current liabilities              | (439   | ) | 801    | 
|                                 |        |   |        | 
|Total liabilities                | (106   | ) | 1,336  | 
|                                 |        |   |        | 
|Total equity and liabilities     | 17,656 |   | 24,753 | 
|                                 |        |   |        | 



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Notes to the Consolidated Financial Statementscontinued

14. Investments in
      associated undertakingsThe Companys
      principal associated undertakings all have share capital consisting solely
      of ordinary shares, unless otherwise
  stated, and are all indirectly held. The country of incorporation or registration
  of all associated undertakings is also their principal place of operation.
  The accounts of the associated undertakings are drawn up to 31 March 2007 for
  inclusion in the Consolidated Financial Statements. The latest statutory financial
  statements of
the associated undertakings were drawn up to 31 December 2006. Summarised financial
information of associated undertakings is disclosed in note 37.

|                                         |                                        |  |                  |  | Percentage(1)(3)(4) | 
|---------------------------------------- | -------------------------------------- |  | ---------------- |  | ------------------- | 
|                                         |                                        |  | Country of       |  | shareholding/       | 
|                                         |                                        |  | incorporation or |  | partnership         | 
|Name                                     | Principal activity                     |  | registration     |  | interest            | 
|                                         |                                        |  |                  |  |                     | 
|Cellco Partnership(2)                    | Mobile network operator                |  | USA              |  | 45.0                | 
|Société Française du Radiotéléphone S.A. | Mobile network and fixed line operator |  | France           |  | 44.0                | 
|                                         |                                        |  |                  |  |                     | 

|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   

The Groups share of the aggregated financial information of equity accounted
associated undertakings is set out below, and includes the share of results in
Belgacom Mobile S.A. and Swisscom Mobile A.G. up to the date
of disposal.

|                                           | 2007   |   | 2006   |   | 2005   |  
|------------------------------------------ | ------ | - | ------ | - | ------ | -
|                                           | £m     |   | £m     |   | £m     |  
|                                           |        |   |        |   |        |  
|Revenue                                    | 12,919 |   | 12,480 |   | 10,546 |  
|                                           |        |   |        |   |        |  
|Operating profit                           | 3,390  |   | 3,133  |   | 2,668  |  
|Non-operating income and expense           | 3      |   | 17     |   |       |  
|Net interest                               | (206   | ) | (227   | ) | (197   | )
|Income tax expense                         | (398   | ) | (443   | ) | (448   | )
|Minority interest                          | (61    | ) | (52    | ) | (43    | )
|                                           |        |   |        |   |        |  
|Share of result in associated undertakings | 2,728  |   | 2,428  |   | 1,980  |  
|                                           |        |   |        |   |        |  



|                                               | 2007   |  | 2006   | 
|---------------------------------------------- | ------ |  | ------ | 
|                                               | £m     |  | £m     | 
|                                               |        |  |        | 
|Non-current assets                             | 25,120 |  | 29,055 | 
|Current assets                                 | 1,998  |  | 2,183  | 
|                                               |        |  |        | 
|Share of total assets                          | 27,118 |  | 31,238 | 
|                                               |        |  |        | 
|Non-current liabilities                        | 2,067  |  | 4,141  | 
|Current liabilities                            | 4,438  |  | 3,468  | 
|Minority interests                             | 386    |  | 432    | 
|                                               |        |  |        | 
|Share of total liabilities                     | 6,891  |  | 8,041  | 
|                                               |        |  |        | 
|Share of net assets in associated undertakings | 20,227 |  | 23,197 | 
|                                               |        |  |        | 

15. Other investmentsOther investments comprise the following, all of which are classified as available-for-sale with the exception of other debt and bonds which are classified as loans and receivables:

|                                 | 2007  |  | 2006  | 
|-------------------------------- | ----- |  | ----- | 
|                                 | £m    |  | £m    | 
|                                 |       |  |       | 
|Listed securities:               |       |  |       | 
|Equity securities                | 3,915 |  | 1,938 | 
|Unlisted securities:             |       |  |       | 
|Equity securities                | 634   |  | 7     | 
|Public debt and bonds            | 20    |  | 20    | 
|Other debt and bonds             | 1,046 |  |      | 
|Cash held in restricted deposits | 260   |  | 154   | 
|                                 |       |  |       | 
|                                 | 5,875 |  | 2,119 | 
|                                 |       |  |       | 

The fair values of listed securities are based on quoted market prices, and include;

|• | the Groups 3.3% investment in China Mobile Limited, which is listed on the Hong Kong and New York stock exchanges and incorporated under the laws of Hong Kong. China Mobile
Limited is a mobile network operator and its principal place of operation is China.                                    
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | 5.60% of the Groups investment in Bharti Airtel Limited, which is listed on the National Stock Exchange of India Limited and The Stock Exchange, Mumbai, and incorporated
under the laws of India. Bharti Airtel Limited is a mobile network operator and its principal place of operation is India.

Unlisted equity securities include the 26% interest in Bharti Infotel Private
Limited, which is equivalent to a 4.39% economic interest in Bharti Airtel Limited.
Unlisted equity investments are recorded at fair value, or at cost if their fair
value cannot be reliably measured as there is no active market upon which they
are traded.

For public debt and bonds and cash held in restricted deposits, the carrying
amount approximates the fair value. Other debt and bonds represents preferred
equity and a subordinated loan received as part of the disposal of Vodafone Japan
to SoftBank. There was no significant difference between the carrying value of
these items and the fair value at 31 March 2007.

The cumulative unrealised pre-tax gain recognised in the statement of recognised
income and expense in respect of equity securities was £2,884 million (2006: £1,080
million).



|114 | Vodafone Group PlcAnnual
        Report 2007
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| | Financials
| | ----------
| |           



16. Inventory

|                      | 2007 |  | 2006 | 
|--------------------- | ---- |  | ---- | 
|                      | £m   |  | £m   | 
|                      |      |  |      | 
|Goods held for resale | 288  |  | 297  | 
|                      |      |  |      | 

Inventory is reported net of allowances for
obsolescence, an analysis of which is as follows:

|                                                           | 2007 |   | 2006 |   | 2005 |  
|---------------------------------------------------------- | ---- | - | ---- | - | ---- | -
|                                                           | £m   |   | £m   |   | £m   |  
|                                                           |      |   |      |   |      |  
|At 1 April                                                 | 97   |   | 121  |   | 189  |  
|Transfer in respect of discontinued
        operations     |     |   | (40  | ) |     |  
|Exchange movements                                         | (2   | ) | 1    |   | (4   | )
|Amounts charged/(credited)
        to the income statement | 5    |   | 15   |   | (64  | )
|                                                           |      |   |      |   |      |  
|At 31 March                                                | 100  |   | 97   |   | 121  |  
|                                                           |      |   |      |   |      |  

Cost of sales includes amounts related to
    inventory amounting
to £3,797 million (2006: £3,662 million).

17. Trade and other receivables

|                                        | 2007  |  | 2006  | 
|--------------------------------------- | ----- |  | ----- | 
|                                        | £m    |  | £m    | 
|                                        |       |  |       | 
|Included within non-current assets:     |       |  |       | 
|Trade receivables                       | 42    |  | 37    | 
|Other receivables                       | 45    |  | 28    | 
|Prepayments and accrued income          | 183   |  | 65    | 
|Derivative financial instruments        | 224   |  | 231   | 
|                                        |       |  |       | 
|                                        | 494   |  | 361   | 
|                                        |       |  |       | 
|Included within current assets:         |       |  |       | 
|Trade receivables                       | 2,844 |  | 2,462 | 
|Amounts owed by associated undertakings | 14    |  | 12    | 
|Other receivables                       | 226   |  | 399   | 
|Prepayments and accrued income          | 1,859 |  | 1,486 | 
|Derivative financial instruments        | 80    |  | 79    | 
|                                        |       |  |       | 
|                                        | 5,023 |  | 4,438 | 
|                                        |       |  |       | 

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:

|                                               | 2007 |   | 2006 |   | 2005 |  
|---------------------------------------------- | ---- | - | ---- | - | ---- | -
|                                               | £m   |   | £m   |   | £m   |  
|                                               |      |   |      |   |      |  
|At 1 April                                     | 431  |   | 474  |   | 441  |  
|Transfer in respect of discontinued operations |     |   | (41  | ) |     |  
|Exchange movements                             | (16  | ) | 4    |   | 5    |  
|Amounts charged to administrative expenses     | 201  |   | 168  |   | 222  |  
|Trade receivables written off                  | (143 | ) | (174 | ) | (194 | )
|                                               |      |   |      |   |      |  
|At 31 March                                    | 473  |   | 431  |   | 474  |  
|                                               |      |   |      |   |      |  

Concentrations of credit risk with respect to trade receivables are limited due
to the Groups customer base being large and unrelated. Due to this, the
directors believe there is no further credit risk provision required in excess
of the allowance for bad and doubtful debts.

The carrying amounts of trade and other receivables approximate their fair value.
Trade and other receivables are predominantly non-interest bearing.

Included within Derivative financial instruments is
the following:

|                                                                | 2007 |  | 2006 | 
|--------------------------------------------------------------- | ---- |  | ---- | 
|                                                                | £m   |  | £m   | 
|                                                                |      |  |      | 
|Fair value through the income
    statement: (held for trading) |      |  |      | 
|Interest
    rate swaps                                         | 60   |  | 19   | 
|Foreign
    exchange swaps                                      | 78   |  | 30   | 
|Option
    contracts                                            |     |  | 1    | 
|                                                                |      |  |      | 
|                                                                | 138  |  | 138  | 
|Fair value hedges:                                              |      |  |      | 
|Interest
    rate swaps                                         | 166  |  | 260  | 
|                                                                |      |  |      | 
|                                                                | 304  |  | 310  | 
|                                                                |      |  |      | 

The fair values of these financial instruments
    are calculated by discounting the future cash flows to net present values
    using appropriate market interest and foreign currency rates prevailing at
the year end.



|Vodafone Group PlcAnnual
        Report 2007 | 115
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Notes to the Consolidated Financial Statementscontinued

18. Cash and cash equivalents

|                                                                  | 2007  |   |  | 2006  |  
|----------------------------------------------------------------- | ----- | - |  | ----- | -
|                                                                  | £m    |   |  | £m    |  
|                                                                  |       |   |  |       |  
|Cash at bank and in hand                                          | 827   |   |  | 948   |  
|Money market funds                                                | 5,525 |   |  | 1,841 |  
|Commercial paper                                                  | 1,129 |   |  |      |  
|                                                                  |       |   |  |       |  
|Cash and cash equivalents as presented in the balance sheet       | 7,481 |   |  | 2,789 |  
|Bank overdrafts                                                   | (23   | ) |  | (18   | )
|Cash and cash equivalents of discontinued operations              |      |   |  | 161   |  
|                                                                  |       |   |  |       |  
|Cash and cash equivalents as presented in the cash flow statement | 7,458 |   |  | 2,932 |  
|                                                                  |       |   |  |       |  

Bank balances and money market funds comprise cash held by the Group on a short term basis with original maturity of three months or less. The carrying amount of these assets approximates their fair value.

All commercial paper investments have a maturity of less than three months and
the carrying value approximates the fair value.

19. Called up share capital

|                                                                           |                 |   | 2007   |   |  |                |   | 2006  |  
|-------------------------------------------------------------------------- | --------------- | - | ------ | - |  | -------------- | - | ----- | -
|                                                                           | Number          |   | £m     |   |  | Number         |   | £m    |  
|                                                                           |                 |   |        |   |  |                |   |       |  
|Authorised:                                                                |                 |   |        |   |  |                |   |       |  
|Ordinary shares of 113/7 US cents each (2006: 10 US cents)                 | 68,250,000,000  |   | 4,875  |   |  | 78,000,000,000 |   | 4,875 |  
|B shares of 15 pence each                                                  | 66,600,000,000  |   | 9,990  |   |  |               |   |      |  
|                                                                           |                 |   |        |   |  |                |   |       |  
|Ordinary shares allotted, issued and fully paid:(1)                        |                 |   |        |   |  |                |   |       |  
|1 April                                                                    | 66,251,332,784  |   | 4,165  |   |  | 68,380,866,539 |   | 4,286 |  
|Allotted during the year                                                   | 118,241,919     |   | 7      |   |  | 120,466,245    |   | 7     |  
|Consolidated during the year(2)                                            | (8,283,879,405  | ) |       |   |  |               |   |      |  
|Cancelled during the year                                                  |                |   |       |   |  | (2,250,000,000 | ) | (128  | )
|                                                                           |                 |   |        |   |  |                |   |       |  
|31 March                                                                   | 58,085,695,298  |   | 4,172  |   |  | 66,251,332,784 |   | 4,165 |  
|                                                                           |                 |   |        |   |  |                |   |       |  
|                                                                           |                 |   |        |   |  |                |   |       |  
|B shares allotted, issued and fully paid: (2)(3)                           |                 |   |        |   |  |                |   |       |  
|1 April                                                                    |                |   |       |   |  |               |   |      |  
|Issued during the year(2)                                                  | 66,271,035,240  |   | 9,941  |   |  |               |   |      |  
|Redeemed during the year(3)                                                | (38,102,969,449 | ) | (5,715 | ) |  |               |   |      |  
|Converted to deferred shares and subsequently cancelled
during the year(3) | (28,036,064,426 | ) | (4,206 | ) |  |               |   |      |  
|                                                                           |                 |   |        |   |  |                |   |       |  
|31 March                                                                   | 132,001,365     |   | 20     |   |  |               |   |      |  
|                                                                           |                 |   |        |   |  |                |   |       |  

|Notes:
|------
|(1)   
|(2)   
|(3)   
|      
|      
|      

Allotted during the year

|                                                           |             |  | Nominal |  |              | 
|---------------------------------------------------------- | ----------- |  | ------- |  | ------------ | 
|                                                           |             |  | value   |  | Net proceeds | 
|                                                           | Number      |  | £m      |  | £m           | 
|                                                           |             |  |         |  |              | 
|UK share awards and option scheme awards                   | 86,791,709  |  | 5       |  | 120          | 
|US share awards and option scheme awards                   | 31,450,210  |  | 2       |  | 41           | 
|                                                           |             |  |         |  |              | 
|Total for share option schemes and restricted stock awards | 118,241,919 |  | 7       |  | 161          | 
|                                                           |             |  |         |  |              | 

Cancelled during the yearDuring the 2006 financial year, 2,250,000,000 treasury shares were cancelled in order to comply with Companies Act 1985 requirements in relation to the amount of issued share capital that can be held in treasury. No
treasury shares were cancelled in the year ended 31 March 2007.



|116 | Vodafone
            Group PlcAnnual Report
            2007
|--- | ------------------------------------------------------------

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| | Financials
| | ----------
| |           



20. Share-based paymentsThe Company currently uses a number of equity settled share plans to grant options and shares to its directors and employees. The maximum aggregate number of ordinary shares which may be issued in respect
of share options or share plans will not (without shareholder approval) exceed: a.
	10% of the ordinary share capital of the Company in issue immediately prior to the date of grant, when aggregated with the total number of ordinary shares which have been allocated in the preceding ten year period
under all plans; andb.
	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 the Sharesave Scheme and the Vodafone Group Plc All Employee Share Plan. Share OptionsVodafone Group Sharesave SchemeThe Vodafone Group 1998 Sharesave
Scheme (the Sharesave Scheme) enables UK staff to acquire shares
in the Company through monthly savings of up to £250 over a three or five
year period, at the end of which they 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. Vodafone Group executive schemesThe Vodafone Global Incentive
Plan is a discretionary plan under which share options are granted to directors
and certain employees. Some of the share options are subject to performance conditions.
Options are normally exercisable between three and ten years from the date of
grant. The Company has a number of discretionary share option plans, under which awards are no longer made; the Vodafone Group 1998 Company Share Option Scheme and Vodafone Group 1988 Executive Share Option Scheme (which are
UK HM Revenue and Customs approved), the Vodafone Group 1998 Executive Share Option Scheme and the Vodafone 1988 Share Option


Scheme (which are unapproved) and the Vodafone Group 1999 Long Term Incentive
Plan. Some of the options are subject to performance conditions. Options are
normally exercisable between three and ten years from the date
of grant. For grants made to US employees, prior to 7 July 2003 the options have phased
vesting over a four year period and are exercisable in respect of ADSs. For grants
made from 7 July 2003, options are normally exercisable between three and ten
years from the date of grant, subject to the satisfaction of predetermined performance
conditions and are exercisable in respect of ADSs. Other share option schemesShare option schemes are operated
by certain of the Groups subsidiary undertakings although awards are no
longer made under these schemes. Share PlansVodafone Share Incentive PlanThe 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. Vodafone Group AllSharesAll permanent employees at
1 April 2006 received an award of 340 shares (2006: 320) in Vodafone Group Plc
on 3 July 2006, under the Vodafone Group Plc Global All Employee Share Plan.
The awards vest after two years and are not subject to performance conditions
other than continued employment. Vodafone Group executive plansUnder the Vodafone Global
Incentive Plan and its predecessor the Vodafone Group Plc 1999 Long Term Stock
Incentive Plan, awards of performance shares are granted to directors and certain
employees. The release of these shares is conditional upon achievement of performance
targets measured over a three year period. Under the Vodafone Group Deferred Share Bonus Plan, directors and certain employees
may defer their annual bonus into shares. Subject to continued employment and
retention of the deferred shares for two years, additional shares are released
at the end of this two year period if a performance condition has been satisfied.




|Vodafone
            Group Plc Annual Report 2007 | 117
|------------------------------------------------- | ---

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Back to Contents

Notes to the Consolidated Financial Statementscontinued

20. Share-based paymentscontinued

Movements in ordinary share options and ADS options outstanding

|                                 |          |   |  |          |   | ADS      |   |          |   |  |          |   | Ordinary |  
|-------------------------------- | -------- | - |  | -------- | - | -------- | - | -------- | - |  | -------- | - | -------- | -
|                                 |          |   |  |          |   |          |   |          |   |  |          |   |          |  
|                                 | 2007     |   |  | 2006     |   | 2005     |   | 2007     |   |  | 2006     |   | 2005     |  
|                                 | Millions |   |  | Millions |   | Millions |   | Millions |   |  | Millions |   | Millions |  
|                                 |          |   |  |          |   |          |   |          |   |  |          |   |          |  
|1 April                          | 8        |   |  | 11       |   | 18       |   | 787      |   |  | 1,123    |   | 1,184    |  
|Granted during the year          |         |   |  |         |   |         |   | 65       |   |  | 64       |   | 60       |  
|Forfeited during the year        |         |   |  |         |   | (2       | ) | (31      | ) |  | (40      | ) | (61      | )
|Exercised during the year        | (3       | ) |  | (2       | ) | (5       | ) | (179     | ) |  | (325     | ) | (60      | )
|Expired during the year          | (2       | ) |  | (1       | ) |         |   | (58      | ) |  | (35      | ) |         |  
|                                 |          |   |  |          |   |          |   |          |   |  |          |   |          |  
|31 March                         | 3        |   |  | 8        |   | 11       |   | 584      |   |  | 787      |   | 1,123    |  
|                                 |          |   |  |          |   |          |   |          |   |  |          |   |          |  
|Weighted average exercise price: |          |   |  |          |   |          |   |          |   |  |          |   |          |  
|1 April                          | $26.53   |   |  | $24.49   |   | $23.36   |   | £1.32    |   |  | £1.25    |   | £1.16    |  
|Granted during the year          |         |   |  |         |   |         |   | £1.12    |   |  | £1.35    |   | £1.17    |  
|Forfeited during the year        |         |   |  |         |   | $28.52   |   | £1.26    |   |  | £1.46    |   | £1.43    |  
|Exercised during the year        | $18.50   |   |  | $15.08   |   | $16.75   |   | £1.05    |   |  | £0.93    |   | £0.94    |  
|Expired during the year          | $41.86   |   |  | $36.83   |   |         |   | £1.68    |   |  | £1.83    |   |         |  
|                                 |          |   |  |          |   |          |   |          |   |  |          |   |          |  
|31 March                         | $21.46   |   |  | $26.53   |   | $24.49   |   | £1.35    |   |  | £1.32    |   | £1.25    |  
|                                 |          |   |  |          |   |          |   |          |   |  |          |   |          |  

Summary of options outstanding and exercisable at 31 March 2007

|                                                     |             |  |          |  | Outstanding      |  |             |  |          |  | Exercisable      | 
|---------------------------------------------------- | ----------- |  | -------- |  | ---------------- |  | ----------- |  | -------- |  | ---------------- | 
|                                                     |             |  |          |  |                  |  |             |  |          |  |                  | 
|                                                     |             |  | Weighted |  | Weighted         |  |             |  | Weighted |  | Weighted         | 
|                                                     |             |  | average  |  | average          |  |             |  | average  |  | average          | 
|                                                     | Outstanding |  | exercise |  | remaining        |  | Exercisable |  | exercise |  | remaining        | 
|                                                     | shares      |  | price    |  | contractual life |  | shares      |  | price    |  | contractual life | 
|                                                     | Millions    |  |          |  | Months           |  | Millions    |  |          |  | Months           | 
|                                                     |             |  |          |  |                  |  |             |  |          |  |                  | 
|Vodafone Group Savings Related and Sharesave Scheme: |             |  |          |  |                  |  |             |  |          |  |                  | 
|£
0.01
 £1.00                                       | 10          |  | £0.93    |  | 29               |  |            |  |         |  |                 | 
|£
1.01
 £2.00                                       | 5           |  | £1.09    |  | 23               |  |            |  |         |  |                 | 
|                                                     |             |  |          |  |                  |  |             |  |          |  |                  | 
|                                                     | 15          |  | £0.98    |  | 27               |  |            |  |         |  |                 | 
|                                                     |             |  |          |  |                  |  |             |  |          |  |                  | 
|Vodafone Group Executive Schemes:                    |             |  |          |  |                  |  |             |  |          |  |                  | 
|£
1.01
 £2.00                                       | 15          |  | £1.58    |  | 17               |  | 15          |  | £1.58    |  | 17               | 
|£
2.01
 £3.00                                       | 28          |  | £2.75    |  | 37               |  | 28          |  | £2.75    |  | 37               | 
|                                                     |             |  |          |  |                  |  |             |  |          |  |                  | 
|                                                     | 43          |  | £2.34    |  | 30               |  | 43          |  | £2.34    |  | 30               | 
|                                                     |             |  |          |  |                  |  |             |  |          |  |                  | 
|Vodafone Group 1999 Long Term Stock Incentive Plan:  |             |  |          |  |                  |  |             |  |          |  |                  | 
|£
0.01
 £1.00                                       | 137         |  | £0.91    |  | 63               |  | 137         |  | £0.91    |  | 63               | 
|£
1.01
 £2.00                                       | 357         |  | £1.40    |  | 71               |  | 242         |  | £1.48    |  | 58               | 
|£
2.01
 £3.00                                       | 6           |  | £2.92    |  | 4                |  | 6           |  | £2.92    |  | 4                | 
|                                                     |             |  |          |  |                  |  |             |  |          |  |                  | 
|                                                     | 500         |  | £1.29    |  | 68               |  | 385         |  | £1.30    |  | 58               | 
|                                                     |             |  |          |  |                  |  |             |  |          |  |                  | 
|Other Share Option Plans:                            |             |  |          |  |                  |  |             |  |          |  |                  | 
|£
0.01
 £1.00                                       | 16          |  | £0.80    |  | 24               |  | 1           |  | £0.73    |  | 3                | 
|£
1.01
 £2.00                                       | 7           |  | £1.35    |  | 47               |  | 6           |  | £1.45    |  | 41               | 
|£
2.01
 £3.00                                       | 3           |  | £2.16    |  | 12               |  | 3           |  | £2.16    |  | 12               | 
|                                                     |             |  |          |  |                  |  |             |  |          |  |                  | 
|                                                     | 26          |  | £1.10    |  | 28               |  | 10          |  | £1.65    |  | 30               | 
|                                                     |             |  |          |  |                  |  |             |  |          |  |                  | 
|Vodafone Group 1999 Long Term Stock Incentive Plan:  |             |  |          |  |                  |  |             |  |          |  |                  | 
|$
10.01  $20.00                                     | 1           |  | $13.67   |  | 63               |  | 1           |  | $13.67   |  | 63               | 
|$
20.01  $30.00                                     | 1           |  | $21.63   |  | 39               |  | 1           |  | $21.62   |  | 40               | 
|Greater than $30.01                                  | 1           |  | $44.65   |  | 4                |  | 1           |  | $44.13   |  | 4                | 
|                                                     |             |  |          |  |                  |  |             |  |          |  |                  | 
|                                                     | 3           |  | $21.46   |  | 44               |  | 3           |  | $21.27   |  | 45               | 
|                                                     |             |  |          |  |                  |  |             |  |          |  |                  | 



|118 | Vodafone Group PlcAnnual
        Report 2007
|--- | --------------------------------------------

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| | Financials
| | ----------
| |           



Share awardsMovements in non-vested shares during the year ended 31 March 2007 are as follows:

|              |          |   | All Shares     |  |          |   | Other          |  |          |   | Total          | 
|------------- | -------- | - | -------------- |  | -------- | - | -------------- |  | -------- | - | -------------- | 
|              |          |   |                |  |          |   |                |  |          |   |                | 
|              |          |   | Weighted       |  |          |   | Weighted       |  |          |   | Weighted       | 
|              |          |   | average fair   |  |          |   | average fair   |  |          |   | average fair   | 
|              |          |   | value at grant |  |          |   | value at grant |  |          |   | value at grant | 
|              | Millions |   | date           |  | Millions |   | date           |  | Millions |   | date           | 
|              |          |   |                |  |          |   |                |  |          |   |                | 
|1 April 2006  | 35       |   | £1.19          |  | 141      |   | £1.16          |  | 176      |   | £1.17          | 
|Granted       | 20       |   | £1.02          |  | 107      |   | £0.91          |  | 127      |   | £0.93          | 
|Vested        | (19      | ) | £1.15          |  | (18      | ) | £1.12          |  | (37      | ) | £1.14          | 
|Forfeited     | (3       | ) | £1.14          |  | (33      | ) | £1.08          |  | (36      | ) | £1.09          | 
|              |          |   |                |  |          |   |                |  |          |   |                | 
|31 March 2007 | 33       |   | £1.13          |  | 197      |   | £1.04          |  | 230      |   | £1.05          | 
|              |          |   |                |  |          |   |                |  |          |   |                | 

Fair value

|                                | ADS Options  |  |  |              |  |              |  |              |  | Ordinary Share Options |                       
|------------------------------- | ------------ |  |  | ------------ |  | ------------ |  | ------------ |  | ---------------------- | ----------------------
|                                |              |  |  |              |  |              |  |              |  |                        |                       
|                                |              |  |  |              |  |              |  |              |  |                        | Board of directors and
|                                |              |  |  |              |  | Other        |  |              |  |                        | Executive Committee   
|                                |              |  |  |              |  |              |  |              |  |                        |                       
|                                | 2007         |  |  | 2006         |  | 2005         |  | 2007         |  |                        | 2006                  
|                                |              |  |  |              |  |              |  |              |  |                        |                       
|Expected life of option (years) | 5  6        |  |  | 8  9        |  | 6  7        |  | 5  6        |  |                        | 6  7                 
|Expected share price volatility | 27.3  28.3% |  |  | 17.9  18.9% |  | 25.6  26.6% |  | 24.0  27.7% |  |                        | 17.6  18.6%          
|Dividend yield                  | 5.1  5.5%   |  |  | 2.8  3.2%   |  | 1.7  2.1%   |  | 4.8  5.5%   |  |                        | 2.6  3%              
|Risk free rates                 | 4.8%         |  |  | 4.2%         |  | 5.1%         |  | 4.7  4.9%   |  |                        | 4.2%                  
|Exercise price(1)               | £1.15        |  |  | £1.36        |  | £1.40        |  | £1.15  1.36 |  |                        | £1.45                 
|                                |              |  |  |              |  |              |  |              |  |                        |                       

|Note:
|-----
|(1)  

The fair value of the options is estimated at the date of grant using a lattice-based option valuation model (i.e. binomial model) that uses the assumptions noted in the above table. Lattice-based option valuation
models incorporate ranges of assumptions for inputs and those ranges are disclosed above. Certain options granted to the Board of directors and Executive Committee have a market based performance condition attached and hence the assumptions are
disclosed separately.

The Group uses historical data to estimate option exercise and employee termination
within the valuation model; separate groups of employees that have similar historical
exercise behaviour are considered separately for valuation purposes. The expected
life of options granted is derived from the output of the option valuation model
and represents the period of time that options granted are expected to be outstanding;
the range given above results from certain groups of employees exhibiting different
behaviour. Expected volatilities are based on implied volatilities as determined
by a simple average of no less than three international banks excluding the highest
and lowest numbers. The risk-free rates for periods within the contractual life
of the option are based on the UK gilt yield curve in effect at the time of grant.

Shares used for the Groups employee incentive plans can be newly issued
shares, shares held in treasury or market purchased shares either through the
Companys employee benefit trust or direct from the market or a combination
of sources. The source of the shares is determined by the Company having regard
to what is considered the most efficient source at the relevant time.

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 methodology for the TSR was based on
Vodafones ranking within the same group of companies (where possible) over
the past five years (2006: ten years, 2005: ten years). The volatility of the
ranking over a three year period was used to determine the probability weighted
percentage number of shares that could be expected to vest and hence affect fair
value.

Other informationThe
weighted average grant-date fair value of options granted during the 2007 financial
year was £0.22 (2006: £0.30, 2005: £0.34) . The total intrinsic value of options exercised during the year ended 31
March 2007 was £65 million (2006: £164 million, 2005: £28 million). The aggregate intrinsic value of fully vested share options outstanding at the year end was £102 million and the aggregate intrinsic value of fully vested share
options exercisable at the year end was £73 million. Cash received from the exercise of options under share options schemes was £193 million and the tax benefit realised from options exercised during the annual period was £21
million.

The total fair value of shares vested during the year ended 31 March 2007 was £41
million (2006: £18 million, 2005: £5 million).

The compensation cost that has been charged against income in respect of share
options and share plans for continuing operations was £93 million (2006: £109
million, 2005: £130 million), which is comprised entirely of equity-settled
transactions. Including discontinued operations, the compensation cost charged
against income in respect of share options and share plans in total was £93
million (2006: £114 million, 2005: £137 million). The total income
tax benefit recognised in the consolidated income statement in respect of share
options and share plans was £34 million (2006: £50 million, 2005: £17
million). Compensation costs in respect of share options and share plans capitalised
during the years ended 31 March 2007, 31 March 2006 and 31 March 2005 were insignificant.
As of 31 March 2007, there was £130 million of total compensation cost relating
to non-vested awards not yet recognised, which is expected to be recognised over
a weighted average period of two years.

No cash was used to settle equity instruments granted under share-based payment
schemes.

The average share price for the 2007 financial year was 129 pence.



|Vodafone
            Group Plc Annual Report 2007 | 119
|------------------------------------------------- | ---

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Notes to the Consolidated Financial Statementscontinued

21. Transactions with equity shareholders

|                                                                   |               |   | Capital    |  |            |   |                 |  
|------------------------------------------------------------------ | ------------- | - | ---------- |  | ---------- | - | --------------- | -
|                                                                   | Share premium |   | redemption |  | Own shares |   | Additional      |  
|                                                                   | account       |   | reserve    |  | held       |   | paid-in capital |  
|                                                                   | £m            |   | £m         |  | £m         |   | £m              |  
|                                                                   |               |   |            |  |            |   |                 |  
|1 April 2004                                                       | 52,154        |   |           |  | (1,136     | ) | 99,950          |  
|Issue of new shares                                                | 130           |   |           |  |           |   | (28             | )
|Purchase of own shares                                             |              |   |           |  | (3,997     | ) |                |  
|Own shares released on vesting of share awards                     |              |   |           |  | 12         |   |                |  
|Share based payment charge, inclusive of tax credit of £22 million |              |   |           |  |           |   | 159             |  
|                                                                   |               |   |            |  |            |   |                 |  
|31 March 2005                                                      | 52,284        |   |           |  | (5,121     | ) | 100,081         |  
|Issue of new shares                                                | 152           |   |           |  |           |   | (44             | )
|Purchase of own shares                                             |              |   |           |  | (6,500     | ) |                |  
|Own shares released on vesting of share awards                     | 8             |   |           |  | 370        |   | (8              | )
|Cancellation of own shares held                                    |              |   | 128        |  | 3,053      |   |                |  
|Share-based payment charge, inclusive of tax credit of £9 million  |              |   |           |  |           |   | 123             |  
|                                                                   |               |   |            |  |            |   |                 |  
|31 March 2006                                                      | 52,444        |   | 128        |  | (8,198     | ) | 100,152         |  
|Issue of new shares                                                | 154           |   |           |  |           |   | (44             | )
|Own shares released on vesting of share awards                     |              |   |           |  | 151        |   |                |  
|Share consolidation                                                | (9,026        | ) |           |  |           |   |                |  
|B share capital redemption                                         |              |   | 5,713      |  |           |   |                |  
|B share preference dividend                                        |              |   | 3,291      |  |           |   |                |  
|Share-based payment charge, inclusive of tax charge of £16 million |              |   |           |  |           |   | 77              |  
|                                                                   |               |   |            |  |            |   |                 |  
|31 March 2007                                                      | 43,572        |   | 9,132      |  | (8,047     | ) | 100,185         |  
|                                                                   |               |   |            |  |            |   |                 |  

22. Movements in accumulated other recognised income
and expense

|                                                |             |   |          |   | Available-for-sale |   |                   |  |        |  
|----------------------------------------------- | ----------- | - | -------- | - | ------------------ | - | ----------------- |  | ------ | -
|                                                | Translation |   | Pensions |   | investments        |   | Asset revaluation |  |        |  
|                                                | reserve     |   | reserve  |   | reserve            |   | surplus           |  | Total  |  
|                                                | £m          |   | £m       |   | £m                 |   | £m                |  | £m     |  
|                                                |             |   |          |   |                    |   |                   |  |        |  
|1 April 2004                                    |            |   |         |   | 233                |   |                  |  | 233    |  
|Gains/(losses) arising in the year              | 1,521       |   | (102     | ) | 106                |   |                  |  | 1,525  |  
|Tax effect                                      |            |   | 23       |   |                   |   |                  |  | 23     |  
|                                                |             |   |          |   |                    |   |                   |  |        |  
|31 March 2005                                   | 1,521       |   | (79      | ) | 339                |   |                  |  | 1,781  |  
|Gains/(losses) arising in the year              | 1,486       |   | (43      | ) | 710                |   | 112               |  | 2,265  |  
|Foreign exchange recycled on business disposal  | 36          |   |         |   |                   |   |                  |  | 36     |  
|Tax effect                                      |            |   | 13       |   | (5                 | ) |                  |  | 8      |  
|                                                |             |   |          |   |                    |   |                   |  |        |  
|31 March 2006                                   | 3,043       |   | (109     | ) | 1,044              |   | 112               |  | 4,090  |  
|(Losses)/gains arising in the year              | (3,802      | ) | 65       |   | 2,108              |   |                  |  | (1,629 | )
|Foreign exchange recycled on business disposals | 838         |   |         |   |                   |   |                  |  | 838    |  
|Tax effect                                      | 22          |   | (15      | ) |                   |   |                  |  | 7      |  
|                                                |             |   |          |   |                    |   |                   |  |        |  
|31 March 2007                                   | 101         |   | (59      | ) | 3,152              |   | 112               |  | 3,306  |  
|                                                |             |   |          |   |                    |   |                   |  |        |  

23. Movements in retained losses

|                                       | 2007    |   |  | 2006    |   | 2005    |  
|-------------------------------------- | ------- | - |  | ------- | - | ------- | -
|                                       | £m      |   |  | £m      |   | £m      |  
|                                       |         |   |  |         |   |         |  
|1 April                                | (67,356 | ) |  | (39,511 | ) | (43,930 | )
|(Loss)/profit for the financial year   | (5,426  | ) |  | (21,916 | ) | 6,410   |  
|Dividends (note 7)                     | (3,566  | ) |  | (2,753  | ) | (1,991  | )
|Gain on expiration of equity put right | 142     |   |  |        |   |        |  
|Loss on issue of treasury shares       | (43     | ) |  | (123    | ) |        |  
|B share capital redemption             | (5,713  | ) |  |        |   |        |  
|B share preference dividend            | (3,291  | ) |  |        |   |        |  
|Cancellation of shares                 |        |   |  | (3,053  | ) |        |  
|                                       |         |   |  |         |   |         |  
|31 March                               | (85,253 | ) |  | (67,356 | ) | (39,511 | )
|                                       |         |   |  |         |   |         |  



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| | Financials
| | ----------
| |           

24. Borrowings

|                                                  | 2007       |  | 2006       | 
|------------------------------------------------- | ---------- |  | ---------- | 
|                                                  |            |  |            | 
|                                                  | Short term |  | Long term  | 
|                                                  | borrowings |  | borrowings | 
|                                                  | £m         |  | £m         | 
|                                                  |            |  |            | 
|Financial liabilities measured at amortised cost: |            |  |            | 
|Bank loans                                        | 94         |  | 2,086      | 
|Bank overdrafts                                   | 23         |  |           | 
|Redeemable preference shares                      |           |  | 818        | 
|Finance lease obligations                         | 7          |  | 59         | 
|Bonds                                             | 1,648      |  | 3,953      | 
|Other liabilities                                 | 2,202      |  | 156        | 
|Loans and bonds in fair value hedge relationships | 843        |  | 10,726     | 
|                                                  |            |  |            | 
|                                                  | 4,817      |  | 17,798     | 
|                                                  |            |  |            | 

Maturity of borrowingsThe
maturity profile of the anticipated future cash flows including interest in relation
to the Groups non-derivative financial liabilities, on an undiscounted
basis and which, therefore, differs from both the carrying value and fair value,
is as follows:

|                                   |            |   | Redeemable |   | Finance     |   |       |   |                   | Loans in fair |   |        |  
|---------------------------------- | ---------- | - | ---------- | - | ----------- | - | ----- | - | ----------------- | ------------- | - | ------ | -
|                                   |            |   | preference |   | lease       |   |       |   |                   | value hedge   |   |        |  
|                                   | Bank loans |   | shares     |   | obligations |   | Bonds |   | Other liabilities | relationships |   | Total  |  
|                                   | £m         |   | £m         |   | £m          |   | £m    |   | £m                | £m            |   | £m     |  
|                                   |            |   |            |   |             |   |       |   |                   |               |   |        |  
|Within one year                    | 116        |   | 43         |   | 11          |   | 1,853 |   | 2,225             | 1,464         |   | 5,712  |  
|In one to two years                | 142        |   | 43         |   | 11          |   | 1,100 |   | 21                | 1,346         |   | 2,663  |  
|In two to three years              | 153        |   | 43         |   | 10          |   | 334   |   |                  | 3,802         |   | 4,342  |  
|In three to four years             | 1,265      |   | 43         |   | 10          |   | 123   |   | 51                | 355           |   | 1,847  |  
|In four to five years              | 265        |   | 43         |   | 9           |   | 1,430 |   |                  | 979           |   | 2,726  |  
|In more than five years            | 384        |   | 1,187      |   | 32          |   | 1,707 |   | 84                | 9,140         |   | 12,534 |  
|                                   |            |   |            |   |             |   |       |   |                   |               |   |        |  
|                                   | 2,325      |   | 1,402      |   | 83          |   | 6,547 |   | 2,381             | 17,086        |   | 29,824 |  
|Effect of discount/financing rates | (145       | ) | (584       | ) | (17         | ) | (946  | ) |                  | (5,517        | ) | (7,209 | )
|                                   |            |   |            |   |             |   |       |   |                   |               |   |        |  
|31 March 2007                      | 2,180      |   | 818        |   | 66          |   | 5,601 |   | 2,381             | 11,569        |   | 22,615 |  
|                                   |            |   |            |   |             |   |       |   |                   |               |   |        |  
|                                   |            |   |            |   |             |   |       |   |                   |               |   |        |  
|Within one year                    | 68         |   | 49         |   | 12          |   | 167   |   | 1,858             | 2,093         |   | 4,247  |  
|In one to two years                | 53         |   | 49         |   | 11          |   | 2,044 |   | 295               | 1,450         |   | 3,902  |  
|In two to three years              | 58         |   | 49         |   | 11          |   | 936   |   |                  | 1,116         |   | 2,170  |  
|In three to four years             | 61         |   | 49         |   | 11          |   | 55    |   |                  | 3,982         |   | 4,158  |  
|In four to five years              | 1,314      |   | 49         |   | 10          |   | 55    |   |                  | 267           |   | 1,695  |  
|In more than five years            | 45         |   | 1,387      |   | 42          |   | 1,375 |   |                  | 7,428         |   | 10,277 |  
|                                   |            |   |            |   |             |   |       |   |                   |               |   |        |  
|                                   | 1,599      |   | 1,632      |   | 97          |   | 4,632 |   | 2,153             | 16,336        |   | 26,449 |  
|Effect of discount/financing rates | (127       | ) | (730       | ) | (22         | ) | (704  | ) |                  | (4,668        | ) | (6,251 | )
|                                   |            |   |            |   |             |   |       |   |                   |               |   |        |  
|31 March 2006                      | 1,472      |   | 902        |   | 75          |   | 3,928 |   | 2,153             | 11,668        |   | 20,198 |  
|                                   |            |   |            |   |             |   |       |   |                   |               |   |        |  

The maturity profile of the Groups financial derivatives (which include interest rate and foreign exchange swaps), using undiscounted cash flows, is as follows:

|                        | 2007    |  | 2006       | 
|----------------------- | ------- |  | ---------- | 
|                        |         |  |            | 
|                        | Payable |  | Receivable | 
|                        | £m      |  | £m         | 
|                        |         |  |            | 
|Within one year         | 15,163  |  | 15,163     | 
|In one to two years     | 611     |  | 626        | 
|In two to three years   | 503     |  | 587        | 
|In three to four years  | 403     |  | 398        | 
|In four to five years   | 400     |  | 387        | 
|In more than five years | 3,577   |  | 3,596      | 
|                        |         |  |            | 
|                        | 20,657  |  | 20,757     | 
|                        |         |  |            | 



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        2007 | 121
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Notes to the Consolidated Financial Statementscontinued

24. BorrowingscontinuedThe
    currency split of the Groups foreign exchange derivatives, all of which
mature in less than one year, is as follows:

|             | 2007    |  | 2006       | 
|------------ | ------- |  | ---------- | 
|             |         |  |            | 
|             | Payable |  | Receivable | 
|             | £m      |  | £m         | 
|             |         |  |            | 
|Sterling     | 1,000   |  | 5,477      | 
|Euro         | 7,204   |  |           | 
|US dollar    | 6,178   |  | 8,166      | 
|Japanese yen |        |  | 106        | 
|Other        | 84      |  | 747        | 
|             |         |  |            | 
|             | 14,466  |  | 14,496     | 
|             |         |  |            | 

Payables and receivables are stated separately in the table above as settlement is on a gross basis. The £30 million net receivable (2006: £39 million net payable) in relation to foreign exchange financial
instruments, in the table above, is split £48 million (2006: £69 million) within trade and other payables and £78 million (2006: £30 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 analysed as follows:

|                                                                                      |       |  |       |  | 2007     |  | 2006     | 
|------------------------------------------------------------------------------------- | ----- |  | ----- |  | -------- |  | -------- | 
|                                                                                      |       |  |       |  | £m       |  | £m       | 
|                                                                                      |       |  |       |  |          |  |          | 
|Within one year                                                                       |       |  |       |  | 7        |  | 7        | 
|In two to five years                                                                  |       |  |       |  | 30       |  | 31       | 
|In more than five years                                                               |       |  |       |  | 29       |  | 37       | 
|                                                                                      |       |  |       |  |          |  |          | 
|                                                                                      |       |  |       |  |          |  |          | 
|The fair value and carrying value of the Groups short term borrowings is as follows: |       |  |       |  |          |  |          | 
|                                                                                      | Fair  |  | Fair  |  | Carrying |  | Carrying | 
|                                                                                      | value |  | value |  | value    |  | value    | 
|                                                                                      | 2007  |  | 2006  |  | 2007     |  | 2006     | 
|                                                                                      | £m    |  | £m    |  | £m       |  | £m       | 
|                                                                                      |       |  |       |  |          |  |          | 
|Financial liabilities measured at amortised cost:                                     |       |  |       |  |          |  |          | 
|Bank loans                                                                            | 94    |  | 58    |  | 94       |  | 58       | 
|Bank overdrafts                                                                       | 23    |  | 18    |  | 23       |  | 18       | 
|Finance lease obligations                                                             | 7     |  | 7     |  | 7        |  | 7        | 
|Bonds:                                                                                |       |  |       |  |          |  |          | 
|US dollar FRN due June 2007                                                           | 897   |  |      |  | 878      |  |         | 
|US dollar FRN due December 2007                                                       | 749   |  |      |  | 770      |  |         | 
|Other liabilities                                                                     | 2,202 |  | 1,840 |  | 2,202    |  | 1,840    | 
|Loans in fair value hedge relationships:                                              |       |  |       |  |          |  |          | 
|0.83% Japanese yen bond due November 2006                                             |      |  | 15    |  |         |  | 15       | 
|5.4% euro400m bond due June 2006                                                      |      |  | 281   |  |         |  | 293      | 
|5.75% euro1.5bn bond due October 2006                                                 |      |  | 1,063 |  |         |  | 1,091    | 
|7.5% US dollar 400m bond due July 2006                                                |      |  | 126   |  |         |  | 126      | 
|4.161% US dollar 150m bond due November 2007                                          | 76    |  |      |  | 77       |  |         | 
|3.95% US dollar 500m bond due January 2008                                            | 252   |  |      |  | 254      |  |         | 
|4.625% euro 250m bond due January 2008                                                | 170   |  |      |  | 171      |  |         | 
|4.625% euro 500m bond due January 2008                                                | 341   |  |      |  | 341      |  |         | 
|                                                                                      |       |  |       |  |          |  |          | 
|Short term borrowings                                                                 | 4,811 |  | 3,408 |  | 4,817    |  | 3,448    | 
|                                                                                      |       |  |       |  |          |  |          | 



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| | Financials
| | ----------
| |           

The fair value and carrying value of the Groups long term borrowings is as follows:

|                                                   | Fair   |  | Fair   |  | Carrying |  | Carrying | 
|-------------------------------------------------- | ------ |  | ------ |  | -------- |  | -------- | 
|                                                   | value  |  | value  |  | value    |  | value    | 
|                                                   | 2007   |  | 2006   |  | 2007     |  | 2006     | 
|                                                   | £m     |  | £m     |  | £m       |  | £m       | 
|                                                   |        |  |        |  |          |  |          | 
|Financial liabilities measured at amortised cost:  |        |  |        |  |          |  |          | 
|Bank loans                                         | 2,086  |  | 1,414  |  | 2,086    |  | 1,414    | 
|Redeemable preference shares                       | 818    |  | 902    |  | 818      |  | 902      | 
|Finance lease obligations                          | 59     |  | 68     |  | 59       |  | 68       | 
|Bonds:                                             |        |  |        |  |          |  |          | 
|US dollar FRN due June 2007                        |       |  | 1,064  |  |         |  | 1,064    | 
|US dollar FRN due December 2007                    |       |  | 859    |  |         |  | 867      | 
|Euro FRN due July 2008                             | 849    |  | 873    |  | 858      |  | 875      | 
|Euro FRN due February 2009                         | 102    |  |       |  | 102      |  |         | 
|Euro FRN due February 2010                         | 204    |  |       |  | 205      |  |         | 
|US dollar FRN due June 2011                        | 224    |  | 201    |  | 178      |  | 202      | 
|Euro FRN due January 2012                          | 683    |  |       |  | 685      |  |         | 
|Euro FRN due January 2012                          | 205    |  |       |  | 197      |  |         | 
|US dollar FRN due February 2012                    | 254    |  |       |  | 255      |  |         | 
|Euro FRN due September 2013                        | 582    |  |       |  | 579      |  |         | 
|5.125% euro 500m bond due April 2015               | 350    |  | 366    |  | 365      |  | 376      | 
|5% euro 750m bond due June 2018                    | 515    |  | 540    |  | 529      |  | 544      | 
|Other liabilities                                  | 156    |  | 295    |  | 156      |  | 295      | 
|Loans in fair value hedge relationships:           |        |  |        |  |          |  |          | 
|4.161% US dollar 150m bond due November 2007       |       |  | 86     |  |         |  | 85       | 
|3.95% US dollar 500m bond due January 2008         |       |  | 281    |  |         |  | 281      | 
|4.625% euro 250m bond due January 2008             |       |  | 178    |  |         |  | 172      | 
|5.5% euro 400m bond due July 2008                  | 32     |  | 34     |  | 34       |  | 34       | 
|6.25% sterling 250m bond due July 2008             | 251    |  | 257    |  | 249      |  | 255      | 
|6.25% sterling 150m bond due July 2008             | 151    |  | 154    |  | 149      |  | 145      | 
|6.65% US dollar 500m bond due May 2008             | 129    |  | 147    |  | 132      |  | 140      | 
|4.625% euro 500m bond due January 2008             |       |  | 316    |  |         |  | 355      | 
|4.0% euro 300m bond due January 2009               | 203    |  |       |  | 204      |  |         | 
|4.25% euro 1.4bn bond due May 2009                 | 950    |  | 990    |  | 965      |  | 1,008    | 
|4.25% euro 500m bond due May 2009                  | 339    |  | 354    |  | 348      |  | 360      | 
|4.75% euro 3bn bond due May 2009                   | 596    |  | 624    |  | 602      |  | 593      | 
|7.75% US dollar 2.75bn bond due February 2010      | 1,480  |  | 1,702  |  | 1,467    |  | 1,693    | 
|5.5% US dollar 750m bond due June 2011             | 385    |  | 428    |  | 390      |  | 430      | 
|5.35% US dollar 500m bond due February 2012        | 255    |  |       |  | 256      |  |         | 
|3.625% euro 750m bond due November 2012            | 487    |  | 505    |  | 492      |  | 514      | 
|6.75% Australian dollar 265m bond due January 2013 | 108    |  |       |  | 110      |  |         | 
|5.0% US dollar 1bn bond due December 2013          | 464    |  | 549    |  | 502      |  | 559      | 
|4.625% sterling 350m bond due September 2014       | 321    |  | 333    |  | 334      |  | 349      | 
|5.375% US dollar 500m bond due January 2015        | 250    |  | 307    |  | 249      |  | 274      | 
|5.375% US dollar 400m bond due January 2015        | 200    |  | 220    |  | 199      |  | 220      | 
|5.0% US dollar 750m bond due September 2015        | 423    |  | 419    |  | 375      |  | 415      | 
|5.75% US dollar 750m bond due March 2016           | 384    |  | 423    |  | 384      |  | 427      | 
|4.75% euro 300m bond due June 2016                 | 204    |  |       |  | 209      |  |         | 
|4.75% euro 200m bond due June 2016                 | 136    |  |       |  | 140      |  |         | 
|5.625% US dollar 1.3bn bond due February 2017      | 650    |  |       |  | 661      |  |         | 
|4.625% US dollar 500m bond due July 2018           | 231    |  | 258    |  | 235      |  | 260      | 
|5.625% sterling 250m bond due December 2025        | 242    |  | 254    |  | 253      |  | 271      | 
|7.875% US dollar 750m bond due February 2030       | 441    |  | 499    |  | 481      |  | 542      | 
|5.9% sterling 450m bond due November 2032          | 454    |  | 477    |  | 451      |  | 480      | 
|6.25% US dollar 495m bond due November 2032        | 250    |  | 293    |  | 252      |  | 281      | 
|6.15% US dollar 1.2bn bond due February 2037       | 609    |  |       |  | 603      |  |         | 
|                                                   |        |  |        |  |          |  |          | 
|Long term borrowings                               | 17,712 |  | 16,670 |  | 17,798   |  | 16,750   | 
|                                                   |        |  |        |  |          |  |          | 

Fair values are calculated using discounted cash flows with a discount rate based upon forward interest rates available to the Group at the balance sheet date.

Banks loans include a ZAR8 billion loan held by Vodafone Holdings SA Pty Limited
(VHSA), which directly and indirectly owns the Groups 50% interest
in Vodacom Group (Pty) Limited. VHSA has pledged its 100% equity shareholding
in Vodafone Investments SA (VISA) as security for its loan obligations.
The terms and conditions of the pledge mean that should VHSA not meet all of
its loan payment and performance obligations, the lenders may sell the equity
shareholding in its subsidiary VISA at market value to recover their losses,
with any remaining sales proceeds being returned to VHSA. Vodafone International
Holdings BV and VISA have also guaranteed this loan with recourse only to the
VHSA and Vodafone Telecommunications Investment SA (VTISA) shares
they have respectively pledged. The terms and conditions of the security arrangement
mean the lenders may be able to sell these respective shares in preference to
the VISA shares held by VHSA. An arrangement has been put in place, where the
Vodacom Group (Pty) Limited shares held by VHSA and VTISA are held in an escrow
account to ensure the shares cannot be sold to satisfy the pledge made by both
companies. The maximum collateral provided is ZAR8.6 billion, being the carrying
value of the bank loan as at 31 March 2007.



|Vodafone Group Plc Annual Report
        2007 | 123
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Notes to the Consolidated Financial Statementscontinued

24. Borrowingscontinued Borrowing
    facilitiesAt 31 March 2007, the Groups most significant committed borrowing facilities comprised two bank facilities of $5,925 million (£3,010 million) and $5,025 million (£2,553 million) expiring between
two and five years and in more than five years, respectively (2006: two bank facilities of $5,925 million (£3,407 million) and $5,025 million (£2,890 million)), a ¥259 billion (£1,117 million, 2006: ¥259 billion
(£1,265 million)) term credit facility, which expires between two and five years and a 400 billion (£272 million, 2006: nil) loan facility, which expires in
more than five years. The bank facilities remained undrawn throughout the year, the ¥259 billion term credit facility was fully drawn down on 21 December 2005 and the 400
million loan facility was fully drawn down on 14 February 2007. Under the terms and conditions of the $5,925 million and $5,025 million
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 agreement provides 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.
Substantially the same terms and conditions apply in the case of Vodafone Finance
K.K.s ¥259 billion term credit facility, although the change of control
provision is applicable to any guarantor of borrowings under the term credit
facility. As of 31 March 2007, the Company was the sole guarantor of the ¥259
billion term credit facility. The terms and conditions of


the400 million loan facility are similar to those of the US dollar bank facilities, with the addition that, should the Groups
Turkish operating company spend less than the equivalent of $800 million on capital expenditure, the Group will be required to repay the drawn amount of the facility that exceeds 50% of the capital expenditure. In addition to the above, certain of the Groups subsidiaries had committed
facilities at 31 March 2007 of £1,030 million (2006:£271
million) in aggregate, of which £278 million (2006: £65 million) was
undrawn. Of the total committed facilities, £99 million (2006: £121
million) expires in less than one year, £574
million (2006: £109 million) expires between two and five years, and £357
million (2006: £41
million) expires in more than five years. Redeemable preference sharesRedeemable
preference shares comprise class D and E preferred shares issued by Vodafone
Americas, Inc. An annual dividend of $51.43 per class D and E preferred share is payable quarterly in arrears. The dividend
for the year amounted to £45 million (2006: £48 million). The aggregate redemption value of the class D and E preferred shares is $1.65 billion. The holders of the preferred shares are entitled to vote on the election of directors and
upon each other matter coming before any meeting of the shareholders on which the holders of ordinary shares are entitled to vote. Holders are entitled to vote on the basis of twelve votes for each share of class D or E preferred stock held. The
maturity date of the 825,000 class D preferred shares is 6 April 2020. The 825,000 class E preferred shares have a maturity date of 1 April 2020. The class D and E preferred shares have a redemption price of $1,000
per share plus all accrued and
unpaid dividends.




Interest rate and currency of borrowings

|              |            |  |            |  | Fixed rate borrowings | 
|------------- | ---------- |  | ---------- |  | --------------------- | 
|              |            |  |            |  |                       | 
|              |            |  |            |  |                       | 
|              |            |  |            |  |                       | 
|              |            |  | Floating   |  | Fixed                 | 
|              | Total      |  | rate       |  | rate                  | 
|              | borrowings |  | borrowings |  | borrowings            | 
|Currency      | £m         |  | £m         |  | £m                    | 
|              |            |  |            |  |                       | 
|Sterling      | 1,520      |  | 1,520      |  |                      | 
|Euro          | 9,295      |  | 8,382      |  | 913                   | 
|US dollar     | 9,687      |  | 9,687      |  |                      | 
|Japanese yen  | 1,118      |  | 1,118      |  |                      | 
|Other         | 995        |  | 995        |  |                      | 
|              |            |  |            |  |                       | 
|31 March 2007 | 22,615     |  | 21,702     |  | 913                   | 
|              |            |  |            |  |                       | 
|              |            |  |            |  |                       | 
|Sterling      | 1,511      |  | 1,511      |  |                      | 
|Euro          | 6,941      |  | 5,996      |  | 945                   | 
|US dollar     | 8,905      |  | 8,905      |  |                      | 
|Japanese yen  | 1,296      |  | 1,296      |  |                      | 
|Other         | 1,545      |  | 1,545      |  |                      | 
|              |            |  |            |  |                       | 
|31 March 2006 | 20,198     |  | 19,253     |  | 945                   | 
|              |            |  |            |  |                       | 

Interest on floating rate borrowings is based on national LIBOR equivalents or government bond rates in the relevant currencies.

The figures shown in the tables above take into account interest rate swaps used
to manage the interest rate profile of financial liabilities.

At 31 March 2007, the Group had entered into foreign exchange contracts to decrease
its sterling, US dollar, Japanese yen and other currency borrowings above by
amounts equal to £4,477 million, £1,988
million, £106 million and £663 million respectively and to increase
its euro borrowings above by amounts equal to £7,204 million.

At 31 March 2006, the Group had entered into foreign exchange contracts to decrease
its sterling and US dollar borrowings above by amounts equal to £2,971 million
and £6,009 million respectively and to increase its euro, Japanese yen and
other currency borrowings above by amounts equal to £6,230 million, £1,827
million and £962 million respectively.

Further protection from euro and Japanese yen interest rate movements on debt
is provided by interest rate swaps. At 31 March 2007, the Group had euro denominated
interest rate swaps for amounts equal to £1,494 million. The effective rates,
which have been fixed, are 3.54% . In addition, the Group has entered into euro
denominated forward starting interest rate swaps for amounts equal to £679
million, £2,717 million and £679 million, which cover the periods June
2007 to June 2008, June 2008 to June 2009 and September 2008 to September 2009
respectively. The effective rates, which have been fixed, range from 2.62% per
annum to 3.02% per annum.



|124 | Vodafone Group PlcAnnual
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| | Financials
| | ----------
| |           



Financial risk managementThe
    Groups treasury function provides a centralised service to the Group
    for funding, foreign exchange, interest rate management and counterparty
risk management. Treasury operations are conducted within a framework of policies and guidelines
authorised and reviewed annually by the Companys Board of directors, most
recently on 25 September 2006. A Treasury Risk Committee,
comprising of the Groups Chief Financial Officer, Group General Counsel
and Company Secretary, Group Treasurer and Director of Financial Reporting, meets
at least annually to review treasury activities and its members receive management
information relating to treasury activities on a quarterly basis. In accordance
with the Group treasury policy, a quorum for meetings is four members and either
the Chief Financial Officer or Group General Counsel and Company Secretary must
be present at each meeting. The Group accounting function, which does not report
to the Group Treasurer, provides regular update reports of treasury activity
to the Board of directors. The Groups internal auditors review the internal
control
environment regularly. The Group uses a number of derivative instruments that are transacted, for risk
management purposes only, by specialist treasury personnel. There has been no
significant change during the financial year, or since the end of the year, to
the types of financial risks faced by the Group or the Groups approach
to the management of those risks. Capital managementThe
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 on-lent or contributed as equity to certain subsidiaries. The Board of directors
has approved three debt protection ratios, being: net interest to operating cash
flow (plus dividends from associated undertakings); retained cash flow (operating
cash flow plus dividends from associated undertakings less interest, tax, dividends
to minorities and equity dividends) to net debt; and operating cash flow (plus
dividends from associated undertakings) 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. Liquidity riskAs
at 31 March 2007, the Group had $10.9 billion committed undrawn bank facilities
and $15 billion and £5 billion commercial paper programmes, supported
by the $10.9 billion committed bank facilities, available to manage its liquidity.
The Group uses commercial paper and bank facilities to manage short term liquidity
and
manages long term liquidity by raising funds on capital markets. Market riskInterest rate managementUnder
the Groups interest rate management policy, interest rates on monetary
assets and liabilities denominated in euros, sterling and US dollars are maintained
on a floating rate basis, unless the forecast interest charge for the next eighteen
months is material in relation to forecast results, in which case rates are fixed.
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. At 31 March 2007, 29% (2006: 29%) of the Groups gross borrowings were fixed
for a period of at least one year. A one hundred basis point fall or rise in
market interest rates for all currencies in which the Group had borrowings at
31 March 2007 would reduce or increase profit before tax by approximately £24
million (2006: increase or reduce by £91 million), including mark-to-market
revaluations of interest rate and other derivatives and the potential interest
on outstanding tax issues. There would be no material impact on equity.


Foreign exchange managementAs
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, sterling and US dollars,
the Group has a policy to hedge external foreign exchange risks on transactions
denominated in other currencies above certain de minimis levels. As the Groups
future cash flows are increasingly likely to be derived from emerging markets,
it is likely that more debt in emerging market currencies will be drawn. The Group also maintains the currency of debt and interest charges in proportion
to its expected future principal multi-currency cash flows. As such, at 31 March
2007, 135% of net debt was denominated in currencies other than sterling (107%
euro, 20% US dollar and 8% other), whilst 35% of net debt had been purchased
forward in sterling in anticipation of sterling denominated shareholder returns
via dividends. This allows euro, US dollar and other debt to be serviced in proportion
to expected future cash flows and, therefore, provides a partial hedge against
income statement translation exposure, as interest costs will be denominated
in foreign currencies. Yen debt is used as a hedge against the value of yen assets
as the Group has minimal yen cash flows. A relative strengthening in the value
of sterling against certain currencies in which the Group maintains cash and
cash equivalents has resulted in a decrease in cash and cash equivalents of £315
million from currency translation differences. 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 as there would be an offset in the currency translation of the foreign
operation. The following table details the Groups sensitivity of the Groups
adjusted operating profit to a strengthening of the Groups major currencies
in which it transacts. Adjusted operating profit is defined as operating profit
before non-operating income of associated undertakings, impairment losses and
other income and expense. The percentage movement applied to each currency is
based on the average movements in the previous three reporting periods. The analysis
has been performed based on the movement occurring at the start of the reporting
period. 2007£mEUR 3% changeAdjusted operating profit
	175USD 8% changeAdjusted operating profit
	176 Credit riskThe Group considers its maximum exposure
to credit risk to be as follows: 2007
	
	2006£m
	
	£mBank deposits
	827
	
	948Money market fund investments
	5,525
	
	1,841Commercial paper investments
	1,129
	
	Derivative financial instruments
	304
	
	310Trade receivables
	2,886
	
	2,49910,671
	
	5,598 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. Concentrations of credit risk with respect to trade receivables are limited due
to the Groups customer base being 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 (note 17).




|Vodafone Group Plc Annual Report
        2007 | 125
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Notes to the Consolidated Financial Statementscontinued

24. Borrowings continuedThe
    Group has investments in preferred equity and a subordinated loan received
    as part of the disposal of Vodafone Japan to SoftBank in the 2007 financial
    year. The carrying value of those investments at 31 March 2007
was £1,046 million. The deposits shown in the table equate to the principal of the amount deposited.
The foreign exchange transactions and interest rate swaps shown in the table
have been marked-to-market. 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 reference to the long term credit
    ratings assigned for that counterparty by Moodys, Fitch Ratings and
    Standard & Poors. While these counterparties may expose the Group
    to credit losses in the event of non-performance, it considers the possibility
  of material loss to be acceptable because of this policy. The Group targets low single A long term credit ratings. Credit ratings are not
a recommendation to purchase, hold or sell securities, in as much as ratings
do not comment on market price or suitability for a particular investor, and
are subject to revision or withdrawal at any time by the assigning rating organisation.
Each rating should be evaluated independently.


|
|

25. Post employment benefits BackgroundAs at 31 March 2007, the Group operated a
  number of pension plans for the benefit of its employees throughout the world,
  which vary 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 principal defined benefit pension scheme of the Group is in the United Kingdom.
In addition, the Group operates defined benefit schemes in Germany, Greece, Ireland,
Italy, Turkey and the United States. Defined contribution pension schemes are
provided in Australia, Egypt, Germany, Greece, Hungary, Ireland, Italy, Malta,
the Netherlands, New Zealand, Portugal, Spain, the United Kingdom and the United
States. There is a post retirement medical plan in the United States for a small
closed group of participants. The Group also operated a defined benefit scheme
for employees of its operation in Japan. Both the Japanese operation and the
related pension obligations were disposed of on 27 April
2006. The Group accounts for its pension schemes in accordance with IAS 19, Employee
Benefits (IAS19). Scheme liabilities are assessed using the projected
unit funding method and applying the principal actuarial assumptions set out
below. Assets are valued at market value. The measurement date for the Groups pension assets and obligations is 31
March.
The measurement date for the Groups net periodic cost is


31 March of the previous year. The Group has chosen to recognise actuarial gains
and losses in the period in which they arise through the statement of recognised
income and expense. Payments to defined contribution schemes are charged as an
expense as they fall due. In the UK, the majority of the UK employees are members of the Vodafone Group
Pension Scheme (the main scheme), which was closed to new entrants
from 1 January 2006. This is a tax approved final salary defined benefit scheme,
the assets of which are held in an external trustee-administered fund. The investment
policy and strategy of the scheme is the responsibility of the plan trustees,
who are required to consult with the Company as well as take independent advice
on key investment issues. In setting the asset allocation, the trustees take
into consideration a number of criteria, including the key characteristics of
the asset classes, expected risk and return, the structure and term of the member
liabilities, diversification of assets, minimum funding and solvency requirements,
as well as the Companys input on contribution requirements. The plan has
a relatively low level of pensioner liabilities already in payment, meaning that
the overall duration of plan liabilities is long term. The plans target
asset allocation is 80% in equity investments (half of which is to be in UK equities)
and 20% in corporate bonds. The main scheme is subject to quarterly funding updates by independent actuaries
and to formal actuarial valuations at least every three years. The most recent
formal triennial valuation of this scheme was carried out as at 31 March 2004.
The triennial valuation of the scheme as at 31 March 2007 is currently in progress.


Income statement expense

|                                                       | 2007 |  | 2006 |  | 2005 | 
|------------------------------------------------------ | ---- |  | ---- |  | ---- | 
|                                                       | £m   |  | £m   |  | £m   | 
|                                                       |      |  |      |  |      | 
|Defined contribution schemes                           | 32   |  | 28   |  | 18   | 
|Defined benefit schemes                                | 62   |  | 52   |  | 52   | 
|                                                       |      |  |      |  |      | 
|Total amount charged to the income statement (note 34) | 94   |  | 80   |  | 70   | 
|                                                       |      |  |      |  |      | 



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| | Financials
| | ----------
| |           

Defined benefit schemesThe most recent full formal actuarial valuations
for defined benefit schemes have been updated by qualified independent actuaries
for the financial year ended 31 March 2007 to provide the IAS 19 disclosures
below.

Major assumptions used

|                                                                                    | 2007 | (1) | 2006 | (1) | 2005 | (1)
|----------------------------------------------------------------------------------- | ---- | --- | ---- | --- | ---- | ---
|                                                                                    | %    |     | %    |     | %    |    
|                                                                                    |      |     |      |     |      |    
|Weighted average actuarial assumptions used to determine benefit obligations:       |      |     |      |     |      |    
|Rate of inflation                                                                   | 2.7% |     | 2.5% |     | 2.5% |    
|Rate of increase in salaries                                                        | 4.4% |     | 4.2% |     | 4.1% |    
|Rate of increase in pensions in payment and deferred pensions                       | 2.7% |     | 2.5% |     | 2.5% |    
|Discount rate                                                                       | 5.1% |     | 4.8% |     | 5.1% |    
|                                                                                    |      |     |      |     |      |    
|Weighted average actuarial assumptions used to determine net periodic benefit cost: |      |     |      |     |      |    
|Rate of inflation                                                                   | 2.5% |     | 2.5% |     | 2.3% |    
|Rate of increase in salaries                                                        | 4.2% |     | 4.1% |     | 3.9% |    
|Discount rate                                                                       | 4.8% |     | 5.1% |     | 5.3% |    
|Expected long term rate of return on plan assets during the year                    | 6.5% |     | 6.4% |     | 6.5% |    
|                                                                                    |      |     |      |     |      |    
|Expected rates of return:                                                           |      |     |      |     |      |    
|Equities                                                                            | 7.8% |     | 7.3% |     | 7.5% |    
|Bonds(2)                                                                            | 4.8% |     | 4.2% |     | 4.4% |    
|Other assets                                                                        | 5.3% |     | 3.4% |     | 4.5% |    
|                                                                                    |      |     |      |     |      |    

|Notes:
|------
|(1)   
|(2)   

The expected return on assets assumption is derived by considering the expected long term rates of return on plan investments. The overall rate of return is a weighted average of the expected returns of the individual
investments made in the group plans. The long term rate of return on equities and property are derived from considering current risk free rates of return with the addition of an appropriate future risk premium from an
analysis of historic returns in various countries. The long term rates of return on bonds and cash investments are set in line with market yields currently available at the balance sheet date.

Mortality assumptions used are consistent with those recommended by the individual
scheme actuaries, and reflect the latest available tables, adjusted for the experience
of the Group where appropriate, and are used in accordance with statutory and
local funding requirements. The largest scheme in the Group is the UK scheme
and the tables used for this scheme indicate a further life expectancy for a
male/female pensioner currently aged 65 of 19.4/22.4 years (2006: 17.8/20.7 years,
2005: 16.9/19.9 years) and a further life expectancy for a male/female non-pensioner
member currently aged 40 of 22.1/25.1 years (2006: 20.3/23.3 years, 2005: 19.4/22.4
years) from age 65.

Charges made to the consolidated income statement and consolidated statement
of recognised income and expense on the basis of the assumptions stated above:

|                                                                                                                         | 2007 |   | 2006 |   | 2005 |  
|------------------------------------------------------------------------------------------------------------------------ | ---- | - | ---- | - | ---- | -
|                                                                                                                         | £m   |   | £m   |   | £m   |  
|                                                                                                                         |      |   |      |   |      |  
|Current service cost                                                                                                     | 74   |   | 57   |   | 53   |  
|Interest cost                                                                                                            | 61   |   | 52   |   | 41   |  
|Expected return on scheme assets                                                                                         | (73  | ) | (57  | ) | (42  | )
|                                                                                                                         |      |   |      |   |      |  
|Total included within staff costs (note 34)                                                                              | 62   |   | 52   |   | 52   |  
|                                                                                                                         |      |   |      |   |      |  
|Consolidated statement of recognised income and expense:                                                                 |      |   |      |   |      |  
|                                                                                                                         |      |   |      |   |      |  
|Total actuarial (gains)/losses recognised in the consolidated statement of recognised income and expense                 | (65  | ) | 43   |   | 102  |  
|                                                                                                                         |      |   |      |   |      |  
|Total
	        cumulative actuarial losses recognised in the consolidated statement
    of recognised income and expense | 80   |   | 145  |   | 102  |  
|                                                                                                                         |      |   |      |   |      |  

All actuarial gains and losses are recognised immediately.

Figures relating to the income statement are for continuing operations only.

Fair value of the assets and liabilities of the schemesThe amount included in the balance sheet arising
from the Groups obligations in respect of its defined benefit retirement
schemes is as follows:

|                                  | 2007  |   | 2006  |   | 2005 |  
|--------------------------------- | ----- | - | ----- | - | ---- | -
|                                  | £m    |   | £m    |   | £m   |  
|                                  |       |   |       |   |      |  
|Movement in scheme assets:        |       |   |       |   |      |  
|1 April                           | 1,123 |   | 874   |   | 640  |  
|Reclassification as held for sale |      |   | (3    | ) |     |  
|Expected return on scheme assets  | 73    |   | 57    |   | 42   |  
|Actuarial gains                   | 26    |   | 121   |   | 24   |  
|Employer cash contributions       | 55    |   | 85    |   | 167  |  
|Member cash contributions         | 13    |   | 11    |   | 12   |  
|Benefits paid                     | (32   | ) | (27   | ) | (7   | )
|Other movements                   |      |   |      |   | (9   | )
|Exchange rate movements           | (7    | ) | 5     |   | 5    |  
|                                  |       |   |       |   |      |  
|31 March                          | 1,251 |   | 1,123 |   | 874  |  
|                                  |       |   |       |   |      |  



|Vodafone Group Plc Annual Report
        2007 | 127
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Notes to the Consolidated Financial Statementscontinued

25. Post employment benefits continued

|                                  | 2007  |   | 2006  |   | 2005 |  
|--------------------------------- | ----- | - | ----- | - | ---- | -
|                                  | £m    |   | £m    |   | £m   |  
|                                  |       |   |       |   |      |  
|Movement in scheme liabilities:   |       |   |       |   |      |  
|1 April                           | 1,224 |   | 998   |   | 794  |  
|Reclassification as held for sale |      |   | (31   | ) |     |  
|Current service cost              | 74    |   | 57    |   | 58   |  
|Interest cost                     | 61    |   | 52    |   | 42   |  
|Member cash contributions         | 13    |   | 11    |   | 12   |  
|Actuarial (gains)/losses          | (39   | ) | 164   |   | 126  |  
|Benefits paid                     | (32   | ) | (27   | ) | (30  | )
|Other movements                   | 4     |   | (8    | ) | (9   | )
|Exchange rate movements           | (13   | ) | 8     |   | 5    |  
|                                  |       |   |       |   |      |  
|31 March                          | 1,292 |   | 1,224 |   | 998  |  
|                                  |       |   |       |   |      |  
|Accumulated benefit obligation    | 1,084 |   | 1,081 |   | 904  |  
|                                  |       |   |       |   |      |  

|                                             | UK   |   | Other |   | Total |  
|-------------------------------------------- | ---- | - | ----- | - | ----- | -
|                                             |      |   |       |   |       |  
|                                             | 2007 |   | 2006  |   | 2005  |  
|                                             | £m   |   | £m    |   | £m    |  
|                                             |      |   |       |   |       |  
|Analysis of net assets/(deficits):           |      |   |       |   |       |  
|Total fair value of scheme assets            | 954  |   | 835   |   | 628   |  
|Present value of funded scheme liabilities   | (901 | ) | (847  | ) | (619  | )
|                                             |      |   |       |   |       |  
|Net assets/(deficits) for funded schemes     | 53   |   | (12   | ) | 9     |  
|Present value of unfunded scheme liabilities |     |   |      |   |      |  
|                                             |      |   |       |   |       |  
|Net assets/(deficits)                        | 53   |   | (12   | ) | 9     |  
|                                             |      |   |       |   |       |  
|Net assets/(deficits) are analysed as:       |      |   |       |   |       |  
|Assets                                       | 53   |   |      |   | 9     |  
|Liabilities                                  |     |   | (12   | ) |      |  
|                                             |      |   |       |   |       |  

The funding policy for all schemes is reviewed on a systematic basis in consultation with the independent scheme actuary in order to ensure that the funding contributions from sponsoring employers are appropriate to
meet the liabilities of the schemes over the long term.

The deficit in respect of other schemes at 31 March 2007 primarily relates to
various schemes in Germany and internally funded schemes in Italy and the United
States.

Actual return on scheme assets

|                                                     | 2007  |  | 2006  |  | 2005  | 
|---------------------------------------------------- | ----- |  | ----- |  | ----- | 
|                                                     | £m    |  | £m    |  | £m    | 
|                                                     |       |  |       |  |       | 
|Actual return on scheme assets                       | 99    |  | 178   |  | 66    | 
|                                                     |       |  |       |  |       | 
|                                                     |       |  |       |  |       | 
|Analysis of scheme assets at 31 March is as follows: | %     |  | %     |  | %     | 
|Equities                                             | 72.1  |  | 71.9  |  | 60.0  | 
|Bonds                                                | 27.5  |  | 26.5  |  | 25.9  | 
|Property                                             | 0.4   |  | 0.4   |  | 0.4   | 
|Other                                                |      |  | 1.2   |  | 13.7  | 
|                                                     |       |  |       |  |       | 
|                                                     | 100.0 |  | 100.0 |  | 100.0 | 
|                                                     |       |  |       |  |       | 

The scheme has no investments in the Groups equity securities or in property currently used by the Group.

History of experience adjustments

|                                              | 2007 |   | 2006 |   | 2005 |  
|--------------------------------------------- | ---- | - | ---- | - | ---- | -
|                                              | £m   |   | £m   |   | £m   |  
|                                              |      |   |      |   |      |  
|Experience adjustments on scheme liabilities: |      |   |      |   |      |  
|Amount (£m)                                   | (2   | ) | (4   | ) | (60  | )
|Percentage of scheme liabilities (%)          |     |   |     |   | 6%   |  
|                                              |      |   |      |   |      |  
|                                              |      |   |      |   |      |  
|Experience adjustments on scheme assets:      |      |   |      |   |      |  
|Amount (£m)                                   | 26   |   | 121  |   | 24   |  
|Percentage of scheme assets (%)               | 2%   |   | 11%  |   | 3%   |  
|                                              |      |   |      |   |      |  

Expected contributions and benefit payments

|                                                                   | £m  | 
|------------------------------------------------------------------ | --- | 
|                                                                   |     | 
|Expected employers contributions in the year ending 31 March 2008 | 54  | 
|                                                                   |     | 
|                                                                   |     | 
|Expected benefit payments in the year ending 31 March:             |     | 
|2008                                                               | 36  | 
|2009                                                               | 35  | 
|2010                                                               | 37  | 
|2011                                                               | 38  | 
|2012                                                               | 40  | 
|2013-2018                                                          | 220 | 
|                                                                   |     | 



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        Report 2007
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| | Financials
| | ----------
| |           

26. Provisions

|                                         | Asset       |   |       |   |            |   |       |  
|---------------------------------------- | ----------- | - | ----- | - | ---------- | - | ----- | -
|                                         | retirement  |   |       |   | Other      |   |       |  
|                                         | obligations |   | Legal |   | provisions |   | Total |  
|                                         | £m          |   | £m    |   | £m         |   | £m    |  
|                                         |             |   |       |   |            |   |       |  
|1 April 2005                             | 135         |   | 188   |   | 199        |   | 522   |  
|Exchange movements                       | 4           |   | 3     |   | 3          |   | 10    |  
|Amounts capitalised in the year          | 14          |   |      |   |           |   | 14    |  
|Amounts charged to the income statement  |            |   | 1     |   | 38         |   | 39    |  
|Utilised in the year  payments          | (3          | ) | (74   | ) | (77        | ) | (154  | )
|Amounts released to the income statement | (2          | ) | (19   | ) | (6         | ) | (27   | )
|                                         |             |   |       |   |            |   |       |  
|31 March 2006                            | 148         |   | 99    |   | 157        |   | 404   |  
|Exchange movements                       | (4          | ) | (2    | ) | (6         | ) | (12   | )
|Amounts capitalised in the year          | 17          |   |      |   |           |   | 17    |  
|Amounts charged to the income statement  |            |   | 34    |   | 186        |   | 220   |  
|Utilised in the year  payments          | (2          | ) | (11   | ) | (45        | ) | (58   | )
|Amounts released to the income statement |            |   | (4    | ) | (4         | ) | (8    | )
|                                         |             |   |       |   |            |   |       |  
|31 March 2007                            | 159         |   | 116   |   | 288        |   | 563   |  
|                                         |             |   |       |   |            |   |       |  

Provisions have been analysed between current
and non-current as follows:

|                        | 2007 |  | 2006 | 
|----------------------- | ---- |  | ---- | 
|                        | £m   |  | £m   | 
|                        |      |  |      | 
|Current liabilities     | 267  |  | 139  | 
|Non-current liabilities | 296  |  | 265  | 
|                        |      |  |      | 
|                        | 563  |  | 404  | 
|                        |      |  |      | 

Asset retirement obligationsIn
the course of the Groups activities, a number of sites and other assets
are utilised which are expected to have costs associated with exiting and ceasing
their use. The associated cash outflows are generally expected to occur at the
dates of exit of the assets to which they relate, which are long term in nature.

LegalThe
Group is involved in a number of legal and other disputes, including notification
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 legal claims cannot be reasonably
determined. For a discussion of certain legal issues potentially affecting the
Group, refer to note 31 Contingent
liabilities.

Other provisionsIncluded within other provisions are amounts provided for property and restructuring costs. The associated cash outflows for restructuring costs are substantially short term in nature. The timing of the cash flows
associated with property is dependent upon the remaining term of the associated lease.

27. Trade and other payables

|                                         | 2007  |  | 2006  | 
|---------------------------------------- | ----- |  | ----- | 
|                                         | £m    |  | £m    | 
|                                         |       |  |       | 
|Included within non-current liabilities: |       |  |       | 
|Other payables                           | 67    |  | 61    | 
|Derivative financial instruments         | 156   |  | 148   | 
|Accruals and deferred income             | 312   |  | 357   | 
|                                         |       |  |       | 
|                                         | 535   |  | 566   | 
|                                         |       |  |       | 
|                                         |       |  |       | 
|Included within current liabilities:     |       |  |       | 
|Trade payables                           | 2,238 |  | 2,248 | 
|Amounts owed to associated undertakings  | 24    |  | 29    | 
|Other taxes and social security payable  | 467   |  | 412   | 
|Derivative financial instruments         | 63    |  | 71    | 
|Other payables                           | 480   |  | 440   | 
|Accruals and deferred income             | 5,502 |  | 4,277 | 
|                                         |       |  |       | 
|                                         | 8,774 |  | 7,477 | 
|                                         |       |  |       | 

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing operating expenses.

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 the year
end.

Included within Derivative financial instruments are
the following:

|                                                            | 2007 |  | 2006 | 
|----------------------------------------------------------- | ---- |  | ---- | 
|                                                            | £m   |  | £m   | 
|                                                            |      |  |      | 
|Fair value through the income statement (held for trading): |      |  |      | 
|Interest rate swaps                                         | 68   |  | 2    | 
|Foreign exchange swaps                                      | 48   |  | 69   | 
|                                                            |      |  |      | 
|                                                            | 116  |  | 71   | 
|                                                            |      |  |      | 
|Fair value hedges:                                          |      |  |      | 
|Interest rate swaps                                         | 103  |  | 148  | 
|                                                            |      |  |      | 
|                                                            | 219  |  | 219  | 
|                                                            |      |  |      | 



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        2007 | 129
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Notes to the Consolidated Financial Statementscontinued

28. AcquisitionsThe principal acquisition made by the Group during the financial year is as follows:

On 24 May 2006, the Group acquired substantially all the assets and business
of Telsim Mobil Telekomunikasyon Hizmetleri (Telsim) from the Turkish
Savings and Deposit Insurance Fund for consideration of approximately US$ 4.7
billion. Additionally, in April 2007 the Group paid US$ 0.4 billion of VAT,
which is recoverable against Telsims future VAT liabilities. The Group
did not acquire Telsims liabilities, other than certain minor employee-related
liabilities and outstanding service credits to be fulfilled. The transaction
has been accounted for by the purchase method of
accounting.

|                                                                                |            |   | Fair value  |  |            |  
|------------------------------------------------------------------------------- | ---------- | - | ----------- |  | ---------- | -
|                                                                                | Book value |   | adjustments |  | Fair value |  
|                                                                                | £m         |   | £m          |  | £m         |  
|                                                                                |            |   |             |  |            |  
|Net assets acquired:                                                            |            |   |             |  |            |  
|Intangible assets(1)                                                            | 16         |   | 860         |  | 876        |  
|Property, plant and equipment                                                   | 166        |   |            |  | 166        |  
|Inventory                                                                       | 2          |   |            |  | 2          |  
|Trade and other receivables                                                     | 178        |   |            |  | 178        |  
|Trade and other payables                                                        | (250       | ) |            |  | (250       | )
|                                                                                |            |   |             |  |            |  
|                                                                                | 112        |   | 860         |  | 972        |  
|                                                                                |            |   |             |  |            |  
|Goodwill                                                                        |            |   |             |  | 1,597      |  
|                                                                                |            |   |             |  |            |  
|Total cash consideration (including £34 million of directly attributable costs) |            |   |             |  | 2,569      |  
|                                                                                |            |   |             |  |            |  
|                                                                                |            |   |             |  |            |  
|Net cash outflow arising on acquisition:                                        |            |   |             |  |            |  
|Cash consideration                                                              |            |   |             |  | 2,569      |  
|                                                                                |            |   |             |  |            |  

|Note:
|-----
|(1)  

The goodwill is reported within Eastern Europe and is attributable to the expected profitability of the acquired business and the synergies expected to arise within that business after the Groups acquisition of
Telsim. £1,639 million of goodwill is expected to be deductible for tax purposes.

The result of the acquired entity has been consolidated in the income statement
from the date of acquisition.

From the date of acquisition, the acquired entity contributed a loss of £146
million to the net loss of the Group.

For the acquisition mentioned above, the weighted average life of licences and
spectrum fees was 17 years, the weighted average life of other intangible assets
was two years and the weighted average of total intangible
assets was 13 years.

Acquisition of Hutchison EssarOn
8 May 2007, Vodafone completed the acquisition from Hutchison Telecommunications
International Limited (HTIL) of companies with interests in Hutchison Essar for cash consideration of US$10.9 billion
(£5.5 billion), see note 35 for further details. It is impractical to provide
further information due to the proximity of the acquisition date to the date
of approval of the Consolidated Financial Statements.

Pro forma full year informationThe following unaudited pro forma summary presents the Group as if Telsim had been acquired on 1 April 2006 or 1 April 2005, respectively. The pro forma amounts include the results of the acquired company, amortisation
of the acquired intangible assets recognised on acquisition and the interest expense on debt incurred as a result of the acquisition. The pro forma amounts do not include any possible synergies from the acquisition. The pro forma information is
provided for comparative purposes only and does not necessarily reflect the actual results that would have occurred, nor is it necessarily indicative of future results of operations of the combined companies.

|                                                | 2007   |   | 2006    |  
|----------------------------------------------- | ------ | - | ------- | -
|                                                | £m     |   | £m      |  
|                                                |        |   |         |  
|Revenue                                         | 31,208 |   | 29,919  |  
|Loss for the financial year                     | (5,375 | ) | (22,281 | )
|Loss profit attributable to equity shareholders | (5,504 | ) | (22,376 | )
|                                                |        |   |         |  
|                                                |        |   |         |  

|                                                               | Pence per share |   | Pence per share |  
|-------------------------------------------------------------- | --------------- | - | --------------- | -
|                                                               |                 |   |                 |  
|Basic and diluted loss per share  loss for the financial year | (9.98           | ) | (35.74          | )
|                                                               |                 |   |                 |  



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| | Financials
| | ----------
| |           



29. Discontinued operations and disposals

Japan  Vodafone K.K.On
    17 March 2006, the Group announced an agreement to sell its 97.7% holding
    in Vodafone K.K. to SoftBank. The transaction completed on 27 April 2006,
    with the Group receiving cash of approximately ¥1.42 trillion
(£6.9 billion) including the repayment of intercompany debt of ¥0.16 trillion (£0.8 billion). In addition, the Group received non-cash consideration with a fair value of approximately ¥0.23 trillion (£1.1 billion), comprised
of preferred equity and a subordinated loan. SoftBank also assumed debt of approximately ¥0.13 trillion (£0.6 billion). Vodafone K.K. represented a separate geographical area of operation and, on this basis, Vodafone K.K. was treated as a
discontinued operation in Vodafone Group Plcs annual report for the year
ended 31 March 2006.

Income statement and segment analysis of
discontinued operations

|                                                                       | 2007 |   | 2006   |   | 2005   |  
|---------------------------------------------------------------------- | ---- | - | ------ | - | ------ | -
|                                                                       | £m   |   | £m     |   | £m     |  
|                                                                       |      |   |        |   |        |  
|Service revenue                                                        | 376  |   | 5,264  |   | 5,610  |  
|Equipment and other revenue                                            | 144  |   | 2,004  |   | 1,786  |  
|                                                                       |      |   |        |   |        |  
|Segment revenue                                                        | 520  |   | 7,268  |   | 7,396  |  
|Inter-segment revenue                                                  |     |   | (2     | ) | (1     | )
|                                                                       |      |   |        |   |        |  
|Net revenue                                                            | 520  |   | 7,266  |   | 7,395  |  
|Operating expenses                                                     | (402 | ) | (5,667 | ) | (5,417 | )
|Depreciation and amortisation(1)                                       |     |   | (1,144 | ) | (1,314 | )
|Impairment loss                                                        |     |   | (4,900 | ) |       |  
|                                                                       |      |   |        |   |        |  
|Operating profit/(loss)                                                | 118  |   | (4,445 | ) | 664    |  
|Non operating income and expense                                       |     |   |       |   | 13     |  
|Net financing costs                                                    | 8    |   | (3     | ) | (11    | )
|                                                                       |      |   |        |   |        |  
|Profit/(loss) before taxation                                          | 126  |   | (4,448 | ) | 666    |  
|Taxation relating to performance of discontinued operations            | (15  | ) | 7      |   | 436    |  
|Loss on disposal(2)                                                    | (747 | ) |       |   |       |  
|Taxation relating to the classification of the discontinued operations | 145  |   | (147   | ) |       |  
|                                                                       |      |   |        |   |        |  
|(Loss)/profit for the financial year from discontinued operations(3)   | (491 | ) | (4,588 | ) | 1,102  |  
|                                                                       |      |   |        |   |        |  

|     
|-----
|Note:
|(1)  
|(2)  
|(3)  

(Loss)/earnings per share from discontinued
operations

|                                  | 2007            |   | 2006            |   | 2005            | 
|--------------------------------- | --------------- | - | --------------- | - | --------------- | 
|                                  | Pence per share |   | Pence per share |   | Pence per share | 
|                                  |                 |   |                 |   |                 | 
|Basic (loss)/earnings per share   | (0.90           | ) | (7.35           | ) | 1.56            | 
|Diluted (loss)/earnings per share | (0.90           | ) | (7.35           | ) | 1.56            | 
|                                  |                 |   |                 |   |                 | 

Cash flows from discontinued operations

|                                                                 | 2007 |   | 2006  |   | 2005   |  
|---------------------------------------------------------------- | ---- | - | ----- | - | ------ | -
|                                                                 | £m   |   | £m    |   | £m     |  
|                                                                 |      |   |       |   |        |  
|Net cash flows from operating activities                         | 135  |   | 1,651 |   | 1,739  |  
|Net cash flows from investing activities                         | (266 | ) | (939  | ) | (448   | )
|Net cash flows from financing activities                         | (29  | ) | (536  | ) | (1,289 | )
|                                                                 |      |   |       |   |        |  
|Net increase in cash and cash equivalents                        | (160 | ) | 176   |   | 2      |  
|Cash and cash equivalents at the beginning of the financial year | 161  |   | 4     |   | 3      |  
|Exchange loss on cash and cash equivalents                       | (1   | ) | (19   | ) | (1     | )
|                                                                 |      |   |       |   |        |  
|Cash and cash equivalents at the end of the financial year       |     |   | 161   |   | 4      |  
|                                                                 |      |   |       |   |        |  



|Vodafone Group Plc Annual Report
        2007 | 131
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Notes to the Consolidated Financial Statementscontinued

29. Discontinued operations and disposalscontinuedAssets and liabilities of discontinued operations

|                                                                             | 27 April |   | 31 March |  
|---------------------------------------------------------------------------- | -------- | - | -------- | -
|                                                                             | 2006     |   | 2006     |  
|                                                                             | £m       |   | £m       |  
|                                                                             |          |   |          |  
|Intangible assets                                                            | 3,943    |   | 3,957    |  
|Property, plant and equipment                                                | 4,562    |   | 4,546    |  
|Other investments                                                            | 29       |   | 29       |  
|Cash and cash equivalents                                                    | 124      |   | 161      |  
|Inventory                                                                    | 148      |   | 131      |  
|Trade and other receivables                                                  | 1,147    |   | 1,113    |  
|Deferred tax asset                                                           | 636      |   | 655      |  
|                                                                             |          |   |          |  
|Total assets                                                                 | 10,589   |   | 10,592   |  
|                                                                             |          |   |          |  
|                                                                             |          |   |          |  
|Current taxation liability                                                   |         |   | (1       | )
|Short and long term borrowings                                               | (674     | ) | (677     | )
|Trade and other payables(1)                                                  | (2,342   | ) | (1,579   | )
|Deferred tax liabilities                                                     | (245     | ) | (246     | )
|Other liabilities                                                            | (40      | ) | (40      | )
|                                                                             |          |   |          |  
|Total liabilities                                                            | (3,301   | ) | (2,543   | )
|                                                                             |          |   |          |  
|                                                                             |          |   |          |  
|Net assets                                                                   | 7,288    |   |          |  
|Minority interest                                                            | (87      | ) |          |  
|                                                                             |          |   |          |  
|Net assets disposed                                                          | 7,201    |   |          |  
|                                                                             |          |   |          |  
|Total consideration                                                          | 7,245    |   |          |  
|Other effects: foreign exchange recycled to the income statement on disposal | (794     | ) |          |  
|Other                                                                        | 3        |   |          |  
|                                                                             |          |   |          |  
|Net loss on disposal                                                         | (747     | ) |          |  
|                                                                             |          |   |          |  

|                                             |       |   |  | 
|-------------------------------------------- | ----- | - |  | 
|                                             | £m    |   |  | 
|                                             |       |   |  | 
|Net cash inflow arising on
        disposal: |       |   |  | 
|Cash consideration                           | 6,141 |   |  | 
|Cash to settle intercompany
        debt     | 793   |   |  | 
|Cash and cash equivalents
        disposed   | (124  | ) |  | 
|                                             |       |   |  | 
|                                             | 6,810 |   |  | 
|Other                                        | (12   | ) |  | 
|                                             |       |   |  | 
|                                             | 6,798 |   |  | 
|                                             |       |   |  | 

|     
|-----
|Note:
|(1)  

Belgium and Switzerland  Belgacom Mobile S.A. and Swisscom Mobile A.G.During the year, the Group disposed of its 25% interest in Belgacom Mobile S.A. to Belgacom S.A. and its 25% interest in Swisscom Mobile A.G. to Swisscom A.G. These transactions completed on 3 November 2006 and 20
December 2006, respectively. The carrying value of these investments at disposal and the cash effects of the transactions are summarised in the table below:

|                         | Belgacom |   | Swisscom |  
|------------------------ | -------- | - | -------- | -
|                         | Mobile   |   | Mobile   |  
|                         | £m       |   | £m       |  
|                         |          |   |          |  
|Net assets disposed      | 901      |   | 1,664    |  
|Total cash consideration | 1,343    |   | 1,776    |  
|Other effects(1)         | (1       | ) | (44      | )
|                         |          |   |          |  
|Net gain on disposal     | 441      |   | 68       |  
|                         |          |   |          |  

|      |                                                                                                                                   
|----- | ----------------------------------------------------------------------------------------------------------------------------------
|Note:
|(1)   | Other effects include the recycling of
        currency translation on disposal and professional fees related to the
    disposal.



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| | Financials
| | ----------
| |           



30. Commitments

Operating lease commitmentsThe Group has entered into commercial leases on certain properties, network infrastructure, motor vehicles and items of machinery. The leases have various terms, escalation clauses, purchase options and renewal rights.

Future minimum lease payments under non-cancellable
operating leases comprise:

|                                                  | 2007  |  | 2006  | 
|------------------------------------------------- | ----- |  | ----- | 
|                                                  | £m    |  | £m    | 
|                                                  |       |  |       | 
|Within one year                                   | 718   |  | 654   | 
|In more than one year but less than two years     | 577   |  | 509   | 
|In more than two years but less than three years  | 432   |  | 447   | 
|In more than three years but less than four years | 367   |  | 397   | 
|In more than four years but less than five years  | 321   |  | 345   | 
|In more than five years                           | 1,360 |  | 1,292 | 
|                                                  |       |  |       | 
|                                                  | 3,775 |  | 3,644 | 
|                                                  |       |  |       | 

In addition to the amounts disclosed above as at 31 March 2006, there were additional operating lease commitments of £120 million relating to the Groups discontinued operations in Japan, which were sold on
27 April 2006.

The total of future minimum sublease payments expected to be received under non-cancellable
subleases is £107 million (2006: £60 million).

Capital and other financial commitments

|                                                                                               | Group |  | Share of joint ventures | 
|---------------------------------------------------------------------------------------------- | ----- |  | ----------------------- | 
|                                                                                               |       |  |                         | 
|                                                                                               | 2007  |  | 2006                    | 
|                                                                                               | £m    |  | £m                      | 
|                                                                                               |       |  |                         | 
|Contracts placed for future capital expenditure not provided in the financial statements(1)(2) | 1,060 |  | 651                     | 
|Purchase commitments(2)                                                                        | 1,137 |  | 996                     | 
|Purchase of Telsim                                                                             |      |  | 2,600                   | 
|                                                                                               |       |  |                         | 
|                                                                                               | 2,197 |  | 4,247                   | 
|                                                                                               |       |  |                         | 

|Notes:
|------
|(1)   
|(2)   

During the year ended 31 March 2007, the Group entered into various agreements in relation to its acquisition of Hutchison Essar from Hutchison Telecommunications International Ltd. See note 35 for further
details.



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        2007 | 133
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Notes to the Consolidated Financial Statementscontinued

31. Contingent liabilities

|                                             | 2007 |  | 2006 | 
|-------------------------------------------- | ---- |  | ---- | 
|                                             | £m   |  | £m   | 
|                                             |      |  |      | 
|Performance bonds                            | 109  |  | 189  | 
|Credit guarantees  third party indebtedness | 34   |  | 64   | 
|Other guarantees and contingent liabilities  | 90   |  | 19   | 
|                                             |      |  |      | 



Performance bondsPerformance 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. Group performance bonds include £57 million (2006: £152 million) in
respect of undertakings to roll out 3G networks in Spain. Credit guarantees  third party indebtednessCredit
guarantees comprise guarantees and indemnities of bank or other facilities, including
those in respect of the Groups associated undertakings and investments. Other guarantees and contingent liabilitiesOther guarantees principally comprise commitments to support disposed entities. In addition to the amounts disclosed above, the Group has guaranteed financial
indebtedness and issued performance bonds for £25 million (2006: £33
million) in respect of businesses which have been sold and for which counter
indemnities have been received from the purchasers. The Group also enters into lease arrangements in the normal course of business,
which are principally in respect of land, buildings and equipment. Further details
on the minimum lease payments due under non-cancellable operating lease arrangements
can be found in note 30. Legal proceedingsThe Company and its subsidiaries are currently, and may be from time to time, 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 and its subsidiaries are not involved currently in 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 twelve months preceding the date of this report, a significant effect on the financial position or profitability of the Company and its subsidiaries. The Company is a defendant in four actions in the United States alleging personal
injury, including brain cancer, from mobile phone use. In each case, various
other carriers and mobile phone manufacturers are also named as defendants. These
actions have not progressed beyond an early stage and no accurate quantification
of any losses which may arise out of the claims can therefore be made as at the
date of this report. The Company is not aware that the health risks alleged in
such personal injury claims have been substantiated and will be vigorously defending
such claims. A subsidiary of the Company, Vodafone 2, is responding to an enquiry (the
Vodafone 2 enquiry) by Her Majestys Revenue and Customs (HMRC)
with regard to the UK tax treatment of its Luxembourg holding company, Vodafone
Investments Luxembourg SARL (VIL), under the Controlled Foreign Companies
section of the UKs Income and Corporation Taxes Act 1988 (the CFC
Regime) relating to the tax treatment of profits earned by the holding
company for the accounting period ended 31 March 2001. Vodafone 2s position
is that it is not liable for corporation tax in the UK under the CFC Regime in
respect of VIL. Vodafone 2 asserts, inter alia, that the CFC Regime is contrary
to EU law and has made an application to the Special Commissioners of HMRC for
closure of the Vodafone 2 enquiry. In May 2005, the Special Commissioners referred
certain questions relating to the compatibility of the CFC Regime with EU law
to the European Court of Justice (the ECJ) for determination (the
Vodafone 2 reference). HMRC subsequently appealed against the decision
of the Special Commissioners to make the Vodafone 2 reference but its appeal
was rejected by both the High


Court and Court of Appeal. The Vodafone 2 reference has still to be heard by
the ECJ. Vodafone 2s application for closure was stayed pending delivery
of the ECJs judgment. In September 2006, the ECJ determined in the Cadbury Schweppes case (C-196/04)
(the Cadbury Schweppes Judgment) that the CFC Regime is incompatible
with EU law unless it applies to wholly artificial arrangements intended to escape
national tax normally payable. The correct application of the Cadbury Schweppes
Judgment to Vodafone 2s case is a matter for the Special Commissioners
to determine. At a hearing in March 2007, the Special Commissioners heard submissions from
both parties as to whether the Vodafone 2 reference should be maintained or withdrawn
by the Special Commissioners in light of the Cadbury Schweppes Judgement. The
Special Commissioners are expected to rule on this question in the coming months. In addition to the Vodafone 2 enquiry, on 31 October 2005, HMRC commenced an
enquiry into the residence of Vodafone InvestmentsLuxembourg
Sarl (the VIL enquiry). VILs position is that it is resident
for tax purposes solely in Luxembourg and therefore it is not liable for corporation
tax in the UK. On 8 December 2006, HMRC confirmed that it had closed the VIL
enquiry. The Company has taken provisions, which at 31 March 2007 amounted to approximately £2.1
billion, for the potential UK corporation tax liability and related interest
expense that may arise in connection with the Vodafone 2 enquiry. The provisions
relate to the accounting period which is the subject of the proceedings described
above as well as to accounting periods after31
March 2001 to date. The provisions at 31 March 2007 reflect the developments
during the year, in particular the Cadburys Schweppes Judgment. The Company has recently been served with a Complaint filed in theSupreme
Court of the State of New York by Cem Uzan and others against the Company, Vodafone
Telekomunikasyon A.S. (VTAS), Vodafone Holding A.S. and others. The
Plaintiffs make certain allegations in connection with the sale of the assets
of the Turkish company Telsim Mobil Telekomunikasyon Hizmetleri A.S. (Telsim)
to the Groups Turkish subsidiary which acquired the assets from the SDIF,
a public agency of the Turkish state, in a public auction in Turkey pursuant
to Turkish law in which a number of mobile telecommunications companies participated.
The Plaintiffs seek an Order requiring the return of the assets of Telsim to
them or damages. The Company believes these claims have no merit and will vigorously
defend the claims.




|134 | Vodafone Group PlcAnnual
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| | Financials
| | ----------
| |           



32. Reconciliation of net cash flows to operating activities

|                                                                  | 2007   |   | 2006    |   | 2005   |  
|----------------------------------------------------------------- | ------ | - | ------- | - | ------ | -
|                                                                  | £m     |   | £m      |   | £m     |  
|                                                                  |        |   |         |   |        |  
|(Loss)/profit for the financial year from continuing operations   | (4,806 | ) | (17,233 | ) | 5,416  |  
|(Loss)/profit for the financial year from discontinued operations | (491   | ) | (4,588  | ) | 1,102  |  
|Adjustments for:(1)                                               |        |   |         |   |        |  
|Loss on disposal of discontinued operations                       | 747    |   |        |   |       |  
|Income tax expense                                                | 2,293  |   | 2,520   |   | 1,433  |  
|Depreciation and amortisation                                     | 5,111  |   | 5,834   |   | 5,517  |  
|Loss on disposal of property, plant and equipment                 | 44     |   | 88      |   | 162    |  
|Non operating income and expense                                  | (4     | ) | 2       |   | (6     | )
|Other income and expense                                          | (502   | ) | (15     | ) |       |  
|Investment income                                                 | (789   | ) | (353    | ) | (303   | )
|Financing costs                                                   | 1,604  |   | 1,123   |   | 900    |  
|Impairment losses                                                 | 11,600 |   | 28,415  |   | 475    |  
|Share of result in associated undertakings                        | (2,728 | ) | (2,428  | ) | (1,980 | )
|                                                                  |        |   |         |   |        |  
|Operating cash flows before movements in working capital          | 12,079 |   | 13,365  |   | 12,716 |  
|(Increase)/decrease in inventory                                  | (23    | ) | 23      |   | 17     |  
|(Increase)/decrease in trade and other receivables                | (753   | ) | 54      |   | (321   | )
|Increase in payables                                              | 1,268  |   | 81      |   | 145    |  
|                                                                  |        |   |         |   |        |  
|Cash generated by operations                                      | 12,571 |   | 13,523  |   | 12,557 |  
|Tax paid                                                          | (2,243 | ) | (1,682  | ) | (1,578 | )
|                                                                  |        |   |         |   |        |  
|Net cash flows from operating activities                          | 10,328 |   | 11,841  |   | 10,979 |  
|                                                                  |        |   |         |   |        |  

|      |                                                                                        
|----- | ---------------------------------------------------------------------------------------
|Note:
|(1)   | Adjustments include amounts relating
        to continuing
and discontinued operations.

33. Directors and key management compensation

DirectorsAggregate emoluments of the directors of the Company were
as follows:

|                  | 2007 |  | 2006 |  | 2005 | 
|----------------- | ---- |  | ---- |  | ---- | 
|                  | £m   |  | £m   |  | £m   | 
|                  |      |  |      |  |      | 
|Salaries and fees | 5    |  | 6    |  | 6    | 
|Incentive schemes | 3    |  | 5    |  | 4    | 
|Benefits          | 1    |  | 2    |  | 1    | 
|Other(1)          | 4    |  |     |  |     | 
|                  |      |  |      |  |      | 
|                  | 13   |  | 13   |  | 11   | 
|                  |      |  |      |  |      | 

|     
|-----
|Note:
|(1)  

The aggregate gross pre-tax gain made on the exercise of share options in the year ended 31 March 2007 by directors who served during the year was £3 million (2006: less than £1 million, 2005: £3
million).

Further details of directors emoluments can be found in Governance  Boards
Report to Shareholders on Directors Remuneration on pages 78 to 87.

Key management compensationAggregate compensation for key management, being the directors and members of the Group Executive Committee, were as follows:

|                             | 2007 |  | 2006 |  | 2005 | 
|---------------------------- | ---- |  | ---- |  | ---- | 
|                             | £m   |  | £m   |  | £m   | 
|                             |      |  |      |  |      | 
|Short term employee benefits | 29   |  | 26   |  | 18   | 
|Post-employment benefits:    |      |  |      |  |      | 
|Defined benefit schemes      | 1    |  | 2    |  | 2    | 
|Defined contribution schemes | 1    |  | 2    |  | 1    | 
|Share-based payments         | 6    |  | 16   |  | 22   | 
|                             |      |  |      |  |      | 
|                             | 37   |  | 46   |  | 43   | 
|                             |      |  |      |  |      | 



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Notes to the Consolidated Financial Statementscontinued

34. Employees

An analysis of the average employee headcount by category of activity is shown below.

|                            | 2007   |  | 2006   |  | 2005   | 
|--------------------------- | ------ |  | ------ |  | ------ | 
|                            | Number |  | Number |  | Number | 
|                            |        |  |        |  |        | 
|By activity:                |        |  |        |  |        | 
|Operations                  | 12,630 |  | 12,541 |  | 11,923 | 
|Selling and distribution    | 18,937 |  | 17,315 |  | 16,410 | 
|Administration              | 34,776 |  | 31,816 |  | 29,426 | 
|                            |        |  |        |  |        | 
|                            | 66,343 |  | 61,672 |  | 57,759 | 
|                            |        |  |        |  |        | 
|                            |        |  |        |  |        | 
|By segment:                 |        |  |        |  |        | 
|Germany                     | 10,383 |  | 10,124 |  | 10,183 | 
|Italy                       | 7,030  |  | 7,123  |  | 7,213  | 
|Spain                       | 4,066  |  | 4,052  |  | 3,949  | 
|UK                          | 10,256 |  | 10,620 |  | 11,260 | 
|Arcor                       | 4,038  |  | 4,086  |  | 4,095  | 
|Other Europe                | 8,797  |  | 9,778  |  | 10,388 | 
|                            |        |  |        |  |        | 
|                            | 44,570 |  | 45,783 |  | 47,088 | 
|                            |        |  |        |  |        | 
|Eastern Europe              | 9,194  |  | 5,763  |  | 2,204  | 
|Middle East, Africa & Asia  | 6,839  |  | 4,640  |  | 3,546  | 
|Pacific                     | 2,791  |  | 2,858  |  | 2,720  | 
|                            |        |  |        |  |        | 
|                            | 18,824 |  | 13,261 |  | 8,470  | 
|                            |        |  |        |  |        | 
|Common Functions            | 2,949  |  | 2,628  |  | 2,201  | 
|                            |        |  |        |  |        | 
|Total continuing operations | 66,343 |  | 61,672 |  | 57,759 | 
|                            |        |  |        |  |        | 
|Discontinued operations:    |        |  |        |  |        | 
|Japan                       | 233    |  | 2,733  |  | 3,033  | 
|                            |        |  |        |  |        | 

The cost incurred in respect of these employees (including directors) was:(1)

|                                  | 2007  |  | 2006  |  | 2005  | 
|--------------------------------- | ----- |  | ----- |  | ----- | 
|Continuing operations:            | £m    |  | £m    |  | £m    | 
|                                  |       |  |       |  |       | 
|Wages and salaries                | 1,979 |  | 1,879 |  | 1,752 | 
|Social security costs             | 300   |  | 242   |  | 233   | 
|Share based payments              | 93    |  | 109   |  | 130   | 
|Other pension costs (see note 25) | 94    |  | 80    |  | 70    | 
|                                  |       |  |       |  |       | 
|                                  | 2,466 |  | 2,310 |  | 2,185 | 
|                                  |       |  |       |  |       | 
|                                  |       |  |       |  |       | 

|Note:
|-----
|(1)  

35. Subsequent events

Acquisition of Hutchison EssarOn
8 May 2007, the Group completed its acquisition of 100% of the share capital
in CGP Investments (Holdings) Limited (CGP) for US$10.9 billion from Hutchison Telecommunications International Limited.
CGP owns a 51.95% indirect shareholding in Hutchison Essar Limited (Hutchison Essar),
a mobile telecommunications operator in the Indian market.

As part of its acquisition of CGP, Vodafone acquired a less than 50% equity interest
in Telecom Investments India Private Limited (TII) and in Omega Telecom
Holdings Private Limited (Omega), which in turn have a 19.54% and
5.11% indirect shareholding in Hutchison Essar.

The Group was granted call options to acquire 100% of the shares in two companies
which together indirectly own the remaining shares of TII for, if the market
equity value of Hutchison Essar at the time of exercise is
less than US$25 billion, an aggregate price of US$431 million or, if
the market equity value of Hutchison Essar at the time of exercise is greater
than US$25 billion, the fair market value of the shares as agreed between
the parties. The Group also has an option to acquire 100% of the shares in a
third company, which owns the remaining shares in Omega. In conjunction with
the receipt of these options, the Group also granted a put option to each of
the shareholders of these companies with identical pricing which, if exercised,
would require Vodafone to purchase 100% of the equity in the respective company.
These options can only be exercised in accordance with Indian law prevailing
at the time of exercise.

In conjunction with the acquisition, Vodafone assumed guarantees over US$450
million and INR10 billion (£121 million) of third party financing of TII
and Omega and received investments in preference shares of TII and its subsidiaries
amounting to INR25 billion (£292 million), which entitle the holder to a
redemption premium of approximately 13% per annum.

Concurrently with the acquisition of CGP, the Group granted put options exercisable
between 8 May 2010 and 8 May 2011 to members of the Essar group of companies
that will allow the Essar group to sell its 33% shareholding in Hutchison Essar
to the Group for US$5 billion or to sell between US$1 billion and US$5
billion worth of Hutchison Essar shares to the Group at an independently appraised
fair market value. As with the above call and put options, this put option can
only be exercised in accordance with Indian law prevailing at the time of exercise.

On 28 February 2007, an Indian consumer association, Telecom Watchdog, filed
an application in the High Court of Delhi which appears in substance to question
Hutchison Essars compliance with the 74% telecom sectoral cap on foreign
ownership. The Union of India, Hutchison Essar and HTIL are among 22 named Respondents.
Telecom Watchdog requests the court to direct the Ministry of Communication & IT
to cancel the licences issued to Hutchison Essar and its subsidiaries. It also
requests the court to direct the Government to initiate proceedings against Hutchison
Essar under the Foreign Exchange Management Act 1999. Other remedies are sought
against other companies and individuals. These proceedings are at an early stage
and the Group believes them to be without merit.



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| | Financials
| | ----------
| |           

In conjunction with the acquisition of Hutchison Essar, the Group entered into a share sale and purchase agreement with a Bharti group company regarding the Groups 5.60% direct shareholding in Bharti Airtel. On 9
  May 2007, the Bharti group company irrevocably agreed to purchase this shareholding and the Group expects to receive $1.6 billion in cash consideration for such shareholding by November 2008. The shareholding will be transferred in two tranches,
  the first before 31 March 2008 and the second by November 2008. Following the completion of this sale, the Group will continue to hold an indirect stake of 4.39% in Bharti Airtel.

EU RoamingOn
23 May 2007, the European Parliament voted to introduce regulation on retail
and wholesale roaming prices. The Group expects roaming revenues to be lower
year on year in 2008 due to the combined effect of
Vodafones own initiatives and this direct regulatory intervention.

36. Related party transactions

Transactions with joint ventures and associated undertakingsTransactions between the Company and its subsidiaries, joint ventures and associates represent related party transactions. Transactions with subsidiaries have been eliminated on consolidation. Transactions between the
Company and its joint ventures are not material to the extent that they have not been eliminated through proportionate consolidation. Except as disclosed below, no material 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.

|                                                                            | 2007 |  | 2006 |  | 2005  | 
|--------------------------------------------------------------------------- | ---- |  | ---- |  | ----- | 
|                                                                            | £m   |  | £m   |  | £m    | 
|                                                                            |      |  |      |  |       | 
|Transactions with associated undertakings:                                  |      |  |      |  |       | 
|Sales of goods and services                                                 | 245  |  | 288  |  | 194   | 
|Purchase of goods and services                                              | 295  |  | 268  |  | 243   | 
|                                                                            |      |  |      |  |       | 
|Amounts owed to joint ventures included within
    short term borrowings(1) | 842  |  | 378  |  | 1,142 | 
|                                                                            |      |  |      |  |       | 
|                                                                            |      |  |      |  |       | 

|Note:
|-----
|(1)  

Amounts owed by and owed to associated undertakings are disclosed within notes 17 and 27.

Dividends received from associated undertakings are disclosed in the consolidated
cash flow statement.

Group contributions to pension schemes are disclosed in note 25.

Compensation paid to the Companys Board of directors and members of the
Executive Committee is disclosed in note 33.

Transactions with directorsDuring the three years ended 31 March 2007, and as of 25 May 2007, neither any 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 2007, and as of 25 May 2007, 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.

37. Financial information of joint ventures and associated undertakings

Summary aggregated financial information of 50% or less owned entities accounted for using proportionate consolidation or under the equity method, extracted on a 100% basis from accounts prepared under IFRS at 31 March
and for the years then ended, is set out below.

|                                                                 | 2007   |  | 2006   |  | 2005   | 
|---------------------------------------------------------------- | ------ |  | ------ |  | ------ | 
|50% or less owned entities classified as associated undertakings | £m     |  | £m     |  | £m     | 
|                                                                 |        |  |        |  |        | 
|Revenue                                                          | 30,981 |  | 30,204 |  | 25,141 | 
|Profit for the financial year                                    | 6,435  |  | 5,768  |  | 4,883  | 
|                                                                 |        |  |        |  |        | 
|                                                                 |        |  |        |  |        | 
|Non-current assets                                               | 38,055 |  | 42,776 |  | 36,385 | 
|Current assets                                                   | 5,094  |  | 5,868  |  | 5,763  | 
|                                                                 |        |  |        |  |        | 
|Total assets                                                     | 43,149 |  | 48,644 |  | 42,148 | 
|                                                                 |        |  |        |  |        | 
|                                                                 |        |  |        |  |        | 
|Total equity shareholders funds                                 | 27,296 |  | 29,951 |  | 24,155 | 
|Minority interests                                               | 858    |  | 961    |  | 939    | 
|                                                                 |        |  |        |  |        | 
|Total equity                                                     | 28,154 |  | 30,912 |  | 25,094 | 
|                                                                 |        |  |        |  |        | 
|                                                                 |        |  |        |  |        | 
|Non-current liabilities                                          | 4,640  |  | 9,367  |  | 5,579  | 
|Current liabilities                                              | 10,355 |  | 8,365  |  | 11,475 | 
|                                                                 |        |  |        |  |        | 
|Total liabilities                                                | 14,995 |  | 17,732 |  | 17,054 | 
|                                                                 |        |  |        |  |        | 
|Total equity and liabilities                                     | 43,149 |  | 48,644 |  | 42,148 | 
|                                                                 |        |  |        |  |        | 



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        2007 | 137
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Notes to the Consolidated Financial Statementscontinued

37. Financial information of joint ventures and associated undertakingscontinued

|                                                        | 2007  |  | 2006  |  | 2005  | 
|------------------------------------------------------- | ----- |  | ----- |  | ----- | 
|50% or less owned entities classified as joint ventures | £m    |  | £m    |  | £m    | 
|                                                        |       |  |       |  |       | 
|Revenue                                                 | 6,515 |  | 4,919 |  | 3,946 | 
|Profit for the financial year                           | 1,087 |  | 786   |  | 658   | 
|                                                        |       |  |       |  |       | 
|Non-current assets                                      | 4,171 |  | 7,631 |  | 2,983 | 
|Current assets                                          | 794   |  | 1,389 |  | 1,056 | 
|                                                        |       |  |       |  |       | 
|Total assets                                            | 4,965 |  | 9,020 |  | 4,039 | 
|                                                        |       |  |       |  |       | 
|Total equity shareholders funds                        | 2,900 |  | 5,432 |  | 2,207 | 
|Minority interests                                      | 15    |  | 40    |  | 12    | 
|                                                        |       |  |       |  |       | 
|Total equity                                            | 2,915 |  | 5,472 |  | 2,219 | 
|                                                        |       |  |       |  |       | 
|Non-current liabilities                                 | 542   |  | 1,164 |  | 362   | 
|Current liabilities                                     | 1,508 |  | 2,384 |  | 1,458 | 
|                                                        |       |  |       |  |       | 
|Total liabilities                                       | 2,050 |  | 3,548 |  | 1,820 | 
|                                                        |       |  |       |  |       | 
|Total equity and liabilities                            | 4,965 |  | 9,020 |  | 4,039 | 
|                                                        |       |  |       |  |       | 

Summary aggregated financial information of Vodafone Omnitel N.V., extracted on a 100% basis from financial statements prepared under IFRS at 31 March and for the years then ended, is set out below:

|                                     | 2007   |   | 2006   |   | 2005   | 
|------------------------------------ | ------ | - | ------ | - | ------ | 
|                                     | £m     |   | £m     |   | £m     | 
|                                     |        |   |        |   |        | 
|Revenue                              | 5,522  |   | 5,619  |   | 5,518  | 
|(Loss)/profit for the financial year | (3,369 | ) | (2,134 | ) | 1,507  | 
|                                     |        |   |        |   |        | 
|Non-current assets                   | 14,851 |   | 20,280 |   | 24,186 | 
|Current assets                       | 4,780  |   | 2,837  |   | 6,117  | 
|                                     |        |   |        |   |        | 
|Total assets                         | 19,631 |   | 23,117 |   | 30,303 | 
|                                     |        |   |        |   |        | 
|Total equity shareholders funds     | 17,054 |   | 21,124 |   | 28,272 | 
|Non-current liabilities              | 75     |   | 78     |   | 312    | 
|Current liabilities                  | 2,502  |   | 1,915  |   | 1,719  | 
|                                     |        |   |        |   |        | 
|Total liabilities                    | 2,577  |   | 1,993  |   | 2,031  | 
|                                     |        |   |        |   |        | 
|Total equity and liabilities         | 19,631 |   | 23,117 |   | 30,303 | 
|                                     |        |   |        |   |        | 

38. US GAAP information

The following is a summary of the effects of the differences between US GAAP and IFRS. The unaudited translation of pounds sterling amounts into US dollars is provided solely for convenience based on the Noon Buying
Rate on 30 March 2007 of $1.9685: £1.

Net loss for the years ended 31 March

|                                                                              |           |  | 2007    |   | 2007    |   | 2006    |   | 2005    |  
|----------------------------------------------------------------------------- | --------- |  | ------- | - | ------- | - | ------- | - | ------- | -
|                                                                              | Reference |  | $m      |   | £m      |   | £m      |   | £m      |  
|                                                                              |           |  |         |   |         |   |         |   |         |  
|Revenue (IFRS)                                                                |           |  | 61,228  |   | 31,104  |   | 29,350  |   | 26,678  |  
|Items (decreasing)/increasing revenues:                                       |           |  |         |   |         |   |         |   |         |  
|Discontinued operations                                                       |           |  | (61     | ) | (31     | ) | (944    | ) | (1,108  | )
|Basis of consolidation                                                        | a         |  | (12,268 | ) | (6,232  | ) | (5,756  | ) | (5,423  | )
|Connection revenue                                                            | b         |  | 1,020   |   | 518     |   | 1,106   |   | 1,223   |  
|                                                                              |           |  |         |   |         |   |         |   |         |  
|Revenue (US GAAP)                                                             |           |  | 49,919  |   | 25,359  |   | 23,756  |   | 21,370  |  
|                                                                              |           |  |         |   |         |   |         |   |         |  
|(Loss)/profit for the financial year (IFRS)                                   |           |  | (10,427 | ) | (5,297  | ) | (21,821 | ) | 6,518   |  
|Items (increasing)/decreasing net loss:                                       |           |  |         |   |         |   |         |   |         |  
|Investments accounted for under the equity method                             | c         |  | 1,339   |   | 680     |   | (1,230  | ) | (5,440  | )
|Connection revenue and costs                                                  | b         |  | 10      |   | 5       |   | 10      |   | 16      |  
|Goodwill and other intangible assets                                          | d         |  | (26,283 | ) | (13,352 | ) | (14,299 | ) | (15,534 | )
|Impairment losses                                                             | e         |  | 13,189  |   | 6,700   |   | 15,377  |   | 475     |  
|Amortisation of capitalised interest                                          | f         |  | (211    | ) | (107    | ) | (108    | ) | (105    | )
|Interest capitalised during the year                                          | f         |  | 102     |   | 52      |   | 36      |   | 19      |  
|Other                                                                         | g         |  | 2,482   |   | 1,261   |   | (42     | ) | 99      |  
|Income taxes                                                                  | h         |  | 11,539  |   | 5,862   |   | 8,902   |   | 6,680   |  
|Minority interests                                                            | i         |  | (254    | ) | (129    | ) | (95     | ) | (108    | )
|Cumulative effect of change in accounting principle: post employment benefits | j         |  |        |   |        |   |        |   | (195    | )
|Cumulative effect of change in accounting principle: intangible assets        | j         |  |        |   |        |   |        |   | (6,177  | )
|                                                                              |           |  |         |   |         |   |         |   |         |  
|Net loss (US GAAP)                                                            |           |  | (8,514  | ) | (4,325  | ) | (13,270 | ) | (13,752 | )
|                                                                              |           |  |         |   |         |   |         |   |         |  

Shareholders equity at 31 March

|                                                   |           |  | 2007    |   | 2007    |   | 2006    |  
|-------------------------------------------------- | --------- |  | ------- | - | ------- | - | ------- | -
|                                                   | Reference |  | $m      |   | £m      |   | £m      |  
|                                                   |           |  |         |   |         |   |         |  
|Total equity (IFRS)                                |           |  | 132,466 |   | 67,293  |   | 85,312  |  
|Items (decreasing)/increasing shareholders funds: |           |  |         |   |         |   |         |  
|Investments accounted for under the equity method  | c         |  | (2,106  | ) | (1,070  | ) | (2,287  | )
|Connection revenue and costs                       | b         |  |        |   |        |   | (5      | )
|Goodwill and other intangible assets               | d         |  | 50,226  |   | 25,515  |   | 32,552  |  
|Capitalised interest                               | f         |  | 2,642   |   | 1,342   |   | 1,443   |  
|Other                                              | g         |  | 169     |   | 86      |   | 210     |  
|Income taxes                                       | h         |  | (43,029 | ) | (21,859 | ) | (30,354 | )
|Minority interests                                 | i         |  | (445    | ) | (226    | ) | 113     |  
|                                                   |           |  |         |   |         |   |         |  
|Shareholders equity (US GAAP)                     |           |  | 139,923 |   | 71,081  |   | 86,984  |  
|                                                   |           |  |         |   |         |   |         |  



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| | Financials
| | ----------
| |           

US GAAP condensed consolidated statement
of operations

|                                                                      |           |  |         |   |         |   |         |   |         |  
|--------------------------------------------------------------------- | --------- |  | ------- | - | ------- | - | ------- | - | ------- | -
|                                                                      |           |  | 2007    |   | 2007    |   | 2006    |   | 2005    |  
|                                                                      | Reference |  | $m      |   | £m      |   | £m      |   | £m      |  
|                                                                      |           |  |         |   |         |   |         |   |         |  
|Revenue                                                               |           |  | 49,919  |   | 25,359  |   | 23,756  |   | 21,370  |  
|Cost of sales                                                         |           |  | (58,246 | ) | (29,589 | ) | (28,126 | ) | (27,803 | )
|Selling, general and administrative expense                           |           |  | (8,574  | ) | (4,356  | ) | (4,342  | ) | (3,779  | )
|                                                                      |           |  |         |   |         |   |         |   |         |  
|Operating loss                                                        |           |  | (16,901 | ) | (8,586  | ) | (8,712  | ) | (10,212 | )
|Non-operating income and expense                                      |           |  | 374     |   | 190     |   | (662    | ) | (465    | )
|Share of results in investments accounted for under the equity method |           |  | (51     | ) | (26     | ) | (1,044  | ) | (2,179  | )
|                                                                      |           |  |         |   |         |   |         |   |         |  
|Loss before income taxes                                              |           |  | (16,578 | ) | (8,422  | ) | (10,418 | ) | (12,856 | )
|Income tax benefit                                                    |           |  | 7,978   |   | 4,053   |   | 3,228   |   | 4,994   |  
|Minority interests                                                    |           |  | (254    | ) | (129    | ) | (98     | ) | (108    | )
|                                                                      |           |  |         |   |         |   |         |   |         |  
|Loss from continuing operations                                       |           |  | (8,854  | ) | (4,498  | ) | (7,288  | ) | (7,970  | )
|Discontinued operations, net of taxes                                 |           |  | 340     |   | 173     |   | (5,982  | ) | 590     |  
|Cumulative effect of changes in accounting principles, net of taxes   |           |  |        |   |        |   |        |   | (6,372  | )
|                                                                      |           |  |         |   |         |   |         |   |         |  
|Net loss                                                              |           |  | (8,514  | ) | (4,325  | ) | (13,270 | ) | (13,752 | )
|                                                                      |           |  |         |   |         |   |         |   |         |  
|Basic and diluted loss per share:                                     |           |  | Cents   |   | Pence   |   | Pence   |   | Pence   |  
|Loss from continuing operations                                       |           |  | (16.06  | ) | (8.16   | ) | (11.64  | ) | (12.03  | )
|Discontinued operations                                               |           |  | 0.63    |   | 0.32    |   | (9.56   | ) | 0.89    |  
|Cumulative effect of changes in accounting principles                 |           |  |        |   |        |   |        |   | (9.63   | )
|                                                                      |           |  |         |   |         |   |         |   |         |  
|Net loss                                                              | k         |  | (15.43  | ) | (7.84   | ) | (21.20  | ) | (20.77  | )
|                                                                      |           |  |         |   |         |   |         |   |         |  



Discontinued operationsThe Group disposed of its interests in Vodafone Sweden during the year ended 31 March 2006. Vodafone Sweden has been classified as discontinued under US GAAP. Summary of differences between IFRS and US GAAPThe Consolidated Financial Statements are prepared in accordance with IFRS, which differ in certain material respects from US GAAP. The differences that are material to the Group relate to the following: a. Basis of consolidationThe basis of consolidation under
IFRS differs from that under US GAAP. The Group has interests in several jointly
controlled entities, the most significant being Vodafone Italy. Under IFRS, the
Group reports its interests in jointly controlled entities using proportionate
consolidation. The Groups share of the assets, liabilities, income, expenses
and cash flows of jointly controlled entities are combined with the equivalent
items in the Consolidated Financial Statements on a line-by-line basis. Under
US GAAP, the results and assets and liabilities of jointly controlled entities
are incorporated in the Consolidated Financial Statements using the equity method
of accounting. Under the equity method, investments in jointly controlled entities
are carried in the consolidated balance sheet at cost as adjusted for post-acquisition
changes in the Groups share of the net assets of the jointly controlled
entity, less any impairment in
the value of the investment. The Groups share of the assets, liabilities,
income and expenses of jointly controlled entities which are included in the
Consolidated Financial Statements are reported in note 13. b. Connection revenues and costsUnder IFRS and, for transactions
subsequent to 30 September 2003, under US GAAP, customer connection revenue is
recognised together with the related equipment revenue to the extent that the
aggregate equipment and connection revenue does not exceed the fair value of
the equipment delivered to the customer. Any customer connection revenue not
recognised together with related equipment revenue is deferred and recognised
over the period in which services are
expected to be provided to the customer. For transactions prior to 1 October 2003, connection revenue under US GAAP is
recognised over the period that a customer is expected to remain connected to
a network. Connection costs directly attributable to the income deferred are
recognised over the same period. Where connection costs exceed connection revenue,
the excess costs were charged in the profit and loss account immediately upon
connection. The balances of deferred revenue and deferred charges as of 30 September
2003 continue to be recognised over the period that a customer is expected to
remain connected to a network.


During the year ended 31 March 2007, the Group revised the estimated period customers
are expected to remain connected to the network. As a result of this change in
estimate, an additional £210 million of revenue and related costs were recognised
during the year. c. Investments accounted for under the equity methodThis line item includes the net effect
of IFRS to US GAAP adjustments affecting net
loss and shareholders equity related to investments accounted for under
the equity method, other than the cumulative effect of change in accounting principle
related to intangible assets, which has been disclosed separately. The differences
are: Adjustment to the share of results
in investments accounted for under  the equity method 2007
    
    2006£m
    
    £mGoodwill and other intangible
        assets associatedwith
          investments accounted for under theequity
          method
    (6,497
    )
    (7,772
    )Impairment loss
    4,900
    
    3,600Income taxes
    2,198
    
    2,863Other
    79
    
    79680
    
    (1,230
    ) Adjustments to the carrying value
of investments accounted for under  the equity method 2007
	
	2006£m
	
	£mGoodwill and other intangible assets associatedwith investments accounted for under theequity method
	7,462
	
	9,539Income taxes
	(8,742
	)
	(11,997
	)Other
	210
	
	171(1,070
	)
	(2,287
	)




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        2007 | 139
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Notes to the Consolidated Financial Statementscontinued

38. US GAAP informationcontinuedd. Goodwill and other intangible assetsThe differences related to goodwill
  and other intangible assets included in the reconciliations of net loss and
  shareholders equity relate to acquisitions prior to the Groups
  adoption of SEC guidance issued on 29 September 2004. In determining the value
  of licences purchased in business combinations prior to 29 September 2004,
  the Group allocated the portion of the purchase price in excess of the fair
  value attributed to the share of net assets acquired to licences. The Group
  had previously concluded that the nature of the licences and the related goodwill
  acquired in business combinations was fundamentally indistinguishable. Following the adoption of the SEC guidance issued on 29 September 2004, the Groups
US GAAP accounting policy for initial and subsequent measurement of goodwill
and other intangible assets, other than determination of impairment of goodwill
and finite lived intangible assets, is substantially aligned to that of IFRS
described in note 2. However, there are substantial adjustments arising prior
to 29 September 2004 from different methods of transition to current IFRS and
US GAAP as discussed below. Goodwill arising before the date of transition to IFRS has been retained under
IFRS at the previous UK GAAP amounts for acquisitions prior to 1 April 2004.
The Group has assigned amounts to licences and customer bases under US GAAP as
they meet the criteria for recognition separately from goodwill, while these
had not been recognised separately from goodwill under UK GAAP because they did
not meet the recognition criteria. Under US GAAP, goodwill and other intangible
assets with indefinite lives are capitalised and not amortised, but tested for
impairment at least annually. Intangible assets with finite lives are capitalised
and amortised over their useful economic lives. Under IFRS and US GAAP, the purchase price of a transaction accounted for as
an acquisition is based on the fair value of the consideration. In the case of
share consideration, under IFRS the fair value of such consideration is based
on the share price on the date of exchange. Under US GAAP, the fair value of
the share consideration is based on the average share price over a reasonable
period of time before and after the proposed acquisition is agreed to and announced.
This has resulted in a difference in the fair value of the consideration for
certain acquisitions and consequently in the amount of goodwill capitalised under
IFRS and US GAAP. The Groups accounting policy for testing goodwill and finite lived intangible
assets for impairment under IFRS is discussed in note 2. For the purpose of goodwill
impairment testing under US GAAP, the fair value of a reporting unit including
goodwill is compared to its carrying value. If the fair value of a reporting
unit is lower than its carrying value, the fair value of the goodwill within
that reporting unit is compared to its respective carrying value, with any excess
carrying value written off as an impairment loss. The fair value of the goodwill
is the difference between the fair value of the reporting unit and the fair value
of the identifiable net assets of the reporting unit. Intangible assets with
finite lives are subject to periodic impairment tests when circumstances indicate
that an impairment loss may exist. Where an assets (or asset groups)
carrying amount exceeds its sum of undiscounted future cash flows, an impairment
loss is recognised in an amount equal to the amount by which the assets
(or asset groups) carrying amount exceeds its fair value, which is generally
based on discounted cash flows. As a result of the above, there are significant amounts reported as goodwill
and not amortised under IFRS which are reported as licences, customers and deferred
tax liabilities under US GAAP. Finite-lived intangible assets 2007
	
	2006Licences
	£m
	
	£mGross carrying value
	152,358
	
	154,135Accumulated amortisation
	(88,541
	)
	(75,170
	)63,817
	
	78,965Customer basesGross carrying value
	493
	
	1,663Accumulated amortisation
	(168
	)
	(1,071
	)325
	
	592


The total amortisation charge for the year ended 31 March 2007, under US GAAP, was £15,207 million (2006: £15,011 million; 2005: £15,400 million). During the year ended 31 March 2007, the Group revised
the estimated useful life of certain customer bases. As a result, an additional £113 million of amortisation expense has been recorded during the year. The estimated future amortisation charge on finite-lived intangible assets for each of the next five years is set out in the following table. The estimate is based on finite-lived intangible assets recognised at 31
March 2007 using foreign exchange rates on that date. It is probable that future amortisation charges will vary from the figures below, as the estimate does not include the impact of any future investments, disposals, capital expenditures or
fluctuations in foreign exchange rates. Year ending 31 March
	£m2008
	14,9662009
	14,9592010
	12,1142011
	3,6232012
	3,355 e. Impairment lossesAs discussed in note 10, during the
year ended 31 March 2007, the Group recorded
impairment losses of £11,600 million (2006: £23,000 million) in relation
to the goodwill of Vodafone Germany and Vodafone Italy under IFRS. Under US GAAP,
the Group evaluated the recoverability of the long-lived assets, comprised primarily
of licences, in Vodafone Germany and Vodafone Italy using undiscounted cash flows
and determined that the carrying amount of these assets was recoverable. As a
result, the IFRS impairment losses of £11,600 million related to Vodafone
Germany and Vodafone Italy were not recognised under US GAAP. During the year ended 31 March 2006, the Group also recorded an impairment loss
under IFRS of £515 million and £4,900 million in relation to the goodwill
of Vodafone Sweden and Vodafone Japan, respectively. Under US GAAP, the Group
recognised impairment losses of licences of £883 million and £8,556
million in Vodafone Sweden and in Vodafone Japan. As a result of these impairment
losses, the Group released related deferred tax liabilities of £247 million
and £3,508 million, which have been included in the adjustment for income
taxes for the period. The impairment losses on Vodafone Swedens and Vodafone
Japans licences have been included in discontinued operations under US
GAAP. Cumulative foreign currency gains and losses arising on the translation of the
assets and liabilities into sterling have been included in the carrying value
of a discontinued operation when assessing that carrying
value for impairment. f. Capitalised interestUnder IFRS, the Group has adopted
the benchmark accounting treatment for borrowing costs and, as a result, the
Group does not capitalise interest costs on borrowings in respect of the acquisition
or construction of tangible and intangible fixed assets. Under US GAAP, the interest
costs of financing the acquisition or construction of network assets and other
fixed assets is capitalised during the period of construction until the date
that the asset is placed in service. Interest costs of financing the acquisition
of licences are also capitalised until the date that the related network service
is launched. Capitalised interest costs are amortised over the estimated useful
lives of the related
assets. g. OtherFinancial instrumentsUnder IFRS, equity put rights and
similar arrangements are classified as financial liabilities. The liabilities
are measured as the present value of the estimated exercise prices of the equity
put rights and similar arrangements, which is the fair value of the underlying
shares on the date of exercise, with any changes in this estimate recognised
in the consolidated income statement each period. Under US GAAP, the redemption
amount under these arrangements is credited to the minority interest and changes
in the redemption amount are reflected as a charge or credit to retained earnings.




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PensionsUnder both IFRS and US GAAP, the
  Group recognises actuarial gains and losses as they are incurred. Under IFRS,
  these gains and losses are recognised directly in equity. These gains and losses
  are included in the determination of net loss under US GAAP. The Groups adoption of SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106 and 132(R) on 31 March
2007 did not have a significant impact on the Groups results or financial position. DisposalsUnder both IFRS and US GAAP, the
  cumulative foreign currency gains and losses arising on the translation of the
  assets and liabilities of entities with a functional currency other than sterling
  are reclassified from accumulated other recognised income and expense and included
  in the determination of profit for the period or net loss on sale or liquidation
  of a foreign entity. Differences in the amount reclassified arise due to differences
  in the carrying values of the underlying net assets and because the Group deemed
  the cumulative translation differences at the date of transition to IFRS to
  be zero. During the year ended 31 March 2007, £1,539 million (2006: losses of £9 million, 2005: losses of £63 million) of foreign currency losses were reclassified from other recognised income and expense and
included in the determination of US GAAP net loss as a result of the disposal of Vodafone Japan and the Groups interests in Belgacom Mobile SA and Swisscom Mobile AG (2006: Vodafone Sweden, 2005: partial disposal of Vodafone Egypt). Under
IFRS, these losses amounted to £838 million for the year ended 31 March 2007 (2006: gains of £36 million, 2005: gains of £2 million). In addition to the impact of transferring cumulative exchange losses to the income statement, in the year ended 31 March 2007 this line item also includes the £512 million incremental gain resulting from lower US
GAAP carrying values immediately prior to the disposal of Belgacom Mobile SA and Swisscom Mobile AG. h. Income taxesThe most significant component of
  the income tax adjustment is due to temporary differences between the book basis
  and tax basis of intangible assets other than goodwill acquired in business
  combinations prior to 29 September 2004, resulting in the recognition of deferred
  tax liabilities under US GAAP. This line item also includes the tax effects
  of the other pre-tax IFRS to US GAAP adjustments described above. Under IFRS, the Group does not recognise a deferred tax liability on the outside basis differences in its investment in associates to the extent that the Group controls the timing of the reversal of the difference and
it is probable the difference will not reverse in the foreseeable future. Under US GAAP, the Group recognises deferred tax liabilities on these differences. i. Minority interestsMinority interests are reported as
  a component of total equity under IFRS and, accordingly, profit for the period
  does not include an adjustment for profit for the period attributable to minority
  interests. Under US GAAP, minority interests are reported outside of shareholders
  equity and the minority interest in the income of consolidated subsidiaries
  is an adjustment to US GAAP net income. j. Changes in accounting
  principlesPost employment benefitsDuring the second half of the year
    ended 31 March 2005, the Group amended its policy for accounting for actuarial
    gains and losses arising from its pension obligations effective 1 April 2004.
    Until 31 March 2004, the Group used a corridor approach under SFAS No. 87,
    Employers Accounting for Pensions in which actuarial gains
    and losses were deferred and amortised over the expected remaining service
    period of the employees. The Group now recognises these gains and losses through
    the income statement in the period in which they arise.


The cumulative effect on periods prior to adoption of £288 million has been shown, net of tax of £93 million, as a cumulative effect of a change in accounting principle in the reconciliation of net loss. The
effect of the change in the year ended 31 March 2005 was to increase loss from continuing operations by £55 million (or 0.08 pence per share). Intangible assetsOn 29 September 2004, the SEC Staff
  issued new guidance on the interpretation of SFAS No. 142 in relation to the
  valuation of intangible assets in business combinations and impairment testing.
  This guidance has been codified as EITF Topic D-108. Historically, the Group
  assigned to mobile licences the residual purchase price in business combinations
  in excess of the fair values of all assets and liabilities acquired other than
  mobile licences and goodwill. This approach was on the basis that mobile licences
  were indistinguishable from goodwill. The new SEC guidance required the Group
  to distinguish between mobile licences and goodwill. However, the new guidance
  did not permit the amount historically reported as mobile licences to be subsequently
  reallocated between mobile licences and goodwill. The new guidance affects the allocation of the purchase price in future business combinations involving entities with mobile licences. The Group has applied the guidance relating to the allocation of purchase price to
all business combinations consummated subsequent to 29 September 2004. This has resulted in values being assigned to licences using a direct valuation method, with any remaining residual purchase price allocated to goodwill. In impairment testing of mobile licences associated with the Verizon Wireless equity method investment accounted for under SFAS No. 142, the Group has used a similar residual approach to determine the fair value of the
licences when testing the asset for recoverability. In their announcement, the SEC Staff stated that the residual method of accounting for intangible assets should no longer be used and that companies should perform an impairment test using a direct
method on all assets which were previously tested using a residual method. The Groups licences in other businesses are not tested for recoverability using a residual method and were, therefore, not affected by the new guidance. The Group completed its transitional impairment test of Verizon Wireless mobile licences as of 1 January 2005. This resulted in a pre-tax charge of £11,416 million. This impairment loss was included, net of
the related tax of £5,239 million, in the cumulative effect of change in accounting principle in the reconciliation of net loss. The tax effect comprises the release of £1,220 million representing the Groups share of Verizon
Wireless deferred tax liabilities and £4,019 million deferred tax liabilities representing taxes recognised by the Group on its investment in Verizon Wireless. Fair value was determined as the present value of estimated future net cash
flows allocable to the mobile licences. Verizon Wireless is included in the segment Mobile telecommunications  US. Share-based paymentsThe Group adopted SFAS No. 123 (Revised
  2004), Share-based Payment, and related FASB staff positions on
  1 October 2005. SFAS No. 123 (Revised 2004) eliminates the option to account
  for share-based payments to employees using the intrinsic value method and requires
  share-based payments to be recorded using the fair value method. Under the fair
  value method, the compensation cost for employees and directors is determined
  at the date awards are granted and recognised over the service period. Concurrent with the adoption of SFAS No. 123 (Revised 2004), the Group adopted Staff Accounting Bulletin (SAB) 107. SAB 107 summarises the views of the SEC Staff regarding the interaction between SFAS No. 123 (Revised
2004) and certain SEC rules and regulations and provides the staffs views regarding the valuation of share-based payment arrangements for public companies.




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Notes to the Consolidated Financial
  Statementscontinued



38. US GAAP informationcontinuedThe Group has adopted SFAS No. 123 (Revised
  2004) using the modified retrospective method. Under this method, the Group
  has adjusted the financial statements for the periods between 1 April 1995 and
  30 September 2005 to give effect to the fair value method of accounting for
  awards granted, modified or settled during those periods on a basis consistent
  with the pro forma amounts disclosed under the requirements of the original
  SFAS No. 123, Accounting for Stock-Based Compensation. The provisions
  of SFAS No. 123 (Revised 2004) will be applied to all awards granted, modified
  or settled after 1 October 2005. The effect of applying the original provisions
  of SFAS No. 123 under the modified retrospective method of adoption on the year
  ended 31 March 2005 was to decrease loss before income taxes, loss from continuing
  operations and net loss by £66 million, £30 million and £30 million
  respectively (six months ended 30 September 2005: increases of £4 million,
  £8 million and £8 million respectively). The adjustment also had the
  effect of decreasing both basic and diluted loss per share from continuing operations
  and net loss by 0.05 pence (six months ended 30 September 2005: increase 0.01
  pence). The adoption of SFAS No. 123 (Revised 2004) increased shareholders
  equity at 1 April 2004 by £112 million. k. Loss per shareThe share options and shares described
  in note 20 were excluded from the calculation of diluted loss per share as the
  effect of their inclusion in the calculation would be not dilutive due to the
  Group recognising a loss in all periods presented. 39. New accounting standards IFRSThe Group has not adopted the following
        pronouncements, which have been issued by the IASB, but have not yet been
        endorsed for use in the EU.•
      IFRS 8, Operating Segments
        (effective for annual periods beginning on or after
        1 January 2009, with early application permitted). If endorsed for use
        in the EU, the Group currently intends
        to adopt this standard in the 2008 financial
        year. The standard is not expected to significantly impact the
        Group but may change the Groups disclosure in relation
        to segment information.•
      IAS 23 Revised, Borrowing Costs
        (effective for annual periods beginning on
        or after 1 January 2009, with early application permitted). This revised
        standard has not yet been endorsed for use in the EU. The Group
        is currently assessing the impact
        and expected timing of adoption of this standard
        on the Groups results and financial position.The Group has not adopted
        the following pronouncements, which have been issued by the IASB or the
        International Financial Reporting Interpretations Committee (IFRIC).
        The Group does not currently believe the adoption of these pronouncements
        will have a material impact on the consolidated results or financial position
        of the Group.•
      IAS Amendment, Amendment to IAS
        1, Presentation of Financial
        Statements  Capital Disclosures (effective for annual
        periods beginning after 1 January
        2007, with earlier application encouraged). This amendment has
        been endorsed for use in the EU.•
      IFRIC 10, Interim Financial Reporting
        and Impairment (effective for annual periods
        beginning on or after 1 November 2006, with early application encouraged). This interpretation has not yet been endorsed for
        use in the EU.•
      IFRIC 11, IFRS 2  Group
        Treasury Share Transactions (effective for annual periods
        beginning on or after 1 March 2007, with early application permitted). This interpretation has not yet been endorsed for
        use in the EU.•
      IFRIC 12, Service Concession
        Arrangements (effective for annual periods beginning
        on or after 1 January 2008, with early application permitted). This
        interpretation has not yet been endorsed
        for use in the EU.


US GAAPFASB Interpretation
    No. 48FASB Interpretation No. 48, Accounting
    for Uncertainty in Income Taxes (FIN 48), an interpretation
    of SFAS No. 109, Accounting for Income Taxes, prescribes a recognition
    threshold and measurement attribute for the financial statement recognition
    and measurement of a tax position taken or expected to be taken in a tax return.
    FIN 48 also provides guidance on derecognition, classification, interest and
    penalties, accounting in interim periods, disclosure and transition. The Group
    will adopt FIN 48 with effect from 1 April 2007 and is currently assessing
    the impact of the adoption of this standard on the Groups results and
    financial position. EITF Issue 06-1EITF Issue 06-1, Accounting
  for Consideration Given by a Service Provider to Manufacturers or Resellers
  of Equipment Necessary for an End-Customer to Receive Service From the Service
  Provider (Issue 06-1), requires the income statement classification of
  consideration provided to a manufacturer or reseller to be determined based
  on the form of the consideration rendered to the end customer as directed by
  the service provider, if the consideration is contractually linked to the benefit
  received by the end customer. Under this standard, cash consideration
  would be classified as a reduction in revenue while other than cash consideration
  would be accounted for as an expense. The Group will adopt Issue 06-1 no later
  than 1 April 2008 and is currently assessing the impact of the adoption of this
  standard on the Groups results and financial position. SFAS No. 157SFAS No. 157, Fair Value Measurements
  (SFAS 157) defines fair value, establishes a framework for measuring
  fair value and expands disclosure of fair value measurements. SFAS 157 applies
  to fair value measurements under other existing accounting pronouncements that
  require or permit fair value measurements and does not require any new fair
  value measurements. The Group will adopt SFAS 157 no later than 1 April 2008
  and is currently assessing the impact of the adoption of this standard on the
  Groups results and financial position.




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| | Financials
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Company Financial Statements
  of Vodafone Group Plc at 31 March

|                                                              |      |  | 2007    |   | 2006    |  
|------------------------------------------------------------- | ---- |  | ------- | - | ------- | -
|                                                              | Note |  | £m      |   | £m      |  
|                                                              |      |  |         |   |         |  
|Fixed assets                                                  |      |  |         |   |         |  
|Other investments                                             | 3    |  |        |   | 133     |  
|Shares in group undertakings                                  | 3    |  | 67,139  |   | 67,395  |  
|                                                              |      |  |         |   |         |  
|                                                              |      |  | 67,139  |   | 67,528  |  
|                                                              |      |  |         |   |         |  
|Current assets                                                |      |  |         |   |         |  
|Debtors: amounts falling due
      after more than one year   | 4    |  | 227     |   | 236     |  
|Debtors: amounts falling due
      within one year            | 4    |  | 99,404  |   | 99,417  |  
|                                                              |      |  |         |   |         |  
|                                                              |      |  | 99,631  |   | 99,653  |  
|Creditors: amounts falling
      due within one year          | 5    |  | (76,415 | ) | (76,591 | )
|                                                              |      |  |         |   |         |  
|Net current assets                                            |      |  | 23,216  |   | 23,062  |  
|                                                              |      |  |         |   |         |  
|Total assets less current
      liabilities                   |      |  | 90,355  |   | 90,590  |  
|Creditors: amounts falling
      due after more than one year | 5    |  | (14,388 | ) | (13,487 | )
|                                                              |      |  |         |   |         |  
|                                                              |      |  | 75,967  |   | 77,103  |  
|                                                              |      |  |         |   |         |  
|Capital and reserves                                          |      |  |         |   |         |  
|Called up share capital                                       | 6    |  | 4,172   |   | 4,165   |  
|Share premium account                                         | 7    |  | 43,572  |   | 52,444  |  
|Capital redemption reserve                                    | 7    |  | 9,132   |   | 128     |  
|Capital reserve                                               | 7    |  | 88      |   | 88      |  
|Other reserves                                                | 7    |  | 1,026   |   | 1,012   |  
|Own shares held                                               | 7    |  | (8,044  | ) | (8,186  | )
|Profit and loss account                                       | 7    |  | 26,021  |   | 27,452  |  
|                                                              |      |  |         |   |         |  
|Equity shareholders
      funds                              |      |  | 75,967  |   | 77,103  |  
|                                                              |      |  |         |   |         |  

|                                                                                                                              |                                    
|----------------------------------------------------------------------------------------------------------------------------- | -----------------------------------
|The Financial Statements were
      approved by the Board of directors on 29 May 2007 and were signed on its
      behalf by:
|                                                                                                                              |                                    
|                                                                                                                              |                                    
|Arun SarinChief Executive                                                                                                     | Andy HalfordChief Financial Officer
|                                                                                                                              |                                    
|                                                                                                                              |                                    
|The accompanying notes are
      an integral part of these Financial Statements.                                             



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Notes to the Company Financial
  Statements



1. Basis of preparationThe separate financial statements of
  the Company are drawn up in accordance with the Companies Act 1985 and UK generally
  accepted accounting principles (UK GAAP). The preparation of financial statements in conformity with generally accepted accounting principles 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. 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 or in the period of the revision and future periods if the
revision affects both current and future periods. As permitted by Section 230 of the Companies Act 1985, the profit and loss account of the Company is not presented in this Annual Report. The Company has taken advantage of the exemption contained in FRS 1 Cash flow statements and has not produced a cash flow statement. The Company has taken advantage of the exemption contained in FRS 8 Related party disclosures and has not reported transactions with fellow Group undertakings. The Company has taken advantage of the exemption contained in FRS 29 Financial Instruments: Disclosures and has not produced any disclosures required by that standard, as full FRS 29 disclosures are
available in the Vodafone Group Plc Annual Report for the year ended 31 March 2007. 2. Significant accounting policiesThe Companys significant accounting
  policies are described below. Accounting conventionThe Company Financial Statements are
  prepared under the historical cost convention and in accordance with applicable
  accounting standards of the UK Accounting Standards Board and pronouncements
  of the Urgent Issues Task Force. InvestmentsShares in Group undertakings are stated
  at cost less any provision for permanent diminution in value. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. If any such indication of impairment exists, the
Company makes an estimate of the recoverable amount. If the recoverable amount of the cash-generating unit is less than the value of the investment, the investment is considered to be impaired and is written down to its recoverable amount. An
impairment loss is recognised immediately in the profit and loss account. 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 costs method, is included in the net profit or loss for the period. Foreign currenciesIn preparing the financial statements
  of the Company, transactions in currencies other than the Companys functional
  currency are recorded at the rates of exchange prevailing on the dates of the
  transactions. At each balance sheet date, monetary items denominated in foreign
  currencies are retranslated at the rates prevailing on the balance sheet date.
  Non-monetary items carried at fair value that are denominated in foreign currencies
  are retranslated at the rate prevailing on the date when fair value was determined.
  Non-monetary items that are measured in terms of historical cost in a foreign
  currency are not retranslated.


Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the profit and loss account for the period. Exchange differences arising on the
retranslation of non-monetary items carried at fair value are included in the profit and loss account for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised
directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity. Borrowing costsAll borrowing costs are recognised in
  the profit and loss account in the period in which they are incurred. TaxationCurrent tax, including UK corporation
  tax and foreign tax, is provided at amounts expected to be paid (or recovered)
  using the tax rates and laws that have been enacted or substantively enacted
  by the balance sheet date. Deferred tax is provided in full on timing differences that exist at the balance sheet date and that result in an obligation to pay more tax, or a right to pay less tax in the future. The deferred tax is measured at
the rate expected to apply in the periods in which the timing differences are expected to reverse, based on the tax rates and laws that are enacted or substantively enacted at the balance sheet date. Timing differences arise from the inclusion of
items of income and expenditure in taxation computations in periods different from those in which they are included in the financial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they
will be recovered. Deferred tax assets and liabilities are not discounted. Financial instrumentsFinancial assets and financial liabilities,
  in respect of financial instruments, are recognised on the balance sheet when
  the Company becomes a party to the contractual provisions of the instrument. Financial liabilities and equity instrumentsFinancial liabilities and equity instruments
  issued by the Company 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 evidences a residual
  interest in the assets of the Company 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. Capital market and bank
  borrowingsInterest-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 fair value
  hedge. Any difference between the proceeds net of transaction costs and the
  settlement or redemption of borrowings is recognised over the term of the borrowing. Equity instrumentsEquity instruments issued by the
  Company are recorded at the proceeds received, net of direct issue costs. Derivative financial instruments
  and hedge accountingThe Companys activities expose
  it to the financial risks of changes in foreign exchange rates and interest
  rates. 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. Derivative financial instruments are initially measured at fair value on the contract date, and are subsequently re-measured to fair value at each reporting date. The Company designates certain derivatives as hedges of
the change of fair value of recognised assets and liabilities (fair value hedges). Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge
accounting.




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Fair value hedgesThe Company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 Company designates these as
  fair value hedges of interest rate risk with changes in fair value of the hedging
  instrument recognised in the profit and loss account for the period together
  with the changes in the fair value of the hedged item due to the hedged risk,
  to the extent the hedge is effective. The ineffective portion is recognised
  immediately in the profit and loss account. Share based paymentsThe Group operates a number of equity
  settled share based compensation plans for the employees of subsidiary undertakings,
  using the Companys equity instruments. The fair value of the compensation
  given in respect of these share based compensation plans is recognised as a
  capital contribution to the Companys subsidiary undertakings, over the
  vesting period. The capital contribution is reduced by any payments received
  from subsidiary undertakings in respect of these share based payments.


Dividends paid and receivedDividends paid and received are included
  in the financial statements in the period in which the related dividends are
  actually paid or received or, in respect of the Companys final dividend
  for the year, approved by shareholders. PensionsThe Company is the sponsoring employer
  of the Vodafone Group Pension Scheme, a defined benefit pension scheme. The
  Company is unable to identify its share of the underlying assets and liabilities
  of the Vodafone Group Pension Scheme on a consistent and reasonable basis. Therefore,
  the Company has applied the guidance within FRS 17 to account for defined benefit
  schemes as if they were defined contribution schemes and recognise only the
  contribution payable each year. The Company had no contributions payable for
  the years ended 31 March 2007 and 31 March 2006.




3. Fixed assets

Other investmentsThe Companys fixed asset investments
  were £nil at 31 March 2007 (2006: £133 million). The investment at
  31 March 2006 represented 30,252,460 ordinary shares in VenFin Limited. The
  investment was held at fair value and disposed of during the year ended 31 March
  2007.

|Shares in group undertakings                                     |         |  
|---------------------------------------------------------------- | ------- | -
|                                                                 |         |  
|                                                                 | £m      |  
|                                                                 |         |  
|Cost:                                                            |         |  
|1 April 2006                                                     | 72,160  |  
|Additions                                                        | 59,656  |  
|Capital contributions arising from share
      based payments    | 93      |  
|Contributions received in relation to
      share based payments | (79     | )
|Disposals                                                        | (59,508 | )
|                                                                 |         |  
|31 March 2007                                                    | 72,322  |  
|                                                                 |         |  
|                                                                 |         |  
|Amounts provided for:                                            |         |  
|1 April 2006                                                     | 4,765   |  
|Amounts provided for during the year                             | 418     |  
|                                                                 |         |  
|31 March 2007                                                    | 5,183   |  
|                                                                 |         |  
|                                                                 |         |  
|Net book value:                                                  |         |  
|31 March 2007                                                    | 67,139  |  
|                                                                 |         |  
|31 March 2006                                                    | 67,395  |  
|                                                                 |         |  

At 31 March 2007, the Company had the following principal subsidiary undertaking:

|                              |                    |  | Country of       |  |              |  
|----------------------------- | ------------------ |  | ---------------- |  | ------------ | -
|                              |                    |  | incorporation or |  | Percentage   |  
|Name                          | Principal activity |  | registration     |  | shareholding |  
|                              |                    |  |                  |  |              |  
|Vodafone European Investments | Holding company    |  | England          |  | 100          | %
|                              |                    |  |                  |  |              |  

|                                                    |        |  |        | 
|--------------------------------------------------- | ------ |  | ------ | 
|4. Debtors                                          |        |  |        | 
|                                                    | 2007   |  | 2006   | 
|                                                    | £m     |  | £m     | 
|                                                    |        |  |        | 
|Amounts falling due within one year:                |        |  |        | 
|Amounts owed by subsidiary undertakings             | 99,071 |  | 99,174 | 
|Taxation recoverable                                | 137    |  | 72     | 
|Other debtors                                       | 196    |  | 171    | 
|                                                    |        |  |        | 
|                                                    | 99,404 |  | 99,417 | 
|                                                    |        |  |        | 
|Amounts falling due after more than one
      year: |        |  |        | 
|Deferred taxation                                   | 3      |  | 5      | 
|Other debtors                                       | 224    |  | 231    | 
|                                                    |        |  |        | 
|                                                    | 227    |  | 236    | 
|                                                    |        |  |        | 



|Vodafone Group Plc Annual Report
      2007 | 145
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Notes to the Company Financial Statementscontinued

5. Creditors

|                                              | 2007   |  | 2006   | 
|--------------------------------------------- | ------ |  | ------ | 
|                                              | £m     |  | £m     | 
|                                              |        |  |        | 
|Amounts falling due within on year:           |        |  |        | 
|Bank loans and other loans                    | 3,656  |  | 2,143  | 
|Amounts owed to subsidiary undertakings       | 72,568 |  | 74,229 | 
|Group relief payable                          | 101    |  | 89     | 
|Other creditors                               | 82     |  | 120    | 
|Accruals and deferred income                  | 8      |  | 10     | 
|                                              |        |  |        | 
|                                              | 76,415 |  | 76,591 | 
|                                              |        |  |        | 
|Amounts falling due after more than one year: |        |  |        | 
|Other loans                                   | 14,216 |  | 13,321 | 
|Other creditors                               | 172    |  | 166    | 
|                                              |        |  |        | 
|                                              | 14,388 |  | 13,487 | 
|                                              |        |  |        | 

Included in amounts falling due after more than one year are other loans of £7,103 million, which are due in more than five years from 1 April 2007 and are payable otherwise than by instalments. Interest payable
on this debt ranges from 3.625% to 7.875% .

6. Share capital

|                                                                           |                 |   |        |   |                |   |       |  
|-------------------------------------------------------------------------- | --------------- | - | ------ | - | -------------- | - | ----- | -
|                                                                           |                 |   | 2007   |   |                |   | 2006  |  
|                                                                           | Number          |   | £m     |   | Number         |   | £m    |  
|                                                                           |                 |   |        |   |                |   |       |  
|Authorised:                                                                |                 |   |        |   |                |   |       |  
|Ordinary shares of 113/7
      US cents each (2006: 10 US cents)           | 68,250,000,000  |   | 4,875  |   | 78,000,000,000 |   | 4,875 |  
|B shares of 15 pence each                                                  | 66,600,000,000  |   | 9,990  |   |               |   |      |  
|                                                                           |                 |   |        |   |                |   |       |  
|                                                                           |                 |   |        |   |                |   |       |  
|Ordinary shares allotted, issued and fully paid(1):                        |                 |   |        |   |                |   |       |  
|1 April                                                                    | 66,251,332,784  |   | 4,165  |   | 68,380,866,539 |   | 4,286 |  
|Allotted during the year                                                   | 118,241,919     |   | 7      |   | 120,466,245    |   | 7     |  
|Consolidated during the year(3)                                            | (8,283,879,405  | ) |       |   |               |   |      |  
|Cancelled during the year                                                  |                |   |       |   | (2,250,000,000 | ) | (128  | )
|                                                                           |                 |   |        |   |                |   |       |  
|31 March                                                                   | 58,085,695,298  |   | 4,172  |   | 66,251,332,784 |   | 4,165 |  
|                                                                           |                 |   |        |   |                |   |       |  
|                                                                           |                 |   |        |   |                |   |       |  
|B shares allotted, issued and fully paid:(3)(4)                            |                 |   |        |   |                |   |       |  
|1 April                                                                    |                |   |       |   |               |   |      |  
|Issued during the year(4)                                                  | 66,271,035,240  |   | 9,941  |   |               |   |      |  
|Redeemed during the year(3)                                                | (38,102,969,449 | ) | (5,715 | ) |               |   |      |  
|Converted to deferred shares and subsequently cancelled during the year(3) | (28,036,064,426 | ) | (4,206 | ) |               |   |      |  
|                                                                           |                 |   |        |   |                |   |       |  
|31 March                                                                   | 132,001,365     |   | 20     |   |               |   |      |  
|                                                                           |                 |   |        |   |                |   |       |  

|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Notes:
|(1)    | At 31 March 2007, the Company held 5,245,547,674 (2006: 6,120,129,348) treasury shares with a nominal value of £305 million (2006: £352 million).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(2)    | At 31 March 2007, 50,000 (2006: 50,000) 7% cumulative fixed rate shares of £1 each were authorised, allotted, issued and fully paid by the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(3)    | B shareholders were given the alternatives of initial redemption or future redemption at 15 pence per share or the payment of an initial dividend of 15 pence per share. The initial redemption took place on 4 August
2006 with future redemption dates on 5 February and 5 August each year until 5 August 2008 when the Company expects to exercise its right to redeem all B shares still in issue at their nominal value of 15 pence. B shareholders that chose future
redemption are entitled to receive a continuing non-cumulative dividend of 75 per cent of Sterling LIBOR payable semi-annually in arrears until the B shares are redeemed. The B shares which received an initial dividend immediately converted to
deferred shares and all outstanding deferred shares were redeemed on 7 August 2006 for a total consideration of 1 pence and subsequently cancelled. In relation to the ordinary shares held as treasury shares, the Company elected to receive the B
share initial dividend, which was subsequently waived. B shareholders are only entitled to receive notice of (or attend, speak or vote at) any general meeting if the business includes a resolution for the winding up of the Company. If the Company is
wound up, the holders of the B shares are entitled, before any payment to the ordinary shareholders, to repayment of the amount paid up on each B share together with any outstanding entitlement to the B share continuing dividend. By 31 March 2007,
total capital of £9,004 million had been returned to shareholders, £5,713 million by way of capital redemption and £3,291 million by way of initial dividend (note 7). The outstanding B share liability as at 31 March 2007 has been
classified as a financial liability and is disclosed within other creditors greater than one year (note 5). A transfer of £9,004 million in respect of the B shares has been made from retained losses (note 7) to the capital redemption reserve
(note 7).
|(4)    | On 30 May 2006, Vodafone Group Plc announced
      a return of capital to shareholders via a B share scheme and associated
      share consolidation. At the Extraordinary General Meeting of the Company
      held on 25 July 2006, shareholders approved the scheme, with a B share of
      15 pence issued for each existing issued ordinary share held at the close
      of business on 28 July 2006 and the consolidation of existing ordinary shares
      on the basis of 7 new ordinary shares for 8 existing ordinary shares. On
      31 July 2006, the new ordinary shares were admitted to the London Stock
      Exchange official list, and commenced trading. A total of 66,271,035,240
      B shares were issued on that day, and 66,271,035,240 existing ordinary shares
      of 10 US cents each were consolidated into 57,987,155,835 new ordinary shares
      of 11 3/7 cents each.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

Allotted during the year

|                                                           |             |  |         |  |          | 
|---------------------------------------------------------- | ----------- |  | ------- |  | -------- | 
|                                                           |             |  | Nominal |  | Net      | 
|                                                           |             |  | value   |  | proceeds | 
|                                                           | Number      |  | £m      |  | £m       | 
|                                                           |             |  |         |  |          | 
|UK share awards and option scheme awards                   | 86,791,709  |  | 5       |  | 120      | 
|US share awards and option scheme awards                   | 31,450,210  |  | 2       |  | 41       | 
|                                                           |             |  |         |  |          | 
|Total for share option schemes and restricted stock awards | 118,241,919 |  | 7       |  | 161      | 
|                                                           |             |  |         |  |          | 

Cancelled during the yearDuring the 2006 financial year, 2,250,000,000 treasury shares were cancelled in order to comply with Companies Act requirements in relation to the amount of issued share capital that can be held in treasury. No
treasury shares were cancelled in the year ended 31 March 2007.



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        Report 2007
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| | Financials
| | ----------
| |           



7. Share based payments

The Company currently uses a number of equity settled share plans to grant options and shares to the directors and employees of its subsidiary undertakings, as listed below.

Share option schemesVodafone Group savings related and Sharesave schemesVodafone Group executive schemesVodafone Group 1999 Long Term Stock Incentive Plan and ADSsOther share option plans

Share plansShare Incentive PlanRestricted share plans

As at 31 March 2007, the Company had 584 million ordinary share options outstanding (2006: 787 million) and 3 million ADS options outstanding (2006: 8 million).

The Company has made a capital contribution to its subsidiary undertakings in
relation to share based payments. At 31 March 2007, the cumulative capital contribution
net of payments received from subsidiary
undertakings was £397 million (31 March 2006: £383 million, 1 April
2005: £419 million). During the year ended 31 March 2007, the capital contribution
arising from share based payments was £93 million (2006: £114 million),
with payments of £79 million (2006: £150 million) received from subsidiary
undertakings. The Company does not incur a profit and loss account charge in
relation to share based payments.

Full details of share based payments, share option schemes and share plans are
disclosed in note 20 to the Consolidated Financial Statements.

8. Reserves and reconciliation of movements in equity shareholders funds

|                                                            |         |  | Share   |   | Capital    |  |         |  |          |   | Own    |   | Profit   |   | Total equity  |  
|----------------------------------------------------------- | ------- |  | ------- | - | ---------- |  | ------- |  | -------- | - | ------ | - | -------- | - | ------------- | -
|                                                            | Share   |  | premium |   | redemption |  | Capital |  | Other    |   | shares |   | and loss |   | shareholders |  
|                                                            | capital |  | account |   | reserve    |  | reserve |  | reserves |   | held   |   | account  |   | funds         |  
|                                                            | £m      |  | £m      |   | £m         |  | £m      |  | £m       |   | £m     |   | £m       |   | £m            |  
|                                                            |         |  |         |   |            |  |         |  |          |   |        |   |          |   |               |  
|1 April 2006                                                | 4,165   |  | 52,444  |   | 128        |  | 88      |  | 1,012    |   | (8,186 | ) | 27,452   |   | 77,103        |  
|Allotments of shares                                        | 7       |  | 154     |   |           |  |        |  |         |   |       |   |         |   | 161           |  
|Own shares released on vesting of share awards              |        |  |        |   |           |  |        |  |         |   | 142    |   |         |   | 142           |  
|Profit for the financial year                               |        |  |        |   |           |  |        |  |         |   |       |   | 11,126   |   | 11,126        |  
|Dividends                                                   |        |  |        |   |           |  |        |  |         |   |       |   | (3,566   | ) | (3,566        | )
|Capital contribution given relating to share based payments |        |  |        |   |           |  |        |  | 93       |   |       |   |         |   | 93            |  
|Contribution received relating to share based payments      |        |  |        |   |           |  |        |  | (79      | ) |       |   |         |   | (79           | )
|Share consolidation                                         |        |  | (9,026  | ) |           |  |        |  |         |   |       |   |         |   | (9,026        | )
|B share capital redemption                                  |        |  |        |   | 5,713      |  |        |  |         |   |       |   | (5,713   | ) |              |  
|B share preference dividend                                 |        |  |        |   | 3,291      |  |        |  |         |   |       |   | (3,291   | ) |              |  
|Other movements                                             |        |  |        |   |           |  |        |  |         |   |       |   | 13       |   | 13            |  
|                                                            |         |  |         |   |            |  |         |  |          |   |        |   |          |   |               |  
|31 March 2007                                               | 4,172   |  | 43,572  |   | 9,132      |  | 88      |  | 1,026    |   | (8,044 | ) | 26,021   |   | 75,967        |  
|                                                            |         |  |         |   |            |  |         |  |          |   |        |   |          |   |               |  

In accordance with the exemption allowed by section 230 in the Companies Act 1985, no profit and loss account has been presented by the Company. The profit for the financial year dealt with in the accounts of the
Company is £11,126 million (2006: £12,671 million). Under English law, the amount available for distribution to shareholders is based upon the profit and loss reserve of the Company and is reduced by the amount of own shares held and is
limited by statutory or other restrictions.

The auditor remuneration for audit services to the Company was £1 million
(2006: £1 million). The Company paid no audit fees in relation to non audit
services to the Company for the years ended 31 March 2007
and 31 March 2006.

The directors are remunerated by Vodafone Group Plc for their services to the
Group as a whole. No remuneration was paid to them specifically in respect of
their services to Vodafone Group Plc for either year. Full
details of the directors remuneration are disclosed in the Directors Remuneration
Report in the Vodafone Group Plc Annual Report for the year ended 31 March 2007.

There were no employees other than directors of the Company throughout the current
or the preceding year.



|Vodafone Group Plc Annual Report
        2007 | 147
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Notes to the Company Financial Statementscontinued

9. Equity dividends

|                                                                         | 2007  |  | 2006  | 
|------------------------------------------------------------------------ | ----- |  | ----- | 
|                                                                         | £m    |  | £m    | 
|                                                                         |       |  |       | 
|Declared during the financial year:                                      |       |  |       | 
|Final dividend for the year ended 31 March 2006: 3.87 pence per share    |       |  |       | 
|(2005: 2.16 pence per share)                                             | 2,328 |  | 1,386 | 
|Interim dividend for the year ended 31 March 2007: 2.35 pence per share  |       |  |       | 
|(2006: 2.20 pence per share)                                             | 1,238 |  | 1,367 | 
|                                                                         |       |  |       | 
|                                                                         | 3,566 |  | 2,753 | 
|                                                                         |       |  |       | 
|Proposed after the balance sheet date and not recognised as a liability: |       |  |       | 
|Final dividend for the year ended 31 March 2007: 4.41 pence per share    |       |  |       | 
|(2006: 3.87 pence per share)                                             | 2,331 |  | 2,328 | 
|                                                                         |       |  |       | 

|                                             |       |  |       | 
|-------------------------------------------- | ----- |  | ----- | 
|10. Contingent
    liabilities               |       |  |       | 
|                                             | 2007  |  | 2006  | 
|                                             | £m    |  | £m    | 
|                                             |       |  |       | 
|Performance bonds                            | 87    |  | 172   | 
|Credit guarantees  third party indebtedness | 1,278 |  | 1,570 | 
|Other guarantees and contingent liabilities  | 10    |  | 1     | 
|                                             |       |  |       | 

Performance bondsPerformance bonds require the Company to make payments to third parties in the event that the Company or its subsidiary undertakings do not perform what is expected of it under the terms of any related
contracts.

Company performance bonds include £57 million (2006: £152 million)
in respect of undertakings to roll out third generation networks in Spain.

Credit guarantees  third party indebtednessCredit guarantees comprise guarantees and indemnities of bank or other facilities.

At 31 March 2007, the Company had guaranteed debt of Vodafone Finance K.K. amounting
to £1,117 million (2006: £1,268 million) and issued guarantees in respect
of notes issued by Vodafone Americas, Inc.
amounting to £161 million (2006: £302 million). The Japanese facility
expires by March 2011 and the majority of Vodafone Americas, Inc. bond guarantees
by July 2008.

Other guarantees and contingent liabilitiesOther guarantees principally comprise of a guarantee relating to a bid for a UMTS licence in Hungary.

Legal proceedingsDetails regarding certain legal actions which involve the Company are set out in note 31 to the Consolidated Financial Statements.



|148 | Vodafone Group PlcAnnual
        Report 2007
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| | Financials
| | ----------
| |           



Independent Auditors
  Report to the Members of Vodafone Group Plc

We have audited the parent Company Financial Statements of Vodafone Group Plc for the year ended 31 March 2007 which comprise the balance sheet and the related notes numbered 1 to 10. These parent Company Financial
Statements have been prepared under the accounting policies set out therein. The corporate governance statement and the directors remuneration report
are included in the Group annual report of Vodafone Group Plc for the year ended
31 March 2007. We have reported separately on the Consolidated Financial Statements
of Vodafone Group Plc for the year ended 31 March 2007 and on the information
in the directors remuneration report that is described as having been audited. Respective responsibilities of directors and auditorsThe
directors responsibilities for preparing the Annual Report and the parent Company Financial Statements in accordance with applicable law and United Kingdom Accounting standards (United Kingdom Generally
Accepted Accounting Practice) are set out in the Statement of Directors Responsibilities. Our responsibility is to audit the parent Company Financial Statements in accordance
with relevant United Kingdom legal and regulatory requirements and International
Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the parent Company Financial Statements
give a true and fair view in accordance with the relevant financial reporting
framework and whether the parent Company Financial Statements and the part of
the directors remuneration report described as having been audited have
been properly prepared in accordance with the Companies Act 1985. We report to
you whether in our opinion the information given in the
directors report is consistent with the parent Company Financial Statements.
We also report to you, if in our opinion, the Company has not kept proper accounting
records, if we have not received all the information and explanations we require
for our audit, or if information specified by law regarding directors remuneration
and other transactions is not disclosed. We read the directors report and the other information contained in the
annual report for the above year as described in the contents section and consider
whether it is consistent with the audited parent Company Financial Statements.
We consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the parent Company Financial Statements.
Our responsibility does not extend to any further information outside the annual
report.


Basis of audit opinionWe
conducted our audit in accordance with International Standards on Auditing (UK
and Ireland) issued by the Auditing Practices Board. An audit includes examination,
on a test basis, of evidence relevant to the amounts and disclosures in the parent
Company Financial Statements. It also includes an assessment of the significant
estimates and judgements made by the directors in the preparation of the parent
Company Financial Statements, and of whether the accounting
policies are appropriate to the Companys circumstances, consistently applied
and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations
which we considered necessary in order to provide us with sufficient evidence
to give reasonable assurance that the parent Company Financial Statements are
free from material misstatement, whether caused by fraud or other irregularity
or error. In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the parent Company Financial
Statements. OpinionIn our opinion: •
    the parent Company Financial Statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the Companys affairs as at 31 March 2007;•
    the parent Company Financial Statements have been properly prepared in accordance with the Companies Act 1985; and•
    the information given in the Directors Report
    is consistent with the parent Company Financial Statements.   Deloitte & Touche
LLP Chartered Accountants and Registered
Auditors
London
United
Kingdom
29 May 2007




|Vodafone Group Plc Annual Report
        2007 | 149
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Back to Contents

ContentsPageShareholder Information
	150 Financial Calendar for the 2008 financial
    year
	150 Dividends
	150 Telephone Share Dealing
	150 Internet Share Dealing
	150 Registrars and Transfer Office
	150 Online Shareholder Services
	151 Annual General Meeting
	151 ShareGift
	151 The Unclaimed Assets Register
	151 Share Price History
	151 Markets
	152 Memorandum
      and Articles of Association and Applicable English Law
	152 Documents on Display
	155 Material Contracts
	155 Exchange Controls
	155 Taxation
	155Form 20-F Cross Reference Guide
	157 Shareholder Information Financial Calendar for the 2008 Financial Year Interim Results announcement
	13 November 2007Preliminary announcement of full year results
	27 May 2008 The Company does not intend to publish future results announcements in the press; they will be available online at www.vodafone.com. DividendsFull details on the dividend amount per share or ADS can be found on page
    53. Set out below is information relevant to the final dividend for the year
    ended 31 March 2007. Ex-dividend date
	6 June 2007Record date
	8 June 2007Dividend reinvestment plan last election date
	13 July 2007Dividend payment date
	3 August 2007(1) (1)
    Payment date for both ordinary shares
      and ADSs. Dividend payment methodsHolders of ordinary shares can: •
    have cash dividends paid direct to a bank or building society account; or•
    have cash dividends paid in the form of a cheque; or•
    elect to use the cash dividends to purchase more Vodafone shares under the Dividend Reinvestment Plan (see below). If a holder of ordinary shares does decide to receive cash dividends, it is recommended that these are paid directly to the shareholders bank or building society account via BACS for UK account holders or EFTS
for Irish account holders. Ordinary shareholders resident outside the UK and Eurozone can also have their dividends paid into their bank account directly via the Companys Registrars Global Payments service. Details and terms and
conditions may be viewed at www.computershare.com/uk/investor/GPS. This avoids the risk of cheques being lost in the post and means the dividend will be in the shareholders account on the dividend payment date. The shareholder will be sent a
tax voucher confirming the amount of dividend and the account into which it has been paid.


Please contact the Companys Registrars for further details. Holders of ADSs can: •
    have cash dividends paid direct to a bank
    account; or•
    have cash dividends paid by cheque; or•
    elect to have the dividends reinvested
    to purchase additional Vodafone ADSs (see below for contact details). Dividend reinvestmentThe Company offers 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. Further details can be obtained from the Plan Administrator on +44 (0) 870 702 0198. For ADS holders, The Bank of New York maintains a Global BuyDIRECT Plan for the
Company, which is a direct purchase and sale plan for depositary receipts, with
a dividend reinvestment facility. For additional information, please call toll-free
from within the US on 1 800 233 5601, or write to: Vodafone Group PlcC/O Bank of New YorkInvestment Services DepartmentP.O. Box 1958Newark New Jersey07101-1958USA For calls from outside the US, call +1 212
    815 3700 and enter company number 2190. Please note that this number is not
  toll-free. Telephone Share DealingA
telephone share dealing service with the Companys Registrars is available
for holders of ordinary shares. The service is available from 8.00 am to 4.30
pm, Monday to Friday, excluding bank holidays, on telephone number +44 (0) 870
703 0084. Detailed terms and conditions are available on request by calling the above number. Internet Share DealingAn internet share dealing service is available for holders of ordinary shares who want either to buy or sell ordinary shares. Further information about this service can be obtained from the Companys
Registrars on +44 (0) 870 702 0198 or by logging onto www.computershare.com/dealing/uk. Registrars and Transfer OfficeThe
Companys ordinary share register is maintained by: Computershare Investor Services PLCP.O. Box 82The PavilionsBridgwater RoadBristolBS99 7NHEnglandTelephone: +44 (0) 870 702 0198 Fax:
        + 44 (0) 870 703 6101
Email: web.queries@computershare.co.uk




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Holders of ordinary shares resident in
    Ireland should contact:Computershare Investor
    Services (Ireland) LimitedP.O. Box 9742Dublin 18IrelandTelephone: 0818 300 999
    Fax: 01 216 3151Email: web.queries@computershare.ie Any queries about the administration of holdings of ordinary shares, such as
change of address, change of ownership or dividend payments, should be directed
to the Companys Registrars at the relevant address or telephone number
immediately above. Holders of ordinary shares may also view and update details
of their shareholding, after a brief registration process, via our Registrars Investor
Centre service at www.computershare.com/investor. The Depositary Bank for
    the Companys ADR programme is:The Bank of New YorkInvestor Relations Dept, P.O. Box 11258Church St. StationNew York, NY 10286-1258USATelephone: 1 800 233 5601 (Toll free) ADS holders should address any queries or instructions regarding their holdings to The Bank of New York at the above address or telephone number. ADS holders can also, subject to passing an identity check, view their
account balances and transaction history, sell shares and request certificates from their Global BuyDIRECT Plan at www.stockbny.com. Online Shareholder ServicesThe Company provides a number of shareholder services online at www.vodafone.com/shareholder, where shareholders may: •
    register to receive electronic shareholder communications. Benefits to shareholders include faster receipt of communications such as annual reports, with cost and time savings for the Company. Electronic shareholder communications are also more environmentally friendly;•
    view a live webcast of the AGM of the Company on 24 July 2007. A recording will be available to view after that date;•
    view and/or download the Annual Report and the Annual
    Review & Summary Financial Statement 2007;•
    check the current share price;•
    calculate dividend payments; and•
    use interactive tools to calculate the value of shareholdings, look up the historic price on a particular date and chart Vodafone ordinary share price changes against indices. Shareholders and other interested parties can also receive Company press releases, including London Stock Exchange announcements, by registering for Vodafone News via the Companys website at
www.vodafone.com/start/misc/register_for_news.html. Registering for Vodafone News will enable users to: •
    access the latest news from their mobile; and•
    have news automatically e-mailed to them. Annual General MeetingThe twenty-third AGM of the Company will be held at The Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London SW1 on 24 July 2007 at 11.00 a.m.


The Notice of Meeting, together with details of the business to be conducted
at the Meeting, is being circulated to shareholders with this Annual Report or
the Annual Review & Summary Financial Statement and can be viewed at the
Companys website  www.vodafone.com/start/investor_relations/agm.html. The AGM will be transmitted via a live
    webcast and can be viewed at the Companys website  www.vodafone.com/start/investor_relations/agm.html
     on the day of the meeting and a recording will be available to view
    after that date. To find out more about the AGM and how to view the webcast, visit www.vodafone.com/start/investor_relations/agm.html. ShareGiftThe Company supports 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. Donating shares to charity gives rise neither to a gain nor a loss for UK Capital Gains Tax
purposes and UK taxpayers may also be able to claim income tax relief on the value of the donation. ShareGift transfer forms specifically for the Companys shareholders are
available from the Companys Registrars, Computershare Investor Services
PLC, and, even if the share certificate has been lost or destroyed, the gift
can be completed. The service is generally free. However, there may be an indemnity
charge for a lost or destroyed share certificate where the value of the shares
exceeds £100. Further details about ShareGift can be obtained from its website
at www.ShareGift.org or at 5 Lower Grosvenor Place, London SW1W 0EJ (telephone:
+44 (0) 20 7828 1151). The Unclaimed Assets RegisterThe Company participates in the Unclaimed Assets Register, which provides a search facility for financial assets which may have been forgotten and which donates a proportion of its public search fees to a group of
three UK charities (Age Concern, NSPCC and Scope). For further information, contact The Unclaimed Assets Register, Cardinal Place, 6th Floor, 80 Victoria Street, London SW1E 5JL (telephone: +44 (0) 870 241 1713), or visit its website at
www.uar.co.uk. Share Price HistoryUpon flotation of the Company on 11 October
1988, the ordinary shares were valued at 170 pence each. On 16 September 1991,
when the Company was finally demerged, for UK taxpayers the base cost of Racal
Electronics Plc shares was apportioned between the Company and Racal Electronics
Plc for Capital Gains Tax purposes in the ratio of 80.036% and 19.964% respectively.
Opening share prices on 16 September 1991 were 332 pence for each Vodafone share
and 223 pence for
each Racal share. On 21 July 1994, the Company effected a bonus issue of two new shares for every
one then held and, on 30 September 1999, it effected a bonus issue of four new
shares for every one held at that date. The flotation and demerger share prices,
therefore, may be restated as 11.333 pence and 22.133 pence, respectively. The share price at 31 March 2007 was 135.5 pence (31 March 2006: 120.5 pence).
The share price on 25 May 2007 was 151.4 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,
(ii) the reported high and low sales prices of ordinary shares on the Frankfurt
Stock Exchange, and (iii) the reported high and low sales prices of ADSs on the
NYSE.




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The Companys ordinary shares were traded on the Frankfurt Stock Exchange from 3 April 2000 until 23 March 2004 and, therefore, information has not been provided for periods outside these dates. On 31 July 2006, the Group returned £9 billion to shareholders in the form
of a B share arrangement. As part of this arrangement, and in order to facilitate
historical share price comparisons, the Groups share capital was consolidated
on the basis of seven new ordinary shares for every eight ordinary shares held
at this date. Share prices in the five and two year data tables below have not
been restated to reflect this consolidation. Five year data on an annual basis London Stock
      
      Frankfurt StockExchange
      
      ExchangePounds per
      
      Euros perordinary share
      
      ordinary share
      
      NYSE Dollars per
        ADSFinancial Year
      High
      
      Low
      
      High
      
      Low
      
      High
      
      Low2002/2003
      1.31
      
      0.81
      
      2.15
      
      1.26
      
      20.30
      
      12.762003/2004
      1.50
      
      1.12
      
      2.22
      
      1.59
      
      27.88
      
      18.102004/2005
      1.49
      
      1.14
      
      
      
      
      
      28.54
      
      20.832005/2006
      1.55
      
      1.09
      
      
      
      
      
      28.04
      
      19.322006/2007
      1.54
      
      1.08
      
      
      
      
      
      29.85
      
      20.07 Two year data on a quarterly basis London StockExchangePounds perordinary share
      
      NYSE Dollars per
        ADSFinancial Year
      High
      
      Low
      
      High
      
      Low2005/2006First Quarter
      1.47
      
      1.34
      
      26.87
      
      24.32Second Quarter
      1.55
      
      1.36
      
      28.04
      
      23.90Third Quarter
      1.52
      
      1.23
      
      26.65
      
      21.29Fourth Quarter
      1.33
      
      1.09
      
      23.39
      
      19.322006/2007First Quarter
      1.30
      
      1.14
      
      24.23
      
      21.07Second Quarter
      1.24
      
      1.08
      
      22.93
      
      20.07Third Quarter
      1.47
      
      1.20
      
      29.00
      
      22.61Fourth Quarter
      1.54
      
      1.34
      
      29.85
      
      25.942007/2008First Quarter(1)
      1.54
      
      1.36
      
      30.67
      
      26.88 Note:(1)
    Covering period up to 25 May 2007. Six month data on a monthly basis London StockExchangePounds perordinary share
      
      NYSE Dollars per
        ADSFinancial Year
      High
      
      Low
      
      High
      
      LowNovember 2006
      1.42
      
      1.32
      
      26.50
      
      25.04December 2006
      1.47
      
      1.33
      
      29.00
      
      26.20January 2007
      1.53
      
      1.41
      
      29.85
      
      28.03February 2007
      1.54
      
      1.41
      
      29.85
      
      27.40March 2007
      1.45
      
      1.34
      
      28.63
      
      25.94April 2007
      1.45
      
      1.36
      
      28.97
      
      26.88May 2007(1)
      1.54
      
      1.40
      
      30.67
      
      28.10 Note:(1)
    High and low share prices for May 2007
    only reported until 25 May 2007. The current authorised share capital comprises 68,250,000,000 ordinary shares of $0.11 3/7 each and 50,000 7% cumulative fixed rate shares of £1.00 each and 66,600,000,000 B shares of £0.15
each. MarketsOrdinary shares of Vodafone Group Plc are traded on the London Stock Exchange and, in the form of ADSs, on the NYSE. ADSs, each representing ten ordinary shares, are traded on the NYSE under the
symbol VOD. The ADSs are evidenced by ADRs issued by The Bank of
New York, as Depositary, under a Deposit Agreement, dated as of 12 October 1988,
as amended
and restated as of 26 December 1989, as


further amended and restated as of 16 September
    1991, as further amended and restated as of 30 June 1999, and as further
    amended and restated as of 31 July 2006 between the Company, the Depositary
  and the holders from time to time of ADRs issued thereunder. ADS holders are not members of the Company but may instruct The Bank of New York
on the exercise of voting rights relative to the number of ordinary shares represented
by their ADSs. See Memorandum and Articles of Association and Applicable
English Law  Rights attaching to the Companys shares  Voting
rights below. Shareholders at 31 March 2007 Number of
      
      
      % of totalordinary shares
      Number of
      
      issuedheld
      accounts
      
      shares1  1,000
      449,017
      
      0.221,001  5,000
      83,326
      
      0.315,001 50,000
      25,963
      
      0.5750,001  100,000
      1,194
      
      0.14100,001 500,000
      1,142
      
      0.45More than 500,000
      1,824
      
      98.31562,466
      
      100.00 Geographical analysis of shareholdersAt
31 March 2007, approximately 56.02% of the Companys shares were held in
the UK, 30.60% in North America, 12.38% in Europe (excluding the UK) and 1.00%
in the Rest of the World. Major shareholdersThe Bank of New York, as custodian
    of the Companys ADR programme, held approximately 12.2% of the Companys
    ordinary shares of $0.113/7 each at25
    May 2007 as nominee. The total number of ADRs outstanding at 25 May 2007 was
    647,375,153. At this date, 1,138 holders of record of ordinary shares had
    registered addresses in the United States and in total held approximately
    0.006% of the ordinary shares of the Company. As at 25 May 2007, the following
    percentage interests in the ordinary share capital of the Company, disclosable
    under the Disclosure and Transparency Rules, (DTR 5), have been notified to
    the directors: Shareholder
	ShareholdingLegal & General Investment Management
	4.02
	% The rights attaching to the ordinary shares of the Company held by this shareholder are identical in all respects to the rights attaching to all the ordinary shares of the Company. The directors are not aware, as
at25 May 2007, 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. Memorandum and Articles of Association and Applicable English Law The following description summarises certain provisions of the Companys Memorandum and Articles of Association and applicable English law. This summary is qualified in its entirety by reference to the Companies
Act 1985 of England and Wales (the Companies Act), as amended and the Companies Act 2006 of England and Wales, and the Companys Memorandum and Articles of Association. Information on where shareholders can obtain copies of the
Memorandum and Articles of Association is provided under Documents on Display. 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.




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The Companys objectsThe
    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.
The Companys objects are set out in the fourth clause of its Memorandum of Association and cover a wide range of activities, including to carry on the business of a holding company, to carry on business as dealers in, operators, manufacturers,
repairers, designers, developers, importers and exporters of electronic, electrical, mechanical and aeronautical equipment of all types as well as to carry on all other businesses necessary to attain the Companys
objectives. The Memorandum of Association grants the Company a broad range of
powers to effect its objects. DirectorsThe
  Companys Articles of Association provide for a Board of directors, consisting
  of not fewer than three directors, who shall manage the business and affairs
  of the Company. 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 to resolutions (a) giving the director
or a third party any guarantee, security or indemnity in respect of obligations
or liabilities incurred at the request of or for the benefit of the Company,
(b) giving any guarantee, security or indemnity to the director or a third party
in respect of obligations of the Company for which the director has assumed responsibility
under an indemnity or guarantee, (c) relating to an offer of securities of the
Company in which the director participates as a holder of shares or other securities
or in the underwriting of such shares or securities, (d) concerning any other
company in which the director (together with any connected person) is a shareholder
or an officer or is otherwise interested, provided that the director (together
with any connected person) is not interested in 1% or more of any class of the
companys equity share capital or the voting rights available to its shareholders,
(e) relating to the arrangement of any employee benefit in which the director
will share equally with other employees and (f) relating to any insurance that
the Company purchases or renews for its directors or any group of people, including
directors. 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. In accordance with the Companys Articles of Association, directors retiring
at each AGM are those last elected or re-elected at or before the AGM held in
the third calendar year before the current year. In 2005, the Company reviewed
its policy regarding the retirement and re-election of directors and, although
it is not intended to amend the Companys Articles in this regard, the Board
has decided, in the interests of good corporate governance, that all the directors
should offer themselves for re-election annually. Accordingly, all the directors,
except for Lord Broers who is retiring, will submit themselves for re-election
at the 2007 AGM. No person is disqualified from being a director or is required to vacate that
office by reason of age. 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
executive directors participating in long term incentive plans must comply with
the Companys share ownership guidelines. In accordance with best practice
in the UK for corporate governance, compensation awarded to executive directors
is decided by a remuneration committee consisting exclusively of non-executive
directors.


In addition, as required by The Directors Remuneration Report Regulations,
the Board has, since 2003, prepared a report to shareholders on the directors remuneration
which complies with the Regulations (see pages 78 to 87). The report is also
subject to a shareholder vote. Rights attaching to the Companys sharesDividend rightsHolders
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
will be announced in pounds sterling. Holders of ordinary shares with a registered
address in a euro-zone country (defined, for this purpose, as a country that
has adopted the euro as its national currency) will receive their dividends in
euro, exchanged from pounds sterling at a rate fixed by the Board of directors
in accordance with the Articles of Association. Dividends for ADS holders represented
by ordinary shares held by the Depositary will be paid to the Depositary in US
dollars, exchanged from pounds sterling at a rate fixed by the directors in accordance
with the Articles of Association, and the Depositary will distribute them to
the ADS holders. 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. Special distributionAt an Extraordinary General Meeting
of the Company on 25 July 2006, shareholders approved a distribution of capital
of approximately £9 billion by way of a B share scheme, equating to 15 pence
per B share for every ordinary share in issue as at 28 July 2006. The Company
has made payments against B shares redeemed in August 2006 and February 2007.
Outstanding B shares in issue are entitled to accrue a continuing dividend rate
of 75% of sterling LIBOR, payable semi-annually in arrears, on future redemption
dates in the calendar years 2007 and/or 2008 on 5 February or 5 August respectively,
until redemption. The B shares may be redeemed by the Company in full, unless
elected to be redeemed earlier
by holders of B shares, on 5 August 2008. Voting rightsThe
Companys Articles of Association provide that voting on Substantive Resolutions
(i.e. any resolution which is not a Procedural Resolution) at a general meeting
shall be decided on a poll. On a poll, each shareholder who is entitled to vote
and is present in person or by proxy has one vote for every share held. 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. In addition, the Articles
of Association allow persons appointed as proxies of shareholders entitled to
vote at general meetings to vote on a show of hands, as well as to vote on a
poll and attend and speak at general meetings. Holders of the Companys
ordinary shares do not have cumulative voting rights. Under English law, two shareholders present in person constitute a quorum for
purposes of a general meeting, unless a companys articles of association
specify otherwise. The Companys Articles of Association do not specify
otherwise, except that the shareholders do not need to be present in person,
and may instead be present by proxy, to constitute a quorum. 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




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Shareholder Informationcontinued

representatives with respect to the underlying ordinary shares represented by their ADSs. Alternatively, holders of ADSs are entitled to vote by supplying their voting instructions to the Depositary or its nominee, who
will vote the ordinary shares underlying their ADSs in accordance with their instructions. Employees are able to vote any shares held under the Vodafone Group Share Incentive
Plan and My ShareBank (a vested share account) through the respective
plans trustees, Halifax EES Trustees
Limited. Liquidation rightsIn 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. The holders of B shares will be entitled, before any payment to holders of the
Companys ordinary shares but after any payment to holders of the Companys
7% cumulative fixed rate shares, to repayment of the amount paid up or treated
to be paid up on the nominal value of each B share, together with any outstanding
entitlement to the B share continuing dividend up to the future redemption date
immediately before the liquidation. The holders of B shares do not have any other
right to share in the Companys surplus assets. Pre-emptive rights and new issues of sharesUnder Section 80 of the Companies
Act 1985, directors are, with certain exceptions, unable to allot relevant securities
without the authority of the shareholders in a general meeting. Relevant securities
as defined in the Companies Act include
the Companys ordinary shares or securities convertible into the Companys
ordinary shares. In addition, Section 89 of the Companies Act 1985 imposes further
restrictions on the issue of equity securities (as defined in the Companies Act,
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 up to five years to allot
(a) relevant securities generally up to an amount fixed by the shareholders and
(b) equity securities for cash other than in connection with a rights issue up
to an amount specified by the shareholders and free of the restriction in Section
89. In accordance with institutional investor guidelines, the amount of relevant
securities to be fixed by shareholders is normally restricted to one third of
the existing issued ordinary share capital, and the amount of equity securities
to be issued for cash other than in connection with a rights issue is restricted
to 5% of the existing issued ordinary share capital. Disclosure of interests in the Companys sharesThere
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 by the Disclosure and Transparency Rules (DTRs). The basic disclosure requirement upon a person acquiring or disposing of shares
carrying voting rights is an obligation to provide written notification to the
Company, including certain details as set out in DTR 5, where the percentage
of the persons voting rights which he holds as shareholder or through his
direct or indirect holding of financial instruments (falling within DTR 5.3.1R)
reaches, exceeds or falls below 3% and each 1% threshold
thereafter. Under Section 793 of the Companies Act 2006, the Company may by notice in writing
require a person that the Company knows or has reasonable cause to believe is
or was during the preceding three years interested in the
Companys shares to indicate whether or not that is correct and, if that
person does or did hold an interest in the Companys shares, to provide
certain information as set out in the Companies Act 2006.


DTR 3 deals with the disclosure by persons discharging managerial responsibility and
their connected persons of the occurrence of all transactions conducted on their
account in the shares in the
Company. Chapter 1 of Part 28 of The Companies Act 2006 sets out the statutory functions
of the Panel on Takeovers & Mergers (the Panel). The Panel is
responsible for issuing and administering the Code on
Takeovers & Mergers and governs disclosure requirements on all parties to
a takeover with regard to dealings in the securities of an offeror or offeree
company and also on their respective associates during the course of an offer
period. General meetings and noticesAnnual 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 an extraordinary general meeting of the Company.
Extraordinary general meetings may also be convened on requisition as provided by the Companies Act. An annual general meeting and an extraordinary general meeting called for the
passing of a special resolution need to be called by not less than twenty-one
days notice in writing and all other extraordinary general meetings by
not less than fourteen days notice in writing. 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 twenty-one days before the date the relevant notice is sent.
The notice may also specify the record date, which shall not be more than forty-eight
hours before the time fixed for the meeting. Shareholders must provide the Company with an address or (so far as the Companies
Act allows) an electronic address or fax number in the United Kingdom in order
to be entitled to receive notices of shareholders meetings and other notices
and documents. In certain circumstances, the Company may give notices to shareholders
by advertisement in newspapers in the United Kingdom. Holders of the Companys
ADSs are entitled to receive notices under the terms of the Deposit Agreement
relating to the ADSs. Under Section 366 of the Companies Act 1985 and the Companys Articles of
Association, the annual general meeting of shareholders must be held each calendar
year, with no more than fifteen months elapsing since the date of the preceding
annual general meeting. Variation of rightsIf,
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, either with the consent in writing of the holders of three
fourths in nominal value of the shares of that class or upon the adoption of
an extraordinary resolution passed 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 (a) 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, (b) any
person present in person or by proxy may demand a poll, and (c) 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 voting and shareholdingThere
are no limitations imposed by English law or the Companys Articles of Association on the right of non-residents or foreign persons to hold or vote the Companys
shares other than those limitations that would generally apply to all of the
shareholders.




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Documents on DisplayThe
    Company is subject to the information requirements of the US Securities and
    Exchange Act of 1934 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 450 Fifth Street, NW Washington, DC 20549. Information on the operation of the public reference room can be
obtained in the US 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 www.sec.gov. Shareholders can also
obtain copies of the Companys Memorandum and Articles of Association from the Vodafone website at www.vodafone.com or from the Companys
registered office. Material ContractsAt 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 $11.3 billion credit facilities
    which are discussed under Performance  Financial Position and
    Resources. Exchange ControlsThere
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, except as otherwise set out under Taxation below. TaxationAs this is a complex area, investors should consult their own tax adviser regarding the US federal, state and local, the UK and other tax consequences of owning and disposing of shares and ADSs in their particular
circumstances. This section relates generally to shares and
    ADSs in the Company. Certain specific UK and other tax consequences of a return
    of capital and share consolidation are discussed on pages B-1 to B-2. 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
    holders that, directly or indirectly, hold 10% or more of the Company’s
    voting stock. A US holder is a beneficial owner of shares or ADSs that is for US federal income
tax purposes: •
    a 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. This section is based on the 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 United
Kingdom and the Double Taxation Convention between the United States and the United Kingdom (the Treaty), 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. Based on this assumption, for 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, a holder of ADRs evidencing
ADSs will be treated as the owner of the shares in the Company represented by
those ADSs. 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 below). Taxation of dividendsUK TaxationUnder current UK tax law, no withholding tax
will be deducted from dividends paid by the Company. A shareholder that is a company resident for UK tax purposes in the United Kingdom
will not be taxable on a dividend it receives from the Company. A shareholder
in the Company who is an individual resident for UK tax purposes in the United
Kingdom is entitled, in calculating their liability to UK income tax, to a tax
credit on cash dividends paid on shares in the Company or ADSs, and the tax credit
is equal to one-ninth of the cash dividend. US Federal Income TaxationA US holder is subject to US federal income
taxation on the gross amount of any dividend paid by the Company out of its current
or accumulated earnings and profits (as determined for US federal income tax
purposes). Dividends paid to a non-corporate US holder in tax years beginning
before 1 January 2011 that constitute qualified dividend income will be taxable
to the holder at a maximum tax rate of 15%, provided that the ordinary shares
or ADSs are held for more than 60 days during the 121 day period beginning 60
days before the ex-dividend date and the holder meets other holding period requirements.
Dividends paid by the Company with respect to the shares or ADSs will generally
be qualified dividend
income. A US holder is not subject to a UK withholding tax. The US holder includes in
gross income for US federal income tax purposes only the amount of the dividend
actually received from the Company, and the receipt of a dividend does not entitle
the US holder to a foreign tax credit. 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. Dividends will
    be income from sources outside the United States. Dividends paid in taxable
    years beginning before 1 January 2007 generally will be passive
    or financial services income, and dividends paid in taxable years
    beginning after 31 December 2006 generally will be passive or
    general income, which in either case is treated separately from
    other types of income for the purposes of computing any allowable foreign
    tax credit. In the case of shares, 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 of the dividend distribution,
regardless of whether the payment is in fact converted into US dollars. Generally,
any gain or loss resulting from currency exchange fluctuations during the period
from the date the dividend payment is to be included in income to the date the
payment is converted into US dollars will be treated as ordinary income or loss.
Generally, the gain or loss will be income or loss from sources within the United
States for foreign tax credit limitation purposes.




|Vodafone Group Plc Annual Report
        2007 | 155
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Back to Contents

Shareholder Informationcontinued

Taxation
  of capital gainsUK taxationA US holder may be liable for both UK and
  US tax in respect of a gain on the disposal of the Companys shares or
  ADSs if the US holder
is: •
    a citizen of the United States resident or ordinarily resident for UK tax purposes in the United Kingdom;•
    a citizen of the United States who has been resident or ordinarily resident for UK tax purposes in the United Kingdom, ceased to be so resident or ordinarily resident for a period of less than five years of assessment and who disposed
    of the shares or ADSs during that period (a Temporary Non- Resident), unless the shares or ADSs were also acquired
    during that period, such liability arising
    on that individuals return to the UK;•
    a US domestic corporation resident in the United Kingdom by reason of being centrally managed and controlled in the United Kingdom; or•
    a citizen of the United States or a US domestic corporation that carries on a trade, profession or vocation in the United Kingdom through a branch or agency or, in the case of US domestic companies, through a permanent establishment and that has used the shares or ADSs for the purposes of such trade,
profession or vocation or has used, held or acquired the shares or ADSs for the purposes of such branch or agency or permanent establishment. Under the Treaty, capital gains on dispositions of the shares or ADSs are generally subject to tax only in the country of residence of the relevant holder as determined under both the laws of the United Kingdom and the
United States and as required by the terms of the Treaty. However, individuals who are residents of either the United Kingdom or the United States and who have been residents of the other jurisdiction (the US or the UK, as the case may be) at any
time during the six years immediately preceding the relevant disposal of shares or ADSs may be subject to tax with respect to capital gains arising from the dispositions of the shares or ADSs not only in the country of which the holder is resident
at the time of the disposition, but also in that other country (although, in respect of UK taxation, generally only to the extent that such an individual comprises a Temporary Non-Resident). US federal income taxationA US holder that sells or otherwise disposes
of the Companys shares or ADSs 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 tax basis, determined in US dollars, in
the shares or ADSs. Generally, a capital gain of a non-corporate US holder that
is recognised before 1 January 2011 is taxed at a maximum rate of 15%, provided
the holder has a holding period of more than one year. The gain or loss will
generally be income or loss from sources within the United States for foreign
tax credit limitation purposes. The deductibility of losses is subject to limitations. Additional tax considerationsUK inheritance taxAn 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 the Companys 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 taxStamp duty will, subject to certain exceptions,
be payable on any instrument transferring shares in the Company 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 price or value of the shares, could also
be payable in these circumstances, and on issue to such a person, but no SDRT
will be payable if stamp duty equal to such SDRT liability is paid. In accordance
with the terms of the Deposit Agreement, any tax or duty payable on deposits
of shares by the Depositary or the Custodian of the Depositary will be charged
to the party to whom ADSs are
delivered against such deposits. No stamp duty will be payable on any transfer of ADSs of the Company, provided
that the ADSs and any separate instrument of transfer are executed and retained
at all times outside the United Kingdom. A transfer of shares in the Company 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. On a transfer from nominee
to beneficial owner (the nominee having at all times held the shares on behalf
of the transferee) under which no beneficial interest passes and which is neither
a sale nor in contemplation of a sale, a fixed £5.00 stamp duty will be
payable. SDRT is generally payable on an unconditional agreement to transfer shares in
the Company in registered form at 0.5% of the amount or value of the consideration
for the transfer but is repayable if, within six years of the date of the agreement,
an instrument transferring the shares is executed 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 the ADSs of the Company
will not give rise to SDRT.




|156 | Vodafone Group PlcAnnual
    Report 2007
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| | Shareholders
| | ------------
| |             



Form 20-F Cross Reference
  Guide

Certain of the information in this document that is referenced in the following table is included in the Companys Annual Report on Form 20-F for 2007 filed with the SEC (the 2007 Form 20-F). No other
information in this document is included in the 2007 Form 20-F or incorporated by reference into any filings by the Company under the US Securities Act of 1933, as amended. Please see Shareholders  Shareholder Information 
Documents on Display for information on how to access the 2007 Form 20-F as filed with the SEC. The 2007 Form 20-F has not been approved or disapproved by the SEC nor has the SEC passed judgement upon the adequacy or accuracy of the 2007 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                                 | Financial Highlights                                                                                      | 2   
|     |                                                            | Performance  Performance Introduction                                                                    | 29  
|     | 3B Capitalisation and indebtedness                         | Not applicable                                                                                            |    
|     | 3C Reasons for the offer and use of proceeds               | Not applicable                                                                                            |    
|     | 3D Risk Factors                                            | Performance  Risk Factors, Seasonality and Outlook                                                       | 58  
|     |                                                            |                                                                                                           |     
|4    | Information on the Company                                 |                                                                                                           |     
|     | 4A History and Development of the Company                  | Business  Business Overview  How We Developed                                                           | 22  
|     |                                                            | Contact Details                                                                                           | 160 
|     | 4B Business Overview                                       | Business  Business Overview                                                                              | 10  
|     |                                                            | Performance  Operating Results                                                                           | 34  
|     |                                                            | Shareholders  Shareholder Information  Material Contracts                                               | 155 
|     | 4C Organisational Structure                                | Note 12 Principal subsidiary undertakings                                                               | 112 
|     |                                                            | Note 13 Investments in joint ventures                                                                   | 113 
|     |                                                            | Note 14 Investments in associated undertakings                                                          | 114 
|     |                                                            | Note 15 Other investments                                                                               | 114 
|     | 4D Property, Plant and Equipment                           | Business  Business Overview  Our Technology and Resources                                               | 19  
|     |                                                            | Performance  Financial Position and Resources                                                            | 52  
|     |                                                            | Governance  Corporate Responsibility and Environmental Issues                                            | 75  
|     |                                                            |                                                                                                           |     
|4A   | Unresolved Staff Comments                                  | Not applicable                                                                                            |    
|     |                                                            |                                                                                                           |     
|5    | Operating and Financial Review and Prospects               |                                                                                                           |     
|     | 5A Operating Results                                       | Performance  Operating Results                                                                           | 34  
|     |                                                            | Note 24 Borrowings                                                                                      | 121 
|     |                                                            | Performance  Performance Introduction                                                                    | 29  
|     |                                                            | Business  Business Overview  Regulation                                                                 | 24  
|     | 5B Liquidity and Capital Resources                         | Performance  Financial Position and Resources                                                            | 52  
|     |                                                            | Note 24 Borrowings                                                                                      | 121 
|     | 5C Research and Development, Patents and Licences, etc.    | Business  Business Overview  Our Technology and Resources                                               | 19  
|     | 5D Trend Information                                       | Strategy  Delivering on our Strategic Objectives                                                         | 8   
|     | 5E Off-balance sheet arrangements                          | Performance  Financial Position and Resources                                                            | 52  
|     |                                                            | Note 30 Commitments                                                                                     | 133 
|     |                                                            | Note 31 Contingent liabilities                                                                          | 134 
|     | 5F Tabular disclosure of contractual obligations           | Performance  Financial Position and Resources                                                            | 52  
|     | 5G Safe harbor                                             | Performance  Cautionary Statement Regarding
Forward-Looking Statements                                   | 61  
|     |                                                            |                                                                                                           |     
|6    | Directors, Senior Management and Employees                 |                                                                                                           |     
|     | 6A Directors and Senior Management                         | Governance  Board of Directors and Group Management                                                      | 64  
|     | 6B Compensation                                            | Governance  Boards Report to Shareholders on Directors Remuneration                                    | 78  
|     | 6C Board Practices                                         | Governance  Corporate Governance                                                                         | 67  
|     |                                                            | Governance  Boards Report to Shareholders on Directors Remuneration                                    | 78  
|     |                                                            | Governance  Board of Directors and Group Management                                                      | 64  
|     | 6D Employees                                               | Business  Business Overview  Our Technology and Resources                                               | 19  
|     |                                                            | Note 34 Employees                                                                                       | 136 
|     | 6E Share Ownership                                         | Governance  Boards Report to Shareholders on Directors Remuneration                                    | 78  
|     |                                                            | Note 20 Share-based payments                                                                            | 117 
|     |                                                            |                                                                                                           |     
|7    | Major Shareholders and Related Party Transactions          |                                                                                                           |     
|     | 7A Major Shareholders                                      | Shareholders  Shareholder Information  Markets                                                          | 152 
|     | 7B Related Party Transactions                              | Governance  Boards Report to Shareholders on Directors Remuneration                                    | 78  
|     |                                                            | Note 36 Related party transactions                                                                      | 137 
|     |                                                            | Note 31 Contingent liabilities                                                                          | 134 
|     | 7C Interests of experts and counsel                        | Not applicable                                                                                            |    
|     |                                                            |                                                                                                           |     
|8    | Financial Information                                      |                                                                                                           |     
|     | 8A Consolidated Statements and Other Financial Information | Financials                                                                                                | 90  
|     |                                                            | Financials  Report of Independent Registered
Public Accounting Firm to the Members of Vodafone Group Plc | 91  
|     |                                                            | Note 31 Contingent Liabilities                                                                          | 134 
|     |                                                            | Performance  Financial Position and Resources                                                            | 52  
|     | 8B Significant Changes                                     | Note 35 Subsequent events                                                                               | 136 
|     |                                                            |                                                                                                           |     



|Vodafone Group Plc Annual Report
        2007 | 157
|--------------------------------------------- | ---

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Back to Contents

Form 20-F Cross Reference Guidecontinued

|Item | Form 20-F caption                                        | Location in this document                                                                                  | Page
|---- | -------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------- | ----
|     |                                                          |                                                                                                            |     
|9    | The Offer and Listing                                    |                                                                                                            |     
|     | 9A Offer and listing details                             | Shareholders  Shareholder Information  Share Price History                                               | 151 
|     | 9B Plan of distribution                                  | Not applicable                                                                                             |    
|     | 9C Markets                                               | Shareholders  Shareholder Information  Markets                                                           | 152 
|     | 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               | Shareholders  Shareholder
Information  Memorandum and Articles of Association and Applicable
English law | 152 
|     | 10C Material contracts                                   | Shareholders  Shareholder Information  Material Contracts                                                | 155 
|     | 10D Exchange controls                                    | Shareholders  Shareholder Information  Exchange Controls                                                 | 155 
|     | 10E Taxation                                             | Shareholders  Shareholder Information  Taxation                                                          | 155 
|     | 10F Dividends and paying agents                          | Not applicable                                                                                             |    
|     | 10G Statement by experts                                 | Not applicable                                                                                             |    
|     | 10H Documents on Display                                 | Shareholders  Shareholder Information  Documents on Display                                              | 155 
|     | 10I Subsidiary information                               | Not applicable                                                                                             |    
|     |                                                          |                                                                                                            |     
|11   | Quantitative and Qualitative Disclosures About           |                                                                                                            |     
|     | Market Risk                                              | Note 24 Borrowings                                                                                       | 121 
|     |                                                          |                                                                                                            |     
|12   | Description of Securities Other than Equity Securities   | Not applicable                                                                                             |    
|     |                                                          |                                                                                                            |     
|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  Corporate Governance                                                                          | 67  
|     |                                                          |                                                                                                            |     
|16   | 16A Audit committee financial expert                     | Governance  Corporate Governance  Board Committees                                                       | 69  
|     | 16B Code of Ethics                                       | Governance  Corporate Governance  Introduction                                                           | 67  
|     | 16C Principal Accountant Fees and Services               | Note 4 Operating (loss)/profit                                                                           | 102 
|     |                                                          | Governance  Corporate Governance  Auditors                                                               | 72  
|     | 16D Exemptions from the Listing Standards for            |                                                                                                            |     
|     | Audit Committees                                         | Governance  Corporate Governance  Board Committees                                                       | 69  
|     | 16E Purchase of Equity Securities by the Issuer and      | Performance  Financial Position and Resources                                                             | 52  
|     | Affiliated
    Purchasers                                | Note 21 Transactions with equity shareholders                                                            | 120 
|     |                                                          |                                                                                                            |     
|17   | Financial Statements                                     | Not applicable                                                                                             |    
|     |                                                          |                                                                                                            |     
|18   | Financial Statements                                     | Financials                                                                                                 | 90  
|     |                                                          |                                                                                                            |     
|19   | Exhibits                                                 | Filed with the SEC                                                                                         |    
|     |                                                          |                                                                                                            |     



|158 | Vodafone Group PlcAnnual
    Report 2007
|--- | ----------------------------------------

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Back to Contents

| | Glossary
| | --------
| |         



Definition of Terms

The definition of terms used throughout the performance section is detailed below. These terms are not uniformly defined by all companies in the Groups industry. Accordingly, such measures may not be comparable
with similarly titled measures and disclosures by other companies.

|3G broadband                        |  | 3G services enabled with High Speed
        Downlink Packet Access (HSDPA) technology which enables data
        transmission
at speeds of up to two megabits per second.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|----------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|3G device                           |  | A handset or device capable of accessing
    3G data services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Acquired intangibles amortisation   |  | Amortisation relating to intangible
        assets identified and recognised separately in respect of a business
        combination in excess of the intangible assets recognised by the acquiree
    prior to acquisition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Acquisition costs                   |  | The total of connection fees, trade
    commissions and equipment costs relating to new customer connections.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Active customer                     |  | A customer who pays a monthly fee or
    has made or received a chargeable event in the last three months.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|ARPU                                |  | Total revenue excluding handset revenue
        and connection fees divided by the weighted average number of customers
    during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Capitalised fixed asset additions   |  | This measure includes the aggregate
        of capitalised property, plant and equipment additions and capitalised
    software costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Change at constant exchange rates   |  | Changes relating to one country are
        calculated based on local currency amounts in both periods. For changes
        relating to multiple countries, calculations exclude the exchange rate
        movements by restating the prior
periods results as if they had been generated at the current periods
exchange rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Churn                               |  | Total gross customer disconnections
    in the period divided by the average total customers in the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Controlled and jointly controlled   |  | Controlled and jointly controlled measures
        include 100% for the Groups mobile operating subsidiaries and the
    Groups proportionate share for joint ventures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Customer                            |  | A 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) except telemetric applications.
        Telemetric applications include, but are not limited to, asset and equipment
        tracking, mobile payment and billing functionality (for example, vending
        machines and meter readings) and include voice enabled customers whose
        usage is limited to a central service operation (for example, emergency
    response applications in vehicles).                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Data revenue                        |  | Data revenue includes all non-voice
    service revenue excluding messaging, fixed line and DSL.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Depreciation and other amortisation |  | This measure includes the profit or
    loss on disposal of property, plant and equipment and computer software.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|DSL                                 |  | A Digital Subscriber Line which is
    a fixed line enabling data to be transmitted at high speeds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|HSDPA                               |  | High Speed Downlink Packet Access is
        a wireless technology enabling data transmission speeds of up to 3.6
    megabits per second.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Interconnect costs                  |  | A charge paid by Vodafone to other fixed
        line or mobile operators when a Vodafone customer calls a customer connected
    to a different network.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Messaging
revenue                   |  | Messaging revenue includes all SMS and
        MMS revenue including wholesale messaging revenue, revenue from the use
        of messaging services by Vodafone customers roaming away from their home
        network and customers visiting the
local network.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Net
debt                            |  | Long term borrowings, short term borrowings
        and mark to market adjustments on financing instruments less cash and
    cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Organic
growth                      |  | The percentage movements in organic
        growth are presented to reflect operating performance on a comparable
        basis. Where an entity, being a subsidiary, joint venture or associated
        undertaking, was newly acquired or disposed of in the current or prior
        period, the Group adjusts, under organic growth calculations, the results
        for the current and prior period to remove the amount the Group earned
        in both periods as a result of the acquisition or disposal of subsidiary
        or associated undertakings. Where the Group increases, or decreases,
        its ownership interest in a joint venture or associated undertaking in
        the current or prior period, the Groups results for the prior period
        are restated at the
current periods ownership level. Further adjustments in organic calculations
exclude the effect of exchange rate movements by restating the prior periods
results as if they had been generated at the current periods exchange rates
and excludes the amortisation of acquired intangible assets.
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|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 brand reach into such new markets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Penetration                         |  | Number of customers 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 Subscriber
    Identity Module (SIM).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Proportionate customers             |  | The proportionate customer number represents
        the number of mobile customers in ventures which the Group either controls
    or invests, based on the Groups ownership in such ventures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Purchased licence amortisation      |  | Amortisation
        relating to capitalised licence and spectrum fees purchased directly
        by the Group or existing on recognition through business combination
        accounting, and such fees recognised by an acquiree prior to
acquisition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Retention costs                     |  | The total of trade commissions, loyalty
    scheme and equipment costs relating to customer retention and upgrade.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Termination rate                    |  | A per minute charge paid by a telecommunications
        network operator when a customer makes a call to another mobile or fixed
    line network operator.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Vodafone live! active device        |  | A handset or device equipped with the
        Vodafone live! portal which has made or received a chargeable event in
    the last month.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



|Vodafone Group Plc Annual Report
        2007 | 159
|--------------------------------------------- | ---

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Notes





|160 | Vodafone Group PlcAnnual
    Report 2007
|--- | ----------------------------------------

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| | ------------------------- |  | ------------------------------- | 
| |                           |  |                                 | 
| |                           |  |                                 | 
| | Contact
      Details     | 
| |                           | 
| | Investor Relations:       | 
| | Telephone:                |  | +44 (0) 1635 664447             | 
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| | Website:                  |  | www.vodafone.com/responsibility | 
| |                           |  |                                 | 
| |                           |  |                                 | 
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| |                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
| | We want to
      keep the environmental impact of the documents in our Annual Report package
      to a minimum. We have therefore given careful consideration to the production
      process. | 
| |                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 
| |                                                                                                                                                                                                 |  | This document in printed
      on Revive 75 Silk, manufactured in the EU at mills with ISO 14001 accreditation
      and comprising 75% de-inked post consumer waste and 25% virgin fibre. The
      FSC logo identifies products which contain wood from well-managed forests
      certified in accordance with the rules of the Forest Stewardship Council.
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      system using vegetable-based inks. The printer holds FSC Chain of Custody
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      and mailing within a 23 mile radius, further environmental savings in terms
      of transport and energy are achieved. All the steps we have taken demonstrate
      our commitment to making sustainable choices. Designed and produced by Addison
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| |                                                                                                                                                                                                              |  | 
| | Vodafone Group PlcRegistered office:
        
        Vodafone House 
        The Connection 
        Newbury 
        Berkshire 
        RG14 2FN
        England 
        Registered in England No.1833679 |  | 
| |                                                                                                                                                                                                              |  | 
| | Tel: +44 (0) 1635 33251
      
      Fax: +44 (0) 1635 45713 www.vodafone.com                                                                                                                                |  | 
| |                                                                                                                                                                                                              |  |  | 
| |                                                                                                                                                                                                              |  |  | 

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Cellco Partnership(d/b/a Verizon Wireless)Consolidated Financial StatementsFor the years endedDecember 31, 2006, 2005 and 2004

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Table of Contents

|Cellco
      Partnership (d/b/a Verizon Wireless) |                                                                      |     
|------------------------------------------------- | -------------------------------------------------------------------- | ----
|                                                  |                                                                      |     
|                                                  | Consolidated
      Statements of Operations and Comprehensive Income |     
|                                                  | For the years ended December
      31, 2006, 2005 and 2004           | 3   
|                                                  |                                                                      |     
|                                                  | Consolidated
      Balance Sheets                                    |     
|                                                  | December 31, 2006 and 2005                                           | 4   
|                                                  |                                                                      |     
|                                                  | Consolidated
      Statements of Cash Flows                          |     
|                                                  | For the years ended December
      31, 2006, 2005 and 2004           | 5   
|                                                  |                                                                      |     
|                                                  | Consolidated
      Statements of Changes in Partners’ Capital        |     
|                                                  | For the years ended December
      31, 2006, 2005 and 2004           | 6   
|                                                  |                                                                      |     
|                                                  | Notes to Consolidated
      Financial Statements                     |     
|                                                  | For the years ended December
      31, 2006, 2005 and 2004           | 7-24

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CELLCO PARTNERSHIP
  (d/b/a Verizon Wireless)Consolidated Statements of Operations and
  Comprehensive Income
  (in Millions)

|FOR THE YEARS ENDED DECEMBER
      31,                       | 2006 |        | 2005 |   | 2004   |  
|------------------------------------------------------------ | ---- | ------ | ---- | - | ------ | -
|                                                             |      |        |      |   |        |  
|                                                             |      |        |      |   |        |  
|OPERATING REVENUE                                            |      |        |      |   |        |  
|Service
      revenue                                        | $    | 32,796 |      | $ | 28,131 |  
|Equipment
      and other                                    |      | 5,247  |      |   | 4,170  |  
|                                                             |      |        |      |   |        |  
|Total
      operating revenue                                |      | 38,043 |      |   | 32,301 |  
|                                                             |      |        |      |   |        |  
|                                                             |      |        |      |   |        |  
|OPERATING COSTS AND EXPENSES                                 |      |        |      |   |        |  
|Cost
      of service (excluding depreciation and            |      |        |      |   |        |  
|amortization
      related to network assets included below) |      | 4,698  |      |   | 4,154  |  
|Cost
      of equipment                                      |      | 6,793  |      |   | 5,239  |  
|Selling,
      general and administrative                    |      | 12,039 |      |   | 10,768 |  
|Depreciation
      and amortization                          |      | 4,913  |      |   | 4,760  |  
|                                                             |      |        |      |   |        |  
|Total
      operating costs and expenses                     |      | 28,443 |      |   | 24,921 |  
|                                                             |      |        |      |   |        |  
|Operating
      income                                       |      | 9,600  |      |   | 7,380  |  
|OTHER INCOME (EXPENSES)                                      |      |        |      |   |        |  
|Interest
      expense, net                                  |      | (451   | )    |   | (597   | )
|Minority
      interests                                     |      | (251   | )    |   | (226   | )
|Other,
      net                                             |      | 22     |      |   | 29     |  
|                                                             |      |        |      |   |        |  
|Income
      before provision for income taxes               |      | 8,920  |      |   | 6,586  |  
|Provision
      for income taxes                             |      | (599   | )    |   | (434   | )
|                                                             |      |        |      |   |        |  
|INCOME BEFORE CUMULATIVE
      EFFECT OF ACCOUNTING CHANGE   |      | 8,321  |      |   | 6,152  |  
|                                                             |      |        |      |   |        |  
|                                                             |      |        |      |   |        |  
|Cumulative
      effect of accounting change                 |      | (124   | )    |   | -      |  
|                                                             |      |        |      |   |        |  
|NET INCOME                                                   |      | 8,197  |      |   | 6,152  |  
|                                                             |      |        |      |   |        |  
|                                                             |      |        |      |   |        |  
|OTHER COMPREHENSIVE INCOME (LOSS)                            |      |        |      |   |        |  
|Unrealized
      gain on derivative financial instruments    |      | -      |      |   | -      |  
|Minimum
      pension liability adjustments                  |      | (11    | )    |   | (10    | )
|                                                             |      |        |      |   |        |  
|COMPREHENSIVE INCOME                                         | $    | 8,186  |      | $ | 6,142  |  
|                                                             |      |        |      |   |        |  

See Notes to Consolidated Financial Statements.

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CELLCO PARTNERSHIP(d/b/a Verizon Wireless)
  Consolidated Balance Sheets
  (in Millions)

|AS OF DECEMBER 31,                                         |  |   | 2006 |        |   | 2005 |      
|---------------------------------------------------------- |  | - | ---- | ------ | - | ---- | -----
|                                                           |  |   |      |        |   |      |      
|                                                           |  |   |      |        |   |      |      
|ASSETS                                                     |  |   |      |        |   |      |      
|Current assets                                             |  |   |      |        |   |      |      
|Cash                                                       |  |   | $    | 383    |   |      | $    
|Receivables,
      net of allowances of $201 and $193      |  |   |      | 3,235  |   |      |      
|Due
      from affiliates, net                             |  |   |      | 73     |   |      |      
|Unbilled
      revenue                                     |  |   |      | 301    |   |      |      
|Inventories,
      net                                     |  |   |      | 889    |   |      |      
|Prepaid
      expenses and other current assets            |  |   |      | 297    |   |      |      
|                                                           |  |   |      |        |   |      |      
|Total
      current assets                                 |  |   |      | 5,178  |   |      |      
|                                                           |  |   |      |        |   |      |      
|Property,
      plant and equipment, net                   |  |   |      | 24,659 |   |      |      
|Wireless licenses, net                                     |  |   |      | 51,115 |   |      |      
|Other intangibles,
      net                               |  |   |      | 44     |   |      |      
|Deferred charges and other
      assets, net               |  |   |      | 502    |   |      |      
|                                                           |  |   |      |        |   |      |      
|Total
      assets                                         |  |   | $    | 81,498 |   |      | $    
|                                                           |  |   |      |        |   |      |      
|                                                           |  |   |      |        |   |      |      
|LIABILITIES AND PARTNERS CAPITAL                          |  |   |      |        |   |      |      
|Current liabilities                                        |  |   |      |        |   |      |      
|Short-term obligations,
      including current maturities |  | $ | -    |        |   | $    | 2,497
|Accounts
      payable and accrued liabilities             |  |   |      | 4,836  |   |      |      
|Advance
      billings                                     |  |   |      | 1,055  |   |      |      
|Other current
      liabilities                            |  |   |      | 103    |   |      |      
|                                                           |  |   |      |        |   |      |      
|Total
      current liabilities                            |  |   |      | 5,994  |   |      |      
|                                                           |  |   |      |        |   |      |      
|Due to affiliates                                          |  |   |      | 12,933 |   |      |      
|Deferred tax liabilities,
      net                        |  |   |      | 5,739  |   |      |      
|Other non-current
      liabilities                        |  |   |      | 1,559  |   |      |      
|                                                           |  |   |      |        |   |      |      
|Total
      liabilities                                    |  |   |      | 26,225 |   |      |      
|                                                           |  |   |      |        |   |      |      
|Minority
      interests in consolidated entities          |  |   |      | 1,659  |   |      |      
|Partners capital subject
      to redemption              |  |   |      | 10,000 |   |      |      
|                                                           |  |   |      |        |   |      |      
|Commitments and contingencies (see
      Notes 13 and 15)  |  |   |      |        |   |      |      
|                                                           |  |   |      |        |   |      |      
|Partners capital                                          |  |   |      |        |   |      |      
|Capital                                                    |  |   |      | 43,677 |   |      |      
|Accumulated
      other comprehensive loss                 |  |   |      | (63    | ) |      |      
|                                                           |  |   |      |        |   |      |      
|Total
      partners capital                              |  |   |      | 43,614 |   |      |      
|                                                           |  |   |      |        |   |      |      
|Total
      liabilities and partners capital              |  |   | $    | 81,498 |   |      | $    
|                                                           |  |   |      |        |   |      |      

See Notes to Consolidated Financial Statements.

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CELLCO PARTNERSHIP(d/b/a Verizon Wireless)
  Consolidated Statements of Cash Flows
  (in Millions)

|FOR THE YEARS ENDED DECEMBER 31,                                                    | 2006 |        | 2005 |   | 2004    |  
|----------------------------------------------------------------------------------- | ---- | ------ | ---- | - | ------- | -
|                                                                                    |      |        |      |   |         |  
|                                                                                    |      |        |      |   |         |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                |      |        |      |   |         |  
|Net income                                                                          | $    | 8,197  |      | $ | 6,152   |  
|Add: Cumulative effect of accounting change                                         |      | 124    |      |   | -       |  
|                                                                                    |      |        |      |   |         |  
|Income before cumulative effect
      of accounting change                          |      | 8,321  |      |   | 6,152   |  
|Adjustments to reconcile income to net cash
      provided by operating activities: |      |        |      |   |         |  
|Depreciation
      and amortization                                                 |      | 4,913  |      |   | 4,760   |  
|Provision for uncollectible
      receivables                                       |      | 273    |      |   | 250     |  
|Provision
      for deferred income taxes                                           |      | 122    |      |   | 74      |  
|Equity in income of unconsolidated
      entities                                   |      | (19    | )    |   | (27     | )
|Minority
      interests                                                            |      | 251    |      |   | 226     |  
|Net loss (gain) on disposal
      of assets                                         |      | 15     |      |   | 11      |  
|Changes in certain assets
      and liabilities (net of the effects of purchased    |      |        |      |   |         |  
|businesses):                                                                        |      |        |      |   |         |  
|Receivables
      and unbilled revenue, net                                         |      | (726   | )    |   | (604    | )
|Inventories,
      net                                                              |      | 10     |      |   | (235    | )
|Prepaid
      expenses and other current assets                                     |      | 9      |      |   | 54      |  
|Deferred
      charges and other assets                                             |      | (14    | )    |   | 54      |  
|Accounts
      payable and accrued liabilities                                      |      | 658    |      |   | 527     |  
|Other
      current liabilities                                                     |      | 133    |      |   | 43      |  
|Other operating
      activities, net                                               |      | 598    |      |   | 212     |  
|                                                                                    |      |        |      |   |         |  
|Net cash provided by operating
      activities                                     |      | 14,544 |      |   | 11,497  |  
|                                                                                    |      |        |      |   |         |  
|                                                                                    |      |        |      |   |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                |      |        |      |   |         |  
|Capital expenditures                                                                |      | (6,618 | )    |   | (6,484  | )
|Proceeds from sale of property, plant and equipment                                 |      | -      |      |   | -       |  
|Acquisitions of businesses
      and licenses, net of cash acquired                 |      | (2,866 | )    |   | (4,282  | )
|Wireless licenses deposit                                                           |      | -      |      |   | (307    | )
|Other investing activities,
      net                                               |      | (103   | )    |   | (166    | )
|                                                                                    |      |        |      |   |         |  
|Net cash used in investing
      activities                                         |      | (9,587 | )    |   | (11,239 | )
|                                                                                    |      |        |      |   |         |  
|                                                                                    |      |        |      |   |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                |      |        |      |   |         |  
|Net (payments to) proceeds
      from affiliates                                    |      | (901   | )    |   | 3,537   |  
|Net change in short-term obligations                                                |      | (2,505 | )    |   | (1,533  | )
|Contribution from partner,
      net                                                |      | -      |      |   | 512     |  
|Distributions to partners                                                           |      | (1,260 | )    |   | (2,469  | )
|Distributions to minority
      investors, net                                      |      | (236   | )    |   | (148    | )
|                                                                                    |      |        |      |   |         |  
|Net cash used in financing
      activities                                         |      | (4,902 | )    |   | (101    | )
|                                                                                    |      |        |      |   |         |  
|Increase in cash                                                                    |      | 55     |      |   | 157     |  
|Cash, beginning of year                                                             |      | 328    |      |   | 171     |  
|                                                                                    |      |        |      |   |         |  
|Cash, end of year                                                                   | $    | 383    |      | $ | 328     |  
|                                                                                    |      |        |      |   |         |  

See Notes to Consolidated Financial Statements.

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CELLCO PARTNERSHIP(d/b/a Verizon Wireless)Consolidated Statements of Changes in Partners
  Capital
  (in Millions)

|                                                                  |         |        | Accumulated   |   |           |  
|----------------------------------------------------------------- | ------- | ------ | ------------- | - | --------- | -
|                                                                  |         |        | Other         |   | Total     |  
|                                                                  |         |        | Comprehensive |   | Partners |  
|                                                                  | Capital |        | Loss          |   | Capital   |  
|                                                                  |         |        |               |   |           |  
|Balance at January 1, 2004                                        | $       | 21,005 |               | $ | (42       | )
|                                                                  |         |        |               |   |           |  
|Net income                                                        |         | 4,698  |               |   | -         |  
|Distribution to partners, net                                     |         | (3,253 | )             |   | -         |  
|Unrealized loss on derivative financial instruments               |         | -      |               |   | 3         |  
|Minimum pension liability adjustment                              |         | -      |               |   | (3        | )
|                                                                  |         |        |               |   |           |  
|Balance at December 31, 2004                                      |         | 22,450 |               |   | (42       | )
|                                                                  |         |        |               |   |           |  
|Net income                                                        |         | 6,152  |               |   | -         |  
|Contribution from partner, net                                    |         | 512    |               |   | -         |  
|Distribution to partners, net                                     |         | (2,469 | )             |   | -         |  
|Minimum pension liability adjustment                              |         | -      |               |   | (10       | )
|                                                                  |         |        |               |   |           |  
|Balance at December 31, 2005                                      |         | 26,645 |               |   | (52       | )
|                                                                  |         |        |               |   |           |  
|Net income                                                        |         | 8,197  |               |   | -         |  
|Distributions to partners                                         |         | (1,260 | )             |   | -         |  
|Reclassification of portion of Vodafones
      partners capital |         | 10,000 |               |   | -         |  
|Other                                                             |         | 95     |               |   | -         |  
|Minimum pension liability adjustment                              |         | -      |               |   | (11       | )
|                                                                  |         |        |               |   |           |  
|Balance at December 31, 2006                                      | $       | 43,677 |               | $ | (63       | )
|                                                                  |         |        |               |   |           |  

See Notes to Consolidated Financial Statements.

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CELLCO PARTNERSHIP(d/b/a Verizon Wireless)Notes to Consolidated Financial Statements
  Years Ended December 31, 2006, 2005 and 2004



1.     Formation
  of Business and Summary of Significant Accounting Policies

---

Formation
  of Business

Cellco Partnership (the Partnership)
  is a general partnership formed by Bell Atlantic Corporation (Bell Atlantic)
  and NYNEX Corporation (NYNEX) and began conducting business operations
  on July 1, 1995 as Bell Atlantic NYNEX Mobile (BANM). On August
  14, 1997, Bell Atlantic and NYNEX merged into one company, Bell Atlantic. On
  June 30, 2000, Bell Atlantic and GTE Corporation (GTE Corp) completed
  a merger of equals under a definitive merger agreement entered into on July
  27, 1998 (the Merger) and the newly merged entity changed its name
  to Verizon Communications Inc. (Verizon).

In April and June 2000, through the U.S. Wireless
  Alliance Agreement (the Alliance Agreement) dated September 21,
  1999, Bell Atlantic, Vodafone Group Plc (Vodafone), and GTE Corp
  agreed to combine their respective U.S. wireless assets into the Partnership
  and began doing business under the Verizon Wireless brand name. Vodafone contributed
  its U.S. wireless operations (the AirTouch Properties), its 50%
  ownership interest in PrimeCo Personal Communications L.P. (PrimeCo)
  and approximately $4 billion of debt to the Partnership. Verizon contributed
  certain GTE Corp wireless net assets and operations (GTEW), as well
  as its 50% ownership interest in PrimeCo to the Partnership. Verizons
  and Vodafones partnership interests are 55% and 45%, respectively.

The Partnership is the largest domestic wireless
  carrier in terms of total revenue and the most profitable, as measured by operating
  income. The Partnership offers wireless voice and data services across one of
  the most extensive wireless networks in the U.S.

Consolidated Financial Statements and Basis of
  Presentation

The consolidated financial statements of the Partnership
  include the accounts of its majority-owned subsidiaries, the partnerships in
  which the Partnership exercises control, and the variable interest entity in
  which the Partnership is deemed to be the primary beneficiary as defined by
  Financial Accounting Standards Board (FASB) Interpretation No. 46(R),
  Consolidation of Variable Interest Entities, an Interpretation of ARB
  No. 51. Investments in businesses and partnerships in which the Partnership
  does not have control, but has the ability to exercise significant influence
  over operating and financial policies, are accounted for under the equity method
  of accounting. All significant intercompany balances and transactions between
  these entities have been eliminated.

Use of Estimates

The preparation of financial statements in accordance
  with accounting principles generally accepted in the United States of America
  requires management to make estimates and assumptions that affect the reported
  amounts of assets and liabilities and the disclosure of contingent assets and
  liabilities at the date of the financial statements and the reported amounts
  of revenues and expenses during the reporting period. Actual results could differ
  from those estimates. Estimates are used for, but not limited to, the accounting
  for: allowances for uncollectible accounts receivable, unbilled revenue, fair
  values of financial instruments, depreciation and amortization, useful lives
  and impairment of assets, accrued expenses, inventory reserves, equity in income
  of unconsolidated entities, employee benefits, income taxes, contingencies and
  allocation of purchase prices in connection with business combinations. Estimates
  and assumptions are periodically reviewed and the effects of any material revisions
  are reflected in the consolidated financial statements in the period that they
  are determined to be necessary.

Revenue Recognition

The Partnership earns revenue by providing access
  to the network (access revenue) and for usage of the network (usage revenue),
  which includes roaming revenue. In general, access revenue is billed one month
  in advance and is recognized when earned; the unearned portion is classified
  in advance billings. Access revenue, usage revenue and roaming revenue are recognized
  when service is rendered and included in unbilled revenue until billed. Equipment
  sales revenue associated with the sale of wireless handsets and accessories
  is recognized when the products are delivered to and accepted by the customer,
  as this is considered to be a separate earnings process from the sale of wireless
  services. Effective July 1, 2003, the Partnership adopted the provisions under
  Emerging Issues Task Force (EITF) Issue No. 00-21, Revenue
  Arrangements with Multiple Deliverables. Prior to the adoption, customer
  activation fees, along with the related costs up to but not exceeding the activation
  fees, were deferred and amortized over the customer relationship period. Subsequent
  to the adoption of EITF 00-21, customer activation fees are recognized as part
  of equipment revenue. The existing deferred balances, prior to the effective
  date, will continue to be amortized in the statement of operations.

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The Partnerships revenue recognition policies
  are in accordance with the Securities and Exchange Commissions (SEC)
  Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition
  in Financial Statements, SAB No. 104, Revenue Recognition,
  and EITF Issue No. 00-21.

Allowance for Doubtful Accounts

The Partnership maintains allowances for uncollectible
  accounts receivable for estimated losses resulting from the inability of customers
  to make required payments. Estimates are based on the aging of the accounts
  receivable balances and the historical write-off experience, net of recoveries.

Inventory

Inventory consists primarily of wireless equipment
  held for sale. Equipment held for sale is carried at the lower of cost (determined
  using a first-in, first-out method) or market. The Partnership maintains estimated
  inventory valuation reserves for obsolete and slow moving device inventory based
  on analysis of inventory agings and changes in technology.

Capitalized Software

Capitalized software consists primarily of direct
  costs incurred for professional services provided by third parties and compensation
  costs of employees which relate to software developed for internal use either
  during the application stage or for upgrades and enhancements that increase
  functionality. Costs are capitalized and amortized on a straight-line basis
  over their estimated useful lives of three to five years. Costs incurred in
  the preliminary project stage of development and maintenance are expensed as
  incurred.

Capitalized software of $541 million and $589 million
  and related accumulated amortization of $254 million and $310 million as of
  December 31, 2006 and 2005, respectively, have been included in deferred charges
  and other assets, net in the consolidated balance sheets.

Property, Plant and Equipment

Property, plant and equipment primarily represents
  costs incurred to construct and expand capacity and network coverage on Mobile
  Telephone Switching Offices and cell sites. The cost of property, plant and
  equipment is depreciated over its estimated useful life using the straight-line
  method of accounting. Leasehold improvements are amortized over the shorter
  of their estimated useful lives or the term of the related lease. Major improvements
  to existing plant and equipment are capitalized. Routine maintenance and repairs
  that do not extend the life of the plant and equipment are charged to expense
  as incurred.

Upon the sale or retirement of property, plant and
  equipment, the cost and related accumulated depreciation or amortization is
  eliminated from the accounts and any related gain or loss is reflected in the
  statement of operations and comprehensive income in selling, general and administrative
  expense.

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

Valuation of Assets

Long-lived assets, including property, plant and
  equipment and intangible assets with finite lives, are reviewed for impairment
  whenever events or changes in circumstances indicate that the carrying amount
  of the asset may not be recoverable. The carrying amount of a long-lived asset
  is not recoverable if it exceeds the sum of the undiscounted cash flows expected
  to result from the use and eventual disposition of the asset. The impairment
  loss, if determined to be necessary, would be measured as the amount by which
  the carrying amount of the asset exceeds the fair value of the asset. For valuation
  of intangible assets with indefinite lives see Note 2, Wireless Licenses
  and Other Intangibles, Net.

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Financial Instruments

The Partnership used various financial instruments,
  including foreign exchange-forward contracts, to manage risk to the Partnership
  by generating cash flows that offset the cash flows of certain transactions
  in foreign currencies. Derivatives were measured at fair value and were recognized
  as either assets or liabilities in the consolidated balance sheets. Changes
  in the fair values of derivative instruments not used as hedges were recognized
  in earnings immediately. Changes in the fair values of derivative instruments
  used effectively as hedges of changes in cash flows were recognized in other
  comprehensive income and were recognized in the consolidated statements of operations
  and comprehensive income as interest expense, net when the hedged item affected
  earnings. The ineffective portion of a derivatives change in fair value
  was immediately recognized in earnings. The Partnerships derivative financial
  instruments were for foreign exchange-forward contracts to hedge foreign currency
  transactions; specifically Japanese Yen denominated capital lease obligations.
  These contracts were designated as cash flow hedges. The Partnership fulfilled
  its obligations related to these financial instruments in April 2005.

Long-Term Compensation

Effective January 1, 2003, the Partnership adopted
  the fair value recognition provisions of Statement of Financial Accounting Standards
  (SFAS) No. 123, Accounting for Stock-Based Compensation,
  prospectively as permitted under SFAS No. 148, Accounting for Stock-Based
  Compensation  Transition and Disclosure, and accounts for Value
  Appreciation Rights (VARs) and Restricted Partnership Units (RPUs)
  issued to employees accordingly. There was no material effect on the Partnerships
  results of operations or financial position upon the adoption of the fair value
  recognition provisions of SFAS No. 123 as the Partnership was accounting for
  these awards using a fair value approach under Accounting Principles Board (APB)
  Opinion No. 25, Accounting for Stock Issued to Employees, and related
  interpretations. On January 1, 2006 the Partnership adopted SFAS No. 123(R)
  Share Based Payment which eliminates the alternative to use the
  intrinsic value method of accounting that was provided in SFAS No. 123. The
  Partnership recorded a cumulative effect of adoption as of January 1, 2006 to
  recognize the effect of initially measuring the VARs granted under the 2000
  Verizon Wireless Long-Term Incentive Plan at fair value utilizing a Black-Scholes
  model. The Partnership records a charge or benefit in the consolidated statements
  of operations and comprehensive income in selling, general and administrative
  expense each reporting period based on the change in the estimated fair value
  of the awards during the period (see Note 11).

Advertising Costs

The Partnership expenses advertising costs as incurred.
  Total advertising expense amounted to $1,388 million, $1,210 million, and $1,059
  million for the years ended December 31, 2006, 2005, and 2004, respectively.

Income Taxes

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

Concentrations

To the extent the Partnerships customer receivables
  become delinquent, collection activities commence. No single customer is large
  enough to present a significant financial risk to the Partnership. The Partnership
  maintains an allowance for doubtful accounts based on the expected collectibility
  of accounts receivable.

The Partnership relies on local and long-distance
  telephone companies, some of whom are related parties (see Note 14), and other
  companies to provide certain communication services. Although management believes
  alternative telecommunications facilities could be found in a timely manner,
  any disruption of these services could potentially have an adverse impact on
  operating results.

Although the Partnership attempts to maintain multiple
  vendors for each required product, its network assets, which are important components
  of its operations, are currently acquired from only a few sources. If the suppliers
  are unable to meet the Partnerships needs as it builds out its network
  infrastructure and sells service and equipment, delays and increased costs in
  the expansion of the Partnerships network infrastructure or losses of
  potential customers could result, which would adversely affect its operating
  results.

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Comprehensive Income

Comprehensive income consists of net income and
  other gains and losses affecting partners capital that, under generally
  accepted accounting principles, are excluded from net income. Other comprehensive
  income is comprised of net unrealized gains (losses) on derivative financial
  instruments and adjustments to the minimum pension liability.

Segments

The Partnership has one reportable business segment
  and operates domestically only. The Partnerships products and services
  are materially comprised of wireless telecommunications services.

Recently Issued Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123(R),
  Share-Based Payment. This standard replaces SFAS No. 123, Accounting
  for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting
  for Stock Issued to Employees. This statement requires all entities to
  apply a fair-value-based measurement method in accounting for share-based payment
  transactions with a) employees, except for certain equity instruments held by
  employee share ownership plans, and b) non-employees when acquiring goods or
  services. SFAS No. 123(R) also eliminates the alternative to use the intrinsic
  value method of accounting that was provided in SFAS No. 123. SFAS No. 123(R)
  is supplemented by SAB No. 107, Share Based Payments. This SAB,
  issued by the SEC in March 2005, expresses the views of the SEC staff regarding
  the relationship between SFAS No. 123(R) and certain SEC rules and regulations.
  In particular, this SAB provides guidance related to valuation methods, the
  classification of compensation expense, non-GAAP financial measures, the accounting
  for income tax effects of share-based payment arrangements, disclosures in Managements
  Discussion and Analysis subsequent to adoption of SFAS No. 123(R) and interpretations
  of other share-based payment arrangements. On January 1, 2006 the Partnership
  adopted SFAS No. 123(R) and SAB No. 107.

The Partnership recorded a cumulative effect of
  adoption as of January 1, 2006 to recognize the effect of initially measuring
  the outstanding liability awards (VARs) granted under the 2000 Verizon Wireless
  Long-Term Incentive Plan (the Plan) at fair value utilizing a Black-Scholes
  model. The outstanding liability awards are settled in cash, with the amount
  of cash based upon the difference between the VAR price on the date of grant
  and the VAR price on the date of exercise, less applicable taxes. For purposes
  of the VAR price, the Partnership employs the income approach, a standard valuation
  technique, to arrive at the fair value of the Partnership, as defined in the
  Plan, on a quarterly basis using publicly available information (see Note 11).

In July 2006, the FASB issued Interpretation No.
  (FIN) 48, Accounting for Uncertainty in Income Taxes.
  FIN 48 requires the use of a two-step approach for recognizing and measuring
  tax benefits taken or expected to be taken in a tax return and disclosures regarding
  uncertainties in income tax positions, including a roll-forward of tax benefits
  taken that do not qualify for financial statement recognition. The cumulative
  effect of initially adopting FIN 48, to the extent applicable, will be recorded
  as an adjustment to the opening balance in Partners Capital for the year
  of adoption and will be presented as a separately stated item. The Partnership
  is required to adopt FIN 48 effective January 1, 2007. Only tax positions that
  meet the more likely than not recognition threshold at the effective date may
  be recognized upon adoption of FIN 48. The Partnership does not expect the impact
  to the financial statements to be material.

In September 2006, the SEC issued SAB No. 108, Considering
  the Effects of Prior Year Misstatements when Quantifying Misstatements in Current
  Year Financial Statements. SAB No. 108 requires the quantification of
  financial statement errors based on the effects on the current year income statement
  and the cumulative effects on the balance sheet. SAB No. 108 was effective December
  31, 2006. The adoption of SAB No. 108 did not affect the Partnerships
  financial statements.

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In September 2006, the FASB issued SFAS No. 157,
  Fair Value Measurement (SFAS No. 157). SFAS No. 157 defines fair value, expands
  disclosures about fair value measurements, establishes a framework for measuring
  fair value in generally accepted accounting principles, and establishes a hierarchy
  that categorizes and prioritizes the sources to be used to estimate fair value.
  The Partnership is required to adopt SFAS No. 157 effective January 1, 2008
  on a prospective basis. The Partnership is currently evaluating the impact this
  new standard will have on its financial statements.

In September 2006, the FASB issued SFAS No. 158,
  Employers Accounting for Defined Benefit Pension and Other Postretirement
  Plans  an amendment of FASB Statements No. 87, 88, 106, and 132(R).
  SFAS No. 158 requires an entity that sponsors one or more single-employer defined
  benefit plans to recognize the over or underfunded status of the benefit plan
  as an asset or liability and measure the plan assets and benefit obligations
  as of the annual balance sheet date. The Partnership adopted SFAS No. 158 on
  December 31, 2006. The impact to the financial statements upon the adoption
  of this statement was not material.



2. Wireless
  Licenses and Other Intangibles, Net

---

The Partnership adopted the provisions of SFAS No.
  142, Goodwill and Other Intangible Assets, as of January 1, 2002.
  In conjunction with this adoption, the Partnership has reassessed the useful
  lives of previously recognized intangible assets. The Partnerships principal
  intangible assets are licenses, including licenses associated with equity method
  investments, which provide the Partnership with the exclusive right to utilize
  certain radio frequency spectrum to provide wireless communication services.
  While licenses are issued for only a fixed time, generally 10 to 15 years, such
  licenses are subject to renewal by the Federal Communications Commission (FCC).
  Renewals of licenses have occurred routinely and at nominal cost. Moreover,
  the Partnership has determined that there are currently no legal, regulatory,
  contractual, competitive, economic or other factors that limit the useful life
  of the Partnerships wireless licenses. As a result, the wireless licenses
  have been treated as an indefinite life intangible asset under the provisions
  of SFAS No. 142 and have not been amortized but rather were tested for impairment.
  The Partnership reevaluates the useful life determination for wireless licenses
  at least annually to determine whether events and circumstances continue to
  support an indefinite useful life.

When testing the carrying value of the wireless
  licenses for impairment, the Partnership determined the fair value of the aggregated
  wireless licenses by subtracting from enterprise discounted cash flows (net
  of debt) the fair value of all of the other net tangible and intangible assets
  of the Partnership including previously unrecognized intangible assets. This
  approach is generally referred to as the residual method. In addition, the fair
  value of the aggregated wireless licenses was then subjected to a reasonableness
  analysis using public information of comparable wireless carriers. If the fair
  value of the aggregated wireless licenses as determined above had been less
  than the aggregated carrying amount of the licenses, an impairment would have
  been recognized. During 2004, tests for impairment were performed with no impairment
  recognized.

On September 29, 2004, the SEC issued Staff Announcement
  No. D-108, Use of the Residual Method to Value Acquired Assets other than
  Goodwill. This Staff Announcement requires SEC registrants to adopt a
  direct value method of assigning value to intangible assets acquired in a business
  combination under SFAS No. 141, Business Combinations, effective
  for all business combinations completed after September 29, 2004. Further, all
  intangible assets valued under the residual method prior to this adoption are
  required to be tested for impairment using a direct value method no later than
  the beginning of 2005. Any impairment of intangible assets recognized upon application
  of a direct value method by entities previously applying the residual method
  should be reported as a cumulative effect of a change in accounting principle.
  Under this Staff Announcement, the reclassification of recorded balances from
  wireless licenses to goodwill prior to the adoption of this Staff Announcement
  is prohibited.

The Partnership evaluated its wireless licenses
  for potential impairment using a direct value methodology as of December 15,
  2006 and December 15, 2005 in accordance with SEC Staff Announcement No. D-108,
  Use of the Residual Method to Value Acquired Assets other than Goodwill.
  The valuation and analyses prepared in connection with the adoption of a direct
  value method and subsequent revaluation resulted in no adjustment to the carrying
  value of the Partnerships wireless licenses and, accordingly, had no effect
  on its results of operations and financial position. Future tests for impairment
  will be performed at least annually and more often if events or circumstances
  warrant.

Other intangibles, net, which primarily represent
  acquired customer lists, have a finite useful life of four to eight years and
  are amortized on an accelerated basis.

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The changes in the carrying amount of wireless licenses
  are as follows:

|(Dollars in Millions)                 | Wireless Licenses,Net (a), (b) |        | Wireless
      LicensesAssociated with EquityMethod Investments (c) |   |     |  
|------------------------------------- | ------------------------------ | ------ | ------------------------------------------------------------------- | - | --- | -
|                                      |                               
|                                      | Total                          |       
|                                      |                                |        |                                                                     |   |     |  
|                                      |                                |        |                                                                     |   |     |  
|Balance, net, as of January 1, 2005   | $                              | 42,067 |                                                                     | $ | 30  |  
|Wireless licenses acquired            |                                | 5,535  |                                                                     |   | -   |  
|Other                                 |                                | 179    |                                                                     |   | (6) |  
|                                      |                                |        |                                                                     |   |     |  
|Balance, net, as of December 31, 2005 |                                | 47,781 |                                                                     |   | 24  |  
|Wireless licenses acquired            |                                | 3,203  |                                                                     |   | -   |  
|Other                                 |                                | 131    |                                                                     |   | (2  | )
|                                      |                                |        |                                                                     |   |     |  
|Balance, net, as of December 31, 2006 | $                              | 51,115 |                                                                     | $ | 22  |  
|                                      |                                |        |                                                                     |   |     |  
|                                      |                                |        |                                                                     |   |     |  

|   
|---
|(a)
|(b)
|(c)
|   

Other intangibles, net consist of the following:

|                                    |   |      | December 31, |  
|----------------------------------- | - | ---- | ------------ | -
|(Dollars in Millions)               |   | 2006 |              |  
|                                    |   |      |              |  
|                                    |   |      |              |  
|Customer lists (4-7
      yrs.) (a) | $ | 108  |              | $
|Other (8 yrs.)                      |   | 21   |              |  
|                                    |   |      |              |  
|                                    |   |      | 129          |  
|Less: accumulated amortization (b)  |   |      | 85           |  
|                                    |   |      |              |  
|Other intangibles,
      net        | $ | 44   |              | $
|                                    |   |      |              |  
|                                    |   |      |              |  

|                                                                                                                                                                                                        |   |   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | --
|(a) The Partnership retired approximately
      $3.3 billion of fully amortized customer lists in the second quarter of
      2006.                                                                     |   |   
|(b) Based solely on amortizable intangible
      assets existing at December 31, 2006, the estimated amortization expense
      for the five succeeding fiscal yearsand
      thereafter is as follows: |   |   
|                                                                                                                                                                                                        |   |   
|For
      the year ended 12/31/2007                                                                                                                                                                     | $ | 17
|For
      the year ended 12/31/2008                                                                                                                                                                     | $ | 11
|For
      the year ended 12/31/2009                                                                                                                                                                     | $ | 6 
|For
      the year ended 12/31/2010                                                                                                                                                                     | $ | 5 
|For
      the year ended 12/31/2011                                                                                                                                                                     | $ | 4 
|Thereafter                                                                                                                                                                                              | $ | 1 



3. Business
  Combinations and Other Transactions

---

On November 29, 2006, the Partnership was granted
  13 FCC licenses won in the FCCs Advanced Wireless Services spectrum auction
  (Auction 66) that concluded on September 18, 2006. The Partnership
  was the high bidder on these licenses with bids totaling $2.8 billion. The 13
  licenses cover the eastern half of the United States and a population of approximately
  200 million. The Partnership has made all required payments to the FCC for these
  licenses.

Vista PCS LLC (Vista), a joint venture
  between the Partnership and Valley Communications, LLC (Valley),
  was high bidder on 37 of 242 Personal Communications Service (PCS)
  licenses auctioned by the FCC in February 2005. These licenses were available
  only to entities qualifying as an entrepreneur under FCC rules.
  Vista qualified as an "entrepreneur" under FCC rules. Vista is also a Variable
  Interest Entity as defined by FIN 46(R). Vista's results are consolidated by
  the Partnership because the Partnership deems itself to be the primary beneficiary
  of Vista, in accordance with FIN 46(R). Valley has voting control of Vista in
  that it has two of the three votes on Vista's Management Committee while the
  Partnership has the remaining vote. Vistas winning bids in the FCC auction
  totaled $332 million. The 37 licenses cover a population of approximately 34.4
  million, including approximately 2.2 million in markets where the Partnership
  did not hold licenses. The licenses cover major markets such as Charlotte, Cincinnati,
  Houston, Norfolk, Pittsburgh and Seattle. The FCC granted Vista these licenses
  in March 2006.

On August 3, 2005, the Partnership completed the
  purchase of 23 PCS licenses and related network assets from Cricket Communications,
  Inc., a subsidiary of Leap Wireless International, Inc., and certain of its
  affiliates, for approximately $103 million in cash, which included purchase
  price adjustments and deferred consideration of approximately $3 million. The
  licenses cover the Michigan BTAs of Battle Creek, Flint, Kalamazoo and Jackson,
  and 16 other markets in Michigan, Wisconsin, Alabama, Arkansas, Mississippi
  and New York. These licenses provide for additional expansion into markets in
  Michigan, Arkansas, Alabama, Mississippi and Wisconsin, and necessary capacity
  for existing markets in Michigan, Arkansas, Alabama, Mississippi and upstate
  New York.

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On May 13, 2005, the Partnership was granted 26
  FCC licenses won in the FCC auction that concluded on February 15, 2005 of 242
  PCS licenses (Auction 58). The Partnership was the high bidder on
  these licenses with bids totaling $365 million. The 26 licenses cover a population
  of approximately 20 million, including approximately 2.2 million in markets
  where the Partnership did not previously hold licenses. The licenses cover major
  markets, such as Charlotte, Cleveland, St. Louis and San Diego. The Partnership
  has made all required payments to the FCC for these licenses.

On May 11, 2005, the Partnership acquired a PCS
  license in the San Francisco basic trading area (BTA) from Metro PCS, Inc. for $230 million. The license covers a
  population of approximately 7.3 million and provides spectrum capacity in the
  San Francisco, Oakland and San Jose markets.

On April 13, 2005, the Partnership completed the
  purchase of all of the stock of NextWave Telecom Inc., whereby it acquired 23
  PCS licenses and certain tax net operating losses for approximately $3 billion
  in cash. The licenses cover a population of approximately 73 million and provide
  spectrum capacity in key markets such as New York, Los Angeles, Boston, Washington
  D.C. and Detroit, and expand the Partnerships licensed footprint into
  Tulsa, Oklahoma.

On March 4, 2005, the Partnership completed the
  purchase from Qwest Wireless, LLC of all of its PCS licenses and related network
  assets for $419 million in cash, including post-closing adjustments. The licenses
  cover a population of approximately 30.9 million in 62 markets, and provide
  needed spectrum capacity in certain of the Partnerships existing major
  markets, such as Denver, Portland, Phoenix, Salt Lake City and Seattle.

In July 2004, the Partnership won the spectrum license
  for the New York metropolitan area auctioned by NextWave Telecom Inc. The transaction
  closed in October 2004 and, under the terms of the purchase agreement, the Partnership
  paid $930 million for the license. The license covers a population of 20.1 million
  people for the New York, New York Basic Trading Area, and expands the Partnerships
  network capacity to meet customers growing demand for voice and data services.

Other acquisitions in the years ended December 31,
  2006, 2005 and 2004 consisted of various individually immaterial partnership
  interests and wireless licenses.

All of the acquisitions of businesses included above
  were accounted for under the purchase method of accounting with results of operations
  included in the consolidated statements of operations from the date of acquisition.
  Had the acquisitions of businesses been consummated on January 1 of the year
  preceding the year of acquisition, the results of these acquired operations
  would not have had a significant impact on the Partnerships consolidated
  results of operations for any of the periods presented.

The following table presents information about the
  Partnerships acquisitions for the years ended December 31, 2006, 2005
  and 2004:

|(Dollars in Millions)    | Acquisition Date |   | Purchase
      Price (a) |  |   | Wireless
      Licenses |  |   | Net
      Tangible
      Assets |  |   | Other
      Assets and
      Liabilities,
      net |  
|------------------------ | ---------------- | - | ------------------------ |  | - | ----------------------- |  | - | ------------------------------- |  | - | --------------------------------------------------- | -
|                         |                  |   |                          |  |   |                         |  |   |                                 |  |   |                                                     |  
|                         |                  |   |                          |  |   |                         |  |   |                                 |  |   |                                                     |  
|2006                     |                  |   |                          |  |   |                         |  |   |                                 |  |   |                                                     |  
|                         |                  |   |                          |  |   |                         |  |   |                                 |  |   |                                                     |  
|Auction 66               | November 2006    | $ | 2,809                    |  | $ | 2,809                   |  | $ | -                               |  | $ | -                                                   |  
|Vista PCS                | March 2006       | $ | 332                      |  | $ | 353                     |  | $ | -                               |  | $ | (21                                                 | )
|Various                  | Various          | $ | 57                       |  | $ | 41                      |  | $ | 7                               |  | $ | 9                                                   |  
|                         |                  |   |                          |  |   |                         |  |   |                                 |  |   |                                                     |  
|2005                     |                  |   |                          |  |   |                         |  |   |                                 |  |   |                                                     |  
|                         |                  |   |                          |  |   |                         |  |   |                                 |  |   |                                                     |  
|Leap (b)                 | August 2005      | $ | 103                      |  | $ | 95                      |  | $ | 8                               |  | $ | -                                                   |  
|Auction 58               | May 2005         | $ | 365                      |  | $ | 365                     |  | $ | -                               |  | $ | -                                                   |  
|Metro PCS                | May 2005         | $ | 230                      |  | $ | 230                     |  | $ | -                               |  | $ | -                                                   |  
|NextWave Telecom Inc (c) | April 2005       | $ | 3,003                    |  | $ | 4,410                   |  | $ | -                               |  | $ | (1,407                                              | )
|Qwest                    | March 2005       | $ | 419                      |  | $ | 393                     |  | $ | 39                              |  | $ | (13                                                 | )
|Various                  | Various          | $ | 200                      |  | $ | 190                     |  | $ | 2                               |  | $ | 8                                                   |  
|                         |                  |   |                          |  |   |                         |  |   |                                 |  |   |                                                     |  
|2004                     |                  |   |                          |  |   |                         |  |   |                                 |  |   |                                                     |  
|                         |                  |   |                          |  |   |                         |  |   |                                 |  |   |                                                     |  
|NextWave Telecom Inc     | Oct 2004         | $ | 930                      |  | $ | 930                     |  | $ | -                               |  | $ | -                                                   |  
|Various                  | Various          | $ | 101                      |  | $ | 70                      |  | $ | 28                              |  | $ | 3                                                   |  

|   
|---
|(a)
|(b)
|(c)

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Tower Transactions

In accordance with the Alliance Agreement, any tower
  financing transactions accounted for by Verizon as a financing were not contributed
  to the Partnership. The tower financings associated with BANM and GTEW resulted
  in the Partnerships continuing involvement in joint ventures (JVs)
  with Crown Castle International Corporation (Crown), which were
  established through the contribution of communications towers in exchange for
  cash and equity interests in the JVs. The JVs were controlled and managed by
  Crown. The JVs were entitled to build and own the first 500 towers built for
  BANMs network and the first 500 towers built for GTEWs network after
  the date of each agreement; however, the parties agreed to end their obligations
  related to such towers in 2002. The Partnership leases back a portion of the
  towers pursuant to lease agreements. In May 2003 and November 2004, Crown purchased
  Verizons remaining minority interest in these JVs, which are now 100%
  owned by Crown. The Partnership paid $111 million, $104 million and $95 million
  to Crown related to payments under operating leases for the years ended December
  31, 2006, 2005, and 2004, respectively.

Prior to the acquisition of the AirTouch Properties,
  Vodafone entered into agreements (Sublease Agreements) to sublease
  all of its unused space on its communications towers to American Tower Corporation
  (ATC) and SpectraSite Holdings, Inc. (SpectraSite) in
  exchange for $955 million. In accordance with the Alliance Agreement, all proceeds
  from the subleases were retained by or remitted to Vodafone. Vodafone also entered
  into exclusive three-year build-to-suit agreements with ATC and SpectraSite
  to produce new communications towers in strategic locations. The build-to-suit
  agreements were assumed by the Partnership upon the closing of the AirTouch
  Properties acquisition. Several of these transactions closed in phases throughout
  2001. The parties agreed to terminate the build-to-suit agreement with SpectraSite
  in 2002. The build-to-suit agreement with ATC expired in January 2003. As of
  December 31, 2006, approximately 2,200 towers have been subleased, at the monthly
  rate of approximately two thousand dollars per tower. The Sublease Agreements
  require monthly maintenance fees for the existing physical space used by the
  Partnerships wireless equipment. The terms of the Sublease Agreements
  differ for leased communication towers versus those owned by the Partnership
  and range from 20 to 99 years. The Partnership paid $62 million, $60 million
  and $56 million to ATC and SpectraSite pursuant to the Sublease Agreements for
  the years ended December 31, 2006, 2005, and 2004, respectively.



4. Variable
  Interest Entity

---

In November 2004, the Partnership and Valley Communications,
  LLC (Valley) entered into an LLC Agreement (the Agreement)
  to form Vista PCS, LLC (Vista) in order to bid on PCS licenses.
  For the year ended December 31, 2004, Vista had no business activity other than
  its initial capitalization upon formation. On February 15, 2005, the FCC concluded
  an auction of 242 PCS licenses. Vista was the high bidder on 37 of these licenses.

The Partnership has provided capital contributions
  and debt financing to Vista. Under the Agreement, the Partnership has an 80%
  non-controlling interest in Vista, while Valley has the remaining 20% interest.
  Also, under the Agreement, Valley has voting control of Vista in that it has
  two of the three votes on Vistas Management Committee. The Partnership
  has the remaining vote.

Additionally, pursuant to a Management Agreement,
  the Partnership provides Vista assistance in building the wireless networks
  in the areas in which Vista owns the licenses purchased in the FCC auction.

The Partnership considers Vista to be a variable
  interest entity (VIE) because its voting rights are not proportional
  to its ownership interest and the total equity investment at risk is not sufficient
  to permit the entity to finance its activities without additional subordinated
  financial support. The Partnership deems itself to be the primary beneficiary
  of Vista.



5. Verizon
  Wireless of the East

---

On August 15, 2002, the Partnership acquired substantially
  all of the operating assets of Price Communications Wireless, Inc. (Price),
  a subsidiary of Price Communications Corp., pursuant to an agreement dated as
  of December 18, 2001, as amended. The transaction was valued at $1,702 million,
  including $550 million ($700 million debt less $150 million cash contributed
  by Price) in net debt assumed and redeemed. On December 17, 2001 a new limited
  partnership, Verizon Wireless of the East LP, was formed for the purpose of
  acquiring the assets to be contributed by Price and subsidiaries of the Partnership.
  The Partnership contributed certain of its assets to the new limited partnership
  in exchange for a managing general partner interest and a limited partner interest.
  In exchange for its contributed assets, Price received a preferred limited partnership
  interest in Verizon Wireless of the East LP that was exchangeable under certain
  circumstances into equity of Verizon Wireless (if an initial public offering
  of such equity occurred) or mandatorily into common stock of Verizon on the
  fourth anniversary of the asset contribution (August 15, 2006) if a qualifying
  initial public offering of Verizon Wireless equity had not occurred prior to
  such anniversary (the mandatory exchange). Pursuant to the limited
  partnership agreement, the profits of Verizon Wireless of the East LP were allocated
  on a preferred basis to Prices capital account quarterly in an amount
  up to, but not exceeding, 2.915% per annum

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(based on the weighted daily average balance of
  Prices capital account). Prices initial capital account balance
  for its preferred interest was $1,113 million, which was included in minority
  interests in consolidated entities in the consolidated balance sheets. On August
  15, 2006, Price exchanged its preferred limited partnership interest in Verizon
  Wireless of the East LP for 29.5 million shares of Verizons common stock.
  Verizons interest in Verizon Wireless of the East LP of $1,179 million
  is included in minority interests in consolidated entities on the consolidated
  balance sheets. Verizon Wireless of the East LP is controlled and consolidated
  by the Partnership.



6. Supplementary
  Financial Information

---

|Supplementary Balance Sheet Information     |   |              |  |   |       | 
|------------------------------------------- | - | ------------ |  | - | ----- | 
|                                            |   | December 31, | 
|(Dollars in Millions)                       |   | 2006         |  |   | 2005  | 
|                                            |   |              |  |   |       | 
|                                            |   |              |  |   |       | 
|Receivables, Net:                           |   |              |  |   |       | 
|Accounts
      receivable                   | $ | 3,124        |  | $ | 2,586 | 
|Other receivables                           |   | 312          |  |   | 369   | 
|                                            |   |              |  |   |       | 
|                                            |   | 3,436        |  |   | 2,955 | 
|Less: allowance for doubtful
      accounts |   | 201          |  |   | 193   | 
|                                            |   |              |  |   |       | 
|Receivables,
      net                      | $ | 3,235        |  | $ | 2,762 | 
|                                            |   |              |  |   |       | 



|                                |  |   | Balance at   |  |   | Additions  |  |   | Write-offs, |  |   | Balance at | 
|------------------------------- |  | - | ------------ |  | - | ---------- |  | - | ----------- |  | - | ---------- | 
|                                |  |   | beginning of |  |   | charged to |  |   | net of      |  |   | end of the | 
|(in millions)                   |  |   | the year     |  |   | operations |  |   | recoveries  |  |   | year       | 
|                                |  |   |              |  |   |            |  |   |             |  |   |            | 
|Accounts Receivable Allowances: |  |   |              |  |   |            |  |   |             |  |   |            | 
|2006                            |  | $ | 193          |  | $ | 273        |  | $ | (265)       |  | $ | 201        | 
|2005                            |  | $ | 223          |  | $ | 250        |  | $ | (280)       |  | $ | 193        | 
|2004                            |  | $ | 234          |  | $ | 227        |  | $ | (238)       |  | $ | 223        | 
|                                |  |   |              |  |   |            |  |   |             |  |   |            | 
|Inventory Allowances:           |  |   |              |  |   |            |  |   |             |  |   |            | 
|2006                            |  | $ | 47           |  | $ | (1)        |  | $ | 9           |  | $ | 55         | 
|2005                            |  | $ | 59           |  | $ | (13)       |  | $ | 1           |  | $ | 47         | 
|2004                            |  | $ | 17           |  | $ | 44         |  | $ | (2)         |  | $ | 59         | 



|                                                | December 31, |       
|----------------------------------------------- | ------------ | ------
|(Dollars in Millions)                           |              | 2006  
|                                                |              |       
|                                                |              |       
|Property, Plant and Equipment, Net:             |              |       
|Land and improvements                           | $            | 158   
|Buildings (8-40 yrs.)                           |              | 6,229 
|Wireless plant equipment (3-15
      yrs.)      |              | 34,738
|Furniture, fixtures and equipment (5 yrs.)      |              | 3,293 
|Leasehold improvements (5
      yrs.)           |              | 1,993 
|                                                |              |       
|                                                |              | 46,411
|Less: accumulated depreciation                  |              | 21,752
|                                                |              |       
|Property, plant and equipment,
      net (a)(b) | $            | 24,659
|                                                |              |       

|   
|---
|(a)
|(b)



|                                               | December 31, |      
|---------------------------------------------- | ------------ | -----
|(Dollars in Millions)                          |              | 2006 
|                                               |              |      
|                                               |              |      
|Accounts Payable and Accrued Liabilities:      |              |      
|Accounts payable                               | $            | 2,863
|Accrued liabilities                            |              | 1,973
|                                               |              |      
|Accounts payable and accrued
      liabilities | $            | 4,836
|                                               |              |      

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Supplementary Statements of Operations Information

|                                                                  |   | For the Years Ended
      December 31, |  
|----------------------------------------------------------------- | - | -------------------------------------- | -
|(Dollars in Millions)                                             |   | 2006                                   |  
|                                                                  |   |                                        |  
|                                                                  |   |                                        |  
|Depreciation and Amortization:                                    |   |                                        |  
|Depreciation
      of property, plant and equipment               | $ | 4,668                                  |  
|Amortization of other intangibles                                 |   | 137                                    |  
|Amortization
      of deferred charges and other assets           |   | 108                                    |  
|                                                                  |   |                                        |  
|Total
      depreciation and amortization                         | $ | 4,913                                  |  
|                                                                  |   |                                        |  
|                                                                  |   |                                        |  
|                                                                  |   |                                        |  
|Interest Expense, Net:                                            |   |                                        |  
|Interest
      expense                                            | $ | (770                                   | )
|Interest income                                                   |   | 1                                      |  
|Capitalized
      interest                                        |   | 318                                    |  
|                                                                  |   |                                        |  
|Interest
      expense, net                                       | $ | (451                                   | )
|                                                                  |   |                                        |  
|                                                                  |   |                                        |  
|                                                                  |   |                                        |  
|Supplementary Cash Flows Information                              |   |                                        |  
|                                                                  |   | For the Years
      Ended December 31, |  
|(Dollars in Millions)                                             |   | 2006                                   |  
|                                                                  |   |                                        |  
|                                                                  |   |                                        |  
|Net cash
      paid for income taxes                              | $ | 439                                    |  
|Interest paid, net of amounts
      capitalized                   | $ | 445                                    |  
|                                                                  |   |                                        |  
|Supplemental investing and
      financing non-cash transactions: |   |                                        |  
|Reclassification
      of deposits to wireless licenses           | $ | 332                                    |  
|Exchange
      of investment interests                            | $ | -                                      |  
|Debt
      and net liabilities assumed, less cash                 | $ | -                                      |  
|Reclassification
      of portion of Vodafones partners capital | $ | 10,000                                 |  

7. Debt

---

|                                                 |   | December 31, |   |      
|------------------------------------------------ | - | ------------ | - | -----
|(Dollars in Millions)                            |   | 2006         |   | 2005 
|                                                 |   |              |   |      
|                                                 |   |              |   |      
|Short-term obligations consist of the following: |   |              |   |      
|Fixed rate
      notes, net of discount          | $ | -            | $ | 2,497
|                                                 |   |              |   |      
|Total
      debt                                 | $ | -            | $ | 2,497
|                                                 |   |              |   |      

Fixed and Floating Rate Notes

In December 2001, the Partnership and Verizon Wireless
  Capital LLC, a wholly-owned subsidiary of the Partnership, co-issued a private
  placement of $1.5 billion floating rate notes, originally maturing in December
  2003, and $2.5 billion fixed rate notes, maturing in December 2006. The net
  cash proceeds were used to reduce outstanding amounts under a bank credit facility.
  Verizon Wireless Capital LLC, a Delaware limited liability company, was formed
  for the sole purpose of facilitating the offering of the notes and additional
  debt securities of the Partnership. Other than acting as co-issuer of the Partnership
  indebtedness, Verizon Wireless Capital LLC had no material assets, operations
  or revenues. The Partnership was jointly and severally liable with Verizon Wireless
  Capital LLC for the notes. On July 10, 2002, the Partnership filed a registration
  statement on Form S-4 to exchange the privately placed notes for a new issue
  of notes with identical terms registered under the Securities Act of 1933. The
  registration statement was declared effective and the exchange offer commenced
  on October 11, 2002. The exchange offer expired and closed on November 12, 2002.

On November 17, 2003, the Partnership and Verizon
  Wireless Capital LLC co-issued another private placement of $1.5 billion floating
  rate notes. The net proceeds from the sale of the notes were used to repay the
  $1.5 billion floating rate notes that matured in December 2003 and a $24 million
  bank credit facility. On May 23, 2005, the Partnership repaid these floating
  rate notes with proceeds obtained through intercompany borrowings.

The $2.5 billion, net of an original $12 million
  discount, fixed rate notes bore interest at a rate of 5.375% due semi-annually
  on each June 15 and December 15. The discount was amortized using the effective
  interest method. Net capitalized debt issuance costs, included in deferred charges
  and other assets, net in the 2005 consolidated balance sheets, amounted to $2
  million and were

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amortized in the consolidated statements of operations
  and comprehensive income using the straight-line method. On December 15, 2006,
  the Partnership repaid these fixed rate notes with proceeds obtained through
  intercompany borrowings.

8. Due
  from/to Affiliates

---

|                                            |   | December 31, | 
|------------------------------------------- | - | ------------ | 
|(Dollars in Millions)                       |   | 2006         | 
|                                            |   |              | 
|                                            |   |              | 
|Receivable from affiliates,
      net       | $ | 73           | 
|                                            |   |              | 
|Payables to affiliates:                     |   |              | 
|Long term
      notes payable to affiliates |   | 12,933       | 
|                                            |   |              | 
|Total
      due to affiliates               | $ | 12,860       | 
|                                            |   |              | 

Receivable from Affiliates, Net

The Partnership has agreements with certain Verizon
  subsidiaries and affiliates for the provision of services in the normal course
  of business, including but not limited to direct and office telecommunications
  and general and administrative services.

Demand Notes Due to Affiliate

The Partnership had an agreement with Verizons
  wholly-owned financing affiliate, Verizon Global Funding (VGF) under
  which it could borrow, regularly on an uncommitted basis, up to an agreed upon
  amount, payable on demand, for working capital and other general partnership
  purposes. Amounts payable to VGF were offset on a daily basis by cash available
  in the Partnerships cash accounts.

Demand borrowings from VGF fluctuated based upon
  the Partnerships working capital and other funding requirements. Interest
  on the demand borrowings was generally based on a blended interest rate calculated
  by VGF using fixed rates and variable rates applicable to borrowings by VGF
  to fund the Partnership and other entities affiliated with Verizon.

In 2005, the Partnership refinanced the demand borrowings
  through intercompany long-term promissory notes.

Term Notes Payable to Affiliates

In conjunction with its acquisition of the operating
  assets of Price in August 2002, Verizon Wireless of the East LP obtained a $350
  million term note from Verizon Investments Inc., a wholly-owned subsidiary of
  Verizon. These funds were used to partially fund the redemption of debt assumed
  from Price. In September 2006, Verizon Wireless of the East LP repaid in full
  and cancelled this note using the proceeds of a $350 million floating rate note
  payable by Verizon Wireless of the East LP to the Partnership, with a maturity
  date of February 18, 2011. This note bears interest at a rate per annum computed
  monthly based upon the weighted cost of the Partnerships outstanding borrowings
  during the month. The Partnership financed this new note using intercompany
  borrowings from an affiliate of Verizon.

On February 18, 2005, the Partnership signed a floating
  rate promissory note with VGF that permits the Partnership to borrow, repay
  and re-borrow from time-to-time up to a maximum principal amount of $6.5 billion
  with a maturity date of February 22, 2008. Amounts borrowed under the note bear
  interest at a rate per annum equal to one-month LIBOR plus 20 basis points for
  each interest period, with the interest rate being adjusted on the first business
  day of each month. Borrowings under this note as of December 31, 2006 were $6.5
  billion.

On September 1, 2005, the Partnership signed an
  additional floating rate promissory note (the Floating Rate Note)
  in the amount of approximately $2.4 billion payable to VGF, and due on August
  1, 2009. Amounts borrowed under the Floating Rate Note bear interest at a rate
  per annum equal to one-month LIBOR plus 20 basis points for each interest period,
  with the interest rate being adjusted on the first business day of each month.
  The Floating Rate Note was effective as of July 1, 2005, and replaced a prior
  $2.4 billion term note due in 2009 to VGF, which was cancelled as a result.
  Borrowings under the Floating Rate Note at December 31, 2006 were approximately
  $2.4 billion.

Also on September 1, 2005, the Partnership signed
  a fixed rate promissory note (the Fixed Rate Note) that permits
  the Partnership to borrow, repay and re-borrow from time-to-time up to a maximum
  principal amount of $9.0 billion from VGF, with a maturity date of August 1,
  2009. Amounts borrowed under the Fixed Rate Note generally bear interest at
  a rate of 5.8% per annum. The Fixed Rate Note was effective as of July 1, 2005,
  and replaced a prior demand note due to VGF, which was cancelled as a result.
  Borrowings under the Fixed Rate Note at December 31, 2006 were approximately
  $1.5 billion.

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On December 15, 2006, the Partnership signed an
  additional fixed rate promissory note (the Fixed Rate Promissory Note)
  in the amount of $2.5 billion payable to Verizon Financial Services LLC, due
  on December 15, 2008. Amounts borrowed under the Fixed Rate Promissory Note
  generally bear interest at a rate of 5.3% per annum. Proceeds from the note
  were used to repay the $2.5 billion fixed rate notes that matured in December
  2006. Borrowings under the Fixed Rate Promissory Note at December 31, 2006 were
  $2.5 billion.

These borrowings are classified as due to affiliates
  (long-term) on the accompanying condensed consolidated balance sheet as of December
  31, 2006.

Effective February 1, 2006, VGF was merged with
  and into Verizon, making Verizon the lender on all of our notes previously payable
  to VGF. On March 1, 2006, Verizon assigned these notes to a wholly-owned subsidiary,
  Verizon Financial Services LLC.

9. Financial
  Instruments

---

Fair Value

The carrying amounts and fair values of the Partnerships
  financial instruments as of December 31 consist of the following:

|                                              |   |          |  |   | December 31, |  |   |          | 
|--------------------------------------------- | - | -------- |  | - | ------------ |  | - | -------- | 
|                                              |   | 2006     |  |   | 2005         | 
|                                              |   |          |  |   |              |  |   |          | 
|                                              |   | Carrying |  |   | Fair         |  |   | Carrying | 
|(Dollars in Millions)                         |   | Value    |  |   | Value        |  |   | Value    | 
|                                              |   |          |  |   |              |  |   |          | 
|                                              |   |          |  |   |              |  |   |          | 
|Term notes due to affiliates                  | $ | 12,933   |  | $ | 13,116       |  | $ | 13,834   | 
|Fixed rate notes                              | $ | -        |  | $ | -            |  | $ | 2,497    | 
|Partners capital subject
      to redemption | $ | 10,000   |  | $ | 10,000       |  | $ | 20,000   | 

The Partnerships trade receivables and payables
  are short term in nature. Accordingly, these instruments carrying value
  approximates fair value. A discounted future cash flows method is used to determine
  the fair value of the term notes due to affiliates and the fixed rate notes.



10. Employee Benefit Plans

---

Employee Savings and Profit Sharing Retirement
  Plans

The Partnership maintains the Verizon Wireless Savings
  and Retirement Plan (the VZW Plan) for the benefit of its employees.
  Effective January 1, 2001, employees of the Partnership are eligible to participate
  as soon as practicable following their commencement of employment.

Beginning in 2002, under the employee savings component
  of the VZW Plan, employees may contribute, subject to IRS limitations, up to
  a total of 25% of eligible compensation, on a before-tax or after-tax basis,
  or as a combination of before-tax and after-tax contributions, under Section
  401(k) of the Internal Revenue Code of 1986, as amended. In 2006, employees
  were able to contribute up to a total of 25% of eligible compensation. Up to
  the first 6% of an employees eligible compensation contributed to the
  VZW Plan is matched 100% by the Partnership. The Partnership recognized approximately
  $146 million, $118 million and $98 million of expense related to matching contributions
  for the years ended December 31, 2006, 2005, and 2004, respectively.

Beginning in 2001, under the profit sharing component
  of the VZW Plan the Partnership may elect, at the sole discretion of the Human
  Resources Committee of the Board of Representatives (the HRC), to
  contribute an additional amount to the accounts of employees who have completed
  at least 12 months of service by December 1 of the year the profit sharing is
  offered in the form of a profit sharing contribution. The HRC declared profit
  sharing contributions of 3% of employees eligible compensation for 2006,
  2005 and 2004, respectively. The Partnership recognized approximately $81 million,
  $70 million and $64 million of expense related to profit sharing contributions
  for 2006, 2005, and 2004, respectively.

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11. Long-Term Incentive Plan

---

The 2000 Verizon Wireless Long-Term Incentive Plan
  (the Plan) provides compensation opportunities to eligible employees
  and other participating affiliates of the Partnership. The Plan provides rewards
  that are tied to the long-term performance of the Partnership. Under the Plan,
  Value Appreciation Rights (VARs) and Restricted Partnership Units
  (RPUs) are granted to eligible employees. The aggregate number of
  VARs and RPUs that may be issued under the Plan is approximately 343 million.

VARs reflect the change in the value of the Partnership,
  as defined in the plan, similar to stock options. Once VARs become vested, employees
  can exercise their VARs and receive a payment that is equal to the difference
  between the VAR price on the date of grant and the VAR price on the date of
  exercise, less applicable taxes. VARs are fully exercisable three years from
  the date of grant with a maximum term of 10 years. All VARs are granted at a
  price equal to the estimated fair value of the Partnership, as defined in the
  plan, at the date of the grant.

On July 24, 2003, the Verizon Wireless Board of
  Representatives approved a long-term incentive grant of RPUs to all eligible
  employees. RPUs were very similar to restricted stock in that at the time of
  vesting, each RPU was worth the entire value of the unit. The RPUs vested in
  full on December 31, 2005, and were paid on January 31, 2006.

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

On January 1, 2006 the Partnership adopted SFAS
  No. 123(R). The Partnership recognized compensation expense resulting from the
  Plan of approximately $734 million for the year ended December 31, 2006. Included
  in the $734 million of compensation expense for the year ended December 31,
  2006 was a cumulative effect of accounting change of $124 million, which represented
  the effect of initially measuring the fair value of the Partnerships VARs
  utilizing an option-pricing model. The Partnership recognized $587 million and
  $544 million of compensation expense for the years ended December 31, 2005 and
  2004, respectively under the recognition provisions of SFAS No. 123.

With the adoption of SFAS No. 123(R), the Partnership
  began estimating the fair value of VARs granted using a Black-Scholes option
  valuation model. The following table summarizes the assumptions used in the
  model during the year ended December 31, 2006:

|                         | Ranges       
|------------------------ | -------------
|                         |              
|Risk-free rate           | 4.6% - 5.2%  
|Expected term (in years) | 1.0 - 3.5    
|Expected volatility      | 17.6% - 22.3%
|Expected dividend yield  | n/a          

The risk-free rate is based on the U.S. Treasury
  yield curve in effect at the measurement date. The expected term of the VARs
  granted was estimated using a combination of the simplified method as prescribed
  in SAB No. 107, historical experience, and management judgment. Expected volatility
  was based on a blend of the historical and implied volatility of publicly traded
  peer companies for a period equal to the VARs expected life, ending on the measurement
  date, and calculated on a monthly basis. The Partnership does not pay dividends.

As of December 31, 2006 there was $50 million of
  total unrecognized compensation cost related to non-vested VARs granted under
  the Plan. That cost is expected to be recognized within one year.

For the years ended December 31, 2006, 2005, and
  2004, the intrinsic value of VARs exercised during the period was $80 million,
  $375 million, and $2 million, respectively.

For the years ended December 31, 2005 and 2004,
  the fair value of VARs vested during the period was $588 million, and $237 million,
  respectively.

Cash paid to settle VARs for the years ended December
  31, 2006, 2005, and 2004 was $377 million, $351 million, and $1 million, respectively.

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Awards outstanding at December 31, 2006, 2005 and
  2004 under the Plan are summarized as follows:

|                                     |             |     |             |   | Weighted    |       |         |           
|------------------------------------ | ----------- | --- | ----------- | - | ----------- | ----- | ------- | ----------
|                                     |             |     |             |   | Average     |       |         |           
|                                     |             |     |             |   | Exercise    |       |         |           
|                                     |             |     |             |   | Price       |       | Vested  |           
|                                     | RPUs (a)    |     | VARs (a)    |   | of VARs (a) |       | VARs(a) |           
|                                     |             |     |             |   |             |       |         |           
|                                     |             |     |             |   |             |       |         |           
|Outstanding, January 1, 2004         | 16,400,077  |     | 119,808,940 |   | $           | 16.31 |         | 26,345,600
|Granted                              | 10,633      | (b) | 48,999,422  |   |             | 13.89 |         |           
|Exercised                            | -           |     | (2,143,783  | ) |             | 16.39 |         |           
|Cancelled                            | (1,288,317) |     | (6,003,261  | ) |             | 14.65 |         |           
|                                     |             |     |             |   |             |       |         |           
|Outstanding, December 31,
      2004 | 15,122,393  |     | 160,661,318 |   |             | 15.63 |         | 66,939,006
|Granted                              | (72)        | (b) | 9,845       |   |             | 14.85 |         |           
|Exercised                            | -           |     | (47,964,458 | ) |             | 12.27 |         |           
|Cancelled                            | (669,557    | )   | (3,783,534  | ) |             | 15.17 |         |           
|                                     |             |     |             |   |             |       |         |           
|Outstanding, December 31,
      2005 | 14,452,764  | (c) | 108,923,171 |   |             | 17.12 |         | 63,596,655
|Granted                              | 173,197     | (b) | -           |   |             | -     |         |           
|Exercised                            | (14,607,439 | )   | (7,448,447  | ) |             | 13.00 |         |           
|Cancelled/Forfeited                  | (18,522     | )   | (7,007,944  | ) |             | 23.25 |         |           
|                                     |             |     |             |   |             |       |         |           
|Outstanding, December 31,
      2006 | -           |     | 94,466,780  |   | $           | 16.99 |         | 52,041,606
|                                     |             |     |             |   |             |       |         |           
|                                     |             |     |             |   |             |       |         |           

|   
|---
|(a)
|(b)
|(c)

The following table summarizes the status of the
  Partnerships VARs as of December 31, 2006:

|                |  |  |  | VARs Outstanding
      (a) |            | VARs Vested (a) |     
|--------------- |  |  |  | -------------------------- | ---------- | --------------- | ----
|                |  |  |  |                            |            |                 |     
|                |  |  |  |                            |            | Weighted        |     
|                |  |  |  |                            |            | Average         |     
|                |  |  |  |                            |            | Remaining       |     
|Range of        |  |  |  | VARs                       |            | Contractual     |     
|Exercise Prices |  |  |  | Life (Years)               |            | Exercise Price  |     
|                |  |  |  |                            |            |                 |     
|                |  |  |  |                            |            |                 |     
|$8.74 - $14.79  |  |  |  | 57,367,328                 |            | 6.80            |     
|$14.80 -$22.19  |  |  |  |                            | 17,487,914 |                 | 4.75
|$22.20 -$30.00  |  |  |  |                            | 19,611,538 |                 | 3.53
|                |  |  |  |                            |            |                 |     
|Total           |  |  |  |                            | 94,466,780 |                 |     
|                |  |  |  |                            |            |                 |     

|   
|---
|(a)



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12. Income Taxes

---

The provision for income taxes consists of the following:

|                           |   | For the Years
      Ended December 31, | 
|-------------------------- | - | -------------------------------------- | 
|(Dollars in Millions)      |   | 2006                                   | 
|                           |   |                                        | 
|                           |   |                                        | 
|Current tax provision:     |   |                                        | 
|Federal                    | $ | 355                                    | 
|State and local            |   | 122                                    | 
|                           |   |                                        | 
|                           |   | 477                                    | 
|                           |   |                                        | 
|Deferred tax provision:    |   |                                        | 
|Federal                    |   | 94                                     | 
|State and local            |   | 28                                     | 
|                           |   |                                        | 
|                           |   | 122                                    | 
|                           |   |                                        | 
|Provision for income taxes | $ | 599                                    | 
|                           |   |                                        | 

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

|                                                                      |   | For the Years
      Ended December 31, |  
|--------------------------------------------------------------------- | - | -------------------------------------- | -
|(Dollars in Millions)                                                 |   | 2006                                   |  
|                                                                      |   |                                        |  
|                                                                      |   |                                        |  
|Income tax provision at the
      statutory rate                      | $ | 3,123                                  |  
|State income taxes, net of U.S. federal benefit                       |   | 107                                    |  
|Partnership income not subject
      to federal or state income taxes |   | (2,631                                 | )
|                                                                      |   |                                        |  
|Provision for income tax                                              | $ | 599                                    |  
|                                                                      |   |                                        |  

Deferred taxes arise because of differences in the
  book and tax bases of certain assets and liabilities. The significant components
  of the Partnerships deferred tax assets and (liabilities) are as follows:

|                                                                                                                       | December 31, |       
|---------------------------------------------------------------------------------------------------------------------- | ------------ | ------
|(Dollars in Millions)                                                                                                  |              | 2006  
|                                                                                                                       |              |       
|                                                                                                                       |              |       
|Deferred tax assets:                                                                                                   |              |       
|Bad debt                                                                                                               | $            | 7     
|Accrued expenses                                                                                                       |              | 8     
|Net operating loss carryforward                                                                                        |              | 272   
|                                                                                                                       |              |       
|Total deferred tax assets                                                                                              | $            | 287   
|                                                                                                                       |              |       
|                                                                                                                       |              |       
|Deferred tax liabilities:                                                                                              |              |       
|Property, plant and equipment                                                                                          | $            | (468  
|Intangible assets                                                                                                      |              | (5,429
|Other                                                                                                                  |              | -     
|                                                                                                                       |              |       
|Total deferred tax liabilities                                                                                         | $            | (5,897
|                                                                                                                       |              |       
|                                                                                                                       |              |       
|Net deferred tax asset-current
      (a)                                                                               | $            | 129   
|Net deferred tax liability-non-current                                                                                 | $            | (5,739
|                                                                                                                       |              |       
|Included in prepaid expenses and other current
      assets in the accompanying condensed consolidated balance sheets. |              |       



Net operating loss carryforwards of $787 million
  expire at various dates principally from December 31, 2017 through December
  31, 2025.

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13. Leases

---

Operating Leases

The Partnership has entered into operating leases
  for facilities and equipment used in its operations. Lease contracts include
  renewal options that include rent expense adjustments based on the Consumer
  Price Index as well as annual and end-of-lease term adjustments. Rent expense
  is recorded on a straight-line basis. The noncancellable lease term used to
  calculate the amount of the straight-line rent expense is generally determined
  to be the initial lease term, and considers any optional renewal terms that
  are reasonably assured. Leasehold improvements related to these operating leases
  are amortized over the shorter of their estimated useful lives or the noncancellable
  lease term. For the years ended December 31, 2006, 2005, and 2004, the Partnership
  recognized rent expense related to payments under these operating leases of
  $706 million, $603 million, and $510 million, respectively, in cost of service
  and $313 million, $287 million, and $242 million, respectively, in selling,
  general and administrative expense in the accompanying consolidated statements
  of operations and comprehensive income.

The aggregate future minimum rental commitments
  under noncancellable operating leases, excluding renewal options that are not
  reasonably assured for the periods are as follows:

|                       |  |   | Operating | 
|---------------------- |  | - | --------- | 
|(Dollars in Millions)  |  |   | Leases    | 
|                       |  |   |           | 
|                       |  |   |           | 
|Years                  |  |   |           | 
|2007                   |  | $ | 812       | 
|2008                   |  |   | 701       | 
|2009                   |  |   | 585       | 
|2010                   |  |   | 417       | 
|2011                   |  |   | 237       | 
|2012 and thereafter    |  |   | 703       | 
|                       |  |   |           | 
|Total minimum payments |  | $ | 3,455     | 
|                       |  |   |           | 



14. Other Transactions with Affiliates

---

In addition to transactions with affiliates in Notes
  5 and 8, other significant transactions with affiliates are summarized as follows:

|                                                                | For the Years Ended
      December 31, |     
|--------------------------------------------------------------- | -------------------------------------- | ----
|(Dollars in Millions)                                           |                                        | 2006
|                                                                |                                        |     
|                                                                |                                        |     
|Revenue
      related to transactions with affiliated companies | $                                      | 113 
|Cost of
      service (a)                                       | $                                      | 945 
|Certain
      general and administrative expenses (b)           | $                                      | 105 
|Interest
      expense, net (c)                                 | $                                      | 629 
|                                                                |                                        |     

|   
|---
|(a)
|(b)
|(c)

Under the terms of the partnership agreement between
  Verizon and Vodafone, the Partnership is required to make annual distributions
  to its partners to pay taxes. Additionally, through April 2005, the Partnership
  was required, subject to compliance with specified financial tests, to pay distributions
  to the partners based upon a calculation specified in the partnership agreement.

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The Partnership made distributions to its partners
  for the following periods:

|(Dollars in Millions) |                                   |   |                         |    
|--------------------- | --------------------------------- | - | ----------------------- | ---
|Period Paid           | Distribution Measurement Period   |   | Distribution Amount (a) |    
|                      |                                   |   |                        
|                      |                                   |   |                         |    
|November 2006         | July through September 30, 2006   | $ | 467                     | (b)
|August 2006           | April through June 30, 2006       | $ | 193                     |    
|May 2006              | January through March 31, 2006    | $ | 308                     | (b)
|February 2006         | October through December 31, 2005 | $ | 292                     |    
|                      |                                   |   |                         |    
|November 2005         | July through September, 30, 2005  | $ | 153                     |    
|August 2005           | April through June 30, 2005       | $ | 190                     |    
|May 2005              | January through March 31, 2005    | $ | 129                     |    
|February 2005         | July through December 31, 2004    | $ | 1,997                   |    
|                      |                                   |   |                         |    
|August 2004           | January through June 30, 2004     | $ | 1,812                   |    
|February 2004         | July through December 31, 2003    | $ | 1,441                   |    

|____________
|------------
|(a)         
|(b)         

On October 14, 2003, the Partnership received, on
  behalf of our partners, a final purchase payment in respect of the disposition
  of the Chicago market that had previously been beneficially owned jointly by
  Verizon and Vodafone. The receipt of this payment triggered an obligation of
  Verizon and Vodafone pursuant to Section 7.6 of the Alliance Agreement to calculate
  certain payments received and expenses paid by Verizon, Vodafone and each of
  their respective affiliates in connection with overlap market dispositions,
  together with certain adjustments. Also pursuant to this provision, upon completion
  of this calculation, either Verizon or Vodafone was required to make a payment
  to the Partnership under certain circumstances. On September 1, 2005, Verizon
  and Vodafone finalized this calculation. As a result, the Partnership received
  a capital contribution, net, from Verizon through the payment of approximately
  $512 million, which was used to reduce the debt owed to Verizon. This payment
  did not alter the percentage interests of either of the partners in the Partnership.

The Partnership had agreements with an entity owned
  by Verizon and Vodafone that operated overlapping properties in Chicago, Houston
  and Richmond that the Partnership was required to dispose of pursuant to FCC
  regulations and which has since been sold. Pursuant to the agreements, the Partnership
  provided transition services and products and employee services and licensed
  trademarks and copyrighted materials. On September 2, 2005, the Partnership
  received a total payment of $172 million from Verizon and Vodafone representing
  payment in full of the outstanding accounts receivables relating to these transition
  services.



15. Commitments and Contingencies

---

Under the terms of an agreement entered into among
  the Partnership, Verizon, and Vodafone on April 3, 2000, Vodafone obtained the
  right to require the Partnership to purchase up to an aggregate of $20 billion
  of Vodafones interest in the Partnership, at its then fair market value.
  Up to $10 billion was redeemable during the 61-day periods that opened on June
  10 and closed on August 9 in 2004 and 2005. Vodafone did not exercise its redemption
  rights during those periods. As a result, $20 billion, not to exceed $10 billion
  in any one year, remained redeemable during the 61-day periods opening on June
  10 and closing on August 9 in 2006 and 2007. Vodafone did not exercise its redemption
  rights during the period opening June 10 and closing on August 9 in 2006. As
  a result, Vodafone has the right to redeem $10 billion of its interest in the
  Partnership during the 61-day period opening on June 10 and closing on August
  9 in 2007. Verizon has the right, exercisable at its sole discretion, to purchase
  all or a portion of this interest instead of the Partnership. However, even
  if Verizon exercises this right, Vodafone has the option to require the Partnership
  to purchase up to $7.5 billion of this interest redeemable during the 61-day
  period opening on June 10 and closing on August 9 in 2007 with cash or contributed
  debt. Accordingly, $10 billion of partners capital has been classified
  as redeemable on the accompanying condensed consolidated balance sheets as of
  December 31, 2006.

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The U.S. Wireless Alliance Agreement entered into
  between Vodafone and Verizon in September 1999, as amended (the Alliance
  Agreement), contains a provision, subject to specified limitations, that
  requires Vodafone and Verizon to indemnify the Partnership for certain contingencies,
  excluding PrimeCo contingencies, arising prior to the formation of Verizon Wireless.

The Partnership is subject to lawsuits and other
  claims, including class actions and claims relating to product liability, patent
  infringement, intellectual property, antitrust, partnership disputes, and relations
  with resellers and agents. The Partnership is also defending lawsuits filed
  against the Partnership and other participants in the wireless industry alleging
  adverse health effects as a result of wireless phone usage. Various consumer
  class action lawsuits allege that the Partnership violated certain state consumer
  protection laws and other statutes and defrauded customers through misleading
  billing practices or statements. These matters may involve indemnification obligations
  by third parties and/or affiliated parties covering all or part of any potential
  damage awards against the Partnership and/or insurance coverage.

All of the above matters are subject to many uncertainties,
  and outcomes are not predictable with assurance. Consequently, the ultimate
  liability with respect to these matters as of December 31, 2006 cannot be ascertained.
  The potential effect, if any, on the consolidated financial statements of the
  Partnership, in the period in which these matters are resolved, may be material.

In addition to the aforementioned matters, the Partnership
  is subject to various other legal actions and claims in the normal course of
  business. While the Partnerships legal counsel cannot give assurance as
  to the outcome of each of these other matters, in managements opinion,
  based on the advice of such legal counsel, the ultimate liability with respect
  to any of these actions, or all of them combined, will not materially affect
  the consolidated financial statements of the Partnership.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Representatives and
  Partners ofCellco Partnership d/b/a Verizon Wireless:

We have audited the accompanying consolidated balance sheets of Cellco Partnership d/b/a Verizon Wireless (the “Partnership”) as of December 31, 2006 and 2005, and the related consolidated statements of operations and comprehensive income, changes in partners’ capital, and cash flows for each of the three years in the period ended December 31, 2006.  These financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on the financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2006 and 2005, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Notes 1 and 11 to the consolidated financial statements, the Partnership adopted the provisions of Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment,” on January 1, 2006.

Deloitte & Touche LLP

New York, New YorkFebruary 22, 2007

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Return of Capital and Share Consolidation

Background

The Company implemented a transaction to return capital to shareholders (the “Return of Capital”) during the year by way of an issue (the “Bonus Issue”) of redeemable, non-cumulative preference shares (the “B Shares”) to shareholders in proportion to their holding of ordinary shares or ADRs immediately prior to the Bonus Issue (the “Pre-existing Shares” and the “Pre-existing ADRs” respectively). Under the Return of Capital, holders of the Pre-existing Shares could elect to have one of the following alternatives apply (with certain classes of persons located in the US along with holders of Pre-existing ADRs only permitted to participate in the second
alternative below):

(i)  the shareholder could elect to redeem the B Shares at their nominal value on 4 August 2006 (the “Initial Redemption”);

(ii)  the shareholder could elect to receive a single dividend of an amount equal to the nominal value of the B Shares on a specified date in August 2006 (the “Initial B Share Dividend”) following which the shares automatically converted into unlisted deferred shares (the “Deferred Shares”); or

(iii)  the shareholder could elect to redeem the B Shares at their nominal value at a later date being 5 February or 5 August in the calendar year 2007 or 2008 (the “Future Redemption”) with the shareholder receiving a continuing, non-cumulative preferential dividend on the B Shares in the meantime.

At the same time, the Pre-existing Shares and the Pre-existing ADRs were sub-divided and consolidated (the "Share Capital Consolidation"). The Share Capital Consolidation and the Bonus Issue are together referred to as the "Capital Reorganisation". The shares and ADRs following sub-division and consolidation are referred to below as "New Shares" or "New ADRs" in order to distinguish them from the Pre-existing Shares and Pre-existing ADRs.

UK Taxation

The comments below are intended only as a general guide to the current tax position under the laws of the United Kingdom and practice of Her Majesty’s Revenue and Customs primarily in respect of US holders who are (except where specifically addressed) solely resident in the United Kingdom for tax purposes and who hold their shares beneficially as investments and not on trading account. This is a complex area and shareholders should consult their tax advisers in order to be certain of their individual position.

1.Capital Reorganisation

For the purposes of United Kingdom taxation of capital gains and corporation tax on chargeable gains (“CGT”):

1.1 the receipt of the B Shares and the New Shares arising from the Capital Reorganisation was a reorganisation of the share capital of the Company. Accordingly, a shareholder will not be treated as having made a disposal of all or part of their holding of Pre-existing Shares by reason of the Capital Reorganisation;

1.2 the B Shares and New Shares acquired as a result of the Capital Reorganisation are to be treated as the same asset as the shareholder’s holding of Pre-existing Shares, and as having been acquired at the same time as the shareholder’s holding of Pre-existing Shares were acquired; and

1.3 any proceeds of sale of fractional entitlements returned to shareholders are not to be treated as proceeds of disposal but the amount will be deducted from the base cost on acquisition of the Pre-existing Shares.

2.Initial B Share Dividend

2.1 Income Tax

The Company did not (and was not required to) withhold tax at source when paying the Initial B Share Dividend.

A United Kingdom resident individual shareholder liable to income tax at the starting or basic rate pays no tax on the Initial B Share Dividend unless it has taken that shareholder’s income into a higher rate tax band.

A United Kingdom resident individual shareholder liable to income tax at the higher rate is liable to pay tax equal to 25% of the cash dividend received to the extent that the gross dividend when treated as the top slice of that shareholder’s income falls above the threshold for higher rate income tax.

United Kingdom resident taxpayers not liable to United Kingdom tax on dividends are not generally liable to pay tax on the Initial B Share Dividend.

United Kingdom resident corporate shareholders are generally not subject to corporation tax on the Initial B Share Dividend.

2.2 Taxation of chargeable gains

For CGT purposes, the Initial B Share Dividend (and the consequent conversion of the B Shares into Deferred Shares) should not be treated as having given rise to a disposal or part disposal of the B Shares.

Shareholders who have received the Initial B Share Dividend should note that, consequent to the Capital Reorganisation, a proportion of the base cost, for CGT purposes, of their original holdings of Pre-existing Shares is to be attributed to the B Shares and this amount is to continue to be attributed to those B Shares following their conversion into Deferred Shares (notwithstanding that the Deferred Shares have limited rights or value). Correspondingly, only a proportion of the base cost of the holding of Pre-existing Shares is available on any disposal of New Shares.

A transfer of the Deferred Shares is to be treated as a disposal and might result in a shareholder realising a capital loss. However, shareholders liable to corporation tax should note that it is possible that Section 30 of the Taxation of Chargeable Gains Act 1992 could apply to such a shareholder who elected for the Initial B Share Dividend. If it were so applied, the effect is broadly to deny any loss attributable to the payment of that Initial B Share Dividend from being allowed on disposal of the Deferred Shares.

3.Redemption of B Shares

3.1 On redemption (whether an Initial Redemption or a Future Redemption) of all or any of the B Shares, a shareholder might, depending on their particular circumstances, be subject to CGT on the amount of any chargeable gain realised. Any gain is measured by reference to the excess of the redemption price over the shareholder’s allowable expenditure for the B Shares redeemed. The shareholder’s allowable expenditure in relation to his Pre-existing Shares is to be apportioned between the New Shares and the B Shares by reference to their respective market values on the first day on which market values or prices were quoted or published for the New Shares.

3.2 No part of the proceeds received by a shareholder on redemption is an income distribution in the shareholder’s hands.

3.3 On any disposal, otherwise than by way of redemption, of the whole or part of a shareholder’s holding of New Shares or B Shares, a shareholder may, depending on his circumstances, be subject to CGT on the amount of any chargeable gain realised. Please refer to paragraph 3.1 above for details of the manner in which the shareholder’s allowable expenditure is allocated as between the New Shares and the B Shares.

B-1

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4.Dividends on New Shares and B Shares other than the Initial B Share Dividend

Dividends payable on the New Shares and the B Shares are subject to United Kingdom tax under the rules applicable to dividends. Under current United Kingdom taxation legislation, no tax is withheld at source from dividends paid on the New Shares or on the B Shares. The current rules and rates of tax correspond to those outlined in paragraph 2.1 above.

5.Stamp Duty and Stamp Duty Reserve Tax

5.1 Except in relation to depositary receipt arrangements or clearance services where special rules apply:

 no stamp duty or stamp duty reserve tax (“SDRT”) is payable on the issue of the B Shares and New Shares; and

 an agreement to sell B Shares or New Shares normally gives rise to liability on the purchaser to SDRT, at the rate of 0.5% of the actual consideration paid. If an instrument of transfer of the B Shares is subsequently produced it would generally be subject to stamp duty at the rate of 50 pence for every £100 (or part thereof) of the actual consideration paid. When such stamp duty is paid, the SDRT charge is cancelled and any SDRT already paid is refunded. Stamp duty and SDRT is generally the liability of the purchaser.

5.2 Where shareholders elect to redeem B Shares, the redemption of those B Shares by the Company does not give rise to a liability to stamp duty or SDRT.

5.3 In relation to the special rules applicable to depositary receipt arrangements, no stamp duty or SDRT should be payable in respect of the issue of the B Shares or Deferred Shares to the Depositary for the Holders of Pre-existing ADRs. Nor will any such charge arise in connection with the issue of New ADRs.

6. Section 703 Income and Corporation Taxes Act 1988 (“ICTA”) and Section 684 Income Tax Act 2007 (“ITA”)

The Company has been advised that the provisions of section 703 of ICTA (and, as rewritten for income tax purposes, section 684 of ITA) (anti-avoidance provisions relating to transactions in shares) should not apply in relation to shareholders who received B Shares in the Capital Reorganisation. The Company did not apply for clearance under section 707 of ICTA (or section 701 of ITA) in this regard.

US Taxation

The discussion below summarises certain US federal income tax consequences for US holders subject to alternative ii: the Initial B Share Dividend and does not describe potential consequences to investors that receive one of the other alternatives described above. This section only addresses US Holders that hold their Pre-existing Shares as capital assets and does not address tax consequences applicable to Shareholders subject to special treatment under the US federal income tax laws (for example, dealers or traders in securities or currencies, banks, insurance companies, tax-exempt organisations, partnerships or other pass-through entities, persons who own 10% or more of the voting stock of the Company, persons holding Pre-existing Shares as part
of a straddle, hedging, integrated or similar transaction, and persons whose functional currency is not the US dollar). This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and regulations, rulings and judicial decisions as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in US federal income tax consequences different from those discussed below.

If a partnership holds Pre-existing Shares, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership which held Pre-existing Shares, you should consult your tax advisers.

This summary assumes that the Deferred Shares have no value, and therefore receipt of the Deferred Shares have no consequences for US federal income tax purposes.

Each Shareholder should consult its own tax advisers concerning the US federal income tax consequences in light of its particular situation as well as any consequences arising under the laws of any other taxing jurisdiction.

The Initial B Share Dividend

To the extent paid out of the current or accumulated earnings and profits of the Company (as determined under US tax principles), beneficial owners of Pre-existing Shares should be treated as receiving a dividend for US federal income tax purposes upon the receipt of the Initial B Share Dividend and should not be separately taxed upon the receipt of the B Shares, the conversion of Pre-existing Shares into New Shares (except to the extent of any cash received in respect of fractional shares) or the conversion of B Shares into Deferred Shares. Such beneficial owners should generally have the same holding period and basis in the New Shares received as they had in their Pre-existing Shares (except such basis may be reduced to the extent attributable
to any fractional shares for which cash is received).

However, there is no direct authority addressing the treatment of securities similar to the B Shares or the associated conversion of Pre-existing Shares into New Shares and US Holders should consult their own tax advisers with respect to the appropriate US federal income tax treatment of receiving the Initial B Share Dividend.

The dividend is treated as ordinary income from foreign sources. With respect to US Shareholders that do not hold Pre-existing ADRs, the amount of the dividend treated as received generally equals the US dollar value of the sterling received by you calculated by reference to the exchange rate in effect on the date of the Initial B Share Dividend regardless of whether the sterling is converted into US dollars. If the sterling received is not converted into US Dollars on the date of receipt, such US Shareholders has a tax basis in the sterling equal to such US dollar value and any gain or loss realised on a subsequent conversion or other disposal of the sterling will be treated as US source ordinary income or loss. Amounts payable to holders of
Pre-existing ADRs in respect of the Initial B Share Dividend are paid in US dollars by the Depositary (less US withholding taxes, if any). For individuals, such dividends are generally taxed at a reduced maximum tax rate of 15%, subject to certain limitations, including a holding period requirement. Such reduced rate is not available to Shareholders that elect to treat dividend income as “investment income” pursuant to section 163(d)(4) of the Code or that are obligated to make related payments with respect to positions in substantially similar or related property. Individuals should consult their own tax advisers regarding their eligibility to claim such reduced rate based on their particular circumstances.

Such dividend is not eligible for the dividends received deduction generally allowed to corporations under the Code.

To the extent that the amount of the Initial B Share Dividend exceeds a US Holder’s allocable share of the Company’s current and accumulated earnings and profits, the distribution is first treated as a tax-free return of capital, causing a reduction in the adjusted basis of the Pre-existing Shares (thereby increasing the amount of gain, or decreasing the amount of loss, recognised on a subsequent disposition of the New Shares), and the balance in excess of adjusted basis is taxed as US source capital gain recognised on a sale or exchange. However, the Company expects that the distribution will not exceed its current and accumulated earnings and profits.

B-2

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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 transition report on its
  behalf.

| | VODAFONE GROUP PUBLIC LIMITED
      COMPANY(Registrant)
| | -------------------------------------------------------
| |                                                        
| |                                                        
| | /s/ Arun Sarin                                         
| | Arun Sarin                                             
| | Chief Executive                                        

Dated: 14 June 2007



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Index to Exhibits to
  Form 20-F for year ended 31 March 2007

|1.1 |  | Memorandum,
      as adopted on June 13, 1984 and including all amendments made on July 28,
      2000 and July 26, 2005 (incorporated by reference to Exhibit 1 to the Company’s
      Annual Report of Form 20-F for the financial year ended March 31, 2006).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|1.2 |  | Articles
      of Association, as adopted on June 30, 1999 and including all amendments
      made on July 25, 2001, July 26, 2005, and July 25, 2006 of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2.  |  | 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 Amendment
      No. 1 to the Company’s Registration Statement on Form F-3, dated November
      24, 2000). (File No. 333-10762)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|4.1 |  | Agreement
      for US $5,525,000,000 5 year Revolving Credit Facility (subsequently increased
      by accession of further lenders to US$5,925,000,000), dated 24 June 2004,
      among, inter alia, the Company, ABN Amro Bank N.V.; Banco Bilbao Vizcaya
      Argentaria S.A. ; Bank of America, N.A.; Barclays Bank PLC; Bayerische Hypo-und
      Vereinsbank AG; BNP Paribas ; CALYON; Citibank, N.A.; Commerzbank Aktiengesellschaft,
      London Branch; Deutsche Bank AG; HSBC Bank plc; ING Bank, N.V.; JPMorgan
      Chase Bank; Lehman Brothers Bankhaus AG; Lloyds TSB Bank plc; Morgan Stanley
      Dean Witter Bank Limited and Morgan Stanley Bank; Mizuho Corporate Bank,
      Ltd.; National Australia Bank Limited ABN 12 004 044 937; Sumitomo Mitsui
      Banking Corporation Europe Limited; The Bank of Tokyo-Mitsubishi, Ltd.;
      The Royal Bank of Scotland Plc; UBS AG; WestLB AG; Banco Santander Central
      Hispano, S.A.; William Street Commitment Corporation; Banca Intesa SpA;
      KBC Bank NV; Standard Chartered Bank; TD Bank Europe Limited; and The Bank
      of New York with The Royal Bank of Scotland plc as Agent and US Swingline
      Agent, as amended and restated on 24 June 2005 by Supplemental Agreementamong, inter alia, the Company, ABN AMRO Bank N.V.;Banc
      of America Securities Limited; Banco Bilbao Vizcaya Argentaria S.A.; Banco
      Santander Central Hispano, S.A. London Branch; Barclays Capital; Bayerische
      Hypo-und Vereinsbank AG; BNP Paribas; Calyon; Citigroup Global Markets Limited;
      Commerzbank Aktiengesellschaft, London Branch; Deutsche Bank AG London;
      HSBC Bank Plc; ING Bank N.V., London Branch; JPMorgan Chase Bank, N.A.;
      J.P. Morgan Plc; Lehman Commercial Paper Inc.; Llloyds TSB Bank Plc; Mizuho
      Corporate Bank, Ltd; Morgan Stanley Bank International Limited; National
      Australia Bank Limited ABN 12 004 044 937; Sumitomo Mitsui Banking Corporation
      Europe Limited; The Bank of Tokyo-Mitsubishi, Ltd.; The Royal Bank of Scotland
      Plc; UBS Limited; WestLB AG, London Branch; William Street Commitment Corporation;
      Banca Intesa SpA; KBC Bank NV; Standard Chartered Bank; TD Bank Europe Limited;
      The Bank of New York; ABN AMRO Bank N.V.; Banca Intesa SpA; Banco Bilbao
      Vizvcaya Argentaria S.A.; Banco Bilbao Vizvcaya Argentaria S.A. (New York
      Branch); Banco Santander Central Hispano, S.A. London Branch; Bank of America,
      N.A.; Barclays Bank Plc; Bayerische Hypo-und Vereinsbank AG; BNP Paribas
      (London Branch); BNP Paribas (acting through its New York Branch); Calyon;
      Citibank, N.A.; Commerzbank Aktiengesellschaft, London Branch; Commerzbank
      Aktiengesellschaft, New York Branch; Deutsche Bank AG London; Deutsche Bank
      AG New York; HSBC Bank Plc; ING Bank N.V., London Branch; JPMorgan Chase
      Bank, N.A.; KBC Bank NV; Lehman Commercial Paper Inc.; Lloyds TSB Bank Plc;
      Mizuho Corporate Bank, Ltd.; Morgan Stanley Bank; Morgan Stanley Bank International
      Limited; National Australia Bank Limited ABN 12 004 044 937; Standard Chartered
      Bank; Sumitomo Mitsui Banking Corporation Europe Limited; TD Bank Europe
      Limited; The Bank of New York; The Bank of Tokyo-Mitsubishi, Ltd.; The Royal
      Bank of Scotland Plc; The Royal Bank of Scotland Plc (New York Branch);
      UBS AG, London Branch; UBS AG, Stamford Branch; UBS Loan Finance LLC; WestLB
      AG, London Branch; WestLB AG, New York Branch; William Street Commitment
      Corporation; and The Royal Bank of Scotland Plc with The Royal Bank of Scotland
      Plc (New York Branch) as Agent and U.S. Swingline Agent (incorporated by
      reference to Exhibit 4.1 to the Company’s Annual Report on Form 20-F
      for the financial year ended March 31, 2006)

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|4.2 |  | Lender Accession
      Agreement with Merrill Lynch International Bank Limited, effective as of
      May 8, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.3 |  | Agreement
      for US$4,675,000,000 7 year Revolving Credit Facility (subsequently increased
      by accession of further lenders to US$5,025,000,000), dated June 24, 2005,
      among, inter alia, the Company, Banc of America Securities Limited; Banca
      Intesa SpA; Banco Bilboa Vizcaya Argentaria S.A.; Banco Santander Central
      Hispano, S.A. London Branch; Barclays Capital; Bayerische Hypo-und Vereinsbank
      AG; BNP Paribas; Calyon; Citigroup Global Markets Limited; Deutsche Bank
      AG London; HSBC Bank Plc; ING Bank N.V., London Branch; J.P. Morgan Plc;
      Lehman Commercial Paper Inc., UK Branch; Lloyds TSB Bank Plc; Mizuho Corporate
      Bank, Ltd; Morgan Stanley Bank International Limited; National Australia
      Bank Limited ABN 12 004 044 937; The Bank of Tokyo-Mitsubishi, Ltd; The
      Royal Bank of Scotland Plc; UBS Limited; Unicredit Banca d’Impresa
      SpA; WestLB AG, London Branch; William Street Commitment Corporation; Commerzbank
      Aktiengesellschaft, Filiale Düsseldorf; KBC Bank NV; Standard Chartered
      Bank; TD Bank Europe Limited; The Bank of New York; Banca Intesa SpA; Banco
      Bilbao Vizcaya Argentaria S.A.; Banco Bilbao Vizcaya Argentaria S.A. (New
      York Branch); Banco Santander Central Hispano, S.A. London Branch; Bank
      of America, N.A., Barclays Bank Plc; Bayerische Hypo-und Vereinsbank AG;
      BNP Paribas (London Branch); BNP Paribas, New York Branch; Calyon; Citibank,
      N.A.; Commerzbank Aktiengesellschaft, Filiale Düsseldorf; Deustche
      Bank AG London; Deutsche Bank AG New York; HSBC Bank Plc; ING Bank N.V.,
      London Branch; JPMorgan Chase Bank, N.A.; KBC Bank NV; Lehman Commercial
      Paper Inc., UK Branch; Lloyds TSB Bank Plc; Mizuho Corporate Bank, Ltd.;
      Morgan Stanley Senior Funding, Inc.; Morgan Stanley Bank International Limited;
      National Australia Bank Limited ABN 12 004 044 937; Standard Chartered Bank;
      TD Bank Europe Limited; The Bank of New York; The Bank of Tokyo-Mitsubishi,
      Ltd.; The Royal Bank of Scotland Plc; The Royal Bank of Scotland Plc (New
      York Branch); UBS AG, London Branch; UBS Loan Finance LLC; Unicredit Banca
      d’Impresa SpA; WestLB AG, London Branch; WestLB AG, New York Branch;
      William Street Commitment Corporation; and The Royal Bank of Scotland plc
      with The Royal Bank of Scotland Plc (New York Branch) as Agent and US Swingline
      Agent. (incorporated by reference to Exhibit 4.2 to the Company’s
      Annual Report on Form 20-F for the financial year ended March 31, 2006)
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.4 |  | Lender Accession Agreement
      with Merrill Lynch International Bank Limited, effective as of May 8, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.5 |  | Vodafone
      Group Long Term Incentive Plan (incorporated by reference to Exhibit 4.5
      to the Company’s Annual Report on Form 20-F for the financial year
      ended March 31, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.6 |  | Vodafone Group Short Term
      Incentive Plan (incorporated by reference to Exhibit 4.6 to the Company’s
      Annual Report on Form 20-F for the financial year ended March 31, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.7 |  | 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).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.8 |  | Vodafone Group 1998 Company
      Share Option Scheme (incorporated by reference to Exhibit 4.8 to the Company’s
      Annual Report on Form 20-F for the financial year ended March 31, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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|4.9  |  | Vodafone Group
      1998 Executive Share Option Scheme (incorporated by reference to Exhibit
      4.9 to the Company’s Annual Report on Form 20-F for the financial
      year ended March 31, 2001).                                                                                                                                                                                               
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.10 |  | 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).                                                                                                                                                                                                       
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.11 |  | Service Contract of Arun
      Sarin (incorporated by reference to Exhibit 4.20 to the Company’s
      Annual Report on Form 20-F for the financial year ended March 31, 2003).                                                                                                                                                                                                                       
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.12 |  | Service Contract of Andrew
      Halford (incorporated by reference to Exhibit 4.16 to the Company’s
      Annual Report on Form 20-F for the financial year ended March 31, 2006).                                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.13 |  | Agreement for services for
      Sir John Bond.                                                                                                                                                                                                                                                                                                                                                       
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.14 |  | Letter of Appointment of
      Dr. Michael Boskin (incorporated by reference to Exhibit 4.9
      to the Company’s Annual Report on Form 20-F for the financial year
      ended March 31, 2003).                                                                                                                                                                                                     
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.15 |  | Letter of Appointment of
      Professor Sir Alec Broers, now Lord Broers, (incorporated by reference to
      Exhibit 4.10 to the Company’s Annual Report on Form 20-F for the financial
      year ended March 31, 2003; at a meeting of the Directors of the Company
      held on September 16, 2003, the term of office of Professor Sir Alec Broers
      was extended until December 31, 2006).
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.16 |  | Letter of Appointment of
      Dr. John Buchanan (incorporated by reference to Exhibit 4.11
      to the Company’s Annual Report on Form 20-F for the financial year
      ended March 31, 2003).                                                                                                                                                                                                     
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.17 |  | Letter of Appointment of
      Anne Lauvergeon (incorporated by reference to Exhibit 4.22 to the Company’s
      Annual Report on Form 20-F for the financial year ended March 31, 2006).                                                                                                                                                                                                             
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.18 |  | Letter of Appointment of
      Jurgen Schrempp (incorporated by reference to Exhibit 4.21 to the Company’s
      Annual Report on Form 20-F for the financial year ended March 31,
      2004).                                                                                                                                                                                                       
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.19 |  | 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).                                                                                                                                                                                                        
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.20 |  | Letter of Appointment of
      Anthony Watson (incorporated by reference to Exhibit 4.26 to the Company’s
      Annual Report on Form 20-F for the financial year ended March 31, 2006).                                                                                                                                                                                                              
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.21 |  | Letter of Appointment of
      Philip Yea (incorporated by reference to Exhibit 4.27 to the Company’s
      Annual Report for the financial year ended March 31, 2006).                                                                                                                                                                                                                               
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.22 |  | Service contract of Vittorio
      Colao                                                                                                                                                                                                                                                                                                                                                              
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.23 |  | Letter of appointment of
      Alan Jebson                                                                                                                                                                                                                                                                                                                                                            
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|4.24 |  | Letter of appointment of
      Nick Land                                                                                                                                                                                                                                                                                                                                                              
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|7.1  |  | Computation of ratio of
      earnings to fixed charges for the years ended March 31, 2007, 2006 and 2005.                                                                                                                                                                                                                                                                                            
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
|7.2  |  | Computation of ratio of
      earnings to fixed charges for the years ended March 31, 2004 and 2003.                                                                                                                                                                                                                                                                                                  

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|8    |  | The list of
      the Company’s subsidiaries is incorporated by reference to note 12
      to the Consolidated Financial Statements included in the Annual Report.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                                   
|12   |  | Rule 13a
       14(a) Certifications.                                                                                                                            
|     |  |                                                                                                                                                                   
|13   |  | Rule 13a  14(b) Certifications.                                                                                                                                  
|     |  |                                                                                                                                                                   
|15.1 |  | Consent
      letter of Deloitte & Touche LLP, London.                                                                                                            
|     |  |                                                                                                                                                                   
|15.2 |  | Consent
      letter of Deloitte & Touche LLP, New York                                                                                                           
|     |  |                                                                                                                                                                   

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