138 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023 23 INVESTMENT IN SUBSIDIARIES (CONTINUED) (c) Liquidation of subsidiaries in the previous financial year (i) On 13 June 2022, Plantation Resorts Sdn. Bhd. (“PRSB”), an indirect subsidiary of the Company was duly dissolved in relation to the voluntary winding up. The dissolution of PRSB was part of FGV Group’s streamlining exercise to dissolve companies within its Group that are dormant/inactive. As a result, the Group derecognised its interest in PRSB and had reclassified the non-controlling interest of RM64,210,000 to retained earnings for the financial year ended 31 December 2022. (ii) On 9 August 2022, P.T. Patisindo Sawit (“PTPS”), an indirect subsidiary of the Company was dissolved in relation to the voluntary winding up. The dissolution of PTPS was part of the Group’s streamlining exercise to dissolve companies within its Group that are dormant/inactive. During the financial year, the capital return was received and the Group has recognised a gain of liquidation amounting to RM786,000 including the derecognition of non-controlling interests of RM1,061,000. (iii) On 16 September 2022, MSM Trading International DMCC (“MTI Dubai”), an indirest subsidiary of the Company, which had previously ceased its operations in 2019, was duly dissolved in relation to the winding-up exercise. As a result, the Group derecognised its interest in MTI Dubai and had recorded a loss on liquidation of RM290,000 and recognised a gain of RM1,881,000 arising from realisation of foreign exchange reserve to profit or loss for the financial year ended 31 December 2022. (d) Impairment on investment in subsidiaries As at 31 December 2023 FGV Integrated Farming Holdings Sdn. Bhd. (“FGVIF”) The Company assessed the impairment of its investments in FGV Integrated Farming Sdn. Bhd, (“FGVIF”) a wholly owned subsidiary, due to projected negative cash flow. The recoverable amount was determined based on value in use of the investment, computed based on the net present value of the projected future cash flows derived from the CGU discounted at 7%. Based on the value in use assessment, the recoverable amount was nil, which resulted in the impairment loss of RM15,039,000 in the carrying value of the Company’s investment in FGVIF. As at 31 December 2022 FGV Research Sdn. Bhd. (“FGV Research”) On 30 August 2022, due to reduction of demand on research projects for estates and mills, Board of Directors of the Company had approved for the research and development activities under FGV Research to be consolidated or merged through: • Acquisition of property, plant and equipment of FGV Applied Technology Sdn. Bhd. (“FGVAT”) by FGV R&D Sdn. Bhd. (“FGV R&D”) at the relevant market value; • Novation of all agreements entered by FGVAT to FGV R&D; and • Re-organisation of FGVAT’s workforce into FGV R&D and/or any other entities within the Group. Upon completion of the consolidation, FGVAT and FGV Research shall be liquidated in accordance with the provisions of the Companies Act 2016.
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