NOTES TO THE FINANCIAL STATEMENTS
18. INVESTMENTS IN SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
17. LEASES (cont’d) (ii) As lessor (cont’d)
Operating lease (cont’d)
Future minimum lease receivable under non-cancellable operating leases at the end of the reporting period are as follows:
Group
2022 2021
RM’000 RM’000
Less than one year 1,616 1,608
Between one and five years 557 2,065
2,173 3,673
18. INVESTMENTS IN SUBSIDIARIES (cont’d)
(a) Movement of cost of unquoted shares are as follows:
Company
2022 2021
RM’000 RM’000
At beginning of year/period 364,485 234,354
Additional for the year/period (18(e)(i)) - 141,858
Disposal of subsidiary (18(e)(iii)) - (10,000)
Write-off of investment in subsidiaries (18(d) and 18(e)(iv)) (138,716) (1,727)
At end of year/period 225,769 364,485
(b) Movement in impairment account for unquoted shares are as follows:
Company
2022 2021
RM’000 RM’000
At beginning of year/period 197,063 34,572
Charged for the year/period (Note 9) 8,123 27,360
Transfer from impairment of advances to subsidiaries (Note 18(c)) - 136,858 Write-off of investment in subsidiaries (Note 18(d) and 18(e)(iv)) (138,716) (1,727)
At end of year/period 66,470 197,063
(c) Advances to subsidiaries
The advances to subsidiaries have no fixed tenure and the Company does not expect repayment in the foreseeable future. Accordingly, the balances have been classified as part of investments in subsidiaries.
Movement in advance to subsidiaries are as follows:
Company
2022 2021
RM’000 RM’000
At beginning of year/period - 207,390
Addition for the year/period 22,153 9,954
Transfer to amount due from subsidiaries (Note 23) - (22,076)
Repayment for the year/period (2,022) (44,773)
Capitalised during the year/period (Note 18(e)(i)) - (141,858)
Disposal during the year/period (Note 18(e)(iii)) - (8,637)
At end of year/period 20,131 -
Included in the addition to the advance to subsidiary in the current financial year is debt novation from KUB Ekuiti Sdn Bhd to the Company amounting to RM20,957,000.
Movement in impairment account for advances to subsidiaries are as follows:
Company
2022 2021
RM’000 RM’000
At beginning of year/period - 145,193
Allowance of impairment (Note 9) - 40
Transfer to impairment account for unquoted shares (Note 18(b)) - (136,858) Reversal of impairment on advances to subsidiaries (Note 18(e)(ii)) - (8,375)
At end of year/period - -
NOTES TO THE FINANCIAL STATEMENTS
18. INVESTMENTS IN SUBSIDIARIES (cont’d) (d) Transactions during the financial year
(i) Member’s voluntary winding up
During the financial year, a wholly owned subsidiary of the Company, Peramining Sdn Bhd (‘Peramining’) which is currently dormant, had resolved by way of member’s voluntary winding up at its respective general meeting held on 14 June 2022 pursuant to Section 439 (1)(b) of the Companies Act, 2016.
The investment in Peramining amounting to RM5,008,000 which was fully impaired in previous years had been written off by the Company during the year.
(ii) Strike off of dormant subsidiary
The Company’s wholly owned subsidiary, namely Restoran Kualiti Sdn Bhd (‘Restoran Kualiti’) had been struck off from the register pursuant to Section 550 of the Companies Act, 2016 and was accordingly dissolved. Following this, the Company had written-off of its investment in Restoran Kualiti amounting to RM133,708,000 which was fully impaired in previous years had been written off by the Company during the year.
(e) Transactions during the previous year
(i) Subscription of new shares in the subsidiaries
The Company had increased its investment in subsidiaries amounting to RM141,858,000 by capitalising the advances made to the following subsidiaries:
Date of No. of share
Subsidiaries Allotment (Units) RM’000
Restoran Kualiti Sdn Bhd 11 June 2021 131,707,846 131,708
Cybertrek (Malaysia) Sdn Bhd 4 June 2020 5,149,973 5,150
KUB Malua Plantation Sdn Bhd 25 September 2020 5,000,000 5,000
Subsequently, the impairment losses provided for Restoran Kualiti Sdn Bhd and Cybertrek (Malaysia) Sdn Bhd amounting to RM136,858,000 previously, has been transferred to impairment account for unquoted shares.
(ii) Reversal of impairment
During the previous financial period, there was repayment from a subsidiary namely KUB Ekuiti Sdn Bhd amounting to RM8,375,000. The reversal of impairment has been recognised in profit or loss accordingly.
(iii) Disposal of a subsidiary
On 8 April 2021, the Company had entered into a Share Sale Agreement with Tradewinds Plantation Berhad for the disposal of its 100% equity interest in KUB Malua Plantation Sdn Bhd (‘KUB Malua’) comprising 10,000,000 ordinary shares of RM1 per share and shareholders advances of RM8,637,000 for a total cash consideration of RM10,549,000 as determined at the completion date. Upon the disposal of KUB Malua, the amount outstanding from the said company of RM18,561,000 had been written off, which had resulted in loss on disposal to the Group and the Company of RM18,815,000 and RM26,649,000 respectively which was recognised in profit or loss as disclosed in Note 9. The transaction was completed on 30 April 2021.
KUB Malua is principally involved in cultivation of oil palm and management of oil palm estates in Kinabatangan, Sabah.
18. INVESTMENTS IN SUBSIDIARIES (cont’d) (e) Transactions during the previous year (cont’d)
(iii) Disposal of a subsidiary (cont’d)
Effect of disposal of KUB Malua to the financial position of the Group in the previous period were as follows:
2021 RM’000
Property, plant and equipment (Note 15) 97,839
Biological assets (Note 22) 599
Trade and other receivables 1,189
Cash and bank balances 3,641
Trade and other payables (4,090)
Amount due to holding company (18,561)
Borrowings (Note 27) (69,814)
Net assets disposed 10,803
Non-recoverability of intercompany advances 18,561
Loss on disposal of a subsidiary (Note 9) (18,815)
Proceeds from disposal 10,549
Less: Cash and cash equivalents (3,641)
Cash flow on disposal, net of cash disposed of 6,908
(iv) Member’s voluntary winding up
On 8 February 2021, a 86.37% owned subsidiary of the Company, Pernida Berhad (‘Pernida’) had wound up by way of members’ voluntary winding up pursuant to Section 439 (1)(b) of the Companies Act, 2016.
Pernida is a dormant company and the investment in Pernida was fully impaired in previous years.
(f) Financial guarantees
This amount relates to fair value of corporate guarantee provided by the Company to banks for banking facilities granted to subsidiaries in prior years and which have been capitalised as part of the investment in these subsidiary companies.
Movement in impairment:
Company
2022 2021
RM’000 RM’000
At beginning of year/period 3,894 3,113
Charged for the year/period (Note 9) - 781
Written off during the year (781) -
At end of year/period 3,113 3,894