Yinson Annual Report 2020

257 Annual Report 2020 16. Property, plant and equipment (continued) (g) Impairment of Offshore Support Vessels (“OSVs”) (continued) The discount rates used are pre-tax and reflect specific risks relating to the CGUs. The discount rates applied to the cash flow projections are derived from the cost of capital plus a reasonable risk premium at the date of assessment of the CGUs. The Group had taken into consideration the current depressed market conditions in the oil and gas industry in the cash flow projections, which include lower forecasted vessel utilisation and charter rates. Sensitivity to changes in key assumptions Changing the assumptions selected by management would significantly affect the Group’s results. The Group’s review includes the sensitivity of key assumptions to the cash flow projections. An increase by 5% in the utilisation rates and charter rates respectively will result in a reduction of impairment loss by approximately RM3,220,000 (2019: RM12,836,000) and RM2,580,000 (2019: RM13,335,000) respectively with all other inputs remaining constant. A decrease by 5% in utilisation rates and charter rates respectively will result in an additional impairment loss of approximately RM3,220,000 (2019: RM3,239,000) and RM2,580,000 (2019: RM4,242,000) respectively with all other inputs remaining constant. 17. Investment properties Investment properties are stated at fair value, which were determined based on valuations at the reporting date using the market comparison approach. Group 2020 2019 RM’000 RM’000 At 1 February 20,108 24,308 Changes in fair value (Note 9) (2,400) (4,200) At 31 January 17,708 20,108 The investment properties of the Group were pledged to financial institutions for banking facilities granted to the Company as disclosed in Note 32. The following amounts are recognised in profit or loss in respect of investment properties: Group 2020 2019 RM’000 RM’000 Rental income (Note 6) 551 650 Direct operating expenses arising from: - Investment properties that generate rental income 529 655 - Investment properties that do not generate rental income 48 88