Fraser & Neave Holdings Bhd Annual Report 2021

8. INVESTMENTS IN SUBSIDIARIES #CONTINUED$ During the financial year, (a) The Company subscribed additional issued and paid up share capital of RM273,000,000 and RM790,000 respectively in its wholly owned subsidiaries, F&N Beverages Manufacturing Sdn Bhd and Nuvak Company Sdn Bhd for total cash consideration of RM273,000,000 and RM790,000 comprising 273,000,000 and 790,000 ordinary shares respectively. (b) The Company incorporated a wholly owned subsidiary, Awana Citra Sdn Bhd (“ACSB”) with a paid up share capital of RM61,000,000 comprising 61,000,000 ordinary shares. ACSB was set up as an investment holding company. (c) Purchase price allocation (“PPA”) arising from acquisition of Sri Nona Companies On 15 January 2021, ACSB acquired the entire equity interest in Sri Nona Food Industries Sdn Bhd, Sri Nona Industries Sdn Bhd and Lee Shun Hing Sauce Industries Sdn Bhd (collectively referred to as, the “Sri Nona Companies”) for a total cash consideration for RM59,498,000. The principal activities of Sri Nona Companies are the manufacture, distribution and sale of, among others, rice cakes and condiments. The acquisition of Sri Nona Companies has further helped the Group establish Halal Food Pillar as a new pillar of growth. These subsidiaries are included in the F&B Malaysia segment. The contribution of Sri Nona Companies to Group revenue and profit is not material. Pursuant to the acquisition of Sri Nona Companies on 15 January 2021, the net identifiable assets and goodwill disclosed in Note 7 were finalised within twelve months from the acquisition date. The following summarises the major classes of consideration transferred, and the recognised amounts of assets acquired and liabilities determined at the acquisition date: Note RM’000 Fair value of consideration transferred Cash and cash equivalents 59,498 Identifiable assets acquired and liabilities assumed Property, plant and equipment 3 1,051 Right-of-use assets 4 2,084 Intangible assets 7 15,102 Inventories 8,122 Trade and other receivables 10,083 Current tax asset 233 Cash and cash equivalents 9,630 Trade and other payables (7,882) Lease liabilities (2,152) Current tax liability (137) Deferred taxation (3,678) Total identifiable net assets 32,456 Fair value measurements Assets acquired Valuation technique Intangible assets Discounted cash flow: The valuation model considers expected net cash flow using risk-adjusted discount rate. Net cash outflow arising from acquisition of subsidiaries RM’000 Purchase consideration settled in cash and cash equivalents 59,498 Cash and cash equivalents acquired (9,630) 49,868 Financial Statements 201 Fraser & Neave Holdings Bhd ! Annual Report 2021