23 INVESTMENT IN SUBSIDIARIES (CONTINUED) (d) Impairment on investment in subsidiaries As at 31 December 2024 FGV Plantations Sdn. Bhd. (“FGVP”) During the financial year, the Company performed an impairment assessment of its investment in FGV Plantations Sdn. Bhd., the intermediate holding company of APL, as there is an indication that the cost of investment will not be fully recovered. The recoverable amount of FGVP have been determined based on the value-in-use (“VIU”) calculation which is determined based on the equity value of the subsidiary, computed based on net present value of the projected future cash flows, which are adjusted for financing and tax cash flows. These calculations require the use of estimates and key assumptions which are consistent with those used and disclosed in Note 22 (a)(ii)(a) and Note 44 of the financial statements. Based on the net equity value recoverable amount of FGVP of RM1,310,363,000, this has resulted in an additional impairment of RM124,682,000 to the Company’s investment in FGVP. The sensitivity on the FGVP’s equity value to key assumption is as follows: 2024 Key assumption Sensitivity Equity value lower by RM’000 Discount rate Increase by 0.5% (144,367) FGV Research Sdn. Bhd. (“FGV Research”) During the financial year, the Company performed an impairment assessment of its investment in FGV Research, a wholly owned subsidiary, as there is an indication that the cost of investment will not be fully recovered. The recoverable amount of the investment was determined based on the subsidiary’s equity value and it was assessed to approximate the value of its net assets as at 31 December 2024. The recoverable amount was assessed at RM8,646,000, resulting in an impairment of RM466,000 in the carrying value of the Company’s investment in FGV Research. As at 31 December 2023 FGV Integrated Farming Holdings Sdn. Bhd. (“FGVIF”) The Company assessed the impairment of its investments in 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. Notes to the Financial Statements For the financial year ended 31 December 2024 125
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