229 INTEGRATED ANNUAL REPORT 2024 Key Messages Financial Statements Other Information NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024 Overview of Wasco Berhad Value Creation Commitment to Governance Sustainability Journey 9 INVESTMENT IN ASSOCIATES (CONTINUED) (a) Quoted shares – Petra Energy Berhad (continued) As the fair value less costs of disposal is lower than the value-in-use of the investment, the Group has determined the recoverable amount of the investment using discounted cash flows expected to be generated from the investment. The calculations use pre-tax cash flow projections based on financial budgets approved by the Group covering a period of 5 years (2023: 5 years) based on past performance and management’s expectations of market development. Terminal value is estimated at the end of the 5-year period. Due to the uncertainty of the future economic condition, management developed the best, base case and worst case scenario of cash flow projections. Probabilities of occurrence were assigned to each scenario to arrive at a single set of cash flow projection. The assumptions used in all three scenarios and the probabilities of occurrence assigned required management’s judgement. The key assumptions used in the cash flow projections to determine the recoverable amount for the investment under the best, base case and worst case scenarios are as follows: (i) The revenue forecast is supported by management’s expected projects, which is in line with past performance records, future market outlook and management’s expectation of market developments; (ii) Pre-tax discount rate of 14.5% (2023: 18.5%) was applied for all three scenarios, benchmarked against comparable companies at the date of assessment; and (iii) A terminal growth rate of nil (2023: Nil) was applied across all three scenarios. 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 in the financial year ended 31 December 2024 (2023: RM Nil). Sensitivity As at 31 December 2024, an increase of 0.6% in pre-tax discount rate, with all other inputs remaining constant, the estimated recoverable amount will be equal to the carrying value. (b) Impairment of investment in associates The movements for allowance for impairment losses on investment in associates during the financial year are as follows: Group 2024 RM’000 2023 RM’000 At 1 January 57,405 55,133 Effect of exchange rate changes (1,569) 2,272 At 31 December 55,836 57,405
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