2019 UEM Edgenta Annual Report

204 Notes to the Financial Statements For the year ended 31 December 2019 17. INVESTMENT IN SUBSIDIARIES (CONT’D.) (a) Impairment of investment in subsidiaries During the current financial year, an impairment loss of RM78.0 million (2018: RM129.0 million) was recognised against the carrying amount of its investment in Opus Group Berhad (“OGB”) to its recoverable amount. Based on management’s assessment, the recoverable amount of its investment in OGB was RM683.6 million (2018: RM761.6 million) which was estimated based on the value-in-use of OGB. In addition, the carrying amounts of its investments in Edgenta Township Management Services Sdn. Bhd. and Edgenta Energy Services Sdn. Bhd. of RM2.7 million and RM0.7 million respectively were impaired in full in the current financial year. (b) Members’ voluntary winding-up of Faber Hotels Holdings Sdn. Bhd. (“FHH”) On 6 March 2019, FHH, a wholly-owned subsidiary of the Company, had been placed under Member’s Voluntary Winding- Up pursuant to Section 439(1)(b) of the Companies Act 2016. The winding up of FHH did not have a material effect on the earnings, gearing or net assets of the Group. (c) Members’ voluntary winding-up of Pengurusan LRT Sdn. Bhd. (“PLRT”) On 1 August 2019, PLRT, an indirect wholly-owned subsidiary of the Company, had been placed under Member’s Voluntary Winding-Up pursuant to Section 439(1)(b) of the Companies Act 2016. The winding up of PLRT did not have a material effect on the earnings, gearing or net assets of the Group. (d) Termination of joint venture On 1 September 2019, UEM Sunrise Edgenta TMS Sdn. Bhd. (“UEMSET”), an indirect 70% subsidiary of the Company had entered into a Termination Agreement with Township Management Services Sdn. Bhd. to terminate the Joint Venture Shareholders’ Agreement dated 13 January 2016. On 12 December 2019, Edgenta Township Management Services Sdn. Bhd., a wholly-owned subsidiary of the Company, had entered into a Termination Agreement with UEM Sunrise Berhad to terminate the Joint Venture Shareholders’ Agreement dated 30 November 2015. The termination of joint venture did not have a material effect on the earnings, gearing or net assets of the Group. (e) Disposal of a subsidiary On 27 September 2019, Edgenta Mediserve Sdn. Bhd., a wholly-owned subsidiary of the Company, had completed the disposal of its entire 60% equity interest in Fresh Linen Services (Sabah) Sdn. Bhd. for a total cash consideration of RM7,950,000. The disposal resulted in a gain of RM1,483,073 to the Group.