25 Finsbury Food Group Annual Report & Accounts 2017

Audit Committee Report

Role and Responsibilities of the Audit Committee The principal responsibilities of the Committee are to:

• Review and monitor the integrity of the Financial Statements of the Group and assist the Board in fulfilling its responsibilities relating to external financial reporting and similar announcements.

• Review significant issues and the judgements of management and the methodology and assumptions used in relation to the Financial Statements. • Review and monitor the Group’s financial control systems and risk management procedures. • Recommend the appointment and/or reappointment of the external auditor and approve their terms of engagement. • Review and monitor the independence of the external auditor and the effectiveness of the audit process. • Implement and review policy on external auditor non-audit services. • Review and monitor the Group’s compliance with all regulatory legislation and current practice. • Report to the Board on how it has discharged its responsibilities.

The full terms of reference, which can be found on the Company’s website at, are reviewed periodically by the Board.

Membership The Committee is chaired by me, and, the other member is Zoe Morgan, a Non-Executive Director.

The Audit Committee met three times during the year. The Finance Director is invited to attend Committee meetings together with other senior members of the finance team including those members of staff that conduct internal audits. The external auditor attends those meetings involving the Financial Statements, the annual audit and other significant matters. Time is set aside during at least one meeting each year for the Committee to hold discussions in private with the external auditor in the absence of management and Executive Directors.

External Auditor

The Committee carried out an assessment of the effectiveness of the external audit process which focused on criteria that the Committee considered to be important factors in an effective audit process. These factors included the quality of audit staff, the planning and execution of the audit and the role of management in the audit process. Following this assessment, the Committee concluded that the external audit process remained effective and that it provides an appropriate independent challenge.

The engagement of the auditor to carry out non-audit services is approved in advance by me or, in the case of a significant instruction, by the Committee. This enables the Committee to satisfy itself of the auditor’s independence and objectivity.

Internal Controls and Risk Management

The Committee is responsible for reviewing the effectiveness of the Group’s system of internal controls. The system of internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.

Group management prepare an Annual Report for the Committee’s consideration that identifies the risks and uncertainties to which the Group is exposed, the procedures in place to mitigate those risks and uncertainties and the potential impact on the Group. The Committee reviews this Report and any concerns that it has over the adequacy of the controls in place, or the level of risk accepted by the Group, are reported to the Board. The principal risks and uncertainties to which the Group is exposed are considered by the Board and are set out in the Strategic Report on pages 14 to 15. Following this review, the Committee, is satisfied that the Group has in place effective internal control systems and risk management. The Committee continues to keep under review the need for a separate dedicated internal audit function in the Group. The Committee remains satisfied that the Group’s system of internal control is appropriate for a Group of the size and nature of the Company and the Committee’s current view is that a separate formal independent internal audit function is not required at this time. The Committee will monitor the situation closely as the Group continues to expand.

A programme of rolling internal control and risk reviews is monitored by the Committee which considers reports on these reviews at each meeting and monitors any follow up action that is required.

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