Vodafone Group Plc Annual Report for the year ended 31 March 2012

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Vodafone Group Plc Annual Report 2012 Contents 88 89 Directors’ statement of responsibility 90 Audit report on internal controls 91 Critical accounting estimates 93 Audit report on the consolidated financial statements 94 Consolidated financial statements 94 Consolidated income statement 94 Consolidated statement of comprehensive income 95 Consolidated statement of financial position 96 Consolidated statement of changes in equity 97 Consolidated statement of cash flows 98 Notes to the consolidated financial statements: 98 1. Basis of preparation 98 2. Significant accounting policies 106 3. Segment analysis 108 4. Operating profit 109 5. Investment income and financing costs 109 6. Taxation 112 7. Equity dividends 112 8. Earnings per share 113 9. Intangible assets 114 10. Impairment 117 11. Property, plant and equipment 118 12. Principal subsidiaries 119 13. Investments in joint ventures 120 14. Investments in associates 120 15. Other investments 121 16. Inventory 121 17. Trade and other receivables 122 18. Cash and cash equivalents 122 19. Called up share capital 122 20. Share-based payments 124 21. Capital and financial risk management 128 22. Borrowings 133 23. Post employment benefits 135 24. Provisions 136 25. Trade and other payables 136 26. Disposals 137 27. Reconciliation of net cash flow from operating activities 137 28. Commitments 138 29. Contingent liabilities 139 30. Directors and key management compensation 140 31. Related party transactions 141 32. Employees 141 33. Subsequent events 142 Audit report on the Company financial statements 143 Company financial statements of Vodafone Group Plc 144 Notes to the Company financial statements: 144 1. Basis of preparation 144 2. Significant accounting policies 145 3. Fixed assets 146 4. Debtors 146 5. Other investments 146 6. Creditors 146 7. Share capital 147 8. Share-based payments 147 9. Reserves and reconciliation of movements in equity shareholders’ funds 148 10. Equity dividends 148 11. Contingent liabilities
Directors’ statement of responsibility Vodafone Group Plc Annual Report 2012 89 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: aa select suitable accounting policies and apply them consistently; aa make judgements and estimates that are reasonable and prudent; aa 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; aa state for the Company financial statements whether applicable UK accounting standards have been followed; and aa 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: aa 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 aa 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 55 to 59 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 financial 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 Group’s internal control over financial reporting includes policies and procedures that: aa pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; aa 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 aa 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 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 2012 based on the Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (‘COSO’). Based on management’s assessment management has concluded that the internal control over financial reporting was effective at 31 March 2012. 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, 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 £4,963 million (2011: £5,059 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 Group’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 Group’s internal control over financial reporting at 31 March 2012 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 control over financial reporting is on page 90. By Order of the Board Rosemary Martin Company Secretary 22 May 2012 Business review Performance Governance Financials Additional information
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Vodafone Group Plc Annual Report for the year ended 31 March 2012

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