Chemical Company of Malaysia Berhad Annual Report 2018

Notes to the Financial Statements 31. SIGNIFICANT CHANGES IN ACCOUNTING POLICIES (CONTINUED) 31.2 Accounting for financial instruments (continued) b. Classification of financial assets and financial liabilities on the date of initial application ofMFRS9 (continued) (i) Reclassification from loans and receivables to amortised cost Trade and other receivables that were classified as loans and receivables under MFRS 139 are now reclassified at amortised cost. An increase of RM3,063,000 in allowance for impairment was recognised in opening retained earnings and non-controlling interest of the Group at 1 January 2018 respectively on transition to MFRS 9. (ii) Reclassification from AFS to FVOCI Investment in unquoted shares are investments that the Group intends to hold for long term strategic purposes. As permitted by MFRS 9, the Group has designated these investments as measured at FVOCI at the date of initial application. (iii) Reclassification from loans and receivables to mandatorily recognition FVTPL Highly liquid investments with financial institutions previously classified as loans and receivables were held by the Group primarily for fair value gains and withdrawing them if the need arises to meet liquidity requirements. These are classified as FVTPL which are designated upon initial recognition. 32. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR 32.1 Disposal of an investment property On 13 June 2018, the Company completed the disposal of three parcels of leasehold land measuring approximately 70.93 acres for a cash consideration of RM190.0 million to Global Vision Logistics Sdn. Bhd.. A net loss of RM5.5 million, net of real property gain tax of RM9.6 million, has been recognised in the profit or loss during the year, and revaluation reserve of RM112.4 million has been realised to retained earnings upon disposal. 32.2 Disposal of other investments On 29 June 2018, the Company disposed 806,450 common shares representing 8.39% equity interest in PanGen, to DBB for a cash consideration of RM59.2 million. Cumulative gain of RM43.4 million has been realised to retained earnings upon disposal. 194 ANNUAL REPORT 2018