The GDP of UK has declined by 0.

4% in the third quarter of 2009 and the

economy is at recovery stage from Financial Crisis. This is a positive sign for all
the companies who has hit with this Financial Crisis. Among all the sectors of
business, Telecommunication is one of the major sectors and the Vodafone Group
Plc. is one of the leading players in this sector who has operations in major parts
of the world. There are many competitors of Vodafone Group Plc in UK and one of
them is BT Group Plc. BT Group Plc. too has operations throughout the world.
Given below are the details of Vodafone and BT Group and their comparison.

The following is the company profile of Vodafone group Plc.

In the above table you can see the indexes on which shares of Vodafone
are traded, its division of sector in FTSE index, its ISIN number and other
information.

Given below is the Management team of Vodafone Group Plc.

The Fundamentals of Vodafone Group Plc is given below:

The Analysis of the Ratios of Vodafone Group Plc is given below:

Liquidity Ratios:
The Current Ratio is fluctuating every year this shows that there is no constant increase or decrease
in the Liquidity of the company. In 2008 and 2009 it was0.4 and 0.47 which is very week as compared
to previous years and same is the case with Quick Ratio which was0.38 in 2008 and 0.45 in 2009.

How Credit Crisis is affecting the Liquidity of the Company?

The cash generated from operations has been increasing since 2007. It
has increased from (m) 13,289 in 2008 to (m) 14,634 in 2009 i.e. almost 10%
increase. As the cash from operations increased the interest and taxes
paid has decreased this means that the company has repaid some of
the borrowed funds and was also able to get sufficient returns from
that funds. The trend from 2007 to 2009 shows that there is constant increase
in cash generated from operations which states that the company is going in
right direction and the Management has taken sound decisions to overcome from
the situation after 2006-07 in which cash generated from operations was
declined.

Conclusion: Even during Credit Crisis the company has performed well
as compared to previous year. This is a good signal for both the
company and its share holders. The company was affected due to Credit
Crisis during 2007 but it bounced back with increase in Cash generation
and decrease in interest and taxes payments in 2009 and proves that
management is good enough to overcome the situation and to keep the
interest of share holders.
Gearing Ratios:

The Debt Equity Ratio is 0.48 which means the company has huge
amount of loaned funds which leads to more interest payment and is a
sign of highly geared company which leads to either high returns or
high losses. The company has taken full advantage of loaned funds to
generate higher income and paid less interest than previous year. The
company has also repaid some of its debt in 2009 and reduced the
interest burden for future.
Profitability Ratios:
The Gross Profit ratio is of 37% which is relatively good but not better than previous year
which was 38.29%.
The Net Profit ratio before tax is almost 10% which is worse as compared to the previous year
which was 25% in 2008.
The Returns on Capital Employed has declined from 6.32% in 2008 to 2.47% in 2009 whereas it
was negative in previous years.

The company has (m) 3078 Profit After Tax but it has paid Dividends to
Share holders of (m) 4017 which means company has paid Dividends
out of Reserves and the Retained Profit in the current year is (m) -939.
Return on Equity has reduced from 8.53% in 2008 to 3.57%. It was
negative in previous years which shows return on Equity has been
increased but not as compared to last year.
The Operating Margin was 20.21 in previous year which has come down
to 4.31 which shows a downfall in Margins by about 16%.
Debt Coverage Ratios:
Interest Coverage has been 1.08 times in 2009 whereas it was much better in previous years
which were 5.52 times in 2008, 5.21 times in 2007, 21.53 in 2006 and 10.10 times in 2005. This
declining trend in interest cover shows that the company has worst interest coverage in 2009.
Investment Ratios:

The dividend per share is 7.7 which are better than previous 4 years.
This is a good sign for share holders as it is constantly rising.
The earnings per share basic are 5.84 which are very less than
previous year which was 12.56 in 2008 but it was negative in the years
before 2008.
The Price/Earnings Ratio is around 23% which is very good return on
investment for investors (as on March 2009).

Q) An evaluation of Company`s Capital Structure and how problems in

Credit Markets could affect company`s Future Funding Strategies?
Capital Structure Ratios:
The company has worst Interest Coverage in 2009.It has been 1.08 times in 2009 whereas it
was much better in previous years which were 5.52 times in 2008, 5.21 times in 2007, 21.53 in
2006 and 10.10 times in 2005. This shows a declining trend in interest coverage which is not a
good sign for the company.

The Debt/Equity Ratio is 0.48 which makes it a highly geared company.

The trend of Debt/Equity ratio is continuously rising since 2005 which
indicates that the company has raised more funds. There is rise in both
the Equity Share holders funds and Long Term borrowed funds as
compared to last year.
The Share Holder`s Investment Ratio is 0.56 i.e., more money is
financed by share holders than long term debts. This is good to raise
more funds from share holders as they are owners of the company. The
Lenders also want the owners of the company to put in more money
than those otherwise lenders are going to demand higher rate of
interest for taking more financial risk.
Conclusion: The Company is affected by Credit Crisis but not to a great
extent. For the company`s future expansion plans it can raise funds
through its existing share holders by Rights Issue when the market is
favourable and the investors can get good returns too. This will be
better for improving company`s Capital Structure as the company does
not have to pay a fixed amount of liability to any Private Lender i.e.,
Getting a Permanent Share Capital from Share Holders and
No Permanent Liability to pay as interest on Long term borrowing.
Other Ratio Analysis:
As we can see that the Market Capitalisation as on 31 st March, 2009 was (m)
64,423.95.Whereas Capital Employed on that date was (m) 124,752.00.
The Market Capitalisation has reduced from (m) 80,169.55 to (m) 64,423.95
and also the Enterprise Value from (m) 105,189.55 to (m) 95,163.95. The
current net income has reduced from (m) 6660.00 in2008 to (m) 3078.00 in
2009 which shows decline in income by around 54%. The Debtors of company
includes Customers using post paid mobile connections for which the credit limit
is of one month which shows that working capital of the company is in good state
to meet its current liabilities as there is no stock to maintain and the creditors
are the service providers for which the credit period must be two months or more
which leads to more cash in hand which is a sign of a healthy company.
Conclusion: The Vodafone Group Plc is affected by Credit Crisis and
Economic slowdown but not to a great extent, this Crisis resulted in
decline in Profits which affected other factors too but still the company
has sufficient funds and future expansion plans to implement which will

make the company more profitable and to increase shareholders

wealth.

Q) How successful the company has been at increasing shareholders

wealth during last five years and how has the company performed with
the FTSE 100 or FTSE 250 Index?

The Following is the Analysis of Volume of Shares during the last five
years:
From the above we can analyse that the shares of Vodafone Group Plc.
have been traded well in the market. People traded most during 2005 and
2006 which shows that people trusted Vodafone Group shares to rise in
future. The market value of shares was highest during 2006-07.It means
that the price of shares was high in 2006-07 but the number of trades was
less during that period. This shows that investors have traded shares in
huge quantity even at a higher price. The share prices have kept rising till
2007 after that it kept declining due to financial crisis and other factors.
The investors who have invested in the shares of Vodafone Group Plc
during 2004 and 2005 with a motive of keeping them for 2 to 3 years

must have made profits but the investors who have invested during 2008
must have faced the problems occurred due to financial crisis which led to
the fall in share prices. The investors who want to invest in shares of
Vodafone Group Plc with a motive of long term that is for at least 10 to 15
years then this is the right time for investing as the share prices are low
and the investor can create good amount of wealth by investing now. The
company has operations throughout the world and has made profits
during financial crisis this shows that the management of Vodafone Group
Plc is strong enough to make good profits in future and declare good
dividends to shareholders.

Q) How the current financial crisis is likely to affect share holder returns
in the short term?

The Historical share price chart is given below:

Given above are the weekly share price of Vodafone Group Plc from April 2004 to
March 2009 and the chart of Vodafone Group Plc share price and FTSE 100 Index.
The Analysis of the share prices of Vodafone Group Plc during the last five years
at increasing shareholders wealth is given below:
From the given table we can see that at the start of April 2004 the share prices
were trading around 147 and 160 at this movement the Investor who have
invested in shares of Vodafone Group Plc with a motive of keeping them for a
short term i.e., for 2 to 3 years must have made good returns as the price was
stable between 130 and 165 and there was a stock split in July 2006 which
increased the number of shares in existing shareholders account. On the other
hand the investors who have invested during April 2007 and sold them in January
2008 must have made good returns as the price of shares started declining after
January 2008 and did not bounce back up to 180. The reason for the decline was
the effect of Financial Crisis due to which profits of the company was affected
and so was the share price. This states that the share prices of Vodafone Group
Plc have traded at stable price movement and fluctuations were not with big
differences.
The above given chart shows that the share prices of Vodafone Group Plc and
FTSE 100 index has performed at almost same rate. At sometimes the share
price rise was higher than the index rise and sometimes rise in index was higher
than the share price rise. This shows that the share prices of Vodafone Group Plc
are running according to the index.
The company has declared dividend every year to share holders and is making
profits during the Economic Slowdown and Financial Crisis which is a good sign
for the Company and its Investors. At present the share price of Vodafone Group
Plc is_______________ as on (date)

As given in www.Vodafone .com

Geographical analysis of shareholders
At 31 March 2009, approximately 54.3% of the Company's shares were held in
the UK, 30.3% in North America, 11.9% in Europe (excluding the UK) and 3.5% in
the Rest of the World. We hold interests in over 40 licensed network operators
located in 30 countries and spanning five continents

http://www.vodafone.com/start/investor_relations/structure_and_managem
ent.html
The above chart shows that how the share of Vodafone as performed. Its
shows the closing price of the day for the whole year. The chart shows
that the price of shares was highest during January and February and then
it shows a decline in price till July and August. After August there is rise in

the shares price again. At present the share price of Vodafone Group Plc.
Is at __________________as on (DATE ) in FTSE 250 Index.
(I HAVE TO MENTION DATE ON THIS PAGE)
Number of ordinary
shares held
1 - 1,000
1,001 - 5,000
5,001 - 50,000
50,001 - 100,000
100,001 - 500,000
More than 500,000
Total

Number of
% of total
accounts issued shares
440,296
0.21%
81,147
0.31%
25,850
0.56%
1,149
0.14%
1,123
0.46%
1,817
98.32%
551,382
100%

Major shareholders
The Bank of New York Mellon, as custodian of the Company's ADR programme, held
approximately 11.7% of the Company's ordinary shares of $0.11 3/7 each at 18 May 2009 as
nominee. The total number of ADRs outstanding at 18 May 2009 was 618,284,291. At this
date, 1,258 holders of record of ordinary shares had registered addresses in the United States
and in total held approximately 0.008% of the ordinary shares of the Company. As at 18 May
2009, 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:

Axa S.A. 4.61%

Legal & General Group Plc 4.43%

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 at 18 May 2009, 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.
http://www.vodafone.com/start/investor_relations/structure_and_managem
ent/shareholder_structure.html

Conclusion: The Company has sufficient amount of funds for future

expansion and the economy is also recovering from recession which will
be a positive sign for the index to rise and the shares of Vodafone
Group Plc is also trading at _____ price which is good to buy for short
term i.e., for 1-2 years.