Investor Presentaiton
Armour Energy and controlled entities
Financial report continued
Independent auditor's report
IBDO
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IBDO
INDEPENDENT AUDITOR'S REPORT
To the members of Armour Energy Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Armour Energy Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2020, the
consolidated statement of profit and loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors'
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
a) Giving a true and fair view of the Group's financial position as at 30 June 2020 and of its financial
performance for the year ended on that date; and
b) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor's Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor's report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 4 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group's
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Carrying value of oil and gas assets
Key audit matter
Refer to Note 18 in the financial report.
The Group has significant oil and gas assets
following the restart and commissioning of
the Kincora Gas Plant in Surat Basin,
Queensland.
Due to the quantum of this asset and the
subjectivity involved in assessing the asset
for impairment, we have determined this
is a key audit matter.
How the matter was addressed in our audit
Our procedures, amongst others, included:
•
.
•
Evaluating management's assessment if any
impairment indicators in accordance with AASB 136
Impairment of Assets have been identified across the
Group's oil and gas projects.
Comparing oil and gas price assumptions against
third-party forecasts, peer information and relevant
market data to determine whether the Group's
forecasts were within the range.
Reviewing contracts and agreements with the
Group's external customers to understand the
existing level of contracted oil and gas sales.
Reviewing the Group's reserve estimation against
reports provided by external experts and assessing
their scope of work and findings.
Performing sensitivity analysis on key assumptions
used by the Group to assess the impact on
forecasted cash flows.
Selecting a sample of capitalised expenditure
additions and agreeing to supporting documentation,
as well as ensuring they qualify for recognition as
assets under AASB 116 Property, Plant and
Equipment.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a
UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme
approved under Professional Standards Legislation.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a
UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme
approved under Professional Standards Legislation.
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