FGV Annual Report 2017

ANNUAL INTEGRATED REPORT 2017 FINANCIAL STATEMENTS 119 REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Key audit matters (continued) Key audit matters How our audit addressed the key audit matters Recoverability of deferred tax assets As at 31 December 2017, the Group has recognised deferred tax assets amounted to RM740.4 million which include deferred tax assets in respect of unused tax losses of certain loss making subsidiaries of the Group amounted to RM199.3 million. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the tax losses can be utilised. This involves judgments regarding the future financial performance of the subsidiaries in which the deferred tax assets have been recognised and hence, an area of focus for our audit. Refer to Note 3(q) in the significant accounting policies, Note 5(iii) in the critical accounting estimates and judgments and Note 48 to the financial statements. We have performed the following audit procedures: • We assessed the reliability of management’s projection of future taxable profits by comparing actual past financial performances against previous forecasted results; and • We assessed the reasonableness of the key assumptions used in estimating future taxable profit in particular, CPO price, FFB yield and mature estate costs for its plantation subsidiaries, and commission rate and yearly sales quantity arranged for its marketing subsidiary, by comparing against the historical data and industry trends. Based on our procedures, we noted no significant exceptions. Information other than the financial statements and auditors’ report thereon The Directors of the Company are responsible for the other information. The other information comprises the Company’s Corporate Information, Statement from the Chairman, Management Discussion and Analysis (including Message from the Group President/Chief Executive Officer and Performance by Sector), Corporate Governance Overview Statement, Statement of Risk Management and Internal Control, Directors’ Report, and other sections of the 2017 Annual Integrated Report, but does not include the financial statements of the Group and of the Company and our auditors’ 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 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. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the financial statements The Directors of the Company are responsible for the preparation of the financial statements of the Group and of the Company that give a true and fair view in accordance with Financial Reporting Standards and the requirements of the Companies Act 2016 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 or to cease operations, or have no realistic alternative but to do so. INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FELDA GLOBAL VENTURES HOLDINGS BERHAD