Serba Dinamik Annual Report 2016

2016 Annual Report 165 REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Opinion We have audited the financial statements of Serba Dinamik Holdings Berhad, which comprise the statements of financial position as at 31 December 2016 of the Group and of the Company, and the statements of profit or loss and other comprehensive income statement of changes in equity and the statements of cash flows of the Group and of the Company for the period then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 101 to 161. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 December 2016 and of their financial performance and cash flows for the period then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia. Basis for Opinion We concluded 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 auditors’ report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence 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”), the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled 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 significance in our audit of the financial statements of the Group and of the Company for the current financial period. These matters were addressed in the context of our audit of the financial 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. 1. Revenue recognition from provision of operation and maintenance project and engineering, procurement, construction, and commissioning project Refer to Note 2 (n) (accounting policy) and Note 17 (financial disclosures). The Key audit matter How the matter was addressed in our audit The Group’s largest revenue stream related to provision of operation and maintenance. Majority of the customers are in oil and gas industry. Contracts of such services varies, each with different terms. This leads to complexity around the calculation and recognition of revenue and any accrued and deferred revenue. Our audit procedures included, amongst others: i) We evaluated the controls designed and applied by the Group in the process of determining the revenue recognised in the financial statements. ii) We inspected all newly procured projects to contract agreement to determine whether, based on the contract terms and billing schedule as well as overall performance of services, the Group has appropriately accounted the contracts as in the revenue recognition. iii) We checked completeness and accuracy of revenue by inspecting job completion certificates and other relevant documents (i.e. timesheets, delivery order, etc.) whether the associated revenue was recognised in the correct period. INDEPENDENT AUDITORS’ REPORT to the member of Serba Dinamik Holdings Berhad