3 Key Audit Matter How our audit addressed the Key Audit Matter Loan refinancing (Group) We obtained the loan agreements and supporting evidence for the Refer to Note 18. transaction costs capitalised. The Group arranged a secured Term Loan B of €375 million In relation to accuracy, we verified the accounting for the loan and (equivalent to £319.8 million) and a Revolving Credit Facility also the related transaction costs and whether the treatment applied of £100.0 million (which remained fully undrawn in 2021) and by management is in line with requirements of IFRS 9. We also prepaid its existing facilities including interest and break verified that the costs capitalised were in the nature of transaction costs which amounted to £109.3 million. Transaction costs of costs as per IFRS 9. £8.4 million were capitalised in accordance with IFRS 9. We also verified the interest cost for the period in line with the Accounting for financial liabilities can be technically complex terms of the agreement and checked that the transaction costs and increases the risk of error. We considered there to be a are appropriately amortised. We checked the disclosures made in risk of material misstatement in relation to the accuracy and the financial statements in relation to the drawdowns, repayments presentation and disclosure of the loan. and transaction costs and noted that these are consistent with our testing. Direct confirmation was obtained from Credit Suisse with respect to the term loan of €375.0 million and it was also confirmed that the Revolving Credit Facility was fully undrawn as at year end. Existence of bank and cash (Group) We obtained management’s schedule of bank accounts prepared Refer to Note 17. for the audit and compared this against known bank accounts from previous years and due diligence reports for completeness. We then The Group has grown considerably from acquisition and sought to confirm existence through confirmations, and where now stands at 126 legal entities with circa 400 separate confirmations were not received, through alternative procedures. bank accounts. Our component teams and the Group audit team received bank The Group does not have a Group treasury function. confirmations covering £298.3 million of the total cash balance Bank account controls for most acquisitions and new which also tie to bank reconciliations and the general ledger. entities remain decentralised with local management where For the remaining unconfirmed cash balances of £0.8 million a complete list of authorised bank signatories has not relating to six accounts, we performed alternative procedures such been maintained. as logging in to online banking portals to view year end balances Given the volume of bank accounts and lack of integration with management, obtaining year-end bank statements from into a Group treasury function, we identified a risk that bank management, and agreeing accounts back to due diligence reports account ownership and control may not have been transferred and PPA documents to verify ownership/transfer of control. As part 4 of our completeness checks, where there was a bank account in to S at acquisition or remain within the Group. the prior year, we checked that it was included in the current year balance or obtained evidence that the account had been closed during the year. From our procedures performed, we did not identify any material misstatements in the bank and cash balances. Carrying value of Investments (Company) In respect of investments in subsidiaries in the Company, we At 31 December 2021, the Company holds investments in undertook the following to test management’s assessment for subsidiaries amounting to £905 million (2020: £752 million). indicators of impairment: Investments in subsidiaries are accounted for at historical • verified the mathematical accuracy of management’s cost less accumulated impairment. assessment and that the net assets of the subsidiaries being Judgment is required to assess if impairment triggers assessed agreed to the respective subsidiary balance sheets at exist and where triggers are identified, if the carrying value 31 December 2021; and is supported by the recoverable amount. In assessing • independently performed an assessment of other internal and impairment triggers, management considers if the underlying external impairment triggers, including considering the market net assets of the investment support the carrying amount and capitalisation of the Group with reference to the carrying value of whether other facts and circumstances would be indicative of the investments in subsidiaries in the Company to identify other a trigger. possible impairment indicators. Based on management’s assessment, no impairment triggers As a result of our work, we are satisfied that management’s in respect of the carrying value of investments in subsidiaries impairment assessment is appropriate and that there are no were identified at the balance sheet date. indicators of impairment in respect of the carrying value of the Company’s investments in subsidiaries as at 31 December 2021. Refer to Note 1 of the Company’s financial statements. 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