Fraser & Neave Holdings Bhd Annual Report 2020

183 06 financial statements ANNUAL REPORT 2020 Notes to The Financial Statements (Cont’d.) 7. INTANGIBLE ASSETS (CONTINUED) (B) KEY ASSUMPTIONS USED IN VALUE IN USE CALCULATIONS (CONTINUED) (ii) Brand During the financial year, the brand was disposed to F&N Global Marketing Pte Limited, a direct wholly owned subsidiary of F&NL for a cash consideration amounting to RM83,175,000 (Note 35(B)). The Group recorded a gain amounting to RM7,805,000 (Note 25) from the disposal thereof. In the previous financial year, the value in use calculations applied a discounted cash flows model using cash flow projections based on business plan covering three-year period. The discount rates applied to the cash flow projections were derived from the cost of capital plus a reasonable risk premium. Terminal growth rate Annual growth rate Pre-tax discount rate At 30 September 2019 1.0% 1.0% 9.8% The key assumptions represented management’s assessment of future trends in Condensed Milk industry and were based on both external sources and internal sources (historical data). (C) SENSITIVITY TO CHANGES IN ASSUMPTIONS With regard to the assessment of value in use of these CGUs, management believes that no reasonably possible changes in any of the key assumptions would cause the carrying values of these CGUs to differ materially from their recoverable amounts except for the changes in the prevailing operating environment, the impact of which is not expected to be significant. 8. INVESTMENTS IN SUBSIDIARIES Company 2020 RM’000 2019 RM’000 At cost Unquoted shares: – Ordinary shares 363,201 353,201 – Redeemable non-cumulative convertible preference shares (“RNCCPS”) 565,404 565,404 928,605 918,605 Less: Impairment loss (8,562) (7,182) 920,043 911,423 During the financial year, (a) The Company’s wholly owned subsidiary, Fraser & Neave (Malaya) Sdn Bhd incorporated a wholly owned subsidiary, Fraser and Neave MENA DWC-LLC (“F&N MENA”) with a registered and paid up share capital of AED300,000 comprising 300,000 ordinary shares of AED1 each. F&N MENA was set up to conduct the business of trading in food and beverages and dairy products. It had not commenced operations since its incorporation. (b) The Company subscribed additional issued and paid up share capital of RM10,000,000 in its wholly owned subsidiary, F&N AgriValley Sdn Bhd for a total cash consideration of RM10,000,000 comprising 10,000,000 ordinary shares. (c) The Company recognised impairment loss of RM1,380,000 for the investments in its subsidiaries, F&N Dairies (Malaysia) Sdn Bhd, F&N Properties Sdn Bhd, Lettricia Corporation Sdn Bhd and Premier Milk (Malaya) Sdn Berhad in “other expenses” as the recoverable amounts are less than the carrying amounts.