Vodafone 2024 Annual Report

144 Vodafone Group Plc Annual Report 2024

Notes to the consolidated financial statements (continued) 144 Vodafone Group Plc Annual Report 2024 2020 1. Basis of preparation (continued) Significant accounting policies applied in the current reporting period that relate to the financial statements as a whole Accounting convention The consolidated financial statements are prepared on a historical cost basis except for certain financial and equity instruments that have been measured at fair value and for the application of IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ for the Group’s entities reporting in Turkish lira and its associate’s reporting in Ethiopian birr (see below). Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company, subsidiaries controlled by the Company (see note 31 ‘Related undertakings’ to the consolidated financial statements), joint operations that are subject to joint control and the results of joint ventures and associates (see note 12 ‘Investments in associates and joint arrangements’ to the consolidated financial statements). Hyperinflationary economies The Turkish and Ethiopian economies were designated as hyperinflationary from 30 June 2022 and 31 December 2022, respectively. The Group has applied IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ to its Turkish and Ethiopian operations whose functional currencies are Turkish lira and Ethiopian birr from 1 April 2022. In applying IAS 29, the Turkish lira and Ethiopian birr results and non-monetary asset and liability balances for relevant financial years have been revalued to their present value equivalent local currency amounts at the reporting date, based on the consumer price indexes issued by the Turkish Statistical Institute and the Central Statistics Agency of Ethiopia respectively. Comparative periods are not restated per IAS 21 ‘The Effects of Changes in Foreign Exchange rates’. The respective indices have risen by 68.5% and 26.2% (2023: 50.5% and 31.3% ) during this financial year. The revalued balances are translated to euros at the reporting date exchange rate of €1: 34.94 TRL and €1: 61.43 ETB (2023: €1: 20.85 TRL and €1:58.59 ETB) respectively applying IAS 21. For the Group’s operations in Turkey: − The gain or loss on the revaluation of net monetary assets resulting from IAS 29 application is recognised in the consolidated income statement within Other income. − The Group also presents the gain or loss on cash and cash equivalents as monetary items together with the effect of inflation on operating, investing and financing cash flows as one number in the consolidated statement of cash flows. − The Group has presented the equity revaluation effects and the impact of currency movements within other comprehensive income as such amounts are judged to meet the definition of ‘exchange differences’. For Safaricom’s operations in Ethiopia, the impacts are reflected as an increase to Investments in associates and joint ventures in the Consolidated statement of financial position and an increase to Share of results of equity accounted associates and joint ventures recognised in the Consolidated income statement. The main impacts of the aforementioned adjustments for the Group’s Turkish and Ethiopian operations on the consolidated financial statements are shown below. Increase/(decrease) Increase/(decrease) 2024 2023 €m €m Impact on the consolidated income statement for the years ended 31 March Revenue 111 85 Operating profit 1 66 (87) Profit for the financial year 1 (169) (123) Increase/(decrease) Increase/(decrease) 31 March 2024 31 March 2023 €m €m Impact on the consolidated statement of financial position at 31 March Net assets 981 814 Equity attributable to owners of the parent 913 777 Non-controlling interests 68 37 Note: 1 Includes €360 million gain on the net monetary assets/liabilities (2023: €198 million gain). Strategic report Governance Financials Other information

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