ANNUAL REPORT 2026 ENRA GROUP BERHAD 91 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 and right-of-use assets As at 31 March 2026, the carrying amounts of the Group's property, plant and equipment and right-of-use assets were RM42.48 million and RM9.17 million respectively, as disclosed in Notes 4 and 5 to the financial statements. The Group assessed these assets for impairment whenever indicators of impairment exist and estimates their recoverable amounts based on the higher of fair value less costs of disposal ("FVLCD") and value in use ("VIU"). For the Group's marine equipment, management engaged an independent external valuer to determine the recoverable amount using the FVLCD approach. For the other cash-generating unit ("CGU"), management determined the recoverable amount using the VIU approach based on discounted future cash flow forecasts. We determined this to be a key audit matter because the impairment assessment involved significant management judgement and estimation in determining the recoverable amounts of the assets. In particular, significant judgement was required in assessing the fair value of the marine equipment and in estimating future cash flows for the CGUs, including assumptions relating to forecast revenue growth, operating costs, utilisation levels and the selection of an appropriate pre-tax discount rate. Audit response Our audit procedures to assess management’s impairment testing based on FVLCD are as follows: (a) considered the independence, competence, capabilities and objectivity of the external valuer; and (b) obtained an understanding of the methodology adopted by the independent valuer in estimating the fair value of the marine equipment and assessed whether such methodology is consistent with those used in the industry. 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; Independent Auditors’ Report (Cont’d) To The Members Of Enra Group Berhad (Incorporated in Malaysia)
RkJQdWJsaXNoZXIy NDgzMzc=