110 SECTION 05 : FINANCIAL STATEMENTS & OTHERS INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ENRA GROUP BERHAD (continued) (Incorporated in Malaysia) Key Audit Matters (continued) (1) Impairment assessment of the carrying amount of property, plant and equipment As at 31 March 2025, the carrying amount of the Group’s property, plant and equipment was RM58.99 million as disclosed in Note 4 to the financial statements. The Group estimated the recoverable amount of the property, plant and equipment using the higher of fair value less costs of disposal (“FVLCD”) and Value in Use (“VIU”). For recoverable amount based on FVLCD, the Group engaged an independent external valuer to assess the fair value of the marine equipment. The Group applies the VIU model based on present value of forecasted future cash flows for the cash generating unit (“CGU”) to determine if there is any impairment loss required on the carrying amount of property, plant and equipment. We determined this to be a key audit matter as impairment assessment of the carrying amount of marine equipment involved significant judgements and estimates by the Directors about the future results and key assumptions applied to cash flow projections of the CGU in determining its recoverable amount. These key assumptions include forecast growth in future revenues and operating costs, as well as determining an appropriate pre-tax discount rate. Audit response Our audit procedures to assess management’s impairment testing based on VIU included the following: (a) enquired with business development teams to obtain an understanding of the status of negotiation and the likelihood of securing new revenue contracts, including timing of commencement and expected value of revenue contracts; (b) compared cash flow forecasts against recent performance and assessed the reasonableness of the key assumptions used by management in the cashflow forecasts by comparing to terms and conditions stipulated in the charter party agreements, available industry data, taking into consideration of comparability and market factors; (c) assessed whether the assumptions on the operating costs are supportable when compared to the past trends; (d) evaluated the discount rate used to determine the present value of the cash flows and whether the rate used reflects the current market assessments of the time value of money and risks specific to the asset; and Independent Auditors’ Report (Cont’d) TO THE MEMBERS OF ENRA GROUP BERHAD (Incorporated in Malaysia)
RkJQdWJsaXNoZXIy