Key audit matters How we addressed the key audit matters Recognition of gain on the acquisition of the remaining 50% equity interest in GumusutKakap Semi-Floating Production System (L) Limited (“GKL”) – (Refer to Note 15 - Investments in subsidiaries, to the financial statements) During the financial year ended 31 December 2016, the Group recognised a gain on acquisition of subsidiary amounting to RM824 million in respect of its acquisition of the remaining 50% of equity interest in GumusutKakap Semi-Floating Production System (L) Limited. Due to the significance of the amount of gain on acquisition of subsidiary recognised, we identified it as an area of audit focus. In our audit of the accounting of the acquisition, we have perused the purchase agreement and verified the payment made on the purchase price. An important element of our audit relates to the identification and measurement of the acquired assets and liabilities. Based on our understanding of the business of the acquired subsidiary, we have performed the following: a) assessed management’s valuation methodologies applied for the fair value measurement of the acquired assets and liabilities; and b) reviewed the key assumptions used in measuring the fair value of the acquired assets and liabilities. We have also evaluated the adequacy of the related disclosures in Note 15 to the financial statements. Information other than the financial statements and Auditor’s Report The directors of the Corporation are responsible for the other information. The other information comprises the information included in the Group’s 2016 Annual Report, but does not include the financial statements of the Group and of the Corporation and our auditors’ report thereon. The Group’s 2016 Annual Report is expected to be made available to us after the date of this auditors’ report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements of the Group and of the Corporation, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. Key audit matters (cont’d.) Financial Statements 339
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