Vodafone 2007 Annual Report Download - page 91

Vodafone Group Plc Annual Report 2007 89
Governance
Report of Independent Registered Public Accounting Firm to the Members of Vodafone Group Plc
We have audited management’s assessment, included in the accompanying
Management’s Report on Internal Control over Financial Reporting, that
Vodafone Group Plc together with its subsidiaries and applicable joint
ventures (the “Group”) maintained effective internal control over financial
reporting as of 31 March 2007, based on criteria established in Internal
Control – Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
As described in Management’s Report on Internal Control over Financial
Reporting, management excluded from its assessment the internal control
over financial reporting at Vodafone Telekomunikasyon A.S. (“Vodafone
Turkey”), which was acquired on 24 May 2006 and whose financial
statements constitute 0.2 percent and 0.6 percent of net and total assets,
respectively, 2.2 percent of revenues, and 1.3 percent profit of net loss of
the consolidated financial statement amounts as of and for the year ended
31 March 2007. As also described in Management’s Report on Internal
Control over Financial Reporting, management excluded from its
assessment the Internal Controls over Financial Reporting at Vodacom
Group (Pty) Limited (“Vodacom”), as the Group does not have the ability to
dictate, modify or assess the controls at this entity. Vodacom constitutes,
0.7 percent and 0.9 percent of net and total assets, respectively, 4.8 percent
of revenues, and 4.6 percent profit of net loss of the consolidated financial
statement amounts as of and for the year ended 31 March 2007.
Accordingly, our audit did not include the internal control over financial
reporting at Vodafone Turkey or Vodacom. The Group’s management is
responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over
financial reporting. Our responsibility is to express an opinion on
management’s assessment and an opinion on the effectiveness of the
Group’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an
understanding of internal control over financial reporting, evaluating
management’s assessment, testing and evaluating the design and operating
effectiveness of internal control, and performing such other procedures as
we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinions.
A company’s internal control over financial reporting is a process designed
by, or under the supervision of, the company’s principal executive and
principal financial officers, or persons performing similar functions, and
effected by the company’s board of directors, management, and other
personnel to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A
company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being
made only in accordance with authorisations of management and directors
of the company; and (3) 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.
Because of the inherent limitations of internal control over financial
reporting, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may not
be prevented or detected on a timely basis. Also, projections of any
evaluation of the effectiveness of the internal control over financial
reporting to future periods are subject to the risk that the controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
In our opinion, management’s assessment that the Group maintained
effective internal control over financial reporting as of 31 March 2007 is
fairly stated, in all material respects, based on the criteria established in
Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Also in our opinion,
the Group maintained, in all material respects, effective internal control over
financial reporting as of 31 March 2007, based on the criteria established in
Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the consolidated
financial statements as of and for the year ended 31 March 2007 of the
Group and our report dated 29 May 2007 expressed an unqualified opinion
on those financial statements and included an explanatory paragraph
relating to the nature and effect of differences between International
Financial Reporting Standards and accounting principles generally accepted
in the United States of America.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
London
United Kingdom
29 May 2007