UEM EDGENTA BERHAD Integrated Annual Report 2025 324 NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2025 18. INVESTMENT IN SUBSIDIARIES (CONTD.) (a) Cost of investment in subsidiary companies Company 2025 RM’000 2024 RM’000 At 1 January 2,089,174 2,088,924 Acquisition of additional share capital in subsidiaries - 250 At 31 December 2,089,174 2,089,174 In the previous financial year, Opus Energy Sdn. Bhd. (formerly known as Edgenta Energy Projects Sdn. Bhd.) increased its ordinary shares to 1,000,000 by issuing 250,000 new ordinary shares of RM1.00 each. The Company subscribed to the new shares which was settled by cash. (b) Impairment of investment in subsidiaries The movement in accumulated impairment loss as follows: Company 2025 RM’000 2024 RM’000 At 1 January 381,135 414,902 Impairment loss on investment in subsidiary companies 293,810 1,233 Reversal of impairment loss on investment in a subsidiary company - (35,000) At 31 December 674,945 381,135 During the current financial year, impairment losses were recognised against the carrying amount of its investment in Opus Group Berhad (“OGB”), EMS, PROPEL and Edgenta Environmental & Material Testing (“EEMT”) of RM122.2 million, RM6.9 million, RM156.7 million and RM8.0 million, respectively. Based on management’s assessments, the recoverable amount of its investment in OGB, EMS, and EEMT were RM406.6 million, RM84.0 million, and RM12.2 million, respectively which were estimated based on their respective net tangible assets. The recoverable amount of PROPEL was determined based on VIU calculation using cash flow projections derived from financial budgets approved by the Board of Directors covering a five-year period. Based on this assessment, the recoverable amount of PROPEL was RM479.8 million which reflected reduced expected contract values and weaker margin outlook for the CGU. In the previous financial year, management assessment indicated that a reversal of impairment loss of RM35.0 million is required for OGB as the recoverable amount of its investment in OGB of RM528.8 million which is determined using the VIU method, exceeded the previous carrying amount of RM493.8 million. The reversal in the previous financial year reflected improved performance and future prospects for OGB, which have been considered in the VIU calculations for the financial year ended 31 December 2024.
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