Vodafone 1997 Annual Report Download - page 48

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Vodafone Group Plc Annual Report & Accounts for the year ended 31 March 1997 - Report of the Directors
The Board of directors has overall responsibility for the Group's system of internal financial control.
Although no system of internal financial control can provide absolute assurance against material
misstatement or loss, the Group's systems have been designed to provide the directors with reasonable
assurance that assets are safeguarded, transactions are authorised and recorded properly and that material
errors and irregularities are either prevented or detected within a timely period.
Control environment
The directors have established an organisation structure with clear operating procedures, lines of
responsibility and delegated authority. The directors have delegated to executive management the
establishment and implementation of financial control systems appropriate for the various businesses.
Assessment of business risk
Major business risks are identified and evaluated by the directors when setting the strategy, approving
budgets and monitoring progress against budget. Subsidiary management identifies and evaluates business
risks when allocating resources to minimise those risks.
Financial reporting system
The Group's operating procedures include a comprehensive system for reporting financial information to
the directors. The principal elements of this include the formal review by the directors of:
● Detailed budgets prepared by subsidiary management and reviewed by the executive directors before
formal adoption;
● Monthly management accounts with a comparison against budget;
● Forecasts, revised on a quarterly basis, compared against budget.
Main control procedures
Written financial policies and procedures have been issued which specify the minimum requirements for
financial and administrative matters within the Group. These policies and procedures address the areas of
significant business risk and include:
● Financial limits on delegated authority;
● Detailed policies and procedures regulating treasury activities, approved annually.
Associated undertakings are monitored closely through attendance at their board meetings and review of
key financial information. It is the Group's policy that its auditors be appointed as auditors of associated
undertakings. Detailed post investment appraisals of all the Group's investments are conducted on a
regular basis.
http://www.vodafone.com/download/investor/reports/annual97/5/2.htm (2 of 9)29/03/2007 22:44:39