Wah Seong Corporation Berhad Annual Report 2017

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 FINANCIAL STATEMENTS WAH SEONG CORPORATION BERHAD ANNUAL REPORT 2017 114 4 PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Company Long term leasehold building RM’000 Computer and equipment RM’000 Renovations, office equipment, furniture and fittings RM’000 Motor vehicles RM’000 Total RM’000 2016 Cost At 1 January 6,200 782 896 1,108 8,986 Additions - 24 4 - 28 Write-offs - (100) (4) - (104) At 31 December 6,200 706 896 1,108 8,910 Accumulated depreciation At 1 January 218 682 566 791 2,257 Depreciation charge for the financial year 68 66 62 222 418 Write-offs - (99) (3) - (102) At 31 December 286 649 625 1,013 2,573 Carrying amount at 31 December 5,914 57 271 95 6,337 Impairment of specialised building, plant and equipment For the financial year ended 31 December 2017, the market conditions for the oil and gas sector saw decreased demand which affected the utilisation of the Group’s property, plant and equipment. Given this impairment indicator, management carried out an impairment assessment. Based on the recoverable amount which was estimated using value in use calculations, an impairment charge amounting to RM72,842,000 (2016: RM99,111,000) was made on certain specialised building, plant and equipment that were idle and were also not forecasted to generate sufficient future economic benefits. The discount rate used for the value in use calculations was 20.5% (2016: 19%). Assets pledged as security The net book value of property, plant and equipment amounting to RM435,621,000 (2016: Nil) are pledged as security for the advances from customer (Note 28).