118 FGV HOLDINGS BERHAD NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2021 24 INVESTMENT IN SUBSIDIARIES (CONTINUED) (d) Reversal of impairment/(impairment) on investment in subsidiaries in previous financial year (i) FGV Sugar Sdn Bhd (“FGV Sugar”) and MSM Malaysia Holdings Berhad (“MSMH”) The recoverable amounts of the Company’s investment in subsidiaries in FGV Sugar and MSMH were reassessed in previous financial year. The recoverable amounts of the investments were determined based on value in use of the investments, being the holding companies of the sugar business, computed based on the net present value of the projected future cash flows derived from the sugar business, adjusted for financing and tax and discounted at 10.0%. The other key assumptions used were as disclosed in Note 23(a)(i) of the financial statements. Based on the value in use assessments of FGV Sugar and MSMH, the recoverable amounts were computed at RM885,300,000 and RM208,500,000 respectively, resulting in reversal of impairment of RM47,300,000 and RM12,400,000 in the Company’s investment in FGV Sugar and MSMH respectively. (ii) FGV Research Sdn Bhd (“FGV Research”) In previous financial year, the Company assessed the investment in FGV Research for impairment, arising from the shortfall of the net tangible asset of FGV Research. The recoverable amount of the investment was determined based on the value in use of the investment, computed based on the net present value of the projected future cash flows derived from the business, adjusted for financing and tax and discounted at 12%. Based on the value in use assessment, the recoverable amount was computed at RM22,500,000, resulting in impairment of RM5,500,000 in the carrying value of the Company’s investment in FGV Research. Based on sensitivity analysis performed by the Company, the impact of 1% increase in the discount rate used, which was a key assumption, would have resulted in additional impairment loss of approximately RM7,500,000. (e) Summarised financial information on subsidiaries with material non-controlling interests Set out below are the summarised financial information for each subsidiary that has non-controlling interests that are material to the Group (other subsidiaries that have non-controlling interests are individually not significant). MSM Malaysia FGV Palm Holdings Berhad Group Industries Sdn. Bhd 2021 2020 2021 2020 Interest held by non-controlling interest 49% 49% 28% 28%
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