MSM Malaysia Holdings Berhad Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 42 EVENTS AFTERTHE REPORTING DATE a) Impact of Covid-19 In 2020, the global economic impact from the Covid-19 pandemic will be felt by industries and billions of people across the world. Even though a large portion of the Group’s activities are considered as essential operations, it is foreseen that the Covid-19 pandemic may have financial implications to the Group, including the results of the Group and measurement of its assets and liabilities of the Group for the next financial year. The Board of Directors of the Company has also performed a preliminary assessment of its cash flows for the next twelve months. The Board of Directors of the Company are closely monitoring the situation and will make the appropriate decisions and undertake the necessary measures to preserve value. b) Cessation of operations of a subsidiary On 29 January 2020, a townhall was held for a subsidiary's employees where they were informed regarding management's plans to cease the operation of the subsidiary. This follows the decision by the Directors of the Company on 20 November 2019 to cease the operation of its raw sugar refining division of the subsidiary in June 2020. The employees were presented with the option of being relocated to the other subsidiaries' operations. As of the date of this report, the decision from the employees regarding the relocation has yet to be made. c) Rescission of the sale and purchase agreement between a subsidiary and F&N Agrivalley Sdn Bhd On 9 April 2020, the Group issued a letter to F&N to exercise its rights to rescind the sale and purchase agreement in respect of the disposal of its leasehold agriculture land located at Chuping, Perlis, entered on 8 October 2019 as disclosed in Note 29 to the financial statements. As of the date of this report, the Group continues the plan to sell the leasehold agriculture land located at Chuping, Perlis and is of the view that the transacted value in the F&N sale and purchase agreement of RM156,000,000 remains the most reflective market value to be used as fair value less costs to sell for the purposes of measurement of the assets held for sale. Management expects the sale to be completed within the financial year ending 31 December 2020. 43 APPROVAL OF FINANCIAL STATEMENTS The financial statement have been approved for issue in accordance with a resolution of the Board of Directors on 17 April 2020. MSM Malaysia Holdings Berhad | Annual Report 2019 224