ANNUAL REPORT 2012 - Wawasan TKH Holdings Berhad

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WAWASAN TKH HOLDINGS BERHAD (540218-A) ANNUAL REPORT 2012 065 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2012 (cont’d) 8. INTANGIBLE ASSETS (cont’d) 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: (i) Cash flows of mining unit was projected based on financial budgets and plans approved by the Directors. These budgets and plans covered a five (5) year period based on the Directors’ estimation of the remaining available mineral reserves, extraction rate of those mineral reserves during the remaining lease period and the estimated useful life of the machineries for the mining unit. (ii) The anticipated annual revenue growth rates used in the cash flow budgets and plans of the mining unit are 54% in financial year 2013, 6% in financial year 2014, 7% for financial years 2015 and 2016 and 5% in financial year 2017. The management does not foresee any difficulties in obtaining approval for its new land application as planned. (iii) The anticipated gross profit margins used in the cash flow forecast/projections of the mining unit are 8% in financial year 2013, 7% in financial year 2014, 10% in financial year 2015, 13% in financial year 2016 and 14% in financial year 2017; where it was assumed that various cost-cutting measures will be successfully implemented as planned. (iv) A pre-tax discount rate of 8.10% per annum has been applied in determining the recoverable amount of the mining unit. The discount rate was estimated based on an adjusted weighted average cost of capital. The values assigned to the key assumptions represent the management’s assessment of future trends in the mining industry and are based on both internal sources (historical data) and external sources where appropriate. Based on the sensitivity analysis performed by management, a 1% increase in the discount rate used and a 4% decrease in sales volume would result in a trivial difference in the impairment test outcome.
066 WAWASAN TKH HOLDINGS BERHAD (540218-A) ANNUAL REPORT 2012 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2012 (cont’d) 9. INVESTMENTS IN SUBSIDIARIES Redeemable Company Ordinary preference shares shares Total RM ’000 RM ’000 RM ’000 At cost Unquoted shares in Malaysia At 1 January 2011/ 31 December 2011 127,243 55,000 182,243 At 1 January 2012/ 31 December 2012 127,243 55,000 182,243 Accumulated impairment loss At 1 January 2011 108,655 - 108,655 Impairment loss (Note 20) 1,500 - 1,500 At 31 December 2011 110,155 - 110,155 At 1 January 2012 110,155 - 110,155 Impairment loss (Note 20) 4,700 - 4,700 At 31 December 2012 114,855 - 114,855 Carrying amounts At 31 December 2011 17,088 55,000 72,088 At 31 December 2012 12,388 55,000 67,388 The details of the subsidiaries are as follows: Name of subsidiary Country of incorporation Interest in equity held by the Company 2012 2011 % % Principal activities Associated Kaolin Industries Sdn. Bhd.^ Malaysia 100 100 Production and sale of refined kaolin Greatpac Sdn. Bhd. ^ Malaysia 100 100 Manufacturing and trading of disposable foodwares products (Subsidiaries of Greatpac Sdn. Bhd.) Greatpac (S) Pte. Ltd.* Singapore 100 100 Dormant Greatpac Trading Sdn. Bhd.^ Malaysia 100 100 Dormant * Audited by BDO Member Firm. ^ Audited by BDO in Malaysia. During the current financial year, the Company recognised impairment loss of RM4,700,000 (2011: RM1,500,000) in respect of investments in subsidiaries due to the recoverable amounts are less than their carrying amounts.
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WAWASAN TKH HOLDINGS BERHAD (540218
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002 CORPORATE INFORMATION BOARD OF
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004 CHAIRMAN’S STATEMENT (cont’
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006 DIRECTORS' PROFILE ____________
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008 DIRECTORS' PROFILE (cont’d) Y
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010 STATEMENT ON CORPORATE GOVERNAN
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012 STATEMENT ON CORPORATE GOVERNAN
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ANNUAL REPORT 2012 - Wawasan TKH Holdings Berhad

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