Ni Hsin Berhad Annual Report 2017

4. Goodwill (continued) 4.1 Impairment testing for cash-generating unit containing goodwill For the purpose of impairment testing, goodwill is allocated to the Group’s operating segments which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes. The recoverable amount of the cash-generating unit was based on its value-in-use. The carrying amount of the unit was determined to be approximately its recoverable amount and no impairment loss was recognised. Value-in-use was determined by discounting the future cash flows generated from the continuing use of the unit and was based on the following key assumptions: � Revenue growth rate ranging from 6% to 8% per annum (2016: 5% to 10% per annum) � Gross profit margin of 21% (2016: 20%) � A pre-tax discount rate of 8.5% (2016: 8.5%) The values assigned to the key assumptions represent management’s assessment of future trends in the clad metals and convex mirrors industry and are based on both external sources and internal sources (historical data). 5. Investments in subsidiaries Company 2017 2016 Note RM’000 RM’000 Unquoted shares, at cost 56,654 56,654 Less: Impairment loss (70) (70) 56,584 56,584 Amount due from a subsidiary 5.1 2,871 2,871 59,455 59,455 5.1 The amount due from a subsidiary is non-trade in nature, unsecured and interest free. The settlement of the amount is neither planned nor likely to occur in the foreseeable future. As this amount is a part of the Company’s net investment in the subsidiary in substance, it was stated at cost less accumulated impairment. Details of the subsidiaries are as follows: Effective Country of ownership interest Name of subsidiary Principal activities incorporation 2017 2016 % % Ni Hsin Corporation Sdn. Bhd. (“NHC”)# Design, manufacture and sale of stainless steel kitchenware and cookware Malaysia 100 100 Ever-Grow Advanced Materials Sdn. Bhd. (“EGAM”)# Research, development and manufacturing of clad metals and stainless steel convex mirrors Malaysia 100 100 Steel Crafts Europa S.R.L. (“SCE”)* Trading and assembly of kitchenware, cookware, clad metals and stainless steel convex mirrors Italy 100 100 Notes to the financial statements (continued) Annual Report 2017 65