112 SECTION 05 : FINANCIAL STATEMENTS & OTHERS INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ENRA GROUP BERHAD (continued) (Incorporated in Malaysia) Key Audit Matters (continued) (2) Impairment assessment of inventories (continued) Audit response (continued) Our audit procedures included the following: (continued) (b) for those unsold completed units and properties held for sale, we tested the carrying amount by obtaining the recent transacted prices of comparable development units in similar or nearby locations, and adjusted for the size of the units and assess the realisable value through latest offer received by the Group, where applicable. (3) Impairment assessment of the carrying amounts of costs of investments in subsidiaries As at 31 March 2025, carrying amounts of costs of investments in subsidiaries of the Company were RM61.89 million as disclosed in Note 6 to the financial statements of which an impairment of RM26.85 million was recognised during the financial year. Management used the VIU approach based on present value of forecasted future cash flows for the subsidiaries to determine if there is any impairment loss required on the costs of investments in subsidiaries. We determined this to be a key audit matter because the determination of whether or not an impairment loss is necessary involved significant judgements and estimates by the Directors about the future results and key assumptions applied to cash flow projections of the subsidiaries in determining their recoverable amounts. These key assumptions include forecast growth in future revenue, as well as determining an appropriate pre-tax discount rate. Audit response Our audit procedures included the following: (a) compared cash flow projections against recent performance and assessed the reasonableness of the key assumptions used by management in the cashflow forecast and projections by comparing to actual growth rates; (b) compared prior period budgets and forecasts to current period’s actual results to assess the historical accuracy of the forecasts; Independent Auditors’ Report (Cont’d) TO THE MEMBERS OF ENRA GROUP BERHAD (Incorporated in Malaysia)
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