Wah Seong Corporation Berhad Annual Report 2018

4 PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Impairment of specialised 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 was made on certain specialised plant and equipment that were idle and were also not forecast to generate sufficient future economic benefits in the financial year ended 31 December 2017. The pre-tax discount rate used for the value in use calculations was 20.5%. Based on management’s reassessment in 2018, there were no significant impairment for plant and equipment. Assets pledged as security The net book value of the Group’s property, plant and equipment amounting to RM359,153,000 (2017: RM435,621,000) are pledged as security for the advances from customer (Note 29). 5 PREPAID LEASE PAYMENTS Group 2018 2017 RM’000 RM’000 Unexpired period 50 years and above Cost At 1 January 102,622 136,103 Disposals - (33,481) At 31 December 102,622 102,622 Accumulated amortisation At 1 January 12,038 15,181 Amortisation for the financial year 1,328 1,509 Disposals - (4,652) At 31 December 13,366 12,038 Carrying amount at 31 December 89,256 90,584 The title deeds to certain leasehold land of the Group stated at a total carrying amount of approximately RM29,062,000 (2017: RM29,432,000) have yet to be issued by the relevant authorities. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 WAH SEONG CORPORATION BERHAD 116