Investor Presentaiton
BOOHOO GROUP PLC
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BOOHOO
CONTINUED
ANNUAL REPORT AND ACCOUNTS 2021
/// FINANCIAL STATEMENTS
Key audit matter
Returns provision [Note 1 and Note 20]
The provision for sales returns is estimated based on recent historical
returns and management's best estimates and is allocated to the
period in which the revenue is recorded. Actual returns could differ
from these estimates.
The group's provisioning model takes into account current trends as
far as possible, product mix, seasonal change and other factors based
largely on historic events, with the output being the overall return rate
to be applied and resulting provision.
There is a risk that the returns provision is understated.
OTHER INFORMATION
The other information comprises the
information included in the annual report,
other than the financial statements and
our auditor's report thereon. The directors
are responsible for the other information
contained within the annual report. Our
opinion on the financial statements
group
does not cover the other information and
we do not express any form of assurance
conclusion thereon. Our responsibility is
to read the other information and, in doing
so, consider whether the other information.
is materially inconsistent with the financial
statements or our knowledge obtained in
the course of the audit or otherwise appears
to be materially misstated. If we identify
such material inconsistencies or apparent
material misstatements, we are required
to determine whether this gives rise to
a material misstatement in the financial
statements themselves. If, based on the
work we have performed, we conclude that
there is a material misstatement of this other
information, we are required to report that
fact.
We have nothing to report in this regard.
How the scope of our audit responded to the key audit matter
Our audit work in this area included the following:
.
Discussing with management the rationale and methodology used
in making such provision in order to gain an understanding of key
assumptions and inputs to the model;
Obtained the management's year end returns provision calculation
and performed the following:
- Agreeing underlying data used to the accounting records using the
IT team to reproduce the relevant reports;
―
Prior lookback review of utilisation of FY20 provision in
year
FY21; review
PY monthly returns as well as actual returns
average
in March 2020 to assess reasonableness of the provision;
- Post-year end returns review - look at actual returns in March 2021;
- Performing sensitivity analysis on the calculation;
- Assessing completeness of the provision;
- Testing accuracy of inputs to the management's model;
- Testing the mathematical accuracy of the model.
MATTERS ON WHICH WE ARE
REQUIRED TO REPORT BY
EXCEPTION
In the light of the knowledge and
understanding of the group and its
environment obtained in the course of
the audit, we have not identified material
misstatements in the directors' report.
We have nothing to report in respect of the
following matters in relation to which the
Companies (Jersey) Law 1991 requires us to
report to you if, in our opinion:
proper accounting records have not been
kept, or proper returns adequate for
our audit have not been received from
branches not visited by us; or
the financial statements are not in
agreement with the accounting records; or
we have not received all the information
and explanations we require for our audit.
RESPONSIBILITIES OF
DIRECTORS
As explained more fully in the statement
of directors' responsibilities, the directors
are responsible for the preparation of the
financial statements and for being satisfied
that they give a true and fair view, and
for such internal control as the directors
determine is necessary to enable the
preparation of financial statements that are
free from material misstatement, whether
due to fraud or error.
In preparing the group financial statements,
the directors are responsible for assessing the
group's ability to continue as a going concern,
disclosing, as applicable, matters related to
going concern and using the going concern
basis of accounting unless the directors either
intend to liquidate the group or to cease
operations, or have no realistic alternative but
to do so.
AUDITOR'S
RESPONSIBILITIES FOR THE
AUDIT OF THE FINANCIAL
STATEMENTS
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from material
misstatement, whether due to fraud or error,
and to issue an auditor's report that includes
our opinion. Reasonable assurance is a high
level of assurance but is not a guarantee
that an audit conducted in accordance with
ISAS (UK) will always detect a material
misstatement when it exists. Misstatements
can arise from fraud or error and are
considered material if, individually or in the
aggregate, they could reasonably be expected
to influence the economic decisions of
users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances
of non-compliance with laws and regulations.
We design procedures in line with our
responsibilities, outlined above, to detect
material misstatements in
of
respect
irregularities, including fraud. The extent
to which our procedures are capable of
detecting irregularities, including fraud is
detailed below:
We obtained an understanding of the
group and the sector in which it operates
to identify laws and regulations that could
reasonably be expected to have a direct
effect on the financial statements. We
obtained our understanding in this regard
through discussions with management and
the internal legal team. We also selected
a specific audit team based on experience
with auditing entities within this industry
facing similar audit and business risks.
We determined the principal laws and
regulations relevant to the, in this
group
regard to be those arising from:
- AIM Rules
_
UK employment law
- Local tax laws and regulations
.
We designed our audit procedures
to ensure the audit team considered
whether there were any indications of
non-compliance by the group with those
laws and regulations. These procedures
included, but were not limited to:
Making enquiries of management;
- A review of board minutes;
- A review of legal ledger accounts;
- A review of RNS announcements;
Discussions with internal legal
personnel, and liaising with external legal
consultants;
-
Review of internal and external reports
on key practices, including supply chain
and payroll reviews.
We also identified the risks of material
misstatement of the financial statements
due to fraud. Aside from the non-
rebuttable presumption of a risk of fraud
arising from management override of
controls, we did not identify any significant
fraud risks.
As in all of our audits, we addressed the
risk of fraud arising from management
override of controls by performing audit
procedures which included, but were not
limited to: the testing of journals, reviewing
accounting estimates for evidence of bias;
and evaluating the business rationale of any
significant transactions that are unusual or
outside the normal course of business.
Because of the inherent limitations of
an audit, there is a risk that we will not
detect all irregularities, including those
leading to a material misstatement in the
financial statements or non-compliance
with regulation. This risk increases the more
that compliance with a law or regulation is
removed from the events and transactions
reflected in the financial statements, as
we will be less likely to become aware of
instances of non-compliance. The risk is also
greater regarding irregularities occurring due
to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion,
omission or misrepresentation.
A further description of our responsibilities
for the audit of the financial statements
is located on the Financial Reporting
Council's website at: www.frc.org.uk/
auditorsresponsibilities. This description forms
of our auditor's report.
part
USE OF OUR REPORT
This report is made solely to the company's
members, as a body, in accordance with
Article 113A of the Companies (Jersey) Law
1991. Our audit work has been undertaken
so that we might state to the company's
members those matters we are required
to state to them in an auditor's report and
for no other purpose. To the fullest extent
permitted by law, we do not accept or assume
responsibility to anyone, other than the
company and the company's members as a
body, for our audit work, for this report, or for
the opinions we have formed.
Mark Ling (Engagement Partner)
For and on behalf of PKF Littlejohn LLP
Recognised Auditor
London, UK
15 Westferry Circus
Canary Wharf
London E14 4HD
4 May 2021
88
89View entire presentation