Page 204 - S P Setia Annual Report 2016
P. 204

202   S P Setia Berhad Group
                Annual Report 2016


          Independent Auditors’ Report



          To The Members Of S P Setia Berhad (Incorporated In Malaysia)

          REPORT ON AUDIT OF THE FINANCIAL STATEMENTS

          We have audited the financial statements of S P Setia Berhad, which comprise the statements of financial position as at 31 December 2016
          of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash
          flows of the Group and of the Company for the year then ended, and notes to the financial statements, including a summary of significant
          accounting policies, as set out on pages 100 to 200.

          In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as
          at 31 December 2016, and of their financial performance and their cash flows for the year then ended in accordance with Financial Reporting
          Standards (“FRS”) and the requirements of the Companies Act, 1965 in Malaysia.

          Basis for opinion

          We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our
          responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of
          our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

          Independence and other ethical responsibilities

          We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the
          Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional
          Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and IESBA Code.

          Key Audit Matters

          Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of
          the Group and of the Company for the current year. These matters were addressed in the context of our audit of the financial statements of
          the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
          For each matter below, our description of how our audit addressed the matter is provided in that context.

          We have fulfilled the responsibilities described in the Auditors’ responsibilities for the audit of the financial statements section of our report,
          including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment
          of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to
          address the matters below, provide the basis of our audit opinion on the accompanying financial statements.

          (a)   Revenue and cost of sales from property development activities recognised on percentage of completion method

              For the financial year ended 31 December 2016, revenue of RM4,484,432,000 and cost of sales of RM3,077,240,000 from property
              development activities account for approximately 90% and 88% of the total Group’s revenue and cost of sales respectively. Where the
              Group uses percentage of completion method to recognise revenue and profit from its property development activities, the amount
              of revenue and profit recognised are dependent on, amongst others, the extent of costs incurred to the total estimated costs of
              construction to derive the percentage of completion, the actual number of units sold and the estimated total revenue for each of the
              respective projects.

              We identified revenue and cost of sales recognised on percentage of completion method from property development activities as
              matters requiring audit focus as these areas involved significant management’s judgement and estimates in estimating the total property
              development costs (which is used to determine the percentage of completion and gross profit margin of property development
              activities undertaken by the Group).
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