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Audit, Risk and Internal Control / Continued
Annual auditor assessment On an annual basis, the Committee assesses the qualifications, expertise and independence of the Group’s external auditor, as well as the effectiveness of the audit process. It does this through discussion and enquiry with senior management, review of a detailed assessment questionnaire and confirmation from the external auditor. The Committee also considers the external audit plan, setting out the auditor’s assessment of the key audit risk areas and reporting received from the external auditor in respect of both the half-year and year-end reports and accounts. As part of the review of auditor independence and effectiveness, KPMG Channel Islands Limited have confirmed that: / They have internal procedures in place to identify any aspects of non-audit work which could compromise their role as auditor and to ensure the objectivity of their work and audit report; / The total fees paid by the Group during the year do not represent a material part of their total fee income; and / They consider that they have maintained their independence throughout the year. In evaluating KPMG Channel Islands Limited, the Committee completed its assessment of the external auditor for the financial period under review. It has satisfied itself as to their qualifications and expertise and remains confident that their objectivity and independence are not in any way impaired by reason of any non-audit services which they provide to the Group. KPMG Channel Islands Limited have been auditor to the Group since the year ended 31 December 2009. They were reappointed as the Group’s auditor following a tender process in February 2020. The current audit engagement partner, Steve Stormonth, has completed two years as audit partner. The Committee recommends that KPMG Channel Islands Limited are recommended for reappointment at the next Annual General Meeting. Mark Batten Chair of the Audit and Risk Committee 22 May 2024
The Committee was satisfied that the 2024 Annual Report is fair, balanced and understandable and included the necessary information as set out here, and it has confirmed this to the Board. Risk Management Policy The Committee has considered and developed a comprehensive Risk Management Policy which has been adopted by the Group. The purpose of the Risk Management Policy is to strengthen the proper management of risks through proactive risk identification, measurement, management, mitigation and reporting in respect of all activities undertaken by the Group. The Risk Management Policy is intended to: / Ensure that major risks are reported to the Board for review; / Result in the management of those risks that may significantly affect the pursuit of the stated strategic goals and objectives; / Embed a culture of risk awareness and evaluation and identify risks at multiple levels within the Group; and / Meet legal and regulatory requirements. Internal control and internal audit The Board is responsible for the Company’s internal control system and for reviewing its effectiveness. It has therefore established a process designed to meet the particular needs of the Company in managing the risks to which it is exposed. As part of this process, a risk matrix has been prepared that identifies the Company’s key functions and the individual activities undertaken within those functions. From this, the Board has identified the Company’s principal risks and the controls employed to manage those risks. These are reviewed at each Audit and Risk Committee meeting. The Board monitors the performance of the Company against its strategy and receives regular reports from management covering all business activities.
The Committee has received and reviewed a copy of CBRE Limited’s Real Estate Accounting Services – Service Organisation Control Report as at 31 December 2023, prepared in accordance with International Standard on Assurance Engagements 3402, in respect of the suitability of the design and operating effectiveness of controls of the property management accounting services provided to Picton Property Income Limited. BDO provides internal audit and assurance services to the Group. The Committee agreed a programme of reviews for 2023/24, which covered asset management, lease management and property management. The Committee has considered the review reports and the recommendations arising, which had been discussed with management. The Committee also considered and agreed the review plan for 2024/25 which will cover capital expenditure, IT controls and a follow up on previous recommendations. Independence of auditor It is the policy of the Group that non- audit work will not be awarded to the external auditor if there is a risk their independence may be compromised. The Committee monitors the level of fees incurred for non-audit services to ensure that this is not material, and obtains confirmation, where appropriate, that separate personnel are involved in any non-audit services provided to the Group. The Committee must approve in advance all non-audit assignments to be carried out by the external auditor. The fees payable to the Group’s auditor and its member firms are as follows:
2024 £000 223
2023 £000 179
Audit fees
25
Interim review fees Non-audit fees
16
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248
195
Picton Property Income Limited / Annual Report 2024 106
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