SECTION 05 : FINANCIAL STATEMENTS & OTHERS 92 Independent Auditors’ Report (Cont’d) To The Members Of Enra Group Berhad (Incorporated in Malaysia) 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 (continued) Audit response (continued) Our audit procedures to assess management’s impairment testing based on VIU included the following: (continued) (b) compared management's cash flow forecasts against recent historical performance and evaluated the reasonableness of the key assumptions applied in the forecasts by reference to the terms and conditions of awarded contracts, and available industry data, taking into consideration the comparability of contractual arrangements and prevailing market conditions; (c) assessed whether the assumptions on the operating costs are supportable when compared to the past trends; (d) evaluated the discount rate used to determine the present value of the cash flows and whether the rate used reflects the current market assessments of the time value of money and risks specific to the asset; and (e) performed sensitivity analysis to stress test the key assumptions used by management in the impairment model. (2) Assessment of net realisable values of inventories As at 31 March 2026, carrying amounts of property held for sales of the Group were RM20.00 million and completed properties of the Group and Company were RM3.98 million respectively, as disclosed in Note 7 to the financial statements. We determined this to be a key audit matter because of the estimates made by the Directors in determining the net realisable value of the inventories. The net realisable value of inventories are assessed based on estimation of the net realisable value of the underlying properties. This involves analysis of expected future selling prices based on prevailing market conditions. Based on management’s assessment, the Group recognised write-off of RM2.88 million in respect of inventories during the financial year. Audit response Our audit procedures included the following: (a) discussed with management on their plans to recover the carrying amount of the unsold properties and development costs; and
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