FGV Annual Report 2013

Felda Global Ventures Holdings Berhad 258 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 22 INVESTMENT IN SUBSIDIARIES (Cont’d.) (f) Impairment loss on investment in a subsidiary The Group’s investment in a subsidiary, Felda Global Ventures Downstream Sdn. Bhd. (“FGVD”) was tested for impairment due to losses incurred during the financial year by the investee companies held by FGVD. The impairment assessment requires an estimation of the recoverable amount of the cash generating units (“CGU”) owned by FGVD, in respect of the fatty acid business operation in USA, refined food oil business operation in Canada and investment in a joint venture, Felda Iffco Sdn. Bhd. (“FISB”). The recoverable amount was computed using fair value less cost to sell, with key assumptions that are consistent with the key assumptions used by management to assess the impairment of the CGUs in respect of the fatty acid business operations in USA, refined food oil business operations in Canada as disclosed in Note 21 to the financial statements and investment in a joint venture, FISB as disclosed in Note 24 to the financial statements, other than adjustment for discount rate to reflect equity risk and cash flows being assessed on a profit after interest and tax basis. As a result of the impairment assessment, the Company has recognised an impairment loss of RM12,391,000 (2012: RM115,356,000) which is recorded as an impairment loss in profit or loss. Based on sensitivity analysis performed by the Company, the impact of 1% increase in the discount rate used, which is a key assumption, will result in additional impairment loss of approximately RM58,700,000 (2012: RM69,411,000). (g) 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. Summarised statement of financial position MSM Malaysia Felda Palm Industries Holdings Berhad Group Sdn. Bhd. 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000 Current Assets 1,042,917 1,271,245 2,632,661 - Liabilities (235,240) (512,072) (2,056,308) - Total current net assets 807,677 759,173 576,353 - Non-current Assets 1,128,214 1,071,746 1,887,018 - Liabilities (79,694) (81,773) (129,698) - Total non-current net assets 1,048,520 989,973 1,757,320 - Net assets 1,856,197 1,749,146 2,333,673 -