Sasbadi Annual Report 2021

91 ANNUAL REPORT 2021 FINANCIAL STATEMENTS (continued) 91 8. INVESTMENTS IN SUBSIDIARIES (continued) (c) The Company reviews the investments in subsidiaries for impairment when there is an indication of impairment. The recoverable amounts of the investments in subsidiaries are assessed by reference to the fair value less cost to sell of the underlying assets or the value in use of the respective subsidiaries. The value in use is the net present value of the projected future cash flows derived from the business operations of the respective subsidiaries discounted at an appropriate discount rate. For such discounted cash flow method, it involves the use of estimated future results and a set of assumptions to reflect their income and cash flows. Judgement had also been used to determine the discount rate for the cash flows and the future growth of the businesses of the subsidiaries. Impairment losses are made when the carrying amount of the investments in subsidiaries exceed its recoverable amount. (d) As at the end of reporting period, the Company had made impairment of RM2,316,000 (2020: RM278,000) in respect of a subsidiary due to poor financial position of the subsidiary. The recoverable amount of the cost of investment in the subsidiary is based on its fair value less cost to sell (“FVLCTS”) of the underlying assets. The net assets of the subsidiary are used as a proxy for its recoverable amount based on FVLCTS method and are within Level 3 of the fair value hierarchy. 9. OTHER INVESTMENTS Group 2021 2020 RM’000 RM’000 Fair value through profit or loss Club membership 37 37 Fair value through other comprehensive income Shares quoted in Malaysia 178 190 215 227 Market value of quoted investments 178 190 The Group designated shares quoted in Malaysia as fair value through other comprehensive income because these equity securities represent investments that the Group intends to hold for long-term strategic purposes. Shares quoted in Malaysia of the Group are categorised as Level 1 in the fair value hierarchy. The fair value of investments is determined based on quoted market prices at the reporting date. The club membership of the Group is categorised as Level 3 in the fair value hierarchy. There is no transfer between levels in hierarchy during the financial year.