FRONTKEN CORPORATION BERHAD 200401012517 (651020-T) ANNUAL REPORT 2024 57 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FRONTKEN CORPORATION BERHAD (Incorporated in Malaysia) Registration No: 200401012517 (651020 - T) REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Opinion We have audited the nancial statements of Frontken Corporation Berhad, which comprise the statements of nancial position as at 31 December 2024 of the Group and of the Company, and the statements of pro t or loss and other comprehensive income, statements of changes in equity and statements of cash ows of the Group and of the Company for the year then ended, and notes to the nancial statements, including material accounting policy information, as set out on pages 61 to 133. In our opinion, the accompanying nancial statements give a true and fair view of the nancial position of the Group and of the Company as at 31 December 2024, and of their nancial performance and their cash ows for the 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 suf cient 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’ International Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”), as applicable to audits of nancial statements of public interest entities and we have ful lled 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 signi cance in our audit of the nancial statements of the Group and of the Company for the current year. These matters were addressed in the context of our audit of the nancial 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. Impairment of Goodwill on Consolidation Refer to Note 15 to the nancial statements. Key Audit Matter How our audit addressed the Key Audit Matter The Group has goodwill of approximately RM33.8 million comprised within the 3 cash-generating units (“CGU”). For the CGUs which comprised goodwill, the determination of recoverable amount, being the higher of fair value less costs to sell and value-in-use, requires judgement on the part of management in identifying and then valuing the relevant CGUs. The value-in-use models used to assess the risk of impairment are based on assumptions including revenue forecasts, gross and operating margins and discount rates, all of which are country-speci c. We focused on this area because of the inherent judgement involved in determining key assumptions such as future sales growth, pro t margins, discount rates and terminal value. Our procedures included, among others: a) Making enquiries of and challenging the management on the key assumptions made, including: i. the achievement of the business plan; and ii. sales growth, operating margin, discount rates and long-term growth rates; b) Performing sensitivity analysis on key assumptions and agreeing with management’s conclusion to ascertain the extent of change that individually, or in combination, would be required for the goodwill to be impaired; and c) Assessing the adequacy of disclosure of goodwill in the nancial statements.
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