Key Audit Matters (continued) Key audit matters in relation to significant subsidiaries (continued) Refer to Notes 3, 4, 6, 10, 11, 13 and 23 to the financial statements Key Audit Matter (“KAM 4”) How our audit addressed the key audit matter ii. Valuation of deferred tax assets As of 31 December 2023, the Group recognised deferred tax assets of approximately RM50.27 million, which mainly comprise unabsorbed capital allowances and other deductible temporary differences. The Group recognised deferred tax assets to the extent that it is probable that taxable profits will be available in the future to recover these deferred tax assets. The recognition of deferred tax assets is a complex process which involves management projection of future taxable profits. This is an area of focus given the significant estimates involved in the projection of future taxable profits. Silterra • Obtaining an understanding of the relevant processes and internal controls over the estimation of the recoverability of deferred tax assets; • Evaluating key assumptions in the projection of future taxable profits, in particular, the revenue growth and gross profit margin by comparing them to historical data, as well as current and future observable market or economic conditions; • Considering management’s assumptions on timing of utilisation of deductible temporary differences; and • Reviewing the adequacy of the disclosures in the notes to the financial statements. In addition to the procedures performed by the component auditors, our procedures included: • Re-evaluating the key assumptions used in the projection to ensure reliability by comparing them to external sources of information; and • Re-performing the audit procedures to ensure accuracy of management’s projection. 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. Financial Statements DAGANG NeXCHANGE BERHAD 310 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF DAGANG NEXCHANGE BERHAD (CONTINUED) (Incorporated in Malaysia) Registration No. 197001000738 (10039-P)
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