INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF DAGANG NEXCHANGE BERHAD (INCORPORATED IN MALAYSIA) REGISTRATION NO. 197001000738 (10039-P) Key Audit Matters (continued) Recoverability of trade receivables Refer to Note 14 to the financial statements Key Audit Matter How our audit addressed the key audit matter As of 31 December 2025, the Group’s trade receivables was approximately RM61.30 million net of impairment losses. Trade receivables are a major component of the financial position of the Group’s total assets. We focused on this area as judgements are required to assess the allowance for impairment losses. Our procedures included, amongst others: • Reviewed the ageing analysis of trade receivables and tested the reliability thereof; • Reviewed subsequent cash collections for major trade receivables and overdue amounts; • Tested the adequacy of the Group’s allowance for impairment losses on trade receivables by assessing management’s policy; and • Reviewed the adequacy of the disclosures in the notes to the financial statements. Slow-moving and obsolete inventories Refer to Note 12 to the financial statements Key Audit Matter How our audit addressed the key audit matter As of 31 December 2025, the Group’s inventories was approximately RM119.63 million. The review and assessment of inventories writedowns due to excess quantities, obsolescence and decline in net realisable value below cost involved significant judgements and estimation uncertainty in forming expectations about future sales and demand. Possible changes in these estimates could result in revisions to the valuation of inventories. Our procedures included, amongst others: • Obtained an understanding of the process on allowance for slow-moving and obsolete inventories and the design and control effectiveness over slow-moving inventories; • Reviewed the ageing analysis of inventories and tested the reliability thereof; • Reviewed the net realisable value of major inventories; and • Evaluated whether the inventories have been written down to their net realisable value for inventory items with net realisable value lower than their cost. There are no key audit matters to report for the Company. 229 OPERATIONAL REVIEW SUSTAINABILITY STATEMENT GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDERS’ INFORMATION INTELLIGENCE POWERING
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