INDEPENDENT AUDITORS9 REPORT TO THE MEMBERS OF SASBADI HOLDINGS BERHAD (continued) (Incorporated in Malaysia) Key Audit Matters (continued) Key Audit Matters of the Group (continued) 2. Valuation of inventories (continued) We determined this to be a key audit matter because it requires management to exercise significant judgements in assessing the level of allowance for inventories write-down required. Audit response Our audit procedures included the following: a. Evaluated the design and implementation over the control of identification of slow moving inventories and tested their effectiveness; b. Checked selected inventories samples to sales subsequent to the financial year end to determine that these were sold at more than its cost; and c. Assessed the adequacy of the allowance for inventories write-down at year end. Key Audit Matter of the Company Impairment assessment of investments in subsidiaries As at 31 August 2024, the carrying amount of the investments in subsidiaries for unquoted equity shares were RM90,334,000 as disclosed in Note 8 to the financial statements. We determined this to be a key audit matter because it requires management to exercise significant judgements and assumptions in determining the recoverable amount, estimating the future results and key assumptions applied to cash flow projections of these subsidiaries. These judgements and assumptions include projected growth in sales and gross margins, as well as determining an appropriate pre-tax discount rate. Audit response Our audit procedures included the following: a. Compared prior period projection to actual outcome to assess reliability of management9s projections; b. Compared cash flow projections against the subsidiaries9 recent performance, then assessed and evaluated the key assumptions made in the forecast and projections; ANNUAL REPORT 2024 HOLDINGS BERHAD Financial Statements (continued) 84
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