89 2022 ANNUAL REPORT Going concern basis of accounting Refer to Note 2.2 to the Financial Report The key audit matter How the matter was addressed in our audit The Group’s use of the going concern basis of accounting is a key audit matter due to the level of judgement required by us in evaluating the Group’s assessment of going concern. These are outlined in Note 2.2. The Directors have determined that the use of the going concern basis of accounting is appropriate in preparing the financial report. Their assessment of going concern was based on cash flow projections. The preparation of these projections incorporated a number of assumptions and significant judgements. We critically assessed the judgements focusing on the following: • the Group’s significant cash inflow assumptions particularly forecast production volumes, impact of future commodity prices and foreign exchange rates to cash inflows projected; • the Group’s planned levels of operational and capital expenditures, and the ability of the Group to manage cash outflows within available funding; • the Group’s ability to meet financing commitments and covenants. This included nature of planned activities to achieve this and status/progress of those plans; and • the Group’s ability to source suitable funding solutions. In assessing this key audit matter, we involved senior audit team members who understand the Group’s business, industry and the economic environment it operates in. Our procedures included: • We analysed the cash flow projections by: • Evaluating the underlying data used to generate the projections. We specifically looked for consistency of information used with the Group’s intentions, as outlined in Directors minutes and the KOTH feasibility study; • Analysing the impact of reasonably possible changes in projected cash flows and their timing, to the projected periodic cash positions. Assessing the resultant impact to the ability of the Group to pay debts as and when they fall due and continue as a going concern including ability to meet financing commitments and covenants. The specific areas we focused on was gold production sensitivities given the ramp up of production at KOTH; • Assessing the Group’s significant cash inflow assumptions and judgements for feasibility and timing. We used our knowledge of the client, its industry, published views of market trends and conditions to assess the level of associated uncertainty; and • Assessing the planned levels of operating and capital expenditures for consistency of relationships and trends to the Group’s actual results, results since year end, and our understanding of the busines and industry including KOTH’s feasibility study. • We read correspondence to assess the timing and magnitude of suitable funding options. • We evaluated the Group’s going concern disclosures in the financial report by comparing them to our understanding of the matter, the events or conditions incorporated into the cash flow projection assessment, the Group’s funding plans or conditions and accounting standard requirements. Independent AUDITOR’S REPORT (cont.)
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