FGV Audited Financial Statements 2019

11 01 S E C T I O N AUDITED FINANCIAL STATEMENTS 2019 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) (Registration No. 200701042133 (800165-P)) REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Key audit matters (continued) Key audit matters How our audit addressed the key audit matters Impairment assessments of non-financial assets with impairment indicators Management performed impairment assessments of the non-financial assets of the Group and Company, which had impairment indicators. As a result, the following impairment losses were recognised during the financial year ended 31 December 2019: • Impairment totaling RM168.3 million at FGV Group of PPE and right-of-use assets. • Impairment totaling RM336.9 million of FGV Holdings Berhad in respect of the Company’s investment in FGV Sugar Sdn Bhd and MSM Malaysia Holdings Berhad. We focused on this area as the recoverable amounts of the non-financial assets are determined based on discounted cash flows projections, which require judgment on the part of management on the future financial performance and the business plan of those busineses. Refer to Note 3(o) in the significant accounting policies, Note 5(iii) in the critical accounting estimates and judgments and Notes 20, 21 and 24 to the financial statements. We have performed the following audit procedures: • We evaluated the reliability of management’s cash flows projections through the review of past trends of actual financial performances against previous forecasted cash flows; • We assessed the reasonableness of the key assumptions, which were used by management in developing the discounted cash flows projections, by comparing against historical data and industry trends; and • We assessed the adequacy and reasonableness of the disclosures in the financial statements. Based on the above procedures performed, we noted no significant exceptions.