Vodafone 2007 Annual Report Download - page 90

88 Vodafone Group Plc Annual Report 2007
Directors’ Statement of Responsibility
Company law of England and Wales 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 the Consolidated Financial Statements have been prepared
in accordance with IFRS as adopted for use in the EU;
•for the Company Financial Statements, state whether applicable UK
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 and Article 4 of the EU
IAS Regulation. 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.
Disclosure of Information to Auditors
Having made the requisite enquiries, so far as the directors are aware, there
is no relevant audit information (as defined by Section 234ZA of the
Companies Act 1985) of which the Company’s auditors are unaware, and the
directors have taken all the steps they ought to have taken to make
themselves aware of any relevant audit information and to establish that
the Company’s auditors are aware of that information.
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.
Management’s Report on Internal Control over
Financial Reporting
As required by section 404 of the Sarbanes-Oxley Act of 2002, management
is responsible for establishing and maintaining adequate internal control
over financial reporting for the Group.
The Company’s internal control over financial reporting includes policies
and procedures that pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect transactions and dispositions
of assets; provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes
in accordance with IFRS, including the reconciliations to US GAAP, and that
receipts and expenditures are being made only in accordance with
authorisation of management and the directors of the Company; and
provide reasonable assurance regarding prevention or timely detection of
unauthorised acquisition, use or disposition of the Company’s assets that
could have a material effect on the financial statements.
Any internal control framework, no matter how well designed, has inherent
limitations, including the possibility of human error and the circumvention
or overriding of the controls and procedures, and may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate
because of changes in conditions or because the degree of compliance with
the policies or procedures may deteriorate.
Management has assessed the effectiveness of the internal control
over financial reporting as at 31 March 2007 based on the Internal Control –
Integrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”). The assessment
excluded the internal controls over financial reporting relating to Vodafone
Telekomunikasyon A.S. (“Vodafone Turkey “) because the entity was
acquired on 24 May 2006, as described in note 28 to the Consolidated
Financial Statements.
Management has not evaluated the internal controls of Vodacom Group
(Pty) Limited (“Vodacom”), which is accounted for using proportionate
consolidation. The conclusion regarding the effectiveness of internal
control over financial reporting does not extend to the internal controls of
Vodacom. Management is unable to assess the effectiveness of internal
control at Vodacom due to the fact that it does not have the ability to
dictate or modify its controls and does not have the ability, in practice, to
assess those controls.
Key sub-totals that result from the consolidation of Vodafone Turkey and
the proportionate consolidation of Vodacom, whose internal controls have
not been assessed, are set out below.
Vodafone
Turkey Vodacom
2007 2007
£m £m
Total assets 607 1,008
Net assets 150 477
Revenue 698 1,478
Profit for the financial year 71 242
Management is not required to evaluate the internal controls of entities
accounted for under the equity method. Accordingly, the internal controls
of these entities, which contributed a net profit of £2,728 million to the loss
for the financial year, have not been assessed, except relating to controls
over the recording of amounts relating to the investments that are recorded
in the Group’s consolidated financial statement.
Based on management’s assessment, management has concluded that the
internal control over financial reporting was effective as at 31 March 2007.
Management’s assessment of the effectiveness of internal control over
financial reporting, as at 31 March 2007, has been audited by Deloitte &
Touche LLP, an independent registered public accounting firm, who also
audit the Group’s Consolidated Financial Statements. Their audit report on
internal control over financial reporting is on page 89.
By Order of the Board
Stephen Scott
Secretary
29 May 2007