Vodafone 2010 Annual Report Download - page 72

70 Vodafone Group Plc Annual Report 2010
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, the Group maintained, in all material respects, effective internal
control over financial reporting as of 31 March 2010, 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 of
the Group as of and for the year ended 31 March 2010, prepared in conformity with
International Financial Reporting Standards (‘IFRS’), as adopted by the European Union
and IFRS as issued by the International Accounting Standards Board. Our report dated
18 May 2010 expressed an unqualified opinion on those financial statements.
Deloitte LLP
Chartered Accountants and Registered Auditors
London
United Kingdom
18 May 2010
Report of independent registered public accounting
rm to the members of Vodafone Group Plc
We have audited the internal control over financial reporting of Vodafone Group Plc
and subsidiaries and applicable joint ventures (the ‘Group’) as of 31 March 2010 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 it s assessment the internal control over financial reporting at Vodacom
Group Limited (‘Vodacom’), which became a subsidiary during the year and whose
financial statements constitute 6.3% and 5.7% of net and total assets, respectively,
10.0% of revenue, and 1.4% of profit for the financial year of the consolidated financial
statements amounts as of and for the year ended 31 March 2010. Accordingly, our
audit did not include the internal control over financial reporting at Vodacom.
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 £4,742 million (2009: £4,091 million) to the profit for
the financial year, have not been assessed, except relating to the Group’s controls
over the recording and related disclosures of amounts relating to the investments
that are recorded in the consolidated financial statements.
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, included in the accompanying management’s report on
internal control over financial reporting. Our responsibility is to express an opinion
on 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,
assessing the risk that a material weakness exists, testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk, and performing
such other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.
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
reasona ble assurance that tra nsact ions are recorded as necessar y to per mit 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.
Audit report on internal controls