Notes To The Financial Statements (Cont’d) 31 March 2026 ANNUAL REPORT 2026 ENRA GROUP BERHAD 133 Registration No: 55 199201005296 (236800 - T) 6. INVESTMENTS IN SUBSIDIARIES (continued) (i) Management reviews investments in subsidiaries for impairment whenever there is an indication of impairment. The recoverable amounts of investments in subsidiaries are determined based on either the fair value less costs of disposal ("FVLCD") of the underlying assets or the value-in-use ("VIU") of the respective subsidiaries. VIU is determined based on the present value of estimated future cash flows expected to be generated from the subsidiaries' operations, discounted using an appropriate pre-tax discount rate. The determination of recoverable amounts requires management to exercise significant judgement in estimating future cash flows and selecting appropriate assumptions, including forecast growth rates and pre-tax discount rates. An impairment loss is recognised when the carrying amount of an investment in a subsidiary exceeds its recoverable amount. During the financial year, the Company recognised impairment losses on investments in subsidiaries of RM6,083,000 (2025: RM26,849,000) due to decline in operations of certain subsidiaries within the Property Development segment (2025: Property Development and Energy Logistics segments). The recoverable amounts of investments in the property development subsidiaries and the energy logistics subsidiaries were determined using the FVLCD method based on the adjusted net assets of the respective subsidiaries, taking into consideration the estimated net realisable proceeds from the disposal of properties held for sale and marine equipment, respectively. During the financial year, the recoverable amounts of certain property development subsidiaries were determined based on VIU calculations derived from the cash flows of their existing property development projects. The key assumptions applied in the VIU calculations are as follows: (i) Forecasted gross development value, gross development costs, operating margin, and absorption rates were derived from management's expectations of industry trend and the Group’s past performances in comparable development projects; and (ii) Pre-tax discount rate of 7.5%, representing the weighted average cost of capital adjusted for specific risks relating to the Property Development segment. 7. INVENTORIES Group Company 2026 2025 2026 2025 Note RM’000 RM’000 RM’000 RM’000 At cost Completed properties 3,304 3,304 3,304 3,304 Properties development cost (a) 53,047 15,355 - - At net realisable value Completed properties 678 678 678 678 Properties held for sale 20,000 21,536 - - 77,029 40,873 3,982 3,982
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