164 Annual Report 2025 Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matter How the matter was addressed in our audit Impairment risk over oil and gas properties As at 31 December 2025, the Group has oil and gas properties amounting to US$285,491,000, which in aggregate approximate 37% of the Group’s total assets. Management performed impairment assessment by assessing the recoverability of its oil and gas properties based on discounted future cash flows from the respective oil and gas properties as at 31 December 2025. They had also engaged independent qualified persons to estimate, where appropriate, the proved, probable and possible reserves for certain oil and gas properties, including the future net cash flows arising from such. The assessment requires the exercise of significant judgement about and assumptions on, amongst others, the discount rate, oil reserves, expected production volumes and future oil prices, taking into considerations external or internal factors that could indicate an impairment. Based on management’s assessment as at 31 December 2025, impairment charges of US$88,679,000 were taken against the oil and gas properties. The Group has made disclosures on the above judgement and estimates in Note 1.4, and further disclosures in Note 4 to the consolidated financial statements. We have performed, amongst others, the following key audit procedures: • Assessed the design and determined the implementation of management’s relevant controls with respect to the assessment of the recoverability of its oil and gas properties in accordance with SFRS(I); • Reviewed the reserve reports prepared by independent qualified persons relating to the Group’s estimated oil reserves, including involvement of our internal reserve specialists as part of our engagement team to discuss with management’s experts and challenge, where appropriate, the key assumptions and methodology used by management’s experts to estimate the reserves; • Assessed the objectivity, competency and experience of the independent qualified persons who prepared the reserve reports; • Checked management’s budget and plan for the assets, including the funding options for future capital expenditures; • Reviewed management’s discounted cash flow calculations and assumptions used to assess the valuein-use of the respective oil and gas properties, including reviewing the accuracy of the reserves data used by management in the respective cash flow models; • Reviewed the appropriateness of the oil and gas price assumptions used in the cash flow models against external data; and • Involved our valuation specialists in challenging management’s assumptions on key data used in their computation of the discount rate(s). We have further assessed the adequacy of the Group’s disclosures that have been set out in Notes 1.4 and 4 to the consolidated financial statements. INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF REX INTERNATIONAL HOLDING LIMITED
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