2020 UEM Edgenta Annual Report

16. INVESTMENT IN SUBSIDIARIES (CONTD.) e. Termination of joint venture O n 1 September 2019, UEM Sunrise Edgenta TMS Sdn. Bhd. (“UEMSET”), an indirect 70% subsidiary of the Company had entered into a Termination Agreement with Township Management Services Sdn. Bhd. to terminate the Joint Venture Shareholders’ Agreement dated 13 January 2016. O n 12 December 2019, Edgenta Township Management Services Sdn. Bhd., a wholly-owned subsidiary of the Company, had entered into a Termination Agreement with UEM Sunrise Berhad to terminate the Joint Venture Shareholders’ Agreement dated 30 November 2015. T he termination of joint venture did not have a material effect on the earnings, gearing or net assets of the Group. f. Disposal of a subsidiary O n 27 September 2019, Edgenta Mediserve Sdn. Bhd., a wholly-owned subsidiary of the Company, had completed the disposal of its entire 60% equity interest in Fresh Linen Services (Sabah) Sdn. Bhd. for a total cash consideration of RM7,950,000. The disposal resulted in a gain of RM1,483,073 to the Group. The value of the assets and liabilities disposed of on 27 September 2019 are as follows: RM‘000 Property, plant and machinery 1,252 Right-of-use asset 842 Deferred taxation 73 Cash and bank balances 6,785 Deposits and prepayments 67 Trade receivables 3,394 Tax recoverable 592 Trade and other payables (2,227) Total value of net asset disposed of 10,778 Group’s share of net assets disposed of 6,467 Consideration received, satisfied in cash 7,950 Gain on disposal of a subsidiary 1,483 The effect of the disposal on cash flow is as follows: Consideration received, satisfied in cash 7,950 Less: Cash and cash equivalent of subsidiary disposed (6,785) Net cash inflows from disposal of a subsidiary 1,165 ANNUAL REPORT 2020 247 1 2 3 4 5 6 7 8