50 Audit Committee Report
Finsbury Food Group Annual Report and Accounts 2020
As Chairman of the Audit Committee I am pleased to outline below the responsibilities of the Committee and how the Committee has carried these out during the year.
Overview
The Committee met three times during the year. The external auditors attended all meetings at the invitation of the Committee Chairman. The Committee also met with the external auditors without the presence of Executive Directors or management.
Terms of Reference The principle duties carried out in the year were to:
Review and monitor the integrity of the Financial Statements, reviewing significant financial reporting issues and judgements which they contain, and recommend to the Board whether the Financial Statements give a fair, balanced and understandable view of the Group’s assets, liabilities and financial position.
Receive reports on and keep under review the effectiveness of the internal controls and risk management processes, carry out an annual assessment of these processes and approve statements to be included in the Annual Report concerning internal controls and risk management.
Oversee the Company’s relations with the external auditors and consider and make recommendations on the appointment, reappointment and removal of the external auditors.
Monitor and review the effectiveness of the internal audit programme in the context of the overall risk management system to ensure that the internal audit is operating efficiently and effectively within the organisation, review and assess the internal audit plan and reports, recommendations and management responses.
Financial Reporting
During the year, the Committee concluded that the Annual Report and Financial Statements, taken as whole, were fair, balanced and understandable and provided the information necessary for shareholders to assess the Group’s business model, strategy and performance. During the year, the Committee considered the following key matters of judgement:
• Revenue recognition policy; • Valuation of goodwill and intangible assets; • Impairment; • Pensions; and • Significant non-recurring items.
In terms of Going Concern the Committee considered the impact of Covid-19 on the budget for 2021/2 and a range of scenarios for both the budget and the business plan for 2023/24 including a reasonable worst-case scenario. It was concluded that the Going Concern basis is appropriate.
The Committee reviewed the full-year and half-year results announcements, Annual Report and Financial Statements and considered reports from the external auditors. The Committee also reviewed the Strategic Report and concluded that it presented a useful and fair, balanced and understandable review of the business.
External Audit
The Committee considered the effectiveness of the audit, which was the second audit undertaken by PwC. The audit process was more efficient than previous years due to the use of new communication systems and a common business system used for the full year throughout the major sites. The discussions relating to judgemental items were carried out in a timely manner and the audit challenges were rigorous and appropriate.
During the year, the fees paid to the auditors, PwC, were £183,000 (2019: £193,000 for audit services, and £20,000 (2019: £nil) for non-audit services. No services were provided pursuant to contingent fee arrangements.
The Committee reviewed and considered a number of factors to assess the auditors’ objectivity and independence, including their internal procedures, the degree and nature of challenges and scepticism shown by the partner. The Committee is satisfied with PwC’s independence, objectivity and expertise and believes the Group is subjected to a rigorous audit process. The Board will recommend their ongoing appointment at the AGM.
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