Key Audit Matters How the matter was addressed in the audit Issued Capital (Refer to Note 14) The Group’s Issued Capital amounted to $76,449,775. During the reporting year, 148,029,883 ordinary shares were issued through placements, conversion of performance rights and for consideration for mineral interests or services, resulting in an increase in Issued Capital of $4,856,090 net of capital raising costs. Contributed Equity is a key audit matter due to: • the quantum of share capital issued during the year; and • the varied nature of the movements during the year. We have spent significant audit effort on ensuring the Issued Capital was appropriately accounted for and disclosed. Inter alia, our audit procedures included the following: i. Obtaining an understanding of the underlying transactions; ii. Verifying all issued capital movements to the relevant ASX announcements; iii. Vouching proceeds from capital raisings to bank statements and other relevant supporting documentation; iv. Verifying underlying capital raising costs and ensuring these costs were appropriately recorded; v. Ensuring consideration for acquisition of mineral interests or for services provided are measured in accordance with AASB 2 ShareBased Payments and agreed the related costs to relevant supporting documentation; and vi. Ensuring the requirements of the relevant accounting standards and disclosures achieve fair presentation and assessing the adequacy of the disclosures in the financial statements. Share based payments - Performance rights and share options (Refer to Notes 14 and 18 to the financial statements) During the year, the Company issued 2,000,000 performance options to employees and 24,887,368 share options to brokers and consultants. In addition the company has performance options granted in prior years, which are yet to vest. The Group valued the share options using the BlackScholes methodology and the performance rights based on the share price at grant date and estimated likelihood of performance conditions being achieved over the vesting period for each tranche of awards. The Group has performed calculations to record the related share-based payment expense of $665,209, of which $226,236 has been recognised in the profit or loss and $438,973, relating to broker and consultants’ options is recognised directly in equity as it related to capital raising activities. Share based payments are considered to be a key audit matter due to: - the value of the transactions; - the complexities involved in the recognition and measurement of these instruments under AASB 2 Share-based Payment; and - judgement involved in determining the inputs used in the valuations. Inter alia, our audit procedures included the following: i. Verifying the inputs and examining the assumptions used in the Group’s valuation of share options and performance rights, being the share price of the underlying equity, time to maturity (expected life), share price volatility and grant date; ii. Challenging management’s assumptions in relation to the likelihood of achieving the performance conditions; iii. Assessing the fair value of the calculation through re-performance using appropriate inputs; and iv. Assessing the accuracy of the share-based payments expense and the adequacy of disclosures made in the financial statements. 53 St George Mining Limited Annual Report 2024
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