134 | Just Group PLC | Annual Report and Accounts 2024
INDEPENDENT AUDITORS’ REPORT continued to the members of Just Group plc
Key audit matter
How our audit addressed the key audit matter
Valuation of the Company’s investments in Group undertakings (Company) Refer to Company accounting policy 1.4 Investments in Group undertakings and note 2 to the Company’s financial statements – Investments in Group undertakings. In the Company’s statement of financial position, investments in subsidiaries are reported at cost less impairment. The investments in subsidiaries are the largest assets on the Company’s statement of financial position. There is a risk that the carrying value of the investments in subsidiaries exceeds the recoverable amount and therefore an impairment loss should be recognised.
In respect of the carrying value of investments in Group undertakings we have: • Obtained management’s assessment of impairment indicators in investments in Group undertakings and tested relevant key inputs; • Evaluated whether there is an impact on the carrying value of the investment based on our understanding of the business and accounting treatment; and • Tested the disclosures made by management in the financial statements. Based on the work performed and the evidence obtained, we consider the carrying amount of the Company’s investments in Group undertakings to be appropriate.
How we tailored the audit scope We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry in which they operate. Decisions regarding scoping require a significant degree of professional judgement based on quantitative and qualitative considerations, including the size and nature of business activities in each operating entity. The Group is predominantly based in the United Kingdom and writes business across four main product lines, being Defined Benefit De-risking Solutions, Guaranteed Income for Life Solutions, Lifetime Mortgages and Care Plans. The Group consists of the parent Company, Just Group plc, and a number of subsidiary companies, of which the most significant are Just Retirement Limited and Partnership Life Assurance Company Limited, which conduct substantially all the insurance business on behalf of the Group. We have determined three components which were subject to full scope audits, Just Group plc, Just Retirement Limited and Partnership Life Assurance Company Limited. In addition, we performed a limited scope audit covering specific financial statement line items for a further five components. For the residual components, we performed analysis at an aggregated Group level to re-examine our assessment that there were no significant risks of material misstatements. Our scoping resulted in 94% coverage of consolidated total assets, 96% coverage of consolidated total liabilities and 95% coverage of consolidated profit before tax. The impact of climate risk on our audit As part of our audit we made enquiries of management to understand the governance and process adopted to assess the extent of the potential impact of climate risk on the Group’s financial statements and support the disclosures made within the Annual Report. In addition to enquiries with management, we also read the Group’s climate risk assessment documentation, reviewed board minutes and considered disclosures in the Annual Report in relation to climate change (including the Task Force on Climate-related Financial Disclosures (“TCFD”)) in order to assess the completeness of management’s climate risk assessment. Management has made commitments to aim for the operations of the Group to be carbon net zero by 2025 and for emissions from the investment portfolio, properties on which lifetime mortgages are secured and supply chain to be net zero by 2050, with a 50% reduction in emissions from the portfolio by 2030. The key areas of the financial statements where management evaluated that climate risk has a potential impact are Lifetime Mortgage and investment portfolios, where the value of investments may be affected over time based on market expectations. We have assessed the risks of material misstatement to the Annual Report as a result of climate change and concluded that for the year ended 31 December 2024, the main audit risks are related to disclosures included within the ‘Sustainability TCFD’ sections. We also considered the consistency of the disclosures in relation to climate change (including the disclosures in the Task Force on Climate- related Financial Disclosures section) within the Annual Report with the financial statements and our knowledge obtained from our audit. Our procedures did not identify any material impact in the context of our audit of the financial statements as a whole, or our key audit matters for the year ended 31 December 2024.
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