120 Vodafone Group Plc Annual Report 2025
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 and also the continuing availability of the Group’s €7.8 billion revolving credit facilities, undrawn as at 31 March 2025. – 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 2026. 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 – We performed an audit of the complete financial information of 7 components
An overview of the scope of the Parent company and Group audits Tailoring the scope In the current year our audit scoping has been updated to reflect the new requirements of ISA (UK) 600 (Revised). We have followed a risk-based approach when developing our audit approach to obtain sufficient appropriate audit evidence on which to base our audit opinion. We performed risk assessment procedures, with input from our component auditors, to identify and assess risks of material misstatement of the consolidated financial statements and identified significant accounts and disclosures. When identifying components at which audit work needed to be performed to respond to the identified risks of material misstatement of the consolidated financial statements, we considered our understanding of the Group and its business environment, the potential impact of climate change, the applicable financial reporting framework, the Group’s system of internal control at the entity level, the existence of centralised processes, applications and any relevant internal audit results. The goodwill balance was audited centrally by the Group audit team. In addition, we determined that certain centralised audit procedures would be performed on investments in associates and joint ventures, other investments, deferred tax assets, post-employment benefits, derivative financial instruments (classified within trade and other receivables and trade and other payables), taxation recoverable, cash and cash equivalents, equity, borrowings, deferred tax liabilities, taxation liabilities, roaming revenue (classified within revenue), other income, investment income, financing costs and discontinued operations. For these audit areas, audit procedures were also performed by the Group audit team with input from Component audit teams. Vodafone has centralised processes and controls over certain areas within its Vodafone Intelligent Solutions (“VOIS”) finance shared service centre locations. The Group audit team and our audit teams at VOIS form an integrated audit team to perform centralised testing for certain controls and accounts, including procedures on property, plant and equipment, other intangible assets and centralised purchase to pay processes (impacting trade and other payables, cost of sales, selling and distribution expenses and administrative expenses). We then identified 13 components as individually relevant to the Group due to our assessment of risks of material misstatement or a significant risk impacting the consolidated financial statements. We also considered the materiality of the components relative to the Group. For those individually relevant components, we identified the significant accounts where audit work needed to be performed at these components by applying professional judgement, having considered the Group significant accounts on which centralised procedures would be performed, the reasons for identifying the component as an individually relevant component and the size of the component’s account balance relative to the Group significant financial statement account balance. We then considered whether the remaining Group significant account balances not yet subject to audit procedures, in aggregate, could give rise to a risk of material misstatement of the consolidated financial statements. We selected 3 components of the group to include in our audit scope to address these risks. Having identified the components for which work would be performed, we determined the scope to assign to each component. Of the 16 components selected, we designed and performed audit procedures on the entire financial information of 7 components (“full scope components”). For 6 components, we designed and performed audit procedures on specific significant financial statement account balances or disclosures of the
and audit procedures on specific balances for a further 6 components. We also performed specified audit procedures on certain accounts on 3 additional components. – 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 on tax losses – Luxembourg and the UK. – Revenue recognition. – Overall Group materiality of €215m (FY24: €220m) has been calculated based on the Group’s Adjusted EBITDAaL. This represents approximately 2% of the Group’s Adjusted EBITDAaL.
Key audit matters
Materiality
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