8. INVESTMENTS IN SUBSIDIARIES (continued) (c) The Company reviews the investments in subsidiaries for impairment when there is an indication of impairment. The recoverable amounts of the investments in subsidiaries are assessed by reference to the fair value less cost to sell of the underlying assets or the value in use of the respective subsidiaries. The value in use is the net present value of the projected future cash flows derived from the business operations of the respective subsidiaries discounted at an appropriate discount rate. For such discounted cash flow method, it involves the use of estimated future results and a set of assumptions to reflect their income and cash flows. Judgement had also been used to determine the discount rate for the cash flows and the future growth of the businesses of the subsidiaries. Impairment losses are made when the carrying amount of the investments in subsidiaries exceed its recoverable amount. The key assumptions for the impairment testing are disclosed in Note 7(d)(i) to the financial statements. (d) During current financial year, the Company had made an impairment of RM80,000 (2022: Nil) in respect of a subsidiary due to its poor financial position. The recoverable amount of the cost of investment in the subsidiary was based on its fair value less cost to sell (“FVLCTS”) of the underlying assets. The net assets of the subsidiary were used as a proxy for its recoverable amount based on FVLCTS method and were within Level 3 of the fair value hierarchy. (e) On 18 April 2023, a wholly-owned subsidiary of the Company, The Malaya Press Sdn. Bhd. had disposed of its ownership of shares in Media Distribution Sdn. Bhd. to Malaysian Book Promotions Sdn. Bhd., another wholly-owned subsidiary of the Company for a total consideration of RM10,000. 9. OTHER INVESTMENTS Group 2023 2022 RM’000 RM’000 Fair value through profit or loss Club membership 37 37 Fair value through other comprehensive Income Shares quoted in Malaysia - - 37 37 Market value of quoted investments - - The Group designated shares quoted in Malaysia as fair value through other comprehensive income because these equity securities represented investments that the Group intended to hold for long-term strategic purposes. Shares quoted in Malaysia of the Group were categorised as Level 1 in the fair value hierarchy. The fair value of investments was determined based on quoted market prices at the reporting date. Club membership of the Group was categorised as Level 3 in the fair value hierarchy. There was no transfer between levels in hierarchy during the financial year. ANNUAL REPORT 2023 SASBADI HOLDINGS BERHAD 105 Financial Statements (continued)
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