Simavita Limited Annual Report 2020

Simavita Limited 54 Independent Auditor’s Report for the year ended June 30, 2020 57 These conditions, along with other matters detailed in Note 2(a), indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. Our audit approach An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates. Materiality Audit scope Key audit matters ● For the purpose of our audit we used overall Group materiality of $200,000, which represents approximately 5% of the Group’s loss before tax. ● We applied this threshold, together with qualitative considerations, to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial report as a whole. ● We chose Group loss before tax because, in our view, it is the benchmark against which the performance of the Group is most commonly measured. ● We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly acceptable loss related thresholds. ● Our audit focused on where the Group made subjective judgements; for example, significant accounting estimates involving assumptions and inherently uncertain future events. ● The Group is in the field of smart, wearable and disposable technologies for the healthcare market. The Group’s head office is located in Sydney and the Group operates in Australia, Europe and North America. ● The accounting processes are structured around a Group finance function located in Sydney. ● Amongst other relevant topics, we communicated the following key audit matters to the Audit and Risk Committee: − Accounting for Research and Development (R&D) tax incentive − Amendments and subsequent measurement of convertible notes − Material uncertainty related to going concern ● These are further described in the Key audit matters section of our report, except for the matter which is described in the material uncertainty related to going concern section.