ANNUAL REPORT 2026 ENRA GROUP BERHAD 95 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ENRA GROUP BERHAD (continued) (Incorporated in Malaysia) Key Audit Matters (continued) (4) Impairment assessment of the carrying amounts of amounts due from subsidiaries (continued) Audit response (continued) Our audit procedures included the following: (continued) (b) assessed the appropriateness of the indicators of significant increase in credit risk applied by the management and the resultant basis for classification of exposure into respective stages; (c) challenged management on the basis for determining future cash flows, where applicable; and (d) assessed actual loss events subsequent to the end of reporting period for its relationship with the indicators of significant increase in credit risk applied by management. (5) Assessment of going concern of the Group and of the Company As at 31 March 2026, the Group's current assets comprise predominantly property development inventories amounting to RM77.03 million, which are not readily convertible into cash. Excluding property development inventories, the Group's current liabilities exceeded its current assets by RM25.86 million, indicating that the Group's ability to meet its short-term obligations is dependent on the generation of future operating cash flows and continued access to financing facilities. We considered this a key audit matter due to the significance of the judgment involved in assessing the Group’s and the Company’s going concern assumptions including the management’s cash flow forecasts of the Group and the Company. Audit response Our audit procedures included the following: (a) evaluated management’s cash flow forecasts covering a period of not less than 12 months from the reporting date, and the underlying assumptions used; (b) compared actual results post-year-end against budgeted amounts to assess the reliability of management’s forecasting; (c) reviewed and verified the availability of committed financing facilities and other funding sources; (d) evaluated the sensitivity analysis performed by management, including the impact of reasonably possible changes in key assumptions; and (e) considered the adequacy of the disclosures made in the financial statements in relation to the Group’s and the Company’s assessment of the appropriateness of the use of group concern assumptions in their preparation of the Group’s and Company’s financial statement. Independent Auditors’ Report (Cont’d) To The Members Of Enra Group Berhad (Incorporated in Malaysia)
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