Section 8 UEM Edgenta Berhad FINANCIAL STATEMENTS 322 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 18. INVESTMENT IN SUBSIDIARIES (CONTD.) (a) Cost of investment in subsidiary companies (contd.) (iii) Capitalisation of amounts due from ESG In the previous financial year, a wholly-owned subsidiary of the Company, ESG increased its share capital from SGD1 to SGD40.8 million (approximately RM131.0 million). The Company subscribed to the new shares which was settled via capitalisation of debts due to the Company amounting to RM131.0 million. This capitalisation of amounts due from ESG has no cash flows impact to the Company. (iv) Incorporation of EAL In the previous financial year, EAL was incorporated in the Kingdom of Saudi Arabia as a wholly-owned subsidiary of the Company. (b) Impairment of investment in subsidiaries The movement in accumulated impairment loss as follows: Company 2023 RM’000 2022 RM’000 At 1 January 415,300 410,784 Impairment loss on investment in a subsidiary company - 4,516 At 31 December 415,300 415,300 In the previous financial year, an impairment loss of RM4.5 million was recognised against the carrying amount of its investment in Edgenta Environmental & Material Testing Sdn. Bhd. (“EEMT”) of RM25.9 million to its recoverable amounts. Based on management’s assessment, the recoverable amount of its investment in EEMT was RM21.4 million which was estimated based on the net tangible asset of EEMT.
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