Vodafone 2011 Annual Report Download - page 77

Vodafone Group Plc Annual Report 2011 75
Financials
Financial statements and accounting records
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 of the Group 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 International Financial Reporting Standards (‘IFRS’) as
issued by the IASB, in accordance with IFRS as adopted for use in the EU
and Article 4 of the EU IAS Regulations;
■state for the Company financial statements 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 of the Group and to enable them to ensure that the financial
statements comply with the Companies Act 2006 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.
Directors’ responsibility statement
The Board confirms to the best of its knowledge:
■the consolidated financial statements, prepared in accordance with IFRS
as issued by the International Accounting Standards Board (‘IASB’) and
IFRS as adopted by the EU, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Group; and
■the directors’ report includes a fair review of the development and
performance of the business and the position of the Group together with
a description of the principal risks and uncertainties that it faces.
Neither the Company nor the directors accept any liability to any person in
relation to the annual report except to the extent that such liability could
arise under English law. Accordingly, any liability to a person who has
demonstrated reliance on any untrue or misleading statement or omission
shall be determined in accordance with section 90A and Schedule 10A of
the Financial Services and Markets Act 2000.
Disclosure of information to auditor
Having made the requisite enquiries, so far as the directors are aware, there
is no relevant audit information (as defined by Section 418(3) of the
Companies Act 2006) of which the Company’s auditor is 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 auditor is 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. Further detail is
included within liquidity and capital resources on pages 48 to 51 and notes
21 and 22 to the consolidated financial statements which include disclosure
in relation to the Group’s objectives, policies and processes for managing its
capital; its financial risk management objectives; details of its financial
instruments and hedging activities; and its exposures to credit risk and
liquidity risk.
Management’s report on internal control
over nancial reporting
As required by Section 404 of the Sarbanes-Oxley Act 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; are designed to provide reasonable assurance that transactions
are recorded as necessary to permit the preparation of financial statements
in accordance with IFRS, as adopted by the EU and IFRS as issued by the
IASB, 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 at 31 March 2011 based on the Internal Control –
Integrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (‘COSO’). Vodacom’s controls
have been included in the Group’s assessment for the first time this year.
Based on management’s assessment management has concluded that the
internal control over financial reporting was effective at 31 March 2011.
Management has excluded from its assessment the internal control over
financial reporting of entities which are accounted for under the equity
method, including Verizon Wireless and SFR, because the Group does not
have the ability to dictate or modify the controls at these entities and does
not have the ability to assess, in practice, the controls at these entities.
Accordingly, the internal controls of these entities, which contributed a net
profit of £5,059 million (2010: £4,742 million) to the profit 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 statements.
During the period covered by this document there were no changes in the
Company’s internal control over financial reporting that have materially
affected or are reasonably likely to materially affect the effectiveness of the
internal controls over financial reporting.
The Company’s internal control over financial reporting at 31 March 2011
has been audited by Deloitte LLP, an independent registered public
accounting firm who also audit the Group’s consolidated financial
statements. Their audit report on internal controls over financial reporting
is on page 76.
By Order of the Board
Rosemary Martin
Company Secretary
17 May 2011
Directors’ statement of responsibility