116 FINANCIAL STATEMENTS & OTHERS ENRA GROUP BERHAD ANNUAL REPORT 2023 Notes To The Financial Statements 31 March 2023 (Cont’d) 6. INVESTMENTS IN SUBSIDIARIES (CONT’D) (a) A subsidiary is an entity in which the Group and the Company are exposed, or have rights, to variable returns from its involvement with the subsidiary and have the ability to affect those returns through its power over the subsidiary. An investment in subsidiary, which is eliminated on consolidation, is stated in the separate financial statements of the Company at cost less accumulated impairment losses, if any. Put options written over non-controlling interests on the acquisition of subsidiary shall be included as part of the cost of investment in the separate financial statements of the Company. Subsequent changes in the fair value of the written put options over non-controlling interests shall be recognised in profit or loss. Investments accounted for at cost shall be accounted for in accordance with MFRS 5 Non-current Assets Held for Sale and Discontinued Operations when they are classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance with MFRS 5. When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the Group would derecognise all assets, liabilities and non-controlling interests at their carrying amount and to recognise the fair value of the consideration received. Any retained interest in the former subsidiary is recognised at its fair value at the date control is lost. The resulting difference is recognised as a gain or loss in profit or loss. (b) Equity contributions to subsidiaries are unsecured, interest-free and settlement is neither planned nor likely to occur in the foreseeable future for the purposes of providing the subsidiaries with a long term source of additional capital. (c) Changes in investment in subsidiaries during the financial year Incorporation of a subsidiary, MSMENRA Sdn. Bhd. (“MSMENRA”) The wholly-owned subsidiary of the Company, ENRA Engineering Solutions Sdn. Bhd. (“EESSB”) had on 1 June 2022 incorporated a new subsidiary known as MSMENRA, with a paid-up share capital of RM100,000 comprising of 100,000 ordinary shares. EESSB held 70% of the ordinary shares while the remaining 30% of the ordinary shares is held by a non-controlling interest. Internal restructuring of ENRA IOL Sdn Bhd (“EIOL”) During the year, the Company made an internal restructuring involving a transfer of 100% shares in EIOL held by ENRA Engineering and Fabrication Sdn. Bhd. (“EEFAB”) to ENRA Group Berhad (“EGB”) by way of offsetting the amount owing from EEFAB amounting to RM1,000,000. Internal restructuring of EESSB During the year, the Company made an internal restructuring involving a transfer of 100% shares in EESSB held by ENRA Energy Sdn. Bhd. (“EESB”) to ENRA Engineering and Construction Sdn. Bhd. (“EECSB”) by way of offsetting the amount owing from EESB. (d) Changes in investment in subsidiaries during the previous financial year Divestment of the entire issued share capital of ENRA Kimia Sdn Bhd (“ENRA Kimia”) and its subsidiaries On 23 July 2021, ENRA Energy Sdn. Bhd., a wholly-owned subsidiary of the Company had received and accepted a Letter of Offer (“LO”) dated the same date from Hextar Global Berhad (“Hextar Global”) and Ekopintar Sdn Bhd (“Ekopintar”), (collectively the “Acquirors”) to acquire the entire issued share capital of its subsidiary, ENRA Kimia for a total cash consideration of RM50.00 million (“Purchase Consideration”). Ekopintar, is determined as a related party to the Company in view of Dato’ Mazlin bin Md Junid (“Dato’ Mazlin”), the then President and Group CEO of the Company, owning 50% of the issued and paid up share capital of Ekopintar and also a Director of Ekopintar. Subsequently, the Group’s divestment of ENRA Kimia and its subsidiaries (collectively known as “ENRA Kimia Group”) was approved by the Company’s shareholders via the Company’s Extraordinary General Meeting held on 22 October 2021.
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