ENRA Group Berhad Annual Report 2020

ENRA Group Berhad - Annual Report 2020 66 Key Audit Matters (Cont’d) 5. Impairment assessment of the carrying amounts of amounts due from subsidiaries As at 31 March 2020, amounts due from subsidiaries of the Company amounted to RM40.87 million as disclosed in Note 13 to the financial statements. 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, appropriate forward looking information, significant increase in credit risk and estimated cash flows recoverable in worst-case senarios. Audit response Our audit procedures included the following: a. recomputed probability of default using historical data and forward looking adjustment applied by the Company; 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 cash flows recoverable in worst case scenarios, 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. Information Other than the Financial Statements and Auditors’ Report Thereon The Directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon. Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. INDEPENDENT AUDITORS’ REPORT To the Members of ENRA Group Berhad (Incorporated in Malaysia)