Key Audit Matters (continued) Recoverability of trade receivables Refer to Note 13 to the financial statements Key Audit Matter How our audit addressed the key audit matter As of 30 June 2022, the Group’s trade receivables was approximately RM210.23 million net of impairment losses. Trade receivables are a major component of the financial position of the Group’s total assets. We focused on this area due to judgements are required to assess the allowance for impairment losses. Our procedures included, amongst others: • Reviewing the ageing analysis of trade receivables and testing the reliability thereof; • Reviewing subsequent cash collections for major trade receivables and overdue amounts; • Testing the adequacy of the Group’s allowance for impairment losses on trade receivables by assessing management’s policy; and • Reviewing the adequacy of the Group’s disclosure in this area. Slow-moving and obsolete inventories Refer to Note 11 to the financial statements Key Audit Matter How our audit addressed the key audit matter As of 30 June 2022, the Group’s inventories was approximately RM147.97 million. The review and assessment of inventories write-downs due to excess quantities, obsolescence and decline in net realisable value below cost involved judgements and estimation uncertainty in forming expectations about future sales and demand. Possible changes in these estimates could result in revisions to the valuation of inventories. Our procedures included, amongst others: • Obtaining an understanding of the process on allowance for slow-moving and obsolete inventories and the design and control effectiveness over slow-moving inventories; • Reviewing the ageing analysis of inventories and testing the reliability thereof; • Reviewing the net realisable value of major inventories; and • Evaluating whether the inventories have been written down to their net realisable value for inventory items with net realisable value lower than their cost. 311 DNeX INTEGRATED REPORT 2022
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