INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF SASBADI HOLDINGS BERHAD (continued) (Incorporated in Malaysia) Key Audit Matters (continued) Key Audit Matters of the Group (continued) 2. Carrying amount of inventories at the lower of cost and net realisable value (continued) We determined this to be a key audit matter because it requires management to exercise significant judgements in assessing the level of allowance for inventories write down required. Audit response Our audit procedures included the following: a. Evaluated the design and implementation over the control of identification of slow moving inventories and tested their effectiveness; b. Checked selected inventories samples to sales subsequent to the financial year end to determine that these were sold at more than its cost; and c. Assessed the adequacy of the allowance for inventories write down at year end. Key Audit Matter of the Company Impairment assessment of investments in subsidiaries As disclosed in Note 8 to the financial statements, the carrying amount of investments in subsidiaries amounted to RM92,765,000 as at 31 August 2025, of which RM32,980,000 relates to subsidiaries with impairment indicators. The management assessed the recoverable amount of the investments in subsidiaries by determining the value-in-use of the subsidiaries using the discounted cash flow method. We determined this to be a key audit matter because it requires management to exercise significant judgements and assumptions in determining the recoverable amount, estimating the future results and key assumptions applied to cash flow projections of these subsidiaries. These judgements and assumptions include projected growth in sales and gross margins, as well as determining an appropriate pre-tax discount rate. SASBADI HOLDINGS BERHAD Financial Statements (conঞ nued) 84
RkJQdWJsaXNoZXIy NDgzMzc=