Key Audit Matters (continued) Impairment of property, plant and equipment, right-of-use assets and intangible assets Refer to Notes 3, 4 and 6 to the financial statements Key Audit Matter (“KAM 1”) How our audit addressed the key audit matter As of 31 December 2023, the Group’s property, plant and equipment, right-of-use assets and intangible assets were approximately RM2,231.26 million, RM58.09 million and RM1,162.32 million net of impairment losses respectively. These assets mainly relate to the building and facility system and equipment of semiconductor wafers, a floating production, storage and offloading vessel (“FPSO”), leasehold land and production fields of the Anasuria Cluster. This is an area of focus given the inherent subjectivity in impairment testing. Our procedures in relation to the impairment indication test included, amongst others: Technology segment - Silterra Malaysia Sdn. Bhd. • Reviewing the reinstatement cost model prepared by management and assisted by an external expert for indications of impairment; • Evaluating the competence and capabilities of the external expert and reviewing the terms of engagement of the expert appointed by the Group to determine whether there were any matters that might have affected their objectivity or limited their scope of their work; and • Assessing the methodology adopted by management and its appointed expert for calculating the fair values and validating the key assumptions used. Energy segment - Ping Petroleum UK PLC • Reviewing the reserve model prepared by the management and assisted by an external expert for indications of impairment; • Evaluating the competence and capabilities of the external expert and reviewing the terms of engagement of the expert appointed by the Group to determine whether there were any matters that might have affected their objectivity or limited their scope of their work; • Assessing the reasonableness of management’s key assumptions made, including oil prices, production volumes and discount rate; and • Performing sensitivity analysis by changing the key assumptions used and assessing the impact on the recoverable amount of the cash-generating unit (“CGU”). Recoverability of trade receivables Refer to Note 13 to the financial statements Key Audit Matter (“KAM 2”) How our audit addressed the key audit matter As of 31 December 2023, the Group’s trade receivables was approximately RM239.10 million net of impairment losses. Trade receivables are a major component of the financial position of the Group’s total assets. We focused on this area due to judgements are required to assess the allowance for impairment losses. Our procedures included, amongst others: • Reviewing the ageing analysis of trade receivables and testing the reliability thereof; • Reviewing subsequent cash collections for major trade receivables and overdue amounts; • Testing the adequacy of the Group’s allowance for impairment losses on trade receivables by assessing management’s policy; and • Reviewing the adequacy of the disclosures in the notes to the financial statements. Financial Statements DAGANG NeXCHANGE BERHAD 308 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF DAGANG NEXCHANGE BERHAD (CONTINUED) (Incorporated in Malaysia) Registration No. 197001000738 (10039-P)
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