Strategic Report
Corporate Governance
Financial Statements
Finsbury Food Group Annual Report and Accounts 2020 Independent Auditors’ Report to the Members of Finsbury Food Group Plc
57 Report on the Audit of the Financial Statements
Opinion In our opinion:
• Finsbury Food Group Plc’s Group Financial Statements and Company Financial Statements (the “Financial Statements”) give a true and fair view of the state of the Group’s and of the Company’s affairs as at 27 June 2020 and of the Group’s profit and cash flows for the 52 week period (the “period”) then ended;
• The Group Financial Statements have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union;
• The Company Financial Statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosure Framework”, and applicable law); and • The Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the Financial Statements, included within the Annual Report and Consolidated Financial Statements (the “Annual Report”), which comprise: the Consolidated Statement of Financial Position and Company Balance Sheet as at 27 June 2020; the Consolidated Statement of Comprehensive Income, the Consolidated Cash Flow Statement and the Consolidated and Company Statements of Changes in Equity for the 52 weeks ended 27 June 2020; and the notes to the Financial Statements, which include a description of the significant accounting policies.
Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the Financial Statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Our Audit Approach
Overview Materiality • Overall Group materiality: £1.5 million (2019: £1.6 million), based on 0.5% of total revenues. • Overall Company materiality: £1.5 million (2019: £1.2 million), based on 1% of total assets (restricted by Group materiality).
Audit Scope • We performed full-scope audit procedures in respect of the Group’s five largest manufacturing locations as well as Finsbury Food Group Plc. • Our audit procedures covered entities contributing 90% of the Group’s revenues for the 52 week period ended 27 June 2020.
Key Audit Matters • Goodwill impairment assessment (Group). • Recoverability of the Company investments in subsidiaries (Company). • Impact of the outbreak of Covid-19 on the Financial Statements (Group and Company).
The Scope of our Audit As part of designing our audit, we determined materiality and assessed 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.
Key Audit Matters Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the Financial Statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit.
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