88 2022 ANNUAL REPORT Property, plant and equipment ($303.4m) and mine properties ($131.4m) Refer to Notes 10 and 11 to the Financial Report The key audit matter How the matter was addressed in our audit Existence, accuracy and valuation of expenditure capitalised as an asset as part of the Group’s mining operations was considered to be a key audit matter. Additions to Property, Plant and Equipment ($198.5 million) and Mine Development ($82.7 million) primarily related to construction of the King of the Hills (KOTH) project. Of the additions to Property, Plant and Equipment $99.5 million relates to right of use assets, which is largely leases embedded in supply contracts relating to the establishment of the KOTH mining operations. Property, Plant and Equipment and Mine Development represents 75% of total assets of the Group. The Group used judgement in the identification and allocation of cost between operating and capital expenditure. The risks we focused on include: • the existence of expenditure capitalised; • the methodology used to allocate costs between operating expenditure (including inventory stockpiles), capital expenditure and exploration & evaluation assets; • the relative magnitude of lease liabilities right-of-use assets added during the year pursuant to AASB 16 “Leases”. A focus for us was the completeness of leases to be recognised and the accuracy of multiple inputs which may drive different accounting outcomes, including key terms of the lease agreements, such as commencement dates, fixed and variable payments, renewal and termination options; and • the assessment of the existence of impairment or reversal indicators of the nonfinancial assets contained within Group’s CGUs. Our procedures included: • Test of controls and inputs relating to the authorisation and accuracy of the recording, classification and payment of expenditure; • Assessment of the allocation of costs between operating expenditure (including inventory stockpiles), capital expenditure and exploration & evaluation assets by inspecting documentation on a sample basis and assessing the nature of the underlying activity; • Selecting a sample of supplier and contractor invoices raised during the year. We checked the timing and nature of recorded expenditure against the details of the service description on the invoice or contract; • We compared the key inputs adopted by the Group in its AASB 16 lease calculations against underlying source documents including signed agreements and lessor’s invoices; • We assessed the completeness of leases recognition by understanding the Group’s process to identify leases within contracts, and by inspecting a sample of non-lease agreements for the existence of potential embedded leases; and • Challenging the Group’s assertion as to the presence of no impairment or reversal indicators. This included assessing the composition of the KOTH mining hub CGU. Independent AUDITOR’S REPORT (cont.)
RkJQdWJsaXNoZXIy MjE2NDg3