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  • Contents

    Business review#

    2 Aboutus4 Vodafoneataglance6 Chairmansstatement8 Mobiletelecommunications industry10 ChiefExecutivesreview12 Strategyinaction28 Keymarketreview30 Sustainablebusiness32 People

    Performance#

    34 Operatingresults44 Guidance45 Principalriskfactors anduncertainties47 Financialposition andresources

    Governance#

    52 Boardofdirectors andGroupmanagement55 Corporategovernance62 Directorsremuneration

    Financials74 Contents75 Directorsstatement

    ofresponsibility#

    76 Auditreportoninternalcontrols

    77 Criticalaccountingestimates79 Auditreportonthe consolidatedfinancial statements80 Consolidatedfinancial statements125 AuditreportontheCompany financialstatements126 Companyfinancial

    statements

    Additional information132 Shareholderinformation#

    139 Historyanddevelopment#

    140 Regulation#

    143 Non-GAAPinformation#

    146 Form20-Fcross referenceguide148 Forward-lookingstatements149 Definitionofterms151 Selectedfinancialdata

    #Thesesectionsmakeupthedirectorsreport.

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

    Unless otherwise stated references: to year or 2011 mean the financial year ended 31 March 2011; to 2010 or previous year mean the financial year ended 31 March 2010; to the third quarter, previous quarter or Q3 are to the quarter ended 31 December 2010; and to the fourth quarter or Q4 are to the quarter ended 31 March 2011.

    All amounts marked with an (*) represent organic growth which presents performance on a comparable basis, both in terms of merger and acquisition activity and foreign exchange rates.

    Definitions of terms used throughout the report can be found on page 149.

    This report is dated 17 May 2011.

    Highlights of the year Grouprevenueincreased3.2%to45.9billionwithastrongresultfromemergingmarketsandsignsofrenewedgrowthinsomepartsofEurope.

    Adjustedoperatingprofitrose3.1%to11.8billion,supportedbyagoodperformancefromourUSassociate,VerizonWireless.

    Freecashflowof7.0billion,reflectingconsistentlevelsofcapitalexpenditureandstrongworkingcapitalperformance.

    14.2billionexpectedtoberaisedfromagreeddisposalsofinterestsinChinaMobile(China),SoftBank(Japan)and,afteryearend,SFR(France).

    Totaldividendspershareof8.90pence,up7.1%inlinewithourdividendpersharegrowthtarget.6.8billioncommittedtosharebuybacks.

    Our new strategyInNovember2010weunveiledanupdatedstrategytomoveusfromAStrongerVodafonetoAMoreValuableVodafone.Thenewstrategyiscomposedoffourmainelements:

    FocusonkeyareasofgrowthpotentialMobiledata,emergingmarkets,enterprise,totalcommunicationsandnewservices.

    DelivervalueandefficiencyfromscaleUsingoursizeandscaletodrivecostefficienciesandoperationaleffectiveness.

    Generateliquidityorfreecashflowfromnon-controlledinterestsReleasingliquidityandfreecashflowfromminoritystakesandinvestments.

    ApplyrigorouscapitaldisciplinetoinvestmentdecisionsAllocatingcapitaltomaximiseshareholdervalue.

    Find out more on pages 12 to 27

    You can visit our online annual report at:

    www.vodafone.com/investor

    Vodafone Group PlcAnnualReport20111

  • Techn

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    AboutusA business intent on meeting all our customers communication needs

    Technologies and resourcesThelatesttechnologiesofferingourbestcustomerexperience

    Network infrastructureWehaveoneofthelargestmobilefootprintsintheworldwithmorethan224,000basestationsites.Duringtheyearournetworkscarriedaround850billionminutesofvoicetraffic(equivalentto208minutespermonth,percustomer)and161petabytesofdataequivalenttodownloadingover1,400threeminutevideoclipseverysecond.

    Network performanceWecontinuetoinvestaround6billionayeartomaintainleadershipofournetworks.TestsshowthatintheEuroperegion,VodacomandEgypt,Vodafoneofferspeakuserdatadownlinkspeedswhichareonaverage40%fasterthanourbestcompetitors.

    Research and development (R&D)Wedriveinnovationthroughnewtechnologiesandenhancementstoexistingcapabilities.ThisyearR&Dexpenditureamountedto287million.

    Customer support technologiesOurbillingandcustomerrelationshipmanagementsystemsarebeingenhancedtoenableourcustomerstomanageasingleaccount,withasinglebill,formultipledevicesorforseveralpeople.

    Licences and spectrumLicencesandspectrumenableustodeliverfixedandmobilecommunicationsservicesincertainmarkets.Duringtheyearweacquiredadditionallicencesandspectruminseveralmarkets,includingIndiaforthirdgeneration(3G)servicesandGermanyfortheprovisionoffourthgeneration(4G)orLTEservices,toenhancethespeed,coverageandqualityofvoiceanddataservicesinthosemarkets.

    Strategic agreementsWeworkcloselywithsomeoftheworldsleadingcompaniestodeliverinnovativeproductsandservicestoourcustomers.OuragreementswithSamsung,Google,Microsoft,HTCandothershaveenabledustobefirsttomarketwithcutting-edgesmartdevices.WenowdistributetheAppleiPadintheUKandtoourenterprisecustomersinEurope.Forenterprisecustomers,inpartnershipwithMicrosoftweprovidetheMicrosoftOnlinesuitewhichprovideshostedemail,conferencingandcollaborationservices.InconjunctionwithRIMandNokia,VodafonecustomersusingsmartphoneswillbeabletosecurelypayforapplicationsviatheirVodafonebill.

    BrandAccordingtoBrandFinanceplc,theVodafonebrandhasrisentobecomethefifthmostvaluablebrandintheworld.Inthe2010calendaryearwerenewedourtitlepartnershipwiththeVodafoneMcLarenMercedesFormulaOneteam.Ithasbeenastrongyearforthesponsorshipwithincreasedtelevisionviewingfiguresandgreaterexposure.

    PeopleWeemployedapproximately83,900peopleworldwideduringtheyear,comparedto85,000thepreviousyear.

    Employees by activity (%)

    Customer care and administration Operations Selling and distribution

    CustomersInternationalcustomerbasewithdiverseneeds

    Wehaveaninternationalcustomerbaseinbothdevelopedandemergingmarketswithover370millionmobilecustomersinmorethan30countries.Duringtheyearweaddedover40millioncustomers,mostlyinIndia.Weserve

    India Vodacom Germany Egypt Italy UK Spain Other

    Customers by markets (%)

    Customer serviceWe are redesigning and improving our customer care, retail presence and online service to ensure that customers get the best data experience with Vodafone.

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    2Vodafone Group PlcAnnualReport2011

  • Business Review

    Techn

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    Consumer contract

    Consumer prepaid

    Enterprise

    abroadrangeofcustomersfromindividualsoneitherprepaidorcontractpriceplanstoenterprisecustomersrangingfromsmallandmediumsizedbusinessestolargerdomesticandmultinationalcompanies.Ourcustomersneedsareevolvingwithincreasingdemandformulti-productofferswhichcombinemobileandfixedbroadbandsolutionswithtraditionalvoiceandSMSservices.

    Customers segments (%)

    DevicesEnsuringthatourservicesareavailablethroughmultipleplatforms

    Smartphones and tabletsThesehaveadvancedcapabilitiesincludingaccesstoemail,theinternetandmobileapplicationssuchasGoogleMapsandFacebook.Smartphonesnowaccountfor19%ofthetotalnumberofphonesusedbyourcustomersinEurope.WenowsupplytheiPhonein19markets.

    Vodafone branded handsetsWearemakingVodafonedesignedhandsetsavailabletomassmarketaudienceswhileofferingdifferentiatedexperiences.Duringtheyear14newhandsetswerereleasedunderourownbrandandweshipped5.8million.

    Other connected devicesInadditiontohandsets,wesupplyarangeofinnovativeconnectedsmartdevices.DuringtheyearwelaunchedourfirsteverUSBstickbasedon4G/LTEtechnologyandVodafoneWebBoxwhichenablescustomerstoconnecttotheinternetusingexistingtelevisionsetsbysimplyplugginginakeyboardwithanembeddedmobileSIM.

    4G/LTE mobile broadband USB stickThe Samsung GT-B3740, is our first ever 4G/LTE network device which enables customers to experience super-fast mobile broadband.

    ServicesServicestomeetallourcustomersneeds

    VoiceWeareoneofthelargestcarriersofmobilevoicetrafficintheworldprovidingdomestic,internationalandroamingvoiceservicestomorethan370millioncustomers.

    MessagingOurnetworkssentandreceivedover292billiontext,picture,musicandvideomessagesthisyear.

    DataMorethan75millioncustomersbuyourmobiledataserviceswhichallowaccesstotheinternet,emailandapplicationsontheirphones,tablets,laptopsandnetbooks.

    Fixed lineOversixmillioncustomersuseourfixedbroadbandservicesin13marketstomeettheirtotalcommunicationsneeds.Inaddition,throughGateway,weprovidewholesalecarrierservicestomorethan40Africancountries.

    Other service revenueThisincludesbusinessmanagedservices,suchassecureremotenetworkaccess,andrevenuefrommobilevirtualnetworkoperatorsgeneratedfromsellingaccesstoournetworkatthewholesalelevel.

    Service revenue by type (%)

    Voice Messaging Data Fixed Line Other

    DistributionAbroadrangeofchannelsthroughwhichcustomerscanaccessourservicesandproducts

    Indirect channelsThelevelofindirectdistributionvariesbetweenmarketsandmayincludeusingthirdpartyserviceproviders,independentdealers,distributorsandretailers.

    OnlineTheinternethasalsobecomeanincreasinglypowerfulandcost-effectivedistributionchannel.51%ofourEuropeancontractcustomersreceivetheirbillsonline.

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    Direct channelsWedirectlyownandmanageabout2,200storesaroundtheworldandwealsohavearound10,300Vodafone-brandedstoresrunthroughfranchiseandexclusivedealerarrangements.Inmostofourlocalmarketssalesforcesalsoselldirecttoenterprisecustomers.

    Vodafone Group PlcAnnualReport20113

    Business review

  • Revenue (bn)

    VodafoneataglanceWe are one of the worlds largest mobile communications companies by revenue

    Vodafone M-PesaOver