Vodafone 2005 Annual Report Download - page 61

Governance |59
Directors’ Indemnities
In accordance with the Company’s Articles of Association, directors are granted an
indemnity from the Company to the extent permitted by law in respect of liabilities
incurred as a result of their office. The Companies (Audit Investigations and
Community Enterprise) Act 2004 came into force on 6 April 2005, and, amongst other
things, changed the provisions of Section 310 of the Companies Act 1985 to give
companies the power to extend indemnities to directors against liability to third parties
(excluding criminal and regulatory penalties) and to pay directors’ legal costs as
incurred provided that they are reimbursed to the Company if the individual is convicted
or, in an action brought by the Company, judgment is given against the director. The
Company will seek shareholder approval at the AGM this year to amend its
Memorandum and Articles of Association to give it authority to provide funding for
directors’ defence costs. If shareholder approval is obtained, the Company will
indemnify directors to the extent permitted by the new legislation.
Employees
Please refer to “Employees”on page 75.
Corporate responsibility
A summary of the Company’s approach is contained on page 76 of this Annual Report.
Further details are contained in the Company’s CR report which is available to view on
or download from the Company’s website, www.vodafone.com.
Auditors
Following a recommendation by the Audit Committee and, in accordance with section
384 of the Companies Act 1985, a resolution proposing the re-appointment of Deloitte
& Touche LLP as auditors to the Company will be put to the 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 Group 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 have
been adopted to provide for the pre-approval by the Audit Committee of all permitted
non-audit services by Deloitte & Touche LLP. Should there be an immediate
requirement for permitted non-audit services to be provided by Deloitte & Touche LLP
which have not been pre-approved by the Audit Committee, the policies provide that
the Group Audit Director will consult with the Chairman of the Audit Committee for
pre-approval.
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 business acquisitions and disposals.
Other work is awarded on the basis of competitive tender.
During the year Deloitte & Touche LLP charged £5 million (2004: £4 million) for audit
services and a further £4 million (2004: £8 million) for non-audit assignments. An
analysis of these fees can be found in note 5 to the Consolidated Financial Statements.
Major shareholders
The Bank of New York, as custodian of the Company’s American Depositary Receipt
(“ADR”) programme, held approximately 12.5% of the Company’s ordinary shares of
$0.10 each at 23 May 2005 as nominee. The total number of ADRs outstanding at
23 May 2005 was 804,689,870. At this date, 1,104 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 23 May 2005, the following
percentage interests in the ordinary share capital of the Company, disclosable under
Part VI of the Companies Act 1985, have been notified to the directors:
Shareholder Shareholding
The Capital Group Companies, Inc. 7.92%
Fidelity Management & Research Company 3.52%
Legal & General Investment Management 3.69%
Barclays PLC 3.65%
The rights attaching to the ordinary shares of the Company held by these shareholders
are identical in all respects to the rights attaching to all the ordinary shares of the
Company. The directors are not aware, as at 23 May 2005, 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.
Going concern
After 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.
Statement of Directors’ Responsibilities
United Kingdom company law 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 applicable accounting standards have been followed; and
•prepare the financial statements on a going concern basis unless it is inappropriate
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. 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.
By Order of the Board
Stephen Scott
Secretary
24 May 2005