S S TR – the review of the Annual Report and Accounts by the Audit and Financial Reporting Council (FRC) TR A Risk Committee placing reliance on the experience of the In July 2023, the Company received a letter from the FRC requesting A TE Committee members; additional information and explanations on two principal areas of TE G G I I C – reports prepared by senior management regarding critical disclosure in the Company’s 2022 Annual Report and Accounts. The C R R accounting judgements, estimates and key financial areas; and FRC requested information on how the claims filed against the E E P – discussions with, and reports prepared by, the External Auditor. Company by Nebula Project AG were reflected in the accounts, and as P O O R a result of the Company’s response, this query was closed. The FRC R T T The Committee received confirmation from management that the also asked for further information on how the Company satisfied the assurance framework had been adhered to for the preparation of the requirements of IAS 36 in determining that the Parent Company G 2023 Annual Report and Accounts. The Committee provided a carrying value of the investment was not impaired at 31 December G O recommendation to the Board that the fair, balanced and 2022. A full review of the disclosures within the Parent Company O VE understandable statement could be given on behalf of the Directors. accounts and discussion with the Company’s External Auditor and VE R R NAN The Board’s confirmation is set out on page 129. review by the Committee, concluded there were three adjustments NAN required to the Parent Company financial statements for the year C C E ended 31 December 2022: E Significant matters for the year ended 31 December 2023 and how the Committee addressed these matters (i) Impairment of the Parent Company investment in subsidiaries F F I (ii) Reversal of the Expected Credit Loss provision made against the I NAN intercompany receivable balance between the Company and NAN Impairment of finite life intangible assets C The Committee considered the Group’s process in determining Aston Martin Lagonda Limited; and C IAL whether any asset, covered within the scope of IAS 36 Impairment IAL (iii) Reclassification of the intercompany receivable from current to S of Assets, requires impairment. The Committee considered whether non-current. S T there were any indicators of impairment of assets with a finite life T A A T and concluded that the assumptions made, conclusions reached and T E Each of these adjustments relate to technical accounting matters with E M disclosures given were appropriate. M E no impact on the Group’s results or Group financial statements. The E N N T prior year restatement can be found on page 158. The FRC confirmed T S S Recognition and measurement of deferred tax assets its agreement to this restatement and the matter has now been closed. The Group has considered the forecasts presented by management F that indicated the capability of the Group to generate future taxable F U The Company acknowledges that the FRC’s review of its Annual U R profits to recover the deferred tax asset of £156.3m. The Committee R T Report 2022 provided no assurance that the Annual Report is correct T H concluded that the recognition of the deferred tax asset and the H E in all material respects and that the FRC’s role is not to verify E R disclosures given were appropriate. R INF information provided but to consider compliance with reporting INF requirements. The FRC accepts no liability for reliance on its letters by OR Going concern and viability statement reporting the Group or any third party, including but not limited to investors and OR M The Committee discussed the Group’s considerations in assessing shareholders. M A the appropriateness of adopting the going concern basis of A T T I I ON accounting and considered the financial statement disclosures ON in respect of adopting the going concern basis in preparing the In February 2024, the FRC’s Audit Quality Review Team (AQRT) completed a review of EY’s audit of the Company’s financial statements financial information. The Committee concluded that adopting the going concern basis and the disclosures given were appropriate. for the period ended 31 December 2022. The Committee considered the final inspection report findings, noted the area of good practice The Committee discussed the key assumptions used in evaluating and discussed the results with the lead audit partner including the the long-term viability of the Group, the time period for the Viability actions the audit team have taken in conducting the 2023 audit. The Statement and the stress and reverse stress testing used as a basis Committee noted the overall assessment by the AQRT, as part of for conducting the overall assessment. The Committee concluded that the assumptions made and the wording included in the viability its assessment of the quality and effectiveness of the external audit. statement were appropriate. Committee’s oversight of external audit The Committee oversees the work undertaken by EY. EY was Other matters appointed as External Auditor with effect from 24 April 2019, following At the November 2023 and February 2024 meetings, the Committee an audit tender process. Shareholders approved EY’s re-appointment also considered management’s papers on the following subjects and at the Company’s Annual General Meeting on 17 May 2023. The concluded that the assumptions made and the approaches adopted Committee’s responsibilities include making a recommendation on were appropriate: the appointment, re-appointment and removal and remuneration of – the Group’s revenue recognition policies; – accounting for defined benefit pension obligations; the External Auditor. The Committee assesses the qualifications, – recognition and measurement of the Group’s warranty provision; expertise, resources and independence of the External Auditor and – recognition and measurement of adjusting items; the effectiveness of the audit process. The Committee Chair also has – accounting for the placing and debt repurchase; regular contact with the external audit partner outside of Committee – accounting for the exercise of the AMR GP warrants; and meetings without the presence of management. During the period the – accounting for the Lucid transaction Committee approved the External Audit plan, the proposed audit fee and terms of engagement of EY for FY 2023. It has reviewed the audit ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2023 101