Determine and justify the dollar amount of materiality. You should calculate the $ amount of materiality. HKSA says as a minimum you must include 2 amounts one for overall materiality and one for performance materiality. Justify why you choose a certain base & % and discuss any possible qualitative factors. Specific materiality is optional.

Premier Materials Limited Premier Materials Limited and its subsidiaries (Premier) are in the business of manufacturing and trading of construction materials to build flats. Premier's customers are mainly construction companies in Mainland China, Hong Kong and other Asian countries. As at 31 December 2020, over 90% of Premier's assets were located in Mainland China. Since the economy in Mainland China was doing so well two years ago, Premier embarked on an ambitious expansion plan to double the group's revenues within five years. Premier planned to do this through acquisition of other manufacturers as well as setting up new plants in strategic locations in the Mainland. In the last two years to the end of 2020, indeed there was an increasing trend in sales and receivables. In 2021, Premier did purchase another company, Tiny Ltd. On 21 December 2020, Premier succeeded in issuing bonds of US $130 million at an interest rate of 9.5% per annum. The bonds are listed on the New York Stock Exchange. The money received were used partly to repay bank loans when they were due, while the remaining cash was kept in banks in Mainland China. Extracts from consolidated statement of financial position of Premier As at 31 December 2021 Unaudited $ million As at 31 December 2020 Audited $ million Non-current assets Intangible assets Property, plant and equipment Other investments 200 1,757 85 170 1,570 100 Total non-current assets 2,042 1,840 Current assets 1,450 1,420 Total assets 3,492 3,260 Equity and liabilities Equity Share capital Retained Earnings Other components of equity 1,250 840 155 1,150 780 163 Total equity 2,245 2,093 Non-current liabilities Current liabilities 650 597 620 547 Total equity and liabilities 3,492 3,260 Premier Materials Limited Premier Materials Limited and its subsidiaries (Premier) are in the business of manufacturing and trading of construction materials to build flats. Premier's customers are mainly construction companies in Mainland China, Hong Kong and other Asian countries. As at 31 December 2020, over 90% of Premier's assets were located in Mainland China. Since the economy in Mainland China was doing so well two years ago, Premier embarked on an ambitious expansion plan to double the group's revenues within five years. Premier planned to do this through acquisition of other manufacturers as well as setting up new plants in strategic locations in the Mainland. In the last two years to the end of 2020, indeed there was an increasing trend in sales and receivables. In 2021, Premier did purchase another company, Tiny Ltd. On 21 December 2020, Premier succeeded in issuing bonds of US $130 million at an interest rate of 9.5% per annum. The bonds are listed on the New York Stock Exchange. The money received were used partly to repay bank loans when they were due, while the remaining cash was kept in banks in Mainland China. Extracts from consolidated statement of financial position of Premier As at 31 December 2021 Unaudited $ million As at 31 December 2020 Audited $ million Non-current assets Intangible assets Property, plant and equipment Other investments 200 1,757 85 170 1,570 100 Total non-current assets 2,042 1,840 Current assets 1,450 1,420 Total assets 3,492 3,260 Equity and liabilities Equity Share capital Retained Earnings Other components of equity 1,250 840 155 1,150 780 163 Total equity 2,245 2,093 Non-current liabilities Current liabilities 650 597 620 547 Total equity and liabilities 3,492 3,260