Notes To The Financial Statements (Cont’d) 31 March 2026 ANNUAL REPORT 2026 ENRA GROUP BERHAD 117 Registration No: 39 199201005296 (236800 - T) 4. PROPERTY, PLANT AND EQUIPMENT (continued) (c) Impairment assessment (continued) Impairment testing of marine equipment within the Energy Logistics operating segment (continued) In the previous financial year, the recoverable amount of the vessel was determined with reference to a third-party offer price received for the vessel, while the recoverable amount of the buoy was determined based on a valuation performed by an independent external valuer using the depreciated replacement cost approach. Accordingly, an impairment loss of RM18,686,000 was recognised within administrative expenses to write down the carrying amounts of the marine equipment to their respective recoverable amounts. Impairment testing of assets in ENRA Energy Services Sdn. Bhd.(“EESSB”) The Group performed an impairment assessment on the property, plant and equipment and right-of-use assets of EESSB, which had a carrying amount of RM962,000 as at the reporting date, due to impairment indicators arising from the losses incurred during the financial year. The recoverable amount was determined using the value-in-use approach based on cash flow forecasts approved by management covering a five-year period. The key assumptions applied in the impairment assessment include the following: (i) Projected revenue growth and profit margins, which were derived from management's expectations of industry trends, historical performance and existing or potential contracts; and (ii) Pre-tax discount rate of 7.5% that reflects the time value of money and the risks specific to the underlying assets. Based on the impairment assessment performed, no impairment loss was recognised on the assets of EESSB, as the recoverable amount exceeded the carrying amount of the related assets. Management has further assessed that no reasonably possible change in any of the key assumptions would cause the carrying amount of the assets to materially exceed their recoverable amount. (d) Property, plant and equipment subject to operating lease The Group leases its marine equipment to third parties under lease arrangements with initial contractual terms ranging from a few days to twelve (12) months. Any subsequent renewals of the leases are subject to negotiation between the Group and the lessees. The Group has determined that it retains substantially all the significant risks and rewards incidental to ownership of the marine equipment, as the lease terms represent only an insignificant portion of the assets' estimated economic useful lives. Accordingly, the lease arrangements are classified as operating leases. Lease income recognised from operating leases of marine equipment during the financial year amounted to RM36,916,000 (2025: RM23,635,000).
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