WindarPhotonics AnnualReport 2018 All - Flipbook - Page 40
INDEPENDENT AUDITOR´S REPORT
TO THE MEMBERS OF WINDAR PHOTONICS PLC
OUR APPLICATION OF
MATERIALITY
We apply the concept of materiality
both in planning and performing
our audit, and in evaluating the
effect of misstatements.
We consider materiality to be the
magnitude by which misstatements,
including omissions, could influence
the economic decisions of
reasonable users that are taken
on the basis of the financial
statements. Importantly,
misstatements below these levels
will not necessarily be evaluated
as immaterial as we also take into
account the nature of identified
misstatements, and the particular
circumstances of their occurrence,
when evaluating their effect on the
financial statements as a whole.
We determined materiality for
the group financial statements
as a whole to be €90,000 (2017:
€46,000) which represents 3.5%
of net assets (2017: 3.5%).
We have used net assets as the
benchmark as this is deemed of
most interest to the users of the
financial statements for a
start-up company. Performance
materiality was set at 75% of the
above materiality levels (2017:
75%). Performance materiality is
applied at the individual account
or balance level set at an amount
to reduce to an appropriately low
level the probability that the
aggregate of uncorrected and
undetected misstatements
exceeds materiality for the
financial statements as a whole.
Where financial information from
components was audited
separately, component materiality
was set at 90% of group materiality.
We agreed with the Audit
Committee that we would report
to the Committee all individual
audit differences identified during
the course of our audit in excess
of €3,600 (2017: €1,800). We also
agreed to report differences below
this threshold that, in our view,
warranted reporting on qualitative
grounds.
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We determined materiality for
the parent company financial
statements to be €81,000 (2017:
€34,500) which is based on 90%
of gross materiality as the entity
does not trade and acts as a
holding company.
AN OVERVIEW OF THE
SCOPE OF OUR AUDIT
The Group financial statements are
a consolidation of three companies
made up of the parent company
and two trading companies.
The principal trading company is
located in Denmark and the other
trading company is in Shanghai.
The head office and main accounting location is located in Denmark.
Our Group audit scope focused on
the group’s principal trading
company and based on our risk
assessment we determined this
company to be the only component
within the group which, in our view,
required an audit of their complete
financial information due to their
size. This audit was performed by
BDO Denmark. The other trading
company was subject to analytical
review and audit testing on
specific areas which were material
or related to significant risks.
This work was performed by BDO
LLP together with additional
procedures performed at Group
level in respect of the audit of the
parent company, the consolidation
and going concern. These reviews
gave us the evidence we needed
to form our opinion on the Group
financial statements as a whole.
Audits of the subsidiary companies
were performed at lower levels
of 90% of Group materiality and
determined by us to be appropriate
to the relative size of the company
concerned. As part of our audit
strategy detailed group audit
instructions were issued to the
component auditor and the Group
audit team reviewed the complete
audit file for the main trading
company. The Senior Statutory
Auditor visits Denmark on a
rotational basis and last visited in
2017.
Windar Photonics - Annual Report and Accounts 2018
continued
OTHER INFORMATION
The Directors are responsible for
the other information. The other
information comprises the
information included in the Report
of the Directors and Consolidated
Financial Statements, other than
the financial statements and our
auditor’s report thereon.
Our opinion on the financial
statements does not cover the
other information and, except to
the extent otherwise explicitly
stated in our report, we do not
express any form of assurance
conclusion thereon.
In connection with our audit of
the financial statements, our
responsibility is to read the other
information and, in doing so,
consider whether the other
information is materially
inconsistent with the financial
statements or our knowledge
obtained in the audit or otherwise
appears to be materially misstated.
If we identify such material
inconsistencies or apparent
material misstatements, we are
required to determine whether
there is a material misstatement
in the financial statements or a
material misstatement of the other
information. If, based on the work
we have performed, we conclude
that there is a material
misstatement of this other
information, we are required to
report that fact. We have nothing
to report in this regard.
OPINIONS ON OTHER
MATTERS PRESCRIBED BY
THE COMPANIES ACT 2006
In our opinion, based on the work
undertaken in the course of the
audit:
• the information given in the
strategic report and the Directors’
report for the financial year for
which the financial statements are
prepared is consistent with the
financial statements; and
• the strategic report and the
Directors’ report have been
prepared in accordance with
applicable legal requirements.