Page 345 - Full Book_24.4.2021

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF BIMB HOLDINGS BERHAD In Retrospect

(INcORPORATED IN MALAySIA) |
The Will to Suceed
(cOMPANy NO. REGISTRATION NO: 199701008362 (423858-X))

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REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)
Key audit matters (continued)
Key audit matters How our audit addressed the key audit matters Achieving a Leading Repute
Impairment of Financing, Advances and Others We tested the design and operating effectiveness of the controls over
impairment of financing, advances and others. These controls covered:
Refer to Note 2.5 and 2.12 of the summary of significant |
accounting policies and Notes 8, 35 and 49.3 (iii) of the • Identification of financing, advances and others that have experienced
Financial Statements. significant increase in credit risk or objective evidence of impairment;
We focused on this area due to the size of the carrying • Governance over the impairment processes, including model
value of financing, advances and others, which development, model approval and model validation; Paving the Way for a Sustainable Future
represented 63.6% of total assets of the Group.
• Data used to determine the allowances for credit losses including the
In addition, impairment is a highly subjective area as the completeness and accuracy of the key inputs and assumptions into
Group exercised significant judgement on the following respective EcL models; and
areas:
• Review and approval of the ECL calculation.
Timing of identification of Stage 2 and Stage 3 financing, Our detailed testing over the financing, advances and others are as
advances and others 339
follows:
• Assessment of objective evidence of impairment of Individual assessment
financing, advances and others based on mandatory
and judgemental triggers. • Examined a sample of financing, advances and others particularly
focused on customers identified by the Group as having lower
• Identification of financing, advances and others that credit quality, rescheduled and restructured, borrowers in high risk
have experienced a significant increase in credit risk.
industries impacted by cOvID-19, and formed our own judgement Adhering to the Best Governance Practices
Individual assessment as to whether there was a significant increase in credit risk or any
objective evidence of impairment.
Estimates on the amount and timing of futures cash flows
based on realisation of collateral or customer’s business • Where objective evidence of impairment was identified by the Group
cash flows. and impairment loss was individually calculated, we examined both |
the quantum and timing of future cash flows used by the Group
collective assessment
in the impairment loss calculation, challenging the assumptions
choosing the appropriate collective assessment models and comparing estimates to external evidence where available.
and assumptions for the measurement of EcL such calculations of the discounted cash flows were also re-performed.
as expected future cash flows and forward – looking collective assessment Laying the Foundation for Financial Growth
macroeconomic factors given the wide range of potential
economic outcomes due to cOvID-19. • Assessed the methodologies inherent within the collective assessment
EcL models applied against the requirements of MFRS 9, including
the basis used by the management to determine the key assumptions
used in respective EcL models; |
• Assessed and tested the significant modelling assumptions, including
the basis or judgment used for management’s overlays;
• Assessed and considered reasonableness of forward-looking forecasts
assumptions; and Additional Information & Disclosure Summary

• Tested the accuracy of data inputs used in ECL models and checked
the calculation of EcL amount, on a sample basis.
Based on the procedures performed on individual and collective |
assessment, we did not find any material exceptions to the Group’s
24 th AGM Information
assessment on impairment of financing, advances and others.