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Policy for the Provision of Non-Audit Services by the Auditor

Approved: 24 August 2021

Approval

  • All non-audit services must be approved by the Audit Committee following a proper assessment of the threats to independence and the safeguards applied in accordance with the Ethical Standard.

Limits

  • Non-audit service fees are capped at 70% of the average of the audit fees for the preceding three-year period.

Permitted non-audit / additional Services

The external auditor shall not provide any services other than those set out below, to Headlam Group Plc, or any member of the Headlam Group in accordance with the Ethical Standard:

Services required by law or regulation and exempt from the non-audit services cap

  • Reporting required by a competent authority or regulator under law or regulation for example;
    • Reporting to a regulator on client assets;
    • in relation to entities regulated under the Financial Services and Markets Act 2000 (FSMA), reports under s166 and s340 of FSMA;
    • Reporting to a regulator on regulatory financial statements;
    • Reporting on a Solvency and Financial Condition Report under Solvency II.
  • In the case of a controlled undertaking incorporated and based in a third country, reporting required by law or regulation in that jurisdiction where the auditor is permitted to undertake that engagement;
  • Reporting on internal financial controls when required by law or regulation;
  • Reporting on the iXBRL tagging of financial statements in accordance with the European Single Electronic Format for annual financial reports;
  • Reports, required by or supplied to competent authorities / regulators supervising the audited entity, where the authority / regulator has either specified the auditor to provide the service or identified to the entity that the auditor would be an appropriate choice for service provider;
  • Services which support the entity in fulfilling an obligation required by UK law or regulation, including listing requirements where: the provision of such services is time critical; the subject matter of the engagement is price sensitive; and it is probable that an objective, reasonable and informed third party would conclude that the understanding of the entity obtained by the auditor for the audit of the financial statements is relevant to the service, and where the nature of the service would not compromise independence;

Services subject to the non-audit services cap

  • Reviews of interim financial information; and providing verification of interim profits not otherwise required by law or regulation;
  • Where not otherwise required by law or regulation, non-audit and additional services, as defined in this Ethical Standard provided as auditor of the entity, or as reporting accountant, in relation to information of the audited entity for which it is probable that an objective, reasonable and informed third party would conclude that the understanding of the entity obtained by the auditor is relevant to the service, and where the nature of the service would not compromise independence;
  • Extended audit or assurance work that is authorised by those charged with governance performed on financial or performance information and/or financial or operational controls, in an entity relevant to an engagement or a third-party service provider, where this work is closely linked with the audit work;
  • Additional assurance work or agreed upon procedures, authorised by those charged with governance performed on material included within or referenced from the annual report of an entity relevant to an engagement;
  • Reporting on government grants;
  • Reporting on covenant or loan agreements, which require independent verification, and other reporting to third parties with whom the entity relevant to an engagement has a business relationship in accordance with Appendix C of this Ethical Standard;
  • Services which have been the subject of an application to the Competent Authority in accordance with Regulation 79 of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (SI 2019/177);
  • Generic subscriptions providing factual updates of changes to applicable law, regulation