FGV Audited Financial Statements 2019

147 01 S E C T I O N NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 AUDITED FINANCIAL STATEMENTS 2019 24 INVESTMENT IN SUBSIDIARIES (CONTINUED) (b) Liquidation, restructuring and disposal of subsidiaries during the financial year (continued) Note 7 On 14 November 2019, the Board of Directors of the Company announced that Felda Global Ventures Indonesia Sdn. Bhd., a wholly-owned subsidiary of the Company has been placed under Members’ voluntary winding up pursuant to Section 439(1)(b) of the Companies Act 2016. The liquidator has been appointed for the company on the same day. The voluntary winding up of the subsidiary is not expected to have any material impact on the earnings and net assets of the Group for the financial year ended 31 December 2019. (i) The effects of the disposal of FGVCO on the financial position of the Group as at the financial year end is as follows: Net assets disposed RM’000 Property, plant and equipment 51,887 Rights-of-use assets 24,450 Inventories 4,756 Receivables 4,970 Cash and cash equivalents 14,836 Payables (3,967) Net assets disposed 96,932 Gain on disposal of a subsidiary 219 Proceeds from disposal 97,151 Less: Cash and cash equivalents (14,836) Less: Deferred consideration receivables (4,968) Net cash inflow from disposal of a subsidiary 77,347 On the disposal of FGVCO, the Group recognised a gain of RM3.66 million arising from realisation of accumulated foreign exchange difference in foreign exchange reserve to profit or loss. The Company recognised a loss on disposal of RM56.4 million being the difference between the net proceeds from disposal of RM44.8 million and the derecognition of cost of investment of RM101.2 million. The remaining proceeds from disposal of RM52.4 million was used to pay the loan to FGV Capital Sdn. Bhd., a wholly-owned subsidiary of the Company. (c) Liquidation and dissolvement of subsidiaries in previous financial year (i) On 9 April 2018, the member’s voluntary winding up process for Felda Rubber Products Sdn. Bhd. (“FRP”), a dormant indirect subsidiary of the Company had been completed and was deemed fully dissolved pursuant to Section 459(5) of the Companies Act 2016. As a result, the Group derecognised its interest in FRP and recorded a gain on liquidation of RM988,000 in previous financial year.