REA Group Ltd Annual Report 2021

Directors’ Report continued Ind pendent Auditor’s Report REA Group Ltd | Annual Report 2021 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Assets held for sale Why significant How our audit addressed the key audit matter On 30 May 2021, the Group signed the share purchase agreement (‘SPA’) for the sale of its Malaysia and Thailand operations (‘the Panama Group’) to PropertyGuru (PG). Completion date is 3 August 2021 and therefore the assets and liabilities of the Panama Group are classified as held for sale at 30 June 2021. Refer to Note 20. In connection to the Panama Group sale, the Group has also commenced the process to sell its 27% share in 99.co as a condition precedent. The investment in 99.co will be classified as held for sale in the financial statements at 30 June 2021. Due to the significant judgement involved in classifying and valuing the assets and liabilities of the disposal group as held for sale, we considered this a key audit matter. Our audit procedures involved the following: ► Evaluating the Directors’ intent and assessing their judgements made in classifying the businesses as held for sale against the relevant accounting standard. This included assessing whether the disposal was highly probable to occur within twelve months and the business was available for immediate sale in its present condition. Our evaluation included discussions with Directors and management as well as a review of supporting documentation such as Board minutes and signed transaction documents. ► Agreeing the carrying amounts of the identified assets and liabilities of the disposal group to underlying accounting records and assessing the methodology used to apportion goodwill to the disposal group. ► We considered the fair value less costs to sell assessment undertaken by the Group, including assessment of key assumptions and transaction documents. ► Assessed the adequacy of the disclosures made in the financial report. Information Other than the Financial report and Auditor’s Report Thereon The directors are responsible for the other information. The other information comprises the information included in the Company’s 2021 Annual Report other than the financial report and our auditor’s report thereon. We obtained the Directors’ Report that is to be included in the Annual Report, prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the Annual Report after the date of this auditor’s report. Our opinion on the financial report does not cover the other information and we do not and will not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, 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. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. 128 Financial Statements