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Investor Presentaiton

ANNUAL REPORT 2018-2019 Key audit matters 1. Audit of the opening balances The financial statements of the Company for the financial year ended on 30 June 2019 was the first one being subject to our audit. In accordance with International Standards Auditing 510 Initial Engagements Opening Balances, the first-year audit of financial statements requires performing of a few additional audit procedures that are limited in the case of the audit performed for a consecutive year. The purpose of these additional audit procedures is to collect sufficient and relevant audit evidence about whether: - opening balances contain misstatements that materially affect the financial statements for the current period; and accounting policy applied to the opening balances was used continuously in the preparation of financial statements for the current period, or whether the changes made were correctly accounted for and properly presented in accordance with IFRSS. Accordingly, this issue was identified as key audit matter for the audit of the financial statements of the Company. How the matters were addressed in our audit Our procedures, in relation to the key audit matter described, included, among others: the opening meeting with key personnel responsible for financial reporting of the Company as well as meetings with members of the audit team, including specialists planned to be involved in the audit procedures; understood the Company's operations, its business environment and key risk areas related to its operations; understood the Company's internal control environment, including also tests of identified controls; understood the Company's IT environment; understood the accounting policy of the Company and assessing the continuity of its application; understood key areas of estimation and professional judgement of the Company's management; communicated with the previous auditor; discussed of key audit issues and a performed a review of audit documentation from the previous reporting period; assessed the audit issues from the previous reporting period and their impact on the financial statements for the current financial year; and independently carried out select audit procedures in relation to opening balances. Our audit strategy has been discussed with the Board of Directors, Audit Committee to the Board of Directors, and Management of the Company to know their expectations including a discussion on reporting and auditing issues. 2. Revenue recognition from sale of electricity - see note # 20 to the financial statements Revenue recognition is a key area of judgement, particularly Our audit procedures included: in relation to: energy revenue is made to the Company based on the survey of the meter reading. The customer (or government authority in this context) would verify the electrical energy output through physical inspection of meter and/ or review of relevant reports generated from the meter. Upon agreement by both parties, the electrical energy delivered for the month is evidenced by the approvals of the professional engineers representing the Company and the customer. The meter is calibrated and certified by independent professional engineers on a regular basis; capacity or rental payments are recognized according to the terms set out in the Power Purchase Agreement (PPA); identifying conflicting issues relating to billing and assessing whether there is little prospect cash will be received for revenue that has been billed; and - assessing the recoverability of trade debtors as a proportion of customers do not or are unable to pay their bills. ANNUAL REPORT 2018-2019 assessed whether revenue recognition policies are applied through comparison with relevant accounting standards and industry practice, including the policy of not recognizing revenue where it is not probable that cash will be received; tested the Company's controls over revenue recognition, including reconciliations between sales and cash receipts systems and the general ledger; assessed the calculations of capacity or rental revenue, fuel revenue and variable & operation maintenance revenue by ensuring that inputs used to the calculation have been derived properly; assessed the Company's disclosures of its revenue recognition policy; and discussed with the management the treatment for revenue policy of the Company. 3. Accuracy and completeness of disclosure of related party transactions - see note # 33 to the financial statements We identified the accuracy and completeness of disclosure Our procedures in relation to the accuracy and of related party transactions as set out in respective notes to the financial statements as a key audit matter due to the high volume of business transactions with related parties during the year ended 30 June 2019. completeness of disclosure of related parties' transactions included: obtained an understanding of the Company's policies and procedures in respect of the capturing of related party transactions and how management ensures all transactions and balances with related parties have been accurately disclosed in the financial statements; agreed the amounts disclosed to underlying documentation and relevant reviewing agreements, on a sample basis, as part of our evaluation of the disclosure; and evaluated the disclosures through review of statutory information, books and records and other documents obtained during the course of our audit. 94 95
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