As a part of credit analysis, you want to evaluate the financial statement of Volt Power Group Limited for 2017, AusGroup Limited for 2018 and BHP Limited for the year 2019. Before starting financial statement analysis, you need to go through the audit report of the companies. Based on your own analysis of the auditors report, what is the audit opinion and is it worthwhile to evaluate financial statements of the above companies? Justify your opinion. [Checkthe annual reports].

Volt Power Group

AusGroup

BHP

Transcribed image text: To the members of Volt Power Group Limited Report on the Audit of the Financial Report Qualified opinion We have audited the financial report of Volt Power Group Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31 December 2017, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors' declaration. In our opinion, except for the effects of the matter described in the Basis for qualified opinion section of our report, the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: (i) Giving a true and fair view of the Group's financial position as at 31 December 2017 and of its financial performance for the year ended on that date; and (ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for qualified opinion Comparatives Attention is drawn to the comparative figures in the consolidated statement of financial position at 31 December 2016. As stated in note 2(b) of the financial report, on the 18th October 2016, the Company (Enerji Limited) was placed into Administration (subject to a Deed of Company Arrangement) and the duties and responsibilities of the Directors were suspended from the date the Company entered into Administration. For the period in which the Company was in Administration the Directors did not have oversight or control over the Group's financial reporting systems, including but not limited to) being able to obtain access to complete accounting records. As a result, we did not have access to the complete books and financial records of the Group, and this caused us to disclaim our audit opinion on the financial report for the year ended 31 December 2016. Our opinion on the current year's financial report is also modified because of the possible effect of this matter on the comparability of the current period's figures and the corresponding figures. Current year 31 December 2017 Attention is also drawn to the gain on effectuation of the Deed of Company Arrangement of $3,551,951 recognised in the consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2017. As a result of the matters outlined in the comparatives paragraph above, we have not been able to obtain sufficient appropriate audit evidence to satisfy ourselves as to the completeness of this amount. Our audit opinion has been modified accordingly. We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the Financial Report section of our report. Independent Auditor's Report to the Members of AusGroup Limited For the financial year ended 30 June 2018 Report on the audit of the financial statements Disclaimer of opinion We were engaged to audit the financial statements of AusGroup Limited (the Company) and its subsidiaries (the Group), which comprise the consolidated balance sheet of the Group and the balance sheet of the Company as at 30 June 2018, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group for the year then ended, and notes to the financial statements, including a summary of significant accounting policies as set out on pages 38 to 102. We do not express an opinion on the accompanying financial statements of the Group. Because of the significance of the matters described in the 'Basis for disclaimer of opinion' section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements. Basis for disclaimer of opinion (a) The Group's non-current assets at 30 June 2018 include property, plant and equipment of AU$45.2 million (2017: AU$43.4 million) and intangible asset of AU$32.1 million (2017: AU$31.7 million) attributable to the Port and Marine cash-generating unit ("CGU"). As disclosed in note 24 to the financial statements, the Company has estimated the recoverable amount of the Port and Marine CGU based on a fair value less cost of disposal method. We were unable to obtain sufficient appropriate audit evidence regarding the key assumptions applied to arrive at the recoverable amount of the Port and Marine CGU. Consequently, we were unable to determine whether any adjustments were necessary in respect of the accompanying consolidated balance sheet of the Group as at 30 June 2018, and the consolidated statement of comprehensive income and consolidated statement of changes in equity for the year ended 30 June 2018. (b) Arising from above, we were also unable to determine whether any adjustment to the carrying amount of the investments in subsidiaries shown in the Company's balance sheet was necessary. Of the Company's non-current assets of AU$140.4 million as at 30 June 2018 (2017: AU$178.0 million), AU$30.9 million (2017: AU$29.1 million) relates to investments in subsidiaries and AU$50.9 million (2017: AU$52.6 million) pertains to receivables owing from subsidiaries which comprise the Group's Port and Marine CGU. We considered the impact of the above items to be material and pervasive to the overall financial statements of the Group. The financial statements for the year ended 30 June 2017 also included a disclaimer of opinion, with the same basis as described above for the year ended 30 June 2018, which is in relation to the recoverable amount of the Port and Marine CGU. We also draw attention to Notes 2(a) and 17 of the financial statements which disclose conditions that indicate the existence of material uncertainties surrounding the continuing use of the going concern assumption in the preparation of the financial statements. These material uncertainties relate to (i) the extension of maturity date of the Multi Currency Notes ("Notes") (amounting to AU$73.4 million as at 30 June 2018) from October 2018 to October 2022 and (ii) the completion of subscription of the share placement and rights issue. On (i), the Company has received the agreement of the Noteholders' Steering Committee to the revised terms of the Notes, but the restructuring of the terms is subject to Noteholders' approval. The extension of maturity date is also conditional upon a partial redemption of the Notes, to be funded by a share placement and rights issue. On (ii), the Company has executed a subscription agreement for the share placement, but certain conditions have not yet been fulfilled as of the date of this report. 5.6 Independent Auditors' reports Independent auditors' reports of KPMG LLP ('KPMG UK') to the members of BHP Group Plc and of KPMG (KPMG Australia') to the members of BHP Group Limited 1. Opinions For the purpose of these reports, the terms 'we' and 'our' denote KPMG UK in relation to UK responsibilities and reporting obligations to the members of BHP Group Plc, and KPMG Australia in relation to Australian responsibilities and reporting obligations to the members of BHP Group Limited. BHP (the Group') consists of BHP Group Plc, BHP Group Limited and the entities they controlled during the financial year ended 30 June 2019. We have audited the Consolidated Financial Statements which comprise the: Consolidated Balance Sheet as at 30 June 2019; Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Changes in Equity and Consolidated Cash Flow Statement for the year then ended; and Notes to the Financial Statements including a summary of significant accounting policies. In addition: KPMG UK has audited the BHP Group Plc company Financial Statements for the year ended 30 June 2019, which comprise the unconsolidated parent company Balance Sheet and related notes; and KPMG Australia considers the Directors' declaration to be part of the Consolidated Financial Statements when forming its opinion under the requirements of the Corporations Act 2001. A. KPMG UK's opinion on the Consolidated Financial Statements and BHP Group Plc company Financial Statements (collectively the 'Financial Statements') is unmodified In our opinion the: Financial Statements give a true and fair view of the state of the Group's and of BHP Group Plc's affairs as at 30 June 2019 and of the Group's profit for the year then ended; Consolidated Financial Statements have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union ('EU'); BHP Group Plc company Financial Statements have been properly prepared in accordance with UK accounting standards, including FRS 101 Reduced Disclosure Framework; and Financial Statements have been prepared in accordance with the requirements of the UK Companies Act 2006 and, as regards to the Consolidated Financial Statements, Article 4 of the IAS Regulation. B. KPMG UK's additional opinion in relation to IFRSs as issued by the International Accounting Standards Board ('IASB') is unmodified As explained in section 5.1 'Basis of preparation' to the Consolidated Financial Statements, the Group, in addition to complying with its legal obligation to apply IFRSs as adopted by the EU, has also applied IFRSs as issued by the IASB. In our opinion the Consolidated Financial Statements have been properly prepared in accordance with IFRSs as issued by the IASB. C. KPMG Australia's opinion on the Consolidated Financial Statements is unmodified In our opinion the accompanying Consolidated Financial Statements, are in accordance with the Australian Corporations Act 2001, including: . Giving a true and fair view of the Group's financial position as at 30 June 2019 and of its financial performance for the year ended on that date; and Complying with Australian Accounting Standards and the Corporations Regulations 2001. 2. Basis for opinions We conducted our audits in accordance with Australian Auditing Standards and International Standards on Auditing (UK) and applicable law. Our responsibilities under these standards are further described in the Auditors' responsibilities for the audits of the Financial Statements item of our report below. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions, and KPMG UK notes that its opinions are consistent with its report to the Risk and Audit Committee. We were first appointed as auditors by the Directors on 3 May 2002. The period of total uninterrupted engagement is the 17 financial years ended 30 June 2019. We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with: the Australian Corporations Act 2001; the relevant ethical requirements of the Australian Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants; and UK ethical requirements, including the UK FRC Ethical Standard as applied to listed public interest entities. No non-audit services prohibited by the UK FRC Ethical Standard were provided. Transcribed image text: To the members of Volt Power Group Limited Report on the Audit of the Financial Report Qualified opinion We have audited the financial report of Volt Power Group Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31 December 2017, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors' declaration. In our opinion, except for the effects of the matter described in the Basis for qualified opinion section of our report, the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: (i) Giving a true and fair view of the Group's financial position as at 31 December 2017 and of its financial performance for the year ended on that date; and (ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for qualified opinion Comparatives Attention is drawn to the comparative figures in the consolidated statement of financial position at 31 December 2016. As stated in note 2(b) of the financial report, on the 18th October 2016, the Company (Enerji Limited) was placed into Administration (subject to a Deed of Company Arrangement) and the duties and responsibilities of the Directors were suspended from the date the Company entered into Administration. For the period in which the Company was in Administration the Directors did not have oversight or control over the Group's financial reporting systems, including but not limited to) being able to obtain access to complete accounting records. As a result, we did not have access to the complete books and financial records of the Group, and this caused us to disclaim our audit opinion on the financial report for the year ended 31 December 2016. Our opinion on the current year's financial report is also modified because of the possible effect of this matter on the comparability of the current period's figures and the corresponding figures. Current year 31 December 2017 Attention is also drawn to the gain on effectuation of the Deed of Company Arrangement of $3,551,951 recognised in the consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2017. As a result of the matters outlined in the comparatives paragraph above, we have not been able to obtain sufficient appropriate audit evidence to satisfy ourselves as to the completeness of this amount. Our audit opinion has been modified accordingly. We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the Financial Report section of our report. Independent Auditor's Report to the Members of AusGroup Limited For the financial year ended 30 June 2018 Report on the audit of the financial statements Disclaimer of opinion We were engaged to audit the financial statements of AusGroup Limited (the Company) and its subsidiaries (the Group), which comprise the consolidated balance sheet of the Group and the balance sheet of the Company as at 30 June 2018, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group for the year then ended, and notes to the financial statements, including a summary of significant accounting policies as set out on pages 38 to 102. We do not express an opinion on the accompanying financial statements of the Group. Because of the significance of the matters described in the 'Basis for disclaimer of opinion' section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements. Basis for disclaimer of opinion (a) The Group's non-current assets at 30 June 2018 include property, plant and equipment of AU$45.2 million (2017: AU$43.4 million) and intangible asset of AU$32.1 million (2017: AU$31.7 million) attributable to the Port and Marine cash-generating unit ("CGU"). As disclosed in note 24 to the financial statements, the Company has estimated the recoverable amount of the Port and Marine CGU based on a fair value less cost of disposal method. We were unable to obtain sufficient appropriate audit evidence regarding the key assumptions applied to arrive at the recoverable amount of the Port and Marine CGU. Consequently, we were unable to determine whether any adjustments were necessary in respect of the accompanying consolidated balance sheet of the Group as at 30 June 2018, and the consolidated statement of comprehensive income and consolidated statement of changes in equity for the year ended 30 June 2018. (b) Arising from above, we were also unable to determine whether any adjustment to the carrying amount of the investments in subsidiaries shown in the Company's balance sheet was necessary. Of the Company's non-current assets of AU$140.4 million as at 30 June 2018 (2017: AU$178.0 million), AU$30.9 million (2017: AU$29.1 million) relates to investments in subsidiaries and AU$50.9 million (2017: AU$52.6 million) pertains to receivables owing from subsidiaries which comprise the Group's Port and Marine CGU. We considered the impact of the above items to be material and pervasive to the overall financial statements of the Group. The financial statements for the year ended 30 June 2017 also included a disclaimer of opinion, with the same basis as described above for the year ended 30 June 2018, which is in relation to the recoverable amount of the Port and Marine CGU. We also draw attention to Notes 2(a) and 17 of the financial statements which disclose conditions that indicate the existence of material uncertainties surrounding the continuing use of the going concern assumption in the preparation of the financial statements. These material uncertainties relate to (i) the extension of maturity date of the Multi Currency Notes ("Notes") (amounting to AU$73.4 million as at 30 June 2018) from October 2018 to October 2022 and (ii) the completion of subscription of the share placement and rights issue. On (i), the Company has received the agreement of the Noteholders' Steering Committee to the revised terms of the Notes, but the restructuring of the terms is subject to Noteholders' approval. The extension of maturity date is also conditional upon a partial redemption of the Notes, to be funded by a share placement and rights issue. On (ii), the Company has executed a subscription agreement for the share placement, but certain conditions have not yet been fulfilled as of the date of this report. 5.6 Independent Auditors' reports Independent auditors' reports of KPMG LLP ('KPMG UK') to the members of BHP Group Plc and of KPMG (KPMG Australia') to the members of BHP Group Limited 1. Opinions For the purpose of these reports, the terms 'we' and 'our' denote KPMG UK in relation to UK responsibilities and reporting obligations to the members of BHP Group Plc, and KPMG Australia in relation to Australian responsibilities and reporting obligations to the members of BHP Group Limited. BHP (the Group') consists of BHP Group Plc, BHP Group Limited and the entities they controlled during the financial year ended 30 June 2019. We have audited the Consolidated Financial Statements which comprise the: Consolidated Balance Sheet as at 30 June 2019; Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Changes in Equity and Consolidated Cash Flow Statement for the year then ended; and Notes to the Financial Statements including a summary of significant accounting policies. In addition: KPMG UK has audited the BHP Group Plc company Financial Statements for the year ended 30 June 2019, which comprise the unconsolidated parent company Balance Sheet and related notes; and KPMG Australia considers the Directors' declaration to be part of the Consolidated Financial Statements when forming its opinion under the requirements of the Corporations Act 2001. A. KPMG UK's opinion on the Consolidated Financial Statements and BHP Group Plc company Financial Statements (collectively the 'Financial Statements') is unmodified In our opinion the: Financial Statements give a true and fair view of the state of the Group's and of BHP Group Plc's affairs as at 30 June 2019 and of the Group's profit for the year then ended; Consolidated Financial Statements have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union ('EU'); BHP Group Plc company Financial Statements have been properly prepared in accordance with UK accounting standards, including FRS 101 Reduced Disclosure Framework; and Financial Statements have been prepared in accordance with the requirements of the UK Companies Act 2006 and, as regards to the Consolidated Financial Statements, Article 4 of the IAS Regulation. B. KPMG UK's additional opinion in relation to IFRSs as issued by the International Accounting Standards Board ('IASB') is unmodified As explained in section 5.1 'Basis of preparation' to the Consolidated Financial Statements, the Group, in addition to complying with its legal obligation to apply IFRSs as adopted by the EU, has also applied IFRSs as issued by the IASB. In our opinion the Consolidated Financial Statements have been properly prepared in accordance with IFRSs as issued by the IASB. C. KPMG Australia's opinion on the Consolidated Financial Statements is unmodified In our opinion the accompanying Consolidated Financial Statements, are in accordance with the Australian Corporations Act 2001, including: . Giving a true and fair view of the Group's financial position as at 30 June 2019 and of its financial performance for the year ended on that date; and Complying with Australian Accounting Standards and the Corporations Regulations 2001. 2. Basis for opinions We conducted our audits in accordance with Australian Auditing Standards and International Standards on Auditing (UK) and applicable law. Our responsibilities under these standards are further described in the Auditors' responsibilities for the audits of the Financial Statements item of our report below. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions, and KPMG UK notes that its opinions are consistent with its report to the Risk and Audit Committee. We were first appointed as auditors by the Directors on 3 May 2002. The period of total uninterrupted engagement is the 17 financial years ended 30 June 2019. We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with: the Australian Corporations Act 2001; the relevant ethical requirements of the Australian Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants; and UK ethical requirements, including the UK FRC Ethical Standard as applied to listed public interest entities. No non-audit services prohibited by the UK FRC Ethical Standard were provided