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 132 8 INVESTMENT IN ASSOCIATES (CONTINUED) Quoted shares – Petra Energy Berhad (continued) The value-in-use is above the carrying value of the Group’s investment in quoted shares. As such, no impairment loss is deemed necessary to be recognised during the financial year. Sensitivity The recoverable amount of the investment in quoted shares would equal its carrying amount if the key assumptions were to change as follows: 2017 2016 From To From To Revenue growth rate for 5 years 1.5% (2.1%) 4.6% 3.9% Discount rate 12.9% 18.1% 12.4% 12.9% Growth rate for terminal value 2.0% (4.8%) 2.0% 1.4% Unquoted shares – Atama Resources Inc. During the financial year, the Company disposed 100% equity interest in its wholly-owned subsidiary, WS Agro Industries Pte Ltd, which was the holding company of Atama Resources Inc. (“ARI”). As a result, ARI ceased to become associate of the Company. The effects of the disposal of ARI is shown in Note 38. In the prior year, the Group reviewed the recoverable amount of ARI which had suffered losses and did not achieve the targets as set out in its business plan. Subsequently, management revised the business plan. The recoverable amount was then determined using value-in-use calculations based on the discounted cash flows expected to be generated from the forecasted period. As a result, the Group recognised an impairment loss of RM56,487,000 in the previous financial year. Impairment of investment in associates The movements for allowance for impairment loss on investment in associates during the financial year are as follows: Group 2017 RM’000 2016 RM’000 At 1 January 56,487 - Impairment loss recognised 271 56,487 Disposal of an associate (56,758) - At 31 December - 56,487