AAPG-Europe (A company limited by guarantee) AAPG diROPE Report and Consolidated Financial Statements For the Year Ended June 30, 2021 Charity Number (England and Wales): 1126290 Charity Number {Scotland).' SC040127 Company Number: 6540163 AAPG-Europe (A company limited by guarantee) Consolidated Financial Statemenls For the Year Ended Jun• 30, 2021 Contents Nurn￿r Referen￿ and Administrative Infomiat*)n Rewrt of the Trustees Audit Re￿rt 10-15 Stslement of Financial A¢b'vitss 16 Balance Sheets 17 Statement of Cash Flows 18 Notes fomiing part of the financial statements 19- AAPG.Europe ConsolKlated Financial Statements- Year End&J June 30. 2021 Page I AAPG-Europe Report of the Trustees for the Year ended June 30, 2021 The Trustees present their report and audited financial statements for the year ended June 30, 2021. Reference and Adrninistrative Infomiatlon Charity Name: AAP&Eurok Charity Number IEnglaNI and Wales): 112629) Chaiity Number (Scotland}: SC040127 Company RegislralM Numter. 6540163 islered offi￿.. O rational offi￿.. 61h FICMN 9 Appold Street, London, England, EC2A 2AP 1444 South BcMJlder Avenue, Tulsa, Oklahoma 74119, USA Trustees A Wegener D Cook K Gibbons D Curtiss J Craig - Chaimian Secretary Mr. D. Curtiss Senior Management Team Mr. A. Wegener Mr. B. Haws Director Controller Auditors - Moore Ffjngslon Smrth LLP,. 6th Fk>)r, 9 ApFdd Street, L￿dOn Ec￿ 2AP Bankers- HSBC Bank,. 165 Fleet Street, London EC4A 2DY Solleitors- Stone Ki￿J LLP., 16 St. John's L￿e, London. EC1M 4BS AAPG-Europe Consolidated Financial Statements- Year End&1 June 30. 2021 Page 2 AAPG-Europe Report of the Trustees for the Year ended June 30, 2021 AAPG-Europe Alms and Objectives Pur ses and Aims.. Our charity's pur￿Se$ as sel out in the obFcts contain&J in the company's memorandum of association are, for the public benefit.. To advano the Scien￿ of geology its allied %tences in patticular, tyJt without prejudice lo the generality of the forgoing, as they relate to petroleum, natural gas, other Sltbsurtace fluids and mineral resources, thorough melhcds including.. Promoting the lechnok)gy of exploring for, finding and producing such materials in an economically and environmentally sound manner. and Disseminating infoffnalion ￿lated to the geoloJy and associated tethncdcoy of petroleum, natural gas, olher Subsurf￿ IIuKls and mineral resources. The aims of our charity are to foster scientsfic exchange whth &Y¥ances the earth Scien￿$, in particular, those related to Felroleum, natural gas, and other energy minerals. This is the pU￿)Se that our charity was established lo further. The Focus of our Work Our main objects'ves for the year were focused on the delivery of scEnce, particularly the geosciences through our many programs. SFecifically, we have undertaken the following.. Implementing a system of disseminab'on of Se￿n￿'fiC arKI geok4Jical infomiation, through educational activities Conduth'ng addikn'onal short courses in Europe Developing a schedule of Geoscien￿ Technokh3y Wothshops (GTW) Executing a regional conference How Our Activities Deliver Public Benefrt The Iruslees have complied wlh the duty in secti￿ 17 of the Charities Act 201110 have due regard lo public enefil guidance as published by the Charity CoMmiss￿n induding ils gUhlan￿ 'Public benefit.. running a charity IPB21' Our main activities and who are tyirwJ to t￿efit are described below. Our charitable activities focus on the science of gedc4Jy, the dissemination of that scien￿, on the many aspects of the energy geosCien￿s. I￿r work has primarily focused on advancing scientific knowledge through our program of educational events and expanding the geoscience community. All cttarilable activities fC￿S on sharing scientific kno%￿edge which help5 the energy industy remain sustainable, and the events focus on the AAPG-Europe Consolidated Financial Statements- Year Ended June 30, 2021 Page 3 AAPG-Europe Report of the Trustees for the Year ended June 30, 2021 exchange of technology conceming the exploralion of energy resources for the public benefit. In addition to helping ￿infor￿ the training of the geoscientisl, this emphasis on sustanability and enwronmenlal awareness arKI responsiveness ultimately serves scciety in general. Our courses, presentations and leaming opportunities are OFEn to the general public. The primary benefrciaries include geoscienlists working and living in Ihe United Kingdom and in the rest of Europe. These programs help develop and expand the kno%￿edge and infomiation on the technical challenges of finding and producing energy resources. We generally offer sevefal educational events each year, with differing levels of scientific intensity. Our line- up of events includes our flagship Geoscience Technolcgy Workshops, or Grn's and a larger regional conference. The GTWS are scientific leaming opp)rtunilies that apFeal to a much wder audience and are typically focused on issues or I0￿cS related lo regional acb'vib'es, or emerging technologies. The global pandemic caused by the 2019 Novel Coronavirus, SARS-CoV-2 (more f£smmonly known as and referred to hereafter as COVID-19} a profound impact on our organization and effectively eliminated our ability lo deliver in-person events for the fiscal year. Our team was ab￿ lo organize two GTW'S online as well as conduct an online ge0the￿al crossover event. In ￿dit￿)n, we productively used the ts'me to Introdu￿ a new line-up of less formal, free, collaboralK)n events on specific energy geoscien￿ topics using online platforms. Our response was extraordinary and we dramatically increased ttle engagement of geosciences Ihroughthjt Europe and the worfd. These on-line only events aitracled geoscienlisls and those interested in the geosciences that otherwise had not partiopated in our events and aclivits'es. We a￿ very pr¢)ud of that result and the resourcefijlness and proactive outreach of our team. Financlal Review AAPG.Europe has been operating in Ihe United Kingdom for thirteen years. The last few years have teen especially difficult from a financial slandFoint and Cov1￿19 has compounded the challenges. In ajdilion to the lack of ability lo gather in for our events, VIE receive most of our financial support from the energy industy las a yth0￿) in the way of SFonsorship and supp)rt of our acliwties. The energy industry is suffering not just from financial hardship the lasl several years but also the skep drop in pri￿S during the global pandemic. These factors h&1 a pronounced, correspxmding effect on our financial aclivilies, Although our educational offerings increased between 2014 and 2017. we had seen a decline in parb'cipation of our Iradib'onal fomal activities prior to the COVID-19 pandemic. Since the thkdown in the United Kingdom was annoUn￿d in March 2020, V•E have not conduct￿j any signif￿ant in-person revenue generating activities, though we dij have fwr events Ihat generated SO￿ revenue in 2021. The Iruslees are aware of our dramatically dedining revenues and are wotking to man￿e the charrty in as fiscally responsible of a manner as p)ssible in this challeThJing OFerating environment. The result of their focus has teen signrficanlly cutting operating costs, including relocab'ng {and eventually dosing) our physical office. AAPG-Europe Consolidated Financial Statements- Ye& End&J June 30, 2021 Page 4 AAPG-Europe Report of the Trustees for the Year ended June 30, 2021 In light of the financial strain that we are eX￿T￿ncir￿J, tyjr senior le￿ership team has proposed lo the trustees and has implemented some S￿nIfiCant]Y different events and ￿tiVitieS which will continue lo fulfil the objects of the charity and hopefijlly bn'ng back the interest and supp)rt of the energy industry when they are able to relurn to traditional events. This ￿11 not be a short-term fix land COVID-19 has extended our forecast for challenging economic conditions), bul will require lorKJ-lerm iMp￿Mentation of activities that will also be supported by the markewace. Most of AAPG-EuroFe's support and funding used during our time in oFeration is from the gift aid from the subsidiary trading company. This gift aid provides the critical resources to SUPPDrt our charitable mission. Much like the charity, however, the trading subsidiary has also suffered greatly with decreased revenue the past couple of years, which has haj a negative impacl on the amount of gift aid available to the charity. The COVID-19 gbbal pandemic had a significant imp&1 al the our APPEX event in March 2021, Our revenues were down dramatically, thcmjgh we were still able to ccfflducl our event on-line and deliver a robust technical program which was more effective than cancelling. Princi al Fundin Sources AAPG-Europe conducted a few educat￿nal, sctenb'fic events during the year. AsKle from the fees generated in pursuit of these educational activit￿s. the charity has fallen short finanaally with no prospect of gift aid from the trading subsidiary in the current fiscal year. The American Association of Petroleum Geolo3ists AAPG has provvjed a commitment to suppjrt the OFeralion of the Charity group by providing working capital as needed and has aJreed to not seek ￿payrnent of the outstanding balance due lo il by AAPG-Europe ils Irajing subsidiary in the next year. Furthermre, as mentioned above, the Executive Committee of AAPG voied lo forgive Ihe legacy debt of both the Charity and the Trading subsidiary in fiscal year June 30, 2018. This provided AAPG-Europe with much needed debt relief and support needed lo ensure that we can continue lo operate as a going concern for the foreseeable futu￿. The American Assc¢iats'on of Petroleum Geologists is a 1C()+ year￿Id intemalional professional association located in Ihe United Slates has significant resources lo help cary out its mission of advancing the prOfessi￿t and science of geokMJy. This mission of AAPG is dosely aligned with the objects of the Charity. Investment Poli The Twslees of AAPG-Europe are aware of the benefits that a solid financial plan can allow us to continue our mission of disseminating scientific knowledge. This objective has been complicated by the decreased availability of funding from the energy induslry, the squeeze on our cperating margins, and the distress on the live events portion of our business due to COV1￿19. The ManaJeffEnl Committee has invested the small amount of current available reS￿rCeS in a business money manager account with a respected financial inslilulion. In light of the currenl economic enviror¢ment, our tebjm on our investment appears rea￿able. AAPG-Europe Consolidated Financial Slalements- Year Ended June 30. 2021 Page 5 AAPG-Europe Report of the Trustees for the Year ended June 30, 2021 Fund Balances The group results are a shortfall for the pencé of £102,60712020.. £48,344). Closing unrestrpcted reserves of the group are-£91,11412020.. £11,4931- At the end of the year, the liability to AAPG ha decreased lo £126,33712020. £135,183). AAPG-Europe has deVek￿ a s*Jnfficant loan payable to fhe American Association of Petroleum Geologists from the operations of the charity. which has persisted after the debt forgiveness in FY 2018. The Trusl*s have directed that the staff devekp and present a plan to Teduce and eliminate any deficit and deFendence on the sok memtser of the charity. The terms of the loan from AAPG are such that there is no defined repayment date, hen￿ in accordance with FRS 102 this is classified as a current liability. however the AAPG has conf1rn￿d its willingness lo continue lo provide Ihe financial SUPFK)rt to AAPG-Europe unb'l il has generated SuffiC￿nI working caplal lo repay the loan arKI 5ustsin their day to day operations. For this reason, the trustees are satisfied that there will be no call on repayment that woubj limst the charity's ability lo meet its other liabilities and obligations as they fall due for al least12 months from the dale of sts3ning the axounts. Reserves Polic The Management Committee has examined the charity's reqU1￿ments for reserves in light of the main risks to the organizalion. The charity has expressed its goal to increase reserves as il continues devek)ping and reducing its indebtedness. The financial results for the years 2015- 2017 eliminated any progress that had been made in that regard. In light of the current economic challenges for the energy sector, the trustees have not detemined a timescale for ￿h￿VIng the desired level of reserves of 6 months of operaliThJ expenses. The Iiuslees are mindful of the need lo achieve modest surpluses year on year in the shorter term, wlh an immediate f￿uS of minimizing or mitigating the negab've balan￿ in unrestricted reserves al t end of fi￿al year 2022. COV[￿19 global pandemic will have a negats've imp%t on our ability lo meet these goals in the shorl term. The imp* C￿ the energy industy as a whole will ejso continue lo apply negative pressuE on our financial SUPF4)rt. Risk The Management Committee is aware Ihal risk is inherent in most undertakings and believe that most of our risk is minimal or rnanageab￿. The truslees have deNEW a risk register wh￿h wll ￿ reviewed on a periodic basis and amended as deemed necessary by the Irustees. The current largest, and most pressing risk facing the charity continues lo te the cOn￿ntra￿.On of Folenb'al support for the charity's aclivib'es within a single industry. The volatility of energy prices, followed by a prolonged and sustained depression of not only energy prices, but the available support from the previously enthusiastic energy industy have had a profound and illuminating impact. We have creatively inlrcduced altemale energy geoscien￿ opp)rtunilies and have egun attractiTrJ attention from non-tr&filional funding sources. Al Ihis point, our current plans of expanding into other disciplines such as the energy transition and geothemial are being implemented. This exp￿S1On AAPG-Euro Consolidated FinanrAal Ststements- Year Ended June 30. 2021 Page 6 AAPG-Europe Report of the Trustees for the Year ended June 30, 2021 should provide additional exposure into other disciplines within the geosciences in additi'on lo our core, geology, including cross-functional disciplines such as geophysics and engineering. On the liabilily side of risk, we endeavor to organize our events in reputable, reasonable facilities. We have employment policies in pla￿ for the staff that we hire. Despite sourKJ tK)licies and best efforts on bgislrts, loss can still occur. To that end, we obtained insurance cover for the office Spa￿ that we rented, as well as the &b'viti'es that we undertake. We believe that the amounts of coverage, though not limrtless, are reasonable and will help minimize Ihe risk of finarKial loss in the evenl of a successful claim. During the year, our Iruslees were covered by indemnity Insur￿￿. We address our indebtedness to AAPG at ￿ast ￿nUallY lo ensu￿ that the Trustees are always aware of the status of our financial arrangement. Plans for Future Periods Although the charity plans to cL)ntinue disseminating the energy geosciences, the impact of COVID-19 has been swift and punitive. Our standard method of delivery, in person conferences, courses and workshops has been signrficantly disrupted. The activities that we have planned are the Geoscience Technology Workshops, the regional conferen￿, the Energy Transth'on Fonjm and others. In light of our changing bijsiness model, we have taken steps to minimize our costs and contsnue to try new melhTrJs of delivering high-quality scienlrfic education al low cost lo Ihe participants. Our team has been instrumental al developing creative new ideas which we hope and exF￿1 will be rewarded by the market in the fuhjre. Structure, Governance and Management Govemin Docum The organizalKJn is a charitable company, limited by guarantee, incorpNated on March 19, 2008, and registered as a charity on CtlobeT 14. 2Q)8 with the Chanty Commission in England & Wales. The charity was registered with OSCR, the offi￿ of the Scoth'sh Charity Register on Decemtser11, 2CM)8. The company was established under a Memorandum of Asrriation wh￿h established the objects and purposes ol the charitable company and is govem&J under ils Articles of AssocialK￿. In the event of the company teing dissolved, members are required to contribute an amunt not exceeding £1. Trustee Selection The organi2alions governing documents require that two trustees are apF#)inted by the American Association of Petroleum Geolcgists. Three CLWPted trustees are apFointed by the IN)ard of Truslees. AAPG-Europe Consolidated Financial Statements- Year End&1 June 30. 2021 Page 7 AAPG-Europe Report of the Trustees for the Year ended June 30, 2021 Induction and Trainin Most Iruslees are alre￿Y familiar with the practical work of the charity due lo the small group and intsnsive focus on programs lo establish. Addrtionally, the Iruslees are provided with access to upgale sessions on current governance practices through the Charity ComMiss￿n website updates, as well as Ihn)ugh bullelins and seminars provijed by the charity's extemal prOfeS￿onal ajvisors. Auditors Moore Kingston Smith LLP have indrated their MllingrEss to uJntinue in Offi￿ and are deemed reappointed in accordance with section 487{2) of the Companies Act 2CX)6. This report has been prepared in accordance wth Acc(MJntiThJ and ReForbng by Charities.. statement of Recommended Practice aF4)licable to charities preparing their ¥counts in accordance with the Financial Reporting Standard applicable in the UK and Republic of I￿land.. The FRS 102 Charities SORP lissued in July 2014} and in accordance the s￿￿1a1 provIs￿n5 of Part 15 of the Compani8s Act 2006 relating lo small companies. Statement of Trustees, Responsibilities The Iruslees (w￿) are also dIwto￿ of AAPG-Europe for the purwses of company lawl are resp)nsible for preparing the Trustees, Rep)rt and the financial statements in &Cordan￿ with applicable law and United Kingdom Accounting Standards {United Kingdom Generally Accepted Aco)unting Pr&tice). Company law requi￿$ Iruslees to P￿pare financial statements for financial year which give a true and fair view of the slate of the affairs of the charitabk company and the gr(￿p and of the incoming resour and application of resources, including the income and expenditure, of the charitsbk group for that year. In preparing these financial statements, the trustees are required to.. select suitable &ccMJnting p)IK￿S and then apply them consistenlly- • observe the methods and principles in the Charrts'es SORP. • make judgments and eslimales that are reasonab￿ and pnjdenl., stale whether applicable UK Accounting Standards including FRS 102 have been followed, subject lo any material departures disciosed and explained in the financial statements,. and prepare the financial statements on the going concem basis unless it is inapprowiate to presume that the charltable company will continue in trMJsiness. The Itustees are res￿nSIble for maintaining prijper aco)unting records that disclose with reasonable accuracy al any time the financial Fosition of the charitable company and enable them lo ensure that the financial stalemenls comply with Ihe Companies Act 2CQ6, The Charities and Trustees Investment {Scotland) Act 2005 las amended) and The Charities AcLounts IScollaThJ) RegulatM)ns 2CQ6 (as amenckdl. They are AAPG-Europe Consolidated Financial StalerrEnts- Year Ended June 30, 2021 Page 8 AAPG-Europe Report of the Trustees for the Year ended June 30, 2021 also responsible for safeguarding the assets of the charitable company and the group and hell￿ for taking reasonable steps for the prevention and detection of fraud and other irregularities. In so far as the trustees are aware: there is no relevant audit Info￿atiOn of wh￿h the charitable wmpany's auditor is unaware,. and the trustees have tsken all steps that they ought lo have taken to make themselves aware of any relevant audit information and to estsblish that Ihe aLhJrtor is aware of that infomialion. Small company rules These financial slalemenls have been prepar&J in &cordance the sFeaal proViS￿n$ of Part15 of the Companies Act 20C6 relab'ng to small companies. Approved by the Trustees on 25 October 20f3 and signed on its behaw by.. l_i/ Mr. O. Cuitiss ISe¢relaryl AAPG-Europe Consolidated Financial Statements- Year Ended June 30, 2021 Page 9 AAPG-Europe Independent auditorfs report to the members and trustees of AAPG.Europe for the year ended June 30, 2021 Opinic*n We have audrted the financial statements of AAPG-Europe for the year ended 30 June 2021, which comprise the Group Slalemenl of Financial Activities. the Group and Parent Charitable Company Balance Sheets, the Group Cash Flow Slalement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting fraffEwork that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Repjrting Stsndard 102 The Financial Reporting Standard applicable in tr￿ UK Reput4￿ of Ireland IUnil&J lQngdom Generally A￿pIed Accounting Praclicel. In our opinion the financial stalements= give a true and fair vrew of the state of the group's and the parent charitable company's affairs as at 30 June 2021 and of the group's incoming resources ar￿ applicatKin of reSoU￿s, including its income and expendibjre, for the year then ended., have been properly prepared in aCCTh￿2n￿ with United Kingdom Generally Accepted AcC￿nting Practice., and have been prepared in ￿0[danc£ Companies Act 2LIA, the Charities and Trustee Investmenl {So)Ilandl Act 2CK)5 {as amend&dl and regulations 6 and 8 of the Charities Accounts (Scotlandl Regulations {as aM￿ed) and the Charrties Act 2011. Ba819 for oplnlon We conducted our audit in &cordance with Intemat￿naI Slandards on Auditing IUKI {ISAs(UKII and applicable law. Our responsibilities ￿r￿er those standards are lurther descrFbed in ts Auditorfs Responsibilities for the audit of the financial slalemenls section of our reFQrt. We are indeFendenl of the charitable company in accordance wth the ethical requirements that are relevant to our audit of the financia5 statements in the UK, including the FRC'S Ethical Standard, and we have fulfilled our other ethical responsibilrties in accord￿Ce with these requirements. We telieve that the audit ev*Jen￿ ￿ have oblainèl is sufficient and appropriate lo provide a basis foi our ownion. Concluslons relatlng lo going concwn In auditing the financial stalemenls. we have conduded that the trustees, use of the going concem basis of accounting in the preparats'on of the financial statements is appropriate. Based on the work we have performed, have not identified any material uncertainties relating lo events Condit￿nS that, individually or collectively, may cast significant doubl on the charitable company's ability to continue as a going concem for a FerKKI of al least iwelve mnths from when the financial statements are authorised for issue. Our responsibilities and responsibilities of the trustees respect to going concem are described in the relevant sections of this reFX)rt. AAPG-Europe Consolidated Financial Statements- Year Ended June 30, 2021 Page 10 AAPG.Europe Independent auditor's report to the members and trustees of AAPG-Europe for the year ended June 30, 2021 Other Infomiallon The other information tomprises the information induded in the annual report, other than the financial statements and our auditorfs report thereon. The tnjstees are responsible for the other infornalion. our0pin￿n on the financial slalements does not cover the other infonnation and. except lo the extent otherwse explicitly slated in our report, we do not express ￿Y fomi of assuran￿ conclusion thereon. In connectron with our audit of the financial ststements, our responsibility is to reaj the other infomiation and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our kno¥￿edge obtained in the auditor othe￿iSe aFpars lo be materially misstated. If we Klenlify such material inconsistencies or apparent material misslateffenls, we are required lo delemiine whether there is a material misslalemenl in the financial slatemenls or a material misslatemenl of the other information. If, based on the work we have performed, ￿ conclude Ihat there is a material misstatement of this other informabon, we are required lo report that fa¢1. We have nothing lo repjrt in this regard. Opinion8 on other matters pre8¢rfbed by the Companles Act 2006 In our opinpjn, based on the work undertaken in the course of the audiL' the information given in ts stralegtc reF()rt and the tnjslees, annual rep)rt for the financial year for which the financial slalemenls are prepared is consislenl wslh the financial slatemenls,. and the strategic report ar￿ the trustees, annual rep)rt have been prepared in accordwr2 wlh applicable legal requirements. Matters on vthich we are rgqulred lo report by excepllon In the light of knowledge and understarKling of the group and parent charitable company and its environment obtained in the course of the ￿drt. we have not identified material misstatements in the strategic report or the Iruslees, annual rep)rt. We have nothing to report in resFttt of the folbwirKJ matters vthere the CoMpan￿S Acl 2CX)6 or the Charities Accounts IScy)tlandl Regulatrons 2C(6 las affEnded} ￿uIre us to reF#Jl to you rf, in our opinion.. the parenl charitable company has not kept adequate and sufftient accounlirKJ records, or relums adequate for our audit have not been received from branches not visited by us, or the parent charitable company's financial statements are not in agreement wilh the ￿oUnting records and returns,. or rtain disclosures of trustees, remuneratK)n specified by law are nol made., or we have re￿Ived all the infomalion and explanalions we require for our audit. AAPG-Europe Consolidated Finanaal Statements- Year EndeJ June 30, 2021 Page 11 AAPG-Europe Independent auditor's report to the members and trustees of AAPG-Europe for the year ended June 30, 2021 Responsibilitles of trustees As explained more fully in the Iruslees, Tesponsibilities statement sel oul ￿ page 8, the tnjslees {who are also the directors of the Charitab￿ company for the purpjses of company law) are responsible for the preparation of the financial slalemenls and for ￿Ing satisfied that they give a true and fair view. and for such inlemal control as the trustees detemiine is necessary to enable the preparalion of financial statements that are free from material misslalement, whether due to fraud or error. In preparing the financial statements, trustees are resFonsible for assessing the group and parent tharilable company's ability lo continue as a going concem. discbsing, as applicable, matters related lo going concem and using the going concem basis of accounb'ng un￿sS the trustees either intend to liquidate the group or parent charitable company or to cease 0￿rat￿)ns, or have ￿ realists'c altemabve but lo do so. AuditoV8 re3ponslbSlltSe$ for th• audh of tho financial $tstements We have been app)inled as auditor under Section 44{1)(c} of the Charities and Tnjstee Investment Istotlandl Act 2CN)5 and under the Companies Act 20(% and rep)rt to you in accordan￿ wilh regulations made under those Acts. r objectives are to obtain reasonabk assuMce abwl whether the finanaal statements as a whole a￿ free from material misslalemenl, whelhei due lo fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a hvJh level of assuran￿, lyjl is not a guarantee that an audit conducted in accordance with ISAS (UK) will always delect a material misslalement when il exists. Misstalem8nls Can arise from fraud 01 error and are consKlered malerial if, individually or in aJgregate, they could reasonably be expected to influence the eo)nomtc decisions of users taken on the basis of these financial slaleffEnls. As part of an audit in a¢¢ordance ￿th ISAS {UK) we exercise professional judgement and maintain professional sceplicism throughout the audil. We al￿.. Identify arml assess the risks of material misstalemenl ofthe financial stalemenls. whether due to fraud or error, design and FerfoTh audil procedures responsive lo those risks, and obtain audit evidence that is sufficient and appropriate to provKle a basis for our opinion. The risk of not delecling a material misslalemenl resulting from fraud is higher than for one resulting from error, as fraud may involve Ilusion, forgery, intentional omissions, misrepresentations. or the override of inlemal control. Obtain an understanding of inlemal o)ntrol relevant to ttle audit in order lo design audit proc£dures that are appropriate in the circumstaTr￿S, bul not for the purFoses of expressing an opinKJn on the effects'veness of the group and parent charitable company's inlemal control. Evaluate the appropriateness of accounting wlicies used and the reasonableness of ￿nUnting estimates and relat8J disclosures made by the trustees. AAPG-Europe Consolidated Financial Statements- Year End&J June 30. 2021 Page 12 AAPG-Europe Independent auditor's report to the members and trustees of AAPG-Europe for the year ended June 30, 2021 Conclude on the appropriateness of the Iruslees. use of the going concem basis of xcounling and, based on the audit eviderKe obtained, whether a material Un￿rtaInty exists related lo events or conditions that may cast S￿n1￿can1 doubl on the group and parent charitable company's atm'lity to continue as a going concem. If ￿ conclude that a material uncertainly exists, we are required lo draw attention in our audilorfs rep)rt to the related disclosures in the financial slalemenls or, rf such discl¢ysures are inwjequate, lo mcKIty our opinion. C*Jr condusions are based on the audit evidence obtained up to the dale of our auditorfs rwrt. However, futu￿ events or conditions may cause the group or parent Charita)￿ company to ￿ase to ￿nts'nue as a going concem. Evaluate the overall presenlatwJn, structure conlenl of the financial statements, including the dis¢losures, and whether the [in￿¢la1 statements represent the underlying transactions and events in a manner that achieves fair presentsb'on. Obtain sufficient apprq)riale audit eV*jen￿ regarding the finan￿al Info￿all0￿ of the entities or business activities within the group to express an opinKJn on the consolidated financial statements. We are responsible for the direclion, super4ision aThJ perfofflian￿ of the group audit. We remain solely responsible for our audit repjrt. We communicate with Ih¢)se charged with govemance warding, among other matters, the planned scope and timing ol the audit and S￿nifiCant wdil findings, irKluding any sNJnfficant defKiencies in intemal control that v idents'fy during our audit. Explanatlon a$ io what extent the audlt was ¢¢)nsldered Capable of detectlng Irrngularllles, Includlng fraud Irregularities, including fraud, are instances of non