DESTINI Annual Report 2019

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF DESTINI BERHAD How we addressed the key audit matters Our audit procedures included, amongst others, the following: • Understanding on the procedures of the Group:- • the Group’s identification, monitoring and assessment on the impairment of receivables; and • the Group’s basis and justification in making accounting estimates for impairment; • Reviewing the ageing analysis of receivables and testing the reliability thereof; • Reviewing subsequent cash collections for major receivables and overdue amount; • Making inquiries of management regarding the action plans to recover overdue amounts; • Understanding of significant credit exposures which were significantly overdue or deemed to be in default; and • Evaluating the reasonableness and adequacy of the allowance for impairment recognised for identified exposures. Key Audit Matters Impairment on trade receivables The Group’s trade receivables amounting to RM210,802,740 represents approximately 36% of the Group’s total assets as at 31 December 2019. The assessment of recoverability of receivables involved judgements and estimation uncertainty in analysing historical trend in bad payment, customer concentration, customer creditworthiness and customer payment terms and adjusted for forward looking macro economic factors. Information Other than the Financial Statements and Auditors’ Report Thereon The Directors of the Company are responsible for the other information. The other information comprises the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon. Our opinion on the financial statements of the Group and of the Company 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 Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company, or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, 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 Directors for the Financial Statements The Directors of the Company are responsible for the preparation of the financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or has no realistic alternative but to do so. FINANCIAL STATEMENTS 06 ANNUAL REPORT 2019 093