SECTION 05 : FINANCIAL STATEMENTS & OTHERS 94 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ENRA GROUP BERHAD (continued) (Incorporated in Malaysia) Key Audit Matters (continued) (3) Impairment assessment of the carrying amounts of costs of investments in subsidiaries (continued) Audit response (continued) Our audit procedures to assess management’s impairment testing based on VIU included the following: (continued) (d) performed sensitivity analysis to stress test the key assumptions used by management in the impairment model. Our audit procedures to assess management’s impairment testing based on FVLCD are as follows: (a) for subsidiaries holding marine assets, we considered the independence, competence, capabilities and objectivity of the external valuer. We also obtained an understanding of the methodology adopted by the independent valuer in estimating the fair value of the marine equipment and assessed whether the methodology is consistent with those used in the industry; and (b) for subsidiaries holding completed properties held for sale, we tested the carrying amount by obtaining the recent transacted prices of comparable development units in similar or nearby locations, and adjusted for the size of the units and assess the realisable value through latest offer received by the Group, where applicable. (4) Impairment assessment of the carrying amounts of amounts due from subsidiaries As at 31 March 2026, carrying amounts due from subsidiaries of the Company amounted to RM33.37 million as disclosed in Note 8 to the financial statements of which an impairment loss of RM7.47 million was recognised during the financial year. We determined this to be a key audit matter because it requires management to exercise significant judgement in determining the probability of default by subsidiaries, assessing whether there has been a significant increase in credit risk, incorporating appropriate forward looking information and estimating the recoverability of future cash flows under worst-case scenarios. Audit response Our audit procedures included the following: (a) recomputed probability of default using historical data and forward looking information adjustment; Independent Auditors’ Report (Cont’d) To The Members Of Enra Group Berhad (Incorporated in Malaysia)
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