FGV Audited Financial Statements 2020

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, which had impairment indicators. As a result, impairment losses of RM242.1 million for FGV Group’s property, plant and equipment and right-of-use assets were recognised during the financial year ended 31 December 2020. We focused on this area as the recoverable amounts of the non- financial assets are determined based on discounted cash flows projections, which require judgement 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 judgements and Notes 20 and 21 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; • We examined the sensitivity analysis performed by management on the key assumptions listed above and also the discount rates used to evaluate the impact on the impairment assessment; and • We assessed the adequacy and reasonableness Based on the above procedures performed, 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 2020 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 Malaysian Financial Reporting Standards, International 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. REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED) Key audit matters (continued) Independent Auditors’ Report TO THE MEMBERS OF FGV HOLDINGS BERHAD (Incorporated in Malaysia) (Company No. No. 200701042133 (800165-P)) 9 Audited Financial Statements 2020