ENRA Group Berhad Annual Report 2019

100 ENRA GROUP BERHAD ∞ Annual Report 2019 page Notes to the Financial Statement 31 March 2019 10. GOODWILL ON CONSOLIDATION (cont’d) (b) Goodwill has been allocated to the identified cash generating unit (“CGU”) according to relevant operating segments based on the geographical location of customers as follows: (cont’d) For the purpose of impairment testing, the recoverable amount of a CGU is determined based on its value-in-use. The value-in-use is determined by discounting the pre-tax cash flows based on financial budgets prepared by the Group covering a five-year period based on the following key assumptions: 2019 2018 Growth rates 2.5% 1.0% Pre-tax discount rate 7.0% - 7.5% 8.5% Sensitivity to changes in assumptions The management believes that a reasonably possible change in the key assumptions on which management has based its determination of the CGU’s recoverable amount would not cause the CGU’s carrying amount to further exceed its recoverable amount. For the purpose of impairment testing, goodwill is allocated to the operating divisions of the Group, which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes. Goodwill has been allocated to the CGU of the Group. The recoverable amount of a CGU requires management’s estimate and is determined based on value-in-use calculations using cash flow projections based on financial budgets approved by management covering a five-year period. Based on the annual impairment testing undertaken by the Group, no impairment losses were required for the carrying amounts of the remaining goodwill assessed as at 31 March 2019 as their recoverable amounts were in excess of their carrying amounts. Management believes that there is no reasonably possible change in the key assumptions on which management has based its determination of the CGU’s recoverable amount, which would cause the CGU’s carrying amount to materially exceed its recoverable amount. 11. DEFERRED TAXATION (a) The deferred taxation are made up of the following: Group Company 2019 RM’000 2018 RM’000 2019 RM’000 2018 RM’000 At 1 April (126) 1,828 - - Recognised in profit or loss (Note 32) (77) (1,952) - - Exchange adjustment (4) (2) - - At 31 March (207) (126) - - Presented by: Deferred tax assets, net 76 117 - - Deferred tax liabilities, net (283) (243) - - (207) (126) - -