154 John Lewis Partnership plc Annual Report and Accounts 2016


Independent auditors’ report to the members of John Lewis Partnership plc


Report on the financial statements


Our opinion In our opinion:


a John Lewis Partnership plc’s consolidated financial statements and Company financial statements (the “financial statements”) give a true and fair view of the state of the Partnership’s and of the Company’s affairs as at 30 January 2016, and of the Partnership’s profit and the Partnership’s cash flows for the year then ended;


a The Partnership’s financial statements have been properly prepared in accordance with International Financial Reporting Standards (“IFRSs”) as adopted by the European Union;


a The company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union, and as applied in accordance with the provisions of the Companies Act 2006; and


a The financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the Partnership financial statements, Article 4 of the IAS Regulation.


What we have audited


The financial statements, included within the Annual Report and Accounts (the “Annual Report”), comprise: a The consolidated and Company balance sheets as at 30 January 2016;


a The consolidated income statement and statement of comprehensive income for the year then ended;


a The consolidated statement of cash flows for the year then ended;


a The consolidated and Company statements of changes in equity for the year then ended; and


a The notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.


The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and IFRSs as adopted by the European Union and, as regards the company financial statements, as applied in accordance with the provisions of the Companies Act 2006.


Our audit approach


Overview Materiality:


Overall Partnership materiality: £15 million which represents 5% of Profit before Partnership Bonus, tax and exceptional item. Audit scope:


Of the Partnership’s 15 reporting units, we audited the financial information of 12 reporting units, which accounted for 97% (2015: 97%) of Profit before Partnership Bonus, tax and exceptional item.


These are our areas of focus: a Supplier income a Impairment of property, plant and equipment a Post-retirement benefit obligation a Capitalisation of intangible assets a Provisions a Depreciation


The scope of our audit and our areas of focus


We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) (“ISAs (UK & Ireland)”).


We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements. In particular, we looked at where the Directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud. Procedures designed to address these risks included testing of journal entries and post close adjustments and testing and evaluating management’s key accounting estimates for reasonableness and consistency.


The risks of material misstatement that had the greatest effect on our audit, including the allocation of our resources and effort, are identified as “areas of focus” in the table below. We have also set out how we tailored our audit to address these specific areas in order to provide an opinion on the financial statements as a whole, and any comments we make on the results of our procedures should be read in this context. This is not a complete list of all risks identified by our audit.


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