Vodafone 2012 Annual Report Download - page 74

72
Vodafone Group Plc
Annual Report 2012
Political donations
No political donations under the Companies Act 2006 have been
madeduring the year. It is our Group policy not to make political
donations or incur political expenditure as those expressions are
normally understood.
Internal control and risk management
The Board has overall responsibility for the system of internal control.
Asound system of internal control is designed to manage rather than
eliminate the risk of failure to achieve business objectives and can only
provide reasonable and not absolute assurance against material
misstatement or loss.
The Board has established procedures that implement in full the
Turnbull Guidance “Internal Control: Revised Guidance for Directors
onthe Combined Code” for the year under review and to the date of
approval of the annual report. These procedures, which are subject to
regular review, provide an ongoing process for identifying, evaluating
and managing the signicant risks we face. See page 89 for
management’s report on internal control over nancial reporting.
Monitoring and review activities
There are clear processes for monitoring the system of internal control
and reporting any signicant control failings or weaknesses together
with details of corrective action. These include:
a a formal annual conrmation provided by the Chief Executive and
Chief Financial Ofcer of each Group company certifying the
operation of their control systems and highlighting any weaknesses,
the results of which are reviewed by regional management, the Audit
and Risk Committee, and the Board;
a ongoing review of the appropriateness of disclosures undertaken by
the Group’s Disclosure Committee, on behalf of the Chief Executive
and the Chief Financial Ofcer, and an annual report from the Group’s
Disclosure Committee to the Chief Executive and the Chief Financial
Ofcer regarding the effectiveness of the Group’s disclosure controls
and procedures; and
a periodic examination of business processes on a risk basis including
reports on controls, throughout the Group, undertaken by the Group
Internal Audit department which reports directly to the Audit and
RiskCommittee.
In addition, the Board reviews any reports from the external auditor
presented to the Audit and Risk Committee and management in relation
to internal nancial controls.
Any controls and procedures, no matter how well designed and
operated, can provide only reasonable and not absolute assurance
ofachieving the desired control objectives. Management is required
toapply judgement in evaluating the risks we face in achieving our
objectives, in determining the risks that are considered acceptable to
bear, in assessing the likelihood of the risks concerned materialising,
inidentifying our ability to reduce the incidence and impact on the
business of risks that do materialise, and in ensuring that the costs of
operating particular controls are proportionate to the benet.
Review of effectiveness
The Board and the Audit and Risk Committee have reviewed the
effectiveness of the internal control system including nancial,
operational and compliance controls, and risk management in
accordance with the Code for the period from 1 April 2011 to 22 May
2012 (the date of approval of our annual report). No signicant failings
orweaknesses were identied during this review. However, had there
been any such failings or weaknesses, the Board conrms that
necessary actions would have been taken to remedy them.
Disclosure controls and procedures
We maintain “disclosure controls and procedures”, as such term is
dened in Rule 13a-15(e) of the Exchange Act, that are designed to
ensure that information required to be disclosed in reports that we le
orsubmit under the Exchange Act is recorded, processed, summarised
and reported within the time periods specied in the SEC’s rules and
forms, and that such information is accumulated and communicated to
management, including our Chief Executive and Chief Financial Ofcer
as appropriate, to allow timely decisions regarding required disclosure.
The directors, the Chief Executive and the Chief Financial Ofcer have
evaluated the effectiveness of the disclosure controls and procedures
and, based on that evaluation, have concluded that the disclosure
controls and procedures are effective at the end of the period covered
by this document.
Going concern
The going concern statement required by the Listing Rules and the
Code is set out in the “Directors’ statement of responsibility” on page 89.
Risk management
An overview of the Group’s framework for identifying and managing risk,
both at an operational and strategic level, is set out on page 39.
Annual report
The directors are responsible for preparing the annual report.
Corporate governance (continued)