174 REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONT’D) Key audit matters (cont’d) Impairment of development costs Key audit matters How our audit addressed the key audit matters As disclosed in Note 6 to the financial statements, development costs as at the reporting date amounted to approximately RM1,848.12 million representing 43.52% of total assets of the Group. Development costs are subject to impairment assessment by comparing the carrying amounts to their corresponding recoverable amounts. The recoverable amounts were determined by the management using the value in use method, based on future financial information. We considered this as key audit matter due to the significance of the carrying amounts of development cost and the uncertainty inherent in determining the recoverable amounts. Our audit procedures included, amongst others: z Obtained management’s impairment analysis and gained an understanding of their impairment assessment process; z Reviewed the reasonableness of key assumptions used and judgement made in determining the recoverable amount; z Reviewed the sensitivity analysis on revenue growth, profit margin and discount rate; and We have determined that there were no key audit matters to communicate for the Company in our report. 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 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 [Registration No.: 200001003034 (505639-K)] (Incorporated in Malaysia) (cont’d)
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