ENRA Group Berhad Annual Report 2018

80 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 8. INVESTMENT IN A JOINT VENTURE (Cont’d) Details of the joint venture is as follow: Name of company Effective interest in equity Principal activities 2018 2017 % % ENRA Emrail Sdn. Bhd. 51% - Intended business has yet to commence A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control, where the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control. Investment in a joint venture is accounted for in the consolidated financial statements using the equity method less any impairment losses. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the equity accounted joint venture, after adjustments, if any, to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group’s share of losses exceeds its interests in an equity accounted joint venture, the carrying amount of that interests including any long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. 9. GOODWILL ON CONSOLIDATION Group 2018 2017 RM’000 RM’000 At 1 April 8,505 - Acquisition of subsidiary - 8,505 At 31 March 8,505 8,505 On 5 February 2016, EOGS had entered into Share Sale Agreement and Shareholders Agreement in respect of the acquisition of 750,000 ordinary shares in the share capital of Hikmah Oil & Gas Assistance Sdn. Bhd. (“Hikmah”), representing 75% of the total issued and paid up share capital of Hikmah for a consideration of up to RM7,032,000 inclusive of contingent consideration for business acquisition that are subject to the attainment of profit guarantee by the seller. The acquisition was completed on 12 May 2016 and from that date, Hikmah became a subsidiary of EOGS and accordingly, an indirect subsidiary of the Company. Hikmah on 13 June 2016 changed its name to ENRA Engineering And Fabrication Sdn. Bhd. (“EEFAB”).