ENRA Group Berhad Annual Report 2021

FINANCIAL STATEMENTS & OTHERS Annual Report 2021 | ENRA Group Berhad 133 NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2021 10. GOODWILL ON CONSOLIDATION (cont’d) (b) Impairment of goodwill (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 with a terminal value based on the following key assumptions: 2021 2020 Growth rates 5% 5% Pre-tax discount rate 10% 12% Impairment of goodwill amounted to RM8,536,000 (2020: RM Nil) was recognised during the financial year due to adverse adjustments made to the forecast operating cash flows included in the value-in-use calculation of Malaysia’s subsidiaries due to COVID-19 pandemic. 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 2021 as their recoverable amounts were in excess of their carrying amounts. Sensitivity to changes in assumptions The management is not aware of any reasonably possible change in the key assumptions on which management has based its determination of the CGU’s recoverable that could cause further impairment loss on goodwill. 11. DEFERRED TAXATION (a) The deferred taxation are made up of the following: Group Company 2021 2020 2021 2020 RM’000 RM’000 RM’000 RM’000 At beginning of the financial year (502) (207) – – Recognised in profit or loss (Note 30) 56 (299) – – Exchange adjustment (11) 4 – – At end of the financial year (457) (502) – – Presented by: Deferred tax assets, net 247 225 – – Deferred tax liabilities, net (704) (727) – – (457) (502) – –