Ni Hsin Berhad Annual Report 2018

6. Investments in subsidiaries (continued) 6.1 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. 6.2 Impairment loss on investment in subsidiaries and amount due from a subsidiary The increase in impairment loss during the year amounting to RM2,916,000 (2017:RM Nil) was mainly attributable to the investment and amount due from an overseas subsidiary as the management is of the view that the business is affected by geopolitical factors in Europe which is beyond the management’s control. The recoverable amount of the investment in subsidiary was RM Nil which was based on the fair value less cost to disposal by estimating the fair value of the underlying assets and liabilities of the subsidiary. Following an impairment of cost of investment in subsidiary, the recoverable amount is equal to the carrying amount. Details of the subsidiaries are as follows: Effective ownership Country of interest Name of subsidiary Principal activities incorporation 2018 2017 % % 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 and its subsidiary Pentoli S.R.L.* Retail sales of kitchenware, tableware and cookware, water filter and related products and accessories Italy 100 100 Inoco Resources Sdn. Bhd. (“Inoco”)@ General merchandiser and other commodities of all kinds and descriptions and retailer Malaysia 100 100 Ni Hsin Marketing Sdn. Bhd. (formerly known as MyAngkasa Ni Hsin Sdn. Bhd.) (“NHM”)@ General merchandiser, distribution and marketing of cookware, kitchenware, water filters, convex mirrors, and related products and accessories Malaysia 100 70 Pentoli Sdn. Bhd. (“PSB”)@ Distribution and marketing of cookware, convex mirrors, kitchenware, water filters and related products and accessories Malaysia 100 100 * Subsidiaries incorporated in Italy have not been audited as they are exempted from statutory audit under Italian Company Laws. They are consolidated based on unaudited management accounts for the year ended 31 December 2018. # Audited by KPMG @ Not audited by KPMG Notes to the financial statements (continued) Annual Report 2018 70