KEY!AUDIT!MATTERS!(CONT’D*) Going!concern!assessment!(cont’d*) The!consolidated!financial!statements!of!the!Group!and!of!the!Company!have!been!prepared!on!a!going!concern!basis'!As!disclosed!in!Note! "'$!to!the!financial!statements&!the!directors!have!prepared!a!cash!flow!forecast!as!part!of!the!assessment!to!demonstrate!the!Group’s!and! the!Company’s!ability!to!meet!their!loan!repayment!obligations!for!the!next!twelve!months!after!the!reporting!date!and!to!continue!as!a!going! concern'! We! identified! the! going! concern! assessment! as! an! area! requiring! audit! focus! because! the! assessment! is! highly! subjective! as! it! requires! significant!management!judgements!and!largely!based!on!the!expectations!of!and!estimates!made!by!management!of!future!cash!flow!needs'! Critical!to!the!going!concern!assessment!are!the!Group’s!and!the!Company’s!ability!to!secure!the!required!additional!financing&!and!to!sell! certain!assets!to!raise!the!necessary!funds!to!meet!the!loan!repayment!obligations'! How!have!our!audit!addressed!this!matter In!addressing!this!area!of!audit!focus&!we!performed!amongst!others&!the!following!procedures!to!assess!the!Group’s!and!the!Company’s!ability! to!continue!meeting!their!payment!obligations) • We!had!discussions!with!the!directors!to!understand!the!business!plans!and!their!plans!to!address!the!loan!repayment!obligations!for!the! next!twelve!months!after!the!reporting!date* • We!evaluated!the!estimates!made!by!the!directors!in!respect!of!revenue!and!major!operating!costs!against!the!Group’s!business!plans&! historical!results!and!expected!selling!prices* • We!evaluated!the!ability!of!the!Group!to!sell!certain!land!held!for!property!development&!investment!properties!and!property&!plant!and! equipment!to!raise!the!necessary!funds!by!sighting!to!the!signed!letters!of!intent!or!signed!SPAs!or!correspondences!from!identified! buyers* • We!evaluated!the!ability!of!the!Group!and!of!the!Company!to!secure!additional!financing!obtaining!draft!indicative!term!sheets!from!the! financial!institutions* • We!sighted!bank!documents!to!validate!the!availability!of!undrawn!credit!facilities*!and • We!evaluated!the!adequacy!of!disclosures!in!respect!of!this!matter'! Revenue!and!cost!of!sales!in!respect!of!property!development!activities (Refer!to!Note!1!and!Note!/!to!the!financial!statements) A!significant!proportion!of!the!Group’s!revenues!and!profits!are!derived!from!property!development!contracts!which!span!more!than!one! accounting!period'!For!the!financial!year!ended!+$!December!"#"+&!property!development!revenue!from!ongoing!projects!of!RM,0$&###&###! and!cost!of!sales!of!RM%+/&1-"&###!accounted!for!approximately!/,3!and!%$3!of!the!Group’s!revenue!and!cost!of!sales!respectively'!For!these! property!development!contracts!where!revenue!is!recognised!over!time&!the!Group!uses!the!input!method!in!determining!the!percentage!of! completion&!which!is!based!on!the!actual!cost!incurred!to!date!on!the!property!development!project!over!the!total!budgeted!cost!for!the! respective!development!projects!in!accounting!for!the!progress!towards!complete!satisfaction!of!the!Group’s!performance!obligation' We!identified!revenue!and!cost!of!sales!in!respect!of!property!development!activities!as!areas!requiring!audit!focus!as!significant!management’s! judgement!and!estimates!are!involved!in!estimating!the!total!property!development!costs!to!complete!the!project&!which!include!the!common! infrastructure!costs!(which!is!used!to!determine!progress!towards!complete!satisfaction!of!the!Group’s!performance!obligation!and!gross!profit! margin!of!the!property!development!activities!undertaken!by!the!Group)'! 179 FINANCIAL STATEMENTS & OTHER INFORMATION
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