128 Vodafone Group Plc Annual Report 2026
Strategic report
Governance
Financials
Other information
Independent auditor’s report to the members of Vodafone Group Plc continued
Our key observations – The directors’ assessment forecasts that the Group will maintain sufficient liquidity throughout the going concern assessment period. This included the scenario of non-refinancing of certain debt maturities in the assessment period, with continuing availability of the Group’s €7.6 billion revolving credit facilities, which were undrawn as at 31 March 2026. – Furthermore, management’s reverse stress test to model the extent of reduction in profitability compared to forecasts required to breach liquidity during the going concern assessment period is considered by management to have only a remote possibility of occurring. – The controllable identified mitigating actions available to increase liquidity over the going concern assessment period were not modelled by management due to the level of headroom in the directors’ assessment forecasts. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group and Parent company’s ability to continue as a going concern for a period from when the financial statements are authorised for issue to 30 June 2027. In relation to the Group and Parent company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s ability to continue as a going concern. Overview of our audit approach Audit scope
Conclusions relating to going concern In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Group and Parent company’s ability to continue to adopt the going concern basis of accounting included: – confirming our understanding of the directors’ going concern assessment process, including the controls over the review and approval of the budget and long-range plan; – assessing the appropriateness of the duration of the going concern assessment period to 30 June 2027 (“the going concern assessment period”) and considering the existence of any significant events or conditions beyond this period based on our procedures on the Group’s long-range plan and knowledge arising from other areas of the audit; – verifying inputs against board-approved forecasts and debt facility terms and reconciling the opening liquidity position to the balance sheet as at 31 March 2026; – reviewing borrowing facilities to confirm both their availability to the Group and the forecast debt repayments through the going concern assessment period and to validate that there are no financial covenants in relation to any of the borrowing facilities; – understanding and evaluating the appropriateness of management’s model, including testing the assessment, including forecast liquidity, for clerical accuracy; – challenging whether sensitivities in respect of potential downside scenarios were reasonable and appropriately severe, in light of the Group’s relevant principal risks and uncertainties and our own independent assessment of those risks; – evaluating management’s historical forecasting accuracy and the consistency of the going concern assessment with information obtained from other areas of the audit, such as our audit procedures on the long-range plans, which underpin management’s goodwill impairment assessments; – evaluating the impact of the subsequent events relating to transactions expected to close within the going concern period, including with respect to Safaricom, VodafoneZiggo and VodafoneThree; – independently evaluating the mitigating actions available to respond to a severe, but plausible downside scenario, and whether those actions are feasible and within the Group’s control. These mitigations were not modelled by management as they were not relied upon for their conclusion; – reviewing management’s reverse stress test to understand how severe conditions would have to be to breach liquidity and whether the required reduction in profitability metrics has no more than a remote possibility of occurring when compared to current performance and forecasts; – performing independent sensitivity analysis on management’s assumptions, including applying incremental adverse cashflow sensitivities. These sensitivities included the impact of certain severe but plausible scenarios, evaluated as part of management’s work on the Group’s long-term viability materialising within the going concern assessment period; and – reviewing the Group and Parent company’s going concern disclosures included on page 125 of the Annual Report to assess that the disclosures are consistent with the basis upon which the Board have concluded, and in conformity with the reporting standards.
– We performed an audit of the complete financial information of 7 components and audit procedures on specific balances for a further 9 components. We also performed specified audit procedures on certain accounts on 1 additional component. – We performed certain central procedures on financial statement line items as detailed in the ‘Tailoring the scope’ section below. – Carrying value of cash generating units, including goodwill (Germany). – Recognition and recoverability of deferred tax assets in Luxembourg and VodafoneThree. – Revenue recognition. – Merger of Vodafone Limited and Hutchison 3G UK Holdings Limited in the UK. – Overall Group materiality of €270m (FY25: €215m) has been calculated based on the Group’s Adjusted EBITDAaL. This represents approximately 2.5% (FY25: approximately 2.0%) of the Group’s Adjusted EBITDAaL.
Key audit matters
Materiality
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