My EG Services Berhad Annual Report 2019

ANNUAL REPORT 2019 99 FINANCIAL STATEMENTS REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONT’D) Key Audit Matters (cont’d) We have determined the matters described below to be the key audit matters to be communicated in our report. Impairment of Financing Receivables Refer to Notes 5.1(d) and 16 to the financial statements Key Audit Matter How our audit addressed the key audit matter As disclosed in Note 16 to the financial statements, financing receivables as at the reporting date amounted to approximately RM319 million. The management assessed the level of allowance for impairment losses on financing receivables based on management’s application of judgement and use of subjective assumptions. This assessment involves significant judgement and there is inherent uncertainty in the assumptions applied by the management to determine the level of allowance for impairment losses. Due to the significance of financing receivables (representing 31% of total assets of the Group) and the uncertainty inherent in determining the level of allowance for impairment losses, we considered this as a key audit matter. Our audit procedures included, amongst others:- • reviewed recoverability of financing receivables; • reviewed management’s basis of assessment on impairment loss on financing receivables; • reviewed the management assessment on the borrowers’ creditworthiness and guarantor or collaterals for the financing receivables; • enquired management on procedures in place for the approval of financing receivables; • reviewed the repayment of principal and interest during the financial period; and • considered the adequacy of the Group’s disclosures in this area. 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 information included in 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 the 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 have no realistic alternative but to do so. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF MY E.G. SERVICES BERHAD (Incorporated in Malaysia) Registration No: 200001003034 (505639 - K) (CONT’D)