KUB Malaysia Berhad Annual Report 2021

18. INVESTMENTS IN SUBSIDIARIES (cont’d) (d) Transactions during the financial period (cont’d) (iv) Member’s voluntary winding up During the financial period, a subsidiary company, Pernida Berhad (‘Pernida’) which is currently dormant, had resolved by way of special resolution at its respective extraordinary general meeting held on 8 February 2021 to approve the voluntary winding-up pursuant to Section 459 (3)(4) of the Companies Act, 2016. The investment in Pernida was fully impaired in previous years. (e) Transactions during the previous year (i) Share capital reduction During the previous financial year, a subsidiary company, Peraharta Sdn Bhd had undertaken a share capital reduction by RM10,000,000 or RM0.50 per share pursuant to Section 117 of the Companies Act, 2016. (ii) Reversal of impairment on advances to subsidiaries The Company had reversed its impairment on advances to subsidiaries i.e., KUB Ekuiti Sdn Bhd and Restoran Kualiti Sdn Bhd amounting to RM13,665,000 and RM1,460,000 respectively upon collection in the previous year. These reversals amounting to RM15,125,000 had been recognised in profit or loss during the previous year. (iii) Strike off of dormant subsidiaries In previous year, the Company had written-off of its investment in the following dormant subsidiaries amounting to RM11,650,000, as the said subsidiaries had been struck-off from the register pursuant to Section 550 of the Companies Act, 2016 and are accordingly dissolved. • KUB Research Sdn Bhd • KUB Realty (PJ) Sdn Bhd • Utama Steel Works Sdn Bhd (iv) Disposal of a subsidiary On 20 December 2018, a wholly owned subsidiary of the Company, KUB Ekuiti Sdn Bhd, entered into a Share Sale Agreement with Kasmuncak Holdings Sdn Bhd for the disposal of its 100% equity interest comprising 500,000 units of ordinary shares representing RM500,000 of issued shares of KUB Tower Sdn Bhd for a total consideration of RM1,465,000. The disposal was completed on 8 November 2019 with a gain on disposal of RM293,000 as disclosed in Note 9. On 19 July 2019, a wholly owned subsidiary of the Company, KUB Power Sdn Bhd, had disposed of its 50% of equity interest in Kiev Energy Sdn Bhd, at a total consideration of RM1. There was no gain or loss recognised from this disposal. (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 30.6.2021 31.12.2019 RM’000 RM’000 As at 1 January 3,113 3,113 Charge for the period/year (Note 9) 781 - As at 30 June/31 December 3,894 3,113 NOTES TO THE FINANCIAL STATEMENTS 108 KUB MALAYSIA BERHAD