ENRA Group Berhad Annual Report 2018

78 E N R A G R O U P B E R H A D ( 2 3 6 8 0 0 - T ) NOTES TO THE FINANCIAL STATEMENTS 31 March 2018 cont’d 6. INVESTMENTS IN SUBSIDIARIES (Cont’d) (d) The subsidiaries of the Group that have material non-controlling interests (“NCI”) are as follows: (Cont’d) The summarised financial information before intra-group elimination are as follows: (Cont’d) A subsidiary is an entity in which the Group and the Company are exposed, or have rights, to variable returns from its involvement with the subsidiary and have the ability to affect those returns through its power over the subsidiary. An investment in subsidiary, which is eliminated on consolidation, is stated in the separate financial statements of the Company at cost less accumulated impairment losses, if any. Put options written over non-controlling interests on the acquisition of subsidiary shall be included as part of the cost of investment in the separate financial statements of the Company. Subsequent changes in the fair value of the written put options over non-controlling interests shall be recognised in profit or loss. Investments accounted for at cost shall be accounted for in accordance with FRS 5 Non-current Assets Held for Sale and Discontinued Operations when they are classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance with FRS 5. When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the Group would derecognise all assets, liabilities and non-controlling interests at their carrying amount and to recognise the fair value of the consideration received. Any retained interest in the former subsidiary is recognised at its fair value at the date control is lost. The resulting difference is recognised as a gain or loss in profit or loss. (e) The annual impairment review conducted at the end of the financial year is performed by comparing the subsidiaries’ carrying amounts and their recoverable amounts determined based on value in use calculation using cash flow projections covering five years period with a terminal value based on year five results. There is no impairment loss to be recognised in the current financial year. The pre-tax discount rate applied to the cash flow projections and the forecasted growth rate used to extrapolate cash flows beyond the five years period are as follows: Company 2018 2017 Growth rate 1.0% 1.0% Pre-tax discount rate 8.5% 8.5% Sensitivity to changes in assumptions The management believes that a reasonably possible change in the key assumptions on which management has based its determination of the subsidiaries’ recoverable amounts would not cause the subsidiaries’ carrying amounts to further exceed their recoverable amounts. 7. INVESTMENT IN AN ASSOCIATE Group 2018 2017 RM’000 RM’000 Unquoted shares at cost 15 15 Share of post-acquisition reserves (15) (15) - -