b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)Key audit matter How our audit addressed the key audit matterIMPAIRMENT OF OIL EXPLORATION,We obtained an understanding of the process PRODUCING AND REFINING PROPERTIESrelated to impairment testing. We assessedNOTE 4.11 TO THE CONSOLIDATEDdata used in the Fair Value Less Cost of FINANCIAL STATEMENTS Disposal (FVLCD) model, including testing of the forecasted future cash flows.The Groups consolidated financial statement of financial position as at 31 December 2021We assessed managements determination of the includes property, plant and equipment totalingrelevant Cash Generating Units (CGUs) taking $1.679 billion (2020: $1.740 billion), of which theinto consideration how management monitors and combined Oil exploration, producing, refining andmakes decisions about the Groups operations.related corporate assets totaled $1.522 billion.Further we analyzed the sensitivity of key Management reversed the $15.9 millionassumptions used in the valuation model and impairment charge (net of depreciation) related toassessed historical accuracy of cash flows applied the producing, refining and associated corporateby management. We tested the mathematical assets Cash Generating Unit (CGU) previouslyaccuracy of the models and assessed the recorded in 2020. The impairment assessmentassumptions utilized through the following method adopted by the Group in determining thesubstantive procedures:recoverable amount of the producing assets was Fair Value Less Cost of Disposal (FVLCD) asOIL AND PETROLEUM FUEL PRICESallowed under IAS 36 Impairment of assets.We assessed whether the assumptions used inFurther, management recorded an impairmentthe calculations were in line with the contracts;charge of $51.6 million related to the explorationWe agreed the relevant marker price for each and evaluation assets in the shallow offshore area specifically Blocks 1, 2 and former Blockindex to the reports directly from third party D. Managements impairment assessment in thesources;shallow offshore area was determined by the We reviewed the mathematical accuracy of the analysis of available data and other qualitativeformulas for each component of the model for all factors. years in the calculation;There is a significant level of ManagementWe assessed whether the volumes allocatedjudgment and estimation uncertainty in the Fairagreed to the contracted volumes and capacity Value Less Cost of Disposal (FVLCD) model asof the Cash Generating unit (CGU);well as the analysis of data and other qualitativeWe reassessed the reasonableness of the price factors which make impairment of Oil exploration, producing and refining properties a key auditmargins utilized in the model relative to historical matter. trends.DISCOUNT RATE:We independently evaluated the Groupsdiscount rate used in the impairment tests with input from EYs valuation specialists;59'