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.
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