Notes To The Financial Statements (Cont’d) 31 March 2026 SECTION 05 : FINANCIAL STATEMENTS & OTHERS 152 Registration No: 74 199201005296 (236800 - T) 19. REVENUE (continued) (b) Revenue from property development and engineering contracts Contracts with customers include multiple promises to customers and therefore accounted for as separate performance obligations. In this case, the transaction price will be allocated to each performance obligation based on the stand-alone selling prices. When these are not directly observable, they are estimated based on expected cost plus margin. Revenue from property development and engineering contracts is measured at the fixed transaction price agreed under the agreement. Revenue is recognised as and when control of the asset is transferred to the customer and it is probable that the Group would collect the consideration to which it will be entitled in exchange for the asset that would be transferred to the customer. Depending on the terms of the contract and the laws that apply to the contract, control of the asset may transfer over time or at a point in time. Control of the asset is transferred over time if the performance of the Group does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. If control of the asset transfers over time, revenue is recognised over the period of the contract using the input method by reference to the cost incurred relative to the total expected cost for satisfaction of that performance obligation. Otherwise, revenue is recognised at a point in time when the customer obtains control of the asset. Significant judgement is required in determining performance obligations, determining and allocating the transaction price and estimating total contract costs for the purpose of applying the input method to recognise revenue over time. The Group identifies performance obligations that are distinct and material, which is judgmental in the context of contract. For engineering contracts, the Group assesses whether the various activities and scope of work are highly integrated and significantly interrelated in delivering a combined output to the customer. Where the activities are highly integrated, the contract is accounted for as a single performance obligation. The Group determines the transaction price of a property development and engineering contracts after considering the effect of variable consideration, constraining estimates of variable consideration, and consideration payable to customer. For property development contracts, the transaction price is determined based on estimated margins and after considering the exposures to Liquidated Ascertained Damages (“LAD”) based on the facts and circumstances of the relevant property development projects. For engineering contracts, the transaction price comprises the consideration specified in the contract together with approved variations and claims to the extent that it is highly probable that a significant reversal of revenue will not occur. The Group also estimated total contract costs in applying the input method to recognise revenue over time. In estimating the total costs to complete, the Group considers the completeness and accuracy of cost forecasts, including anticipated contract variations, claims, potential cost overruns and contingencies, based on the specific facts and circumstances of each contract and historical experience from similar projects. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. During the financial year, the Group recognises LAD payable to purchasers amounting to RM376,000 (2025: Nil) arising from delays in the delivery of vacant possession as a reduction of property development revenue. The amount recognised represents management's best estimate of the compensation payable based on the expected delay period up to the anticipated delivery date.
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