FGV Annual Report 2018

117 01 02 05 03 07 06 04 08 09 EXAMINED OUR NUMBERS ANNUAL INTEGRATED REPORT 2018 REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Key audit matters (contined) Key audit matters How our audit addressed the key audit matters Recoverability of deferred tax assets As at 31 December 2018, the Group had recognised deferred tax assets amounted to RM605.2 million which include deferred tax assets in respect of unused tax losses of certain loss making subsidiaries of the Group amounted to RM127.7 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. RM74.6 million of deferred tax assets had been reversed during the financial year relating to tax benefits that are not expected to be utilised as disclosed in Note 51 to the financial statements. Refer to Note 3(q) in the significant accounting policies, Note 5(iv) in the critical accounting estimates and judgments and Note 51 to the financial statement. We have performed the following audit procedures: • We assessed the reliability of management’s projections 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 estate and production costs for its plantation subsidiaries, and CPO price, gross margin and sales volume for its trading 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, Message from the Group Chief Executive Officer, Management Discussion and Analysis (including Performance by Sector), Corporate Governance Overview Statement, Statement of Risk Management and Internal Control, Directors’ Report, and other sections of the 2018 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. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FGV HOLDINGS BERHAD (Formerly known as Felda Global Ventures Holdings Berhad) (Incorporated in Malaysia) (Company No. 800165-P)