36 CORPORATE GOVERNANCE ENRA GROUP BERHAD ANNUAL REPORT 2023 d. Employee development and empowerment To support its entry into the MRO business, the Group focused on developing its best asset, which is the right people to enable market expansion, products/services development and to improve customer retention. Groupwide, there are various initiatives such as cross-functional teams, idea generating programs, and internal promotion opportunities that encourage employee contribution to the company's growth objectives. e. Financial performance and investment Our growth strategies, as outlined earlier, are fully aligned with our financial performance and investment decisions, supported by optimal allocation of available resources. We monitor each investment on a periodic basis, ensuring that the intended returns are attainable. This approach allows us to maintain a careful balance between expansion and fiscal responsibility, safeguarding the company's long-term financial health and sustainability. By continuously evaluating and adjusting our investment portfolio, we hope to be agile and responsive to market dynamics, maximising our potential for growth while mitigating potential risks. Our commitment to prudent financial management empowers us to capitalise on opportunities while safeguarding the interests of our stakeholders. The Group is aware of the need to take necessary steps to ensure its activities continue to generate ample profits, maintain an optimum level of liquidity and ensure stability. In approaching potential growth or expansion, the business model and strategy that would be used must ensure the ability to: i. achieve sustainable growth in enterprise value (market value of total equity and debts less cash and cash equivalents) in line with our vision statement; ii. contribute positively to PATAMI; and iii. achieve reasonable integration (alignment of shared values, direction and good congruent goals) of newly acquired businesses via mergers and acquisitions within two years from the acquisition date. The broad parameters above were set to steer the Group towards its economic targets. The failure to achieve any of these targets may pose a threat to the Group’s sustainability. We have identified the following economic targets that need to be achieved: a. Sustainable profitability Sustainable profitability is a fundamental priority for any company. It demonstrates the commitment to consistently generate profits and achieving strong financial performance over the long term. For ENRA, this means establishing a proven track record of consistent earnings and robust financial results over an extended period. To ensure that our profitability is solely reflective of operational performance, we have taken proactive measures to impair all investments in non-active companies during FY 2022/23, adhering to the guidelines set forth in MFRS 136, Impairment of Assets. Furthermore, as a key component of our strategy for sustainable profitability, we have established a minimum target for return on investment (ROI) of at least 20%. This serves as our guiding principle when assessing and making investment decisions, ensuring that our capital is strategically deployed in ventures with the potential to deliver strong returns and contribute significantly to our longterm financial success. By aligning our efforts with this target, we remain focused on maximising value for our stakeholders while upholding our commitment to responsible and profitable business practices. Sustainability Report (Cont’d)
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