Page 206 - S P Setia Annual Report 2016
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204   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 (CONT’D.)

          Key Audit Matters (cont’d.)

          (c)   Net realisable value of completed properties

              As at 31 December 2016, the carrying amount of completed projects stood at RM871,796,000 which represents 10% of the Group’s
              total current assets. Management’s annual impairment assessment of carrying value of completed properties is significant to our audit
              because it is based on assumptions that are affected by expected future market and economic conditions.

              Our procedures in relation to management assessment of the net realisable value of completed properties includes:

              -    Comparing the recent transacted prices of comparable completed properties, after taken into consideration of the discount
                   given. We focused our evaluation on those completed properties that are slow moving.

              -    Physical sighting on individually significant completed properties and assessed the related cost of maintenance to assess any
                   potential write down due to physical obsolescence.

              The Group’s accounting policies and disclosures on completed properties are disclosed in Notes 1(n), 1(c)(ii) and 13 respectively to the
              financial statements.

          Information other than the financial statements and auditor’s 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 auditor’s 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
          identified above when it becomes available 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.

          Responsibilities of directors for the financial statements

          The directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give a
          true and fair view in accordance with FRS and the requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible
          for such internal control as the directors determine is necessary to enable the preparation of financial statements of the Group and of the
          Company that are free from material misstatement, whether due to fraud or error.

          In preparing the financial statements of the Group and of the Company, the directors are responsible for assessing the Group’s and the
          Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
          basis of accounting unless the directors either intend to liquidate the Group or the Company to cease operations, or has no realistic alternative
          to do so.
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