Sasbadi Annual Report 2017

144 SASBADI HOLDINGS BERHAD (1022660-T) I BER AD (10 2 60-T) INDEPENDENT AUDITORS’ REPORT Key Audit Matters (continued) 3. Valuation of inventories Refer to Note 8 to the financial statements. The key audit matter How the matter was addressed in our audit The valuation of inventories is a key audit matter because of the judgement involved in assessing the level of allowance for inventories write down required and the inventories balance as at year end is material to the Group. We performed the following audit procedures, amongst others, around the valuation of inventories: x We evaluated the design and implementation processes over the identification of slow moving inventories and tested their effectiveness; x From samples selected, we checked the inventories to sales subsequent to the year end to determine that these were sold at more than its cost; and, x We assessed the adequacy of the allowance for inventories write down by comparing against the Group ’s policies. We have determined that there is no key audit matter in the audit of the separate financial statements of the Company to communicate in our auditors’ report.