Dagang NeXchange Berhad Annual Report 2018

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Opinion We have audited the financial statements of Dagang NeXchange Berhad, which comprise the statements of financial position as at 31 December 2018 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 98 to 181. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 December 2018, and of their financial performance and their cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. Basis for Opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence and Other Ethical Responsibilities We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. 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 Group and of the Company for the current financial year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report. 183 Annual Report 2018 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF DAGANG NEXCHANGE BERHAD (INCORPORATED IN MALAYSIA) COMPANY NO. 10039-P FINANCIAL STATEMENTS The acquisition of Genaxis Group was accounted for as a business combination based on MFRS 3 - Business Combinations (“MFRS 3”). A purchase price allocation exercise was performed by management, assisted by an external expert and management determined that the fair value of the net identifiable liabilities for the acquisition is RM35.62 million. We focused on the fair value of the net liabilities acquired from the acquisition as it was a significant area of judgement. Goodwill of RM15.72 million was also highly dependent on the fair value of the net identifiable liabilities acquired at the acquisition date. Our procedures included, amongst others:-  Evaluating the objectively, independence and capabilities of the external expert and reviewing the terms of engagement of the expert appointed by the Company to determine whether there were any matters that might have affected their objectivity or limited their scope of their work;  Assessing the methodology adopted by management and its appointed expert for calculating the fair values, key valuation assumptions and validating the key inputs used; and  Reviewing the adequacy of disclosure of acquisition in the financial statements. KEY AUDIT MATTER HOWOUR AUDIT ADDRESSED THE KEY AUDIT MATTER Acquisition accounting for Genaxis Group Sdn. Bhd. and Innovation Associates Consulting Sdn. Bhd. (“Genaxis Group”) under MFRS 3 - Business Combinations Refer to Note 27 to the financial statements