Wah Seong Corporation Berhad Annual Report 2019

145 ANNUAL REPORT 2019 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 12 INVESTMENT IN JOINT VENTURES (CONTINUED) Sensitivity (continued) Reasonably possible changes to the key assumptions would have decreased the carrying amount of the investment in a joint venture as follows: Group RM’000 2019 Utilisation rate (5% decrease) 3,800 Pre-tax discount rate (1% increase) 7,400 Terminal growth rate (1% decrease) 5,300 In the prior financial year, there were no reasonably possible changes in any of the key assumptions that would have changed the recoverable amount of the investment in a joint venture. Impairment of investment in joint ventures The movements for allowance for impairment loss on investment in joint ventures during the financial year are as follows: Group 2019 2018 RM’000 RM’000 At 1 January 8,930 8,780 Effect of exchange rate changes 29 150 At 31 December 8,959 8,930 Details of joint ventures are as follows: Country of incorporation Group’s effective interest Principal activities 2019 % 2018 % Boustead Wah Seong Sdn. Bhd. Malaysia 50 50 Investment holding activities and businesses in property development and management; provision of general fabrication, engineering and oil and gas services; trading and marketing activities and any other businesses or projects as shall be mutually agreed from time to time in Myanmar Socotherm Shashi Pipe Coating Co. Ltd. People’s Republic of China 50 50 Provision of pipe coating services Socotherm PPSC Ningbo (Daxie) Pipe Coating Co. Limited People’s Republic of China 50 50 Marketing and provision of pipe coating services to the oil and gas industry Sichuan Chuanshi Kanssen (Yadong) Coating Services Company Limited People’s Republic of China 51 51 Provision of pipe coating services