JUST GROUP PLC Annual Report and Accounts 2020
98
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF JUST GROUP PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
EMPHASIS OF MATTER – CAPITAL In forming our opinion on the consolidated financial statements, which is not modified, we draw attention to note 35, which explains that the Group’s capital position can be adversely affected by a number of factors, in particular factors that erode the Group’s capital resources and / or which impact the quantum of risk to which the Group is exposed. Note 35 also explains that the Group is enhancing its investment strategy in part to respond to the Prudential Regulation Authority’s expectations of firms’ compliance with the Prudent Person Principle, that the Group continues to engage in discussions with the Prudential Regulation Authority (“PRA”) around a major model change application for Just Retirement Limited’s internal model and that uncertainty remains as to how the introduction of an Effective Value Test in stress will ultimately be implemented by the Group. Note 35 further explains that given that the Group continues to experience a high level of regulatory activity and intense regulatory supervision, there is also the risk of PRA intervention, not limited to the aforementioned matters, which could negatively impact on the Group’s capital position. OUR AUDIT APPROACH Context Following the recommendation of the Audit Committee, we were appointed by the members on 14 May 2020. In planning for our first year audit of Just Group plc, we met with the Audit Committee and members of management across the business to discuss and understand significant changes during the year, and to understand their perspectives on associated business risks. We used this insight, in addition to our assessment of the previous auditors’ approach, when forming our own views regarding the business, as part of developing our audit plan and when scoping and performing our audit procedures. Due to the COVID-19 pandemic, the audit for the year ended 31 December 2020 has been carried out remotely; we have utilised virtual technologies and collaborative workflow tools to obtain sufficient, appropriate audit evidence whilst working in this environment. The impact of COVID-19 has also been part of our risk assessment and incorporated into the “Key Audit Matters” included below, where relevant. Overview Audit scope • Our audit scope has been determined to provide coverage of all material financial statement line items. • Three reporting components were subject to full scope audits and we performed a limited scope audit covering specific financial statement line items for a further four components. Key audit matters • Valuation of insurance contract liabilities (Group) • Valuation of insurance contract liabilities – Annuitant mortality assumptions (Group) • Valuation of insurance contract liabilities – Credit default assumptions (Group) • Valuation of insurance contract liabilities – Expense assumptions (Group) • Valuation of investments classified as Level 3 under IFRS 13, including Lifetime Mortgages (Group) • Impact of uncertainties related to COVID-19 (Group and Company) • Recoverability of Company’s investment in subsidiaries (Company)
OPINION In our opinion, Just Group plc’s consolidated 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 31 December 2020 and of the Group’s profit and the Group’s and Company’s cash flows for the year then ended; • have been properly prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006; and • 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 Accounts (the “Annual Report”), which comprise: • the Consolidated statement of financial position and Statement of financial position of the Company as at 31 December 2020; • the Consolidated statement of comprehensive income for the year then ended; • the Consolidated statement of changes in equity and the Statement of changes in equity of the Company for the year then ended; • the Consolidated statement of cash flows and the Statement of cash flows of the Company for the year then ended; and • the notes to the financial statements, which include a description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit Committee.
SEPARATE OPINION IN RELATION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ADOPTED PURSUANT TO REGULATION (EC) NO 1606/2002 AS IT APPLIES IN THE EUROPEAN UNION As explained in note 1 to the consolidated financial statements, the Group, in addition to applying international accounting standards in conformity with the requirements of the Companies Act 2006, has also applied international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. In our opinion, the consolidated financial statements have been properly prepared in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. 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 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 public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group. Other than those disclosed in note 5 to the financial statements, we have provided no non-audit services to the Group in the period under audit. for our opinion. Independence
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