KUB Malaysia Berhad Annual Report 2021

Key Audit Matter (cont’d) Key audit matter Our audit performed and responses thereon The provision matrix is initially based on the Group’s historical observed default rates. The Group will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. We considered this as a key audit matter due to significant judgements and estimates involved in the assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs, including the downside scenarios related to the spread of COVID-19. • Assessed and considered the reasonableness of the key judgements and estimates of the current and forward-looking information as well as discussed with management to understand the judgements and estimates involved in applying the simplified approach of using lifetime ECL on trade receivables, contract assets and finance lease receivables, including considering the COVID-19 impact; and • Evaluated the adequacy of the Group’s disclosures included in the financial statements. • Evaluated the adequacy of the impairment losses recognised and the appropriateness of the disclosures included in the notes to the financial statements. Company There are no key audit matters to be communicated in respect of the audit of the financial statements of the Company. 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 Board of 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 intends to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so. 49 ANNUAL REPORT 2021 FINANCIAL STATEMENTS