FGV Annual Report 2017

FELDA GLOBAL VENTURES HOLDINGS BERHAD FINANCIAL STATEMENTS 238 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 21 INVESTMENT IN SUBSIDIARIES (CONTINUED) (d) Impairment loss on investment in a subsidiary In the previous financial year, difficult operating conditions 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 18 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 (other subsidiaries that have non-controlling interests are individually not significant). Summarised statements of financial position MSM Malaysia Holdings Berhad Group Felda Palm Industries Sdn. Bhd. Felda Marketing Services Sdn. Bhd. 2017 RM’000 2016 RM’000 2017 RM’000 2016 RM’000 2017 RM’000 2016 RM’000 Current Assets 1,295,990 1,623,075 930,308 738,308 305,718 239,181 Liabilities (994,653) (985,971) (228,719) (131,446) (221,588) (362) Total current net assets 301,337 637,104 701,589 606,862 84,130 238,819 Non-current Assets 2,112,391 1,602,353 1,539,158 1,596,582 3,108 3,423 Liabilities (483,602) (252,647) (309,085) (297,269) (14) (14) Total non-current net assets 1,628,789 1,349,706 1,230,073 1,299,313 3,094 3,409 Net assets 1,930,126 1,986,810 1,931,662 1,906,175 87,224 242,228