FGV Annual Report 2016

FELDA GLOBAL VENTURES HOLDINGS BERHAD 270 FINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016 22 INVESTMENT IN SUBSIDIARIES (CONTINUED) (d) Impairment loss on investment in a subsidiary Difficult operating conditions during the financial year and continuing losses in a subsidiary, FGV China Oils Ltd, were identified as indicators for an impairment test to be performed for the investment in the palm oil refining operations in China. The recoverable amount of the subsidiary is determined based on fair value less cost to sell calculation (Level 3 fair value computation) using cash flow projections discounted at 13%. The remaining key assumptions for the impairment assessment are disclosed in Note 19 to the financial statements. As a result of the impairment assessment, an impairment loss of RM80,152,000 had been recorded in other operating expenses in the financial statements of the Company. 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 RM10,360,000. (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. Summarised statements of financial position MSM Malaysia Holdings Berhad Group Felda Palm Industries Sdn. Bhd. 2016 RM'000 2015 RM'000 2016 RM'000 2015 RM'000 Current Assets 1,623,075 1,354,704 738,308 626,899 Liabilities (985,971) (610,011) (131,446) (136,719) Total current net assets 637,104 744,693 606,862 490,180 Non-current Assets 1,602,353 1,367,701 1,646,930 1,794,146 Liabilities (252,647) (75,378) (199,986) (159,793) Total non-current net assets 1,349,706 1,292,323 1,446,944 1,634,353 Net assets 1,986,810 2,037,016 2,053,806 2,124,533