ENRA Group Berhad Annual Report 2020

ENRA Group Berhad - Annual Report 2020 99 NOTES TO THE FINANCIAL STATEMENTS 31 March 2020 10. GOODWILL ON CONSOLIDATION (Cont’d) b. Impairment of goodwill Goodwill has been allocated to the identified CGU according to relevant operating segments based on the geographical location of customers as follows: Group 2020 RM’000 2019 RM’000 Malaysia 8,912 8,906 United Kingdom 24 24 Australia 4,004 4,004 12,940 12,934 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 with a terminal value based on the following key assumptions: 2020 2019 Growth rates 5% 2.5% Pre-tax discount rate 12% 7.0% - 7.5% 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. 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 2020 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.