Vodafone 2016 Annual Report Download - page 79

Overview Strategy review Performance Governance Financials Additional information
Vodafone Group Plc
Annual Report 2016
77
Cash ow and liquidity reviews
The business planning process provides outputs for detailed cash ow
and liquidity reviews, to ensure that the Group maintains adequate
liquidity throughout the forecast periods. The prime output is a one year
liquidity forecast which is prepared and updated on a daily basis which
highlights the extent of the Group’s liquidity based on controlled cash
ows and the headroom under the Group’s undrawn revolving credit
facility (‘RCF’).
The key inputs into this forecast are:
a free cash ow forecasts, with the rst three month’s inputs being
sourced directly from the operating companies (analysed on a
daily basis), with information beyond this taken from the latest
forecast/budget cycle;
a bond and other debt maturities; and
a expectations for shareholder returns, spectrum auctions and
M&A activity.
The liquidity forecast shows two scenarios assuming either maturing
commercial paper is renanced or no new commercial paper issuance.
The liquidity forecast is reviewed by the Group Chief Financial Ofcer
and included in each of his reports to the Board.
In addition, the Group continues to manage its foreign exchange and
interest rate risks within the framework of policies and guidelines
authorised and reviewed by the Board, with oversight provided
by theTreasury Risk Committee.
Conclusion
The Group has considerable nancial resources, and the Directors
believe that the Group is well placed to manage its business risks
successfully. Accordingly, the Directors continue to adopt the going
concern basis in preparing the Annual Report and accounts.
Management’s report on internal control
over nancial reporting
As required by section 404 of the US Sarbanes-Oxley Act, management
is responsible for establishing and maintaining adequate internal control
over nancial reporting for the Group. The Group’s internal control over
nancial reporting includes policies and procedures that:
a pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reect transactions and dispositions of assets;
a are designed to provide reasonable assurance that transactions
arerecorded as necessary to permit the preparation of nancial
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
a provide reasonable assurance regarding prevention or timely
detection of unauthorised acquisition, use or disposition
of the Group’s assets that could have a material effect on the
nancial 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 nancial reporting at 31 March 2016 based on the updated
Internal Control – Integrated Framework, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (‘COSO’)
in 2013. Based on management’s assessment, management has
concluded that internal control over nancial reporting was effective
at 31 March 2016.
During the period covered by this document, there were no changes
in the Group’s internal control over nancial reporting that have
materially affected or are reasonably likely to materially affect the
effectiveness of the internal controls over nancial reporting.
The Group’s internal control over nancial reporting at 31 March 2016
has been audited by PricewaterhouseCoopers LLP, an independent
registered public accounting rm who also audit the Group’s
consolidated nancial statements. Their audit report on internal
control over nancial reporting is on page 78.
By Order of the Board
Rosemary Martin
Group General Counsel and Company Secretary
17 May 2016