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Annual Report 2020
129
kumpulan Fima Berhad
(197201000167)(11817-V)
Independent Auditors’ Report
To the members of Kumpulan Fima Berhad (Incorporated in Malaysia)
Key Audit Matters (cont’d.)
Revenue recognition (cont’d.)
(Refer to Note 3 to the financial statements)
As part of our audit, we performed the following procedures to address the possible cause of revenue misstatement, particularly in
respect of the timing and amount of revenue recognised:
(a)
Obtained an understanding of theGroup’s relevant internal controls and tested the controls over timing and amount of revenue
recognised;
(b)
Inspected the terms of significant sales contracts to determine the point of transfer of control to customers;
(c)
Inspected documents evidencing the delivery of goods to customers; and
(d)
Tested the recording of sales transactions close to the year end, including credit notes issued after year end, to establish
whether the transactions were recorded in the correct accounting period.
Impairment assessment of property, plant and equipment and right-of- use (arising from Litigation on PT Nunukan Jaya
Lestari‘s land (Refer to Note 14, Note 15 and Note 46 (a) to the financial statements)
In accordance with MFRS136: Impairment of Assets, the Group is required to perform impairment test of assets whenever there is an
indication that the assets may be impaired by comparing the carrying amount with its recoverable amount.
As disclosed in Note 46 (a) to the financial statements, as at 31 March 2020, the unfavourable outcome arising from the judicial review
dated 27 November 2019 against a subsidiary of Fima Corporation Berhad located in Indonesia, namely PT Nunukan Jaya Lestari
(“PTNJL”) by the Minister of Agrarian Affairs and Spatial Planning, pertaining to the legality of certain areas within the plantation land
occupied by PTNJL (“Judicial Review Outcome”), represents an indication of impairment.
Consequent to the Judicial Review Outcome, management has considered and recorded impairment loss on the affected property,
plant and equipment (“PPE”) and right-of-use (“ROU”). During the financial year, the management recognized impairment losses
on the PPE and the ROU of RM8.9 million and RM8.9 million respectively. As at 31 March 2020, the accumulated impairment losses
of PTNJL’s PPE and ROU amounted to RM17.93 million and RM11.98 million respectively. Given the significance of the matter, we
identified this as an area of focus in our audit.
We performed amongst others the following audit procedures:
(a)
Discussed and considered the impact of the Judicial Review Outcome with management personnel responsible for managing
the Group’s legal matters, PTNJL’s legal advisor, component auditor and with those charged with governance;
(b)
Discussed and considered the component auditor’s assessment of the objectivity, independence and expertise of the legal
advisor engaged by the PTNJL. We have also reviewed the opinion rendered by the legal advisor;
(c)
Reviewed the list of the affected PPE and ROU and the computation of the impairment losses thereon; and
(d)
Evaluated the adequacy of the disclosures of the Judicial Review Outcome giving rise to the impairment loss.
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 information included
in the annual report, but does not include the financial statements of the Group and 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.