ENRA Group Berhad Annual Report 2018

81 A N N U A L R E P O R T 2 0 1 8 NOTES TO THE FINANCIAL STATEMENTS 31 March 2018 cont’d 9. GOODWILL ON CONSOLIDATION (Cont’d) The fair value of assets acquired and liabilities assumed from the acquisition of EEFAB were as follows: Group 2017 RM’000 Assets/(Liabilities) acquired: Property, plant and equipment (Note 4) 65 Trade and other receivables 5,478 Cash and bank balances 123 Trade and other payables (7,442) Borrowings (188) Total identifiable liabilities (1,964) Goodwill on consolidation 8,505 Non-controlling interests 491 Purchase consideration 7,032 Contingent consideration for business acquisition (4,092) Purchase consideration satisfied by cash 2,940 Cash and cash equivalents acquired (123) Cash outflow on acquisition 2,817 Goodwill arising from this acquisition has been allocated to engineering and fabrication unit within the oil and gas division (“CGU”) for annual impairment testing and at other times when such indicators exist. This requires an estimation of the recoverable amount to which goodwill is allocated. The annual impairment review conducted at the end of the financial year is performed by comparing the CGU’s carrying amount and its recoverable amount determined based on value in use calculation using cash flow projections covering five years period with a terminal value based on year five results. There is no impairment loss to be recognised in the current financial year. The pre-tax discount rate applied to the cash flow projections and the forecasted growth rate used to extrapolate cash flows beyond the five years period are as follows: Group 2018 2017 Growth rate 1.0% 1.0% Pre-tax discount rate 8.5% 8.5%