Fraser & Neave Holdings Bhd Annual Report 2021

10. INVESTMENT IN A JOINT VENTURE #CONTINUED$ Group 2021 RM’000 2020 RM’000 Reconciliation of net assets to carrying amount as at 30 September Group’s share of net assets 104,544 104,834 Goodwill 9 9 Interest on shareholder’s loan 38,294 38,294 Elimination of unrealised profit (55,292) (55,292) Carrying amount in the statement of financial position 87,555 87,845 Group’s share of loss for the year (290) (283) The joint venture had no other contingent liabilities or capital commitments as at 30 September 2021 and 2020. VCSB cannot distribute its profits without the consent from the two venture partners. SHAREHOLDER’S LOAN On 11 November 2011, the Company entered into a conditional subscription cum shareholders’ agreement (“SSA”) with Frasers Property Holdings (Malaysia) Pte. Ltd. (“FPHM”) to form a joint venture, via VCSB for the purpose of carrying out a proposed mixed development on the land held under PN 3679 for Lot No. 35 and PN 3681 for Lot No. 37, Seksyen 13, Bandar Petaling Jaya (“PJ”), Daerah Petaling, Selangor (“Land”). The Company and FPHM had both granted shareholders’ loans to VCSB pursuant to the SSA. The loans were unsecured, borne interest at KLIBOR + 1.25% (2020: KLIBOR + 1.25%) per annum and were denominated in RM. On 2 October 2019, the shareholder’s loan was converted to 126,820 RNCCPS at issue price of RM1,000 each. RNCCPS have the following salient terms: (i) Non-cumulative preferential dividend, the quantum of which will be at the discretion of the joint venture subject to the applicable laws and regulations governing the joint venture. (ii) The RNCCPS shall rank pari passu as between themselves and prior to the ordinary shares and all other classes of shares, if any, for the time being of the joint venture. (iii) Each RNCCPS is transferable subject to the Articles of Association and any applicable laws. (iv) The registered RNCCPS holder would not have the right to vote at any general meeting of the joint venture. (v) Subject to the applicable laws and regulations governing the joint venture, the RNCCPS is redeemable at the discretion of the joint venture. (vi) The RNCCPS are convertible into ordinary shares at the option of the joint venture. UNREALISED PROFIT On 18 January 2012, VCSB issued new ordinary shares of 499,998 and 500,000 to the Company and FPHM respectively. Consequent thereupon, the Company and FPHM each holds 50% equity interest in VCSB. With the announcement of the completion of the transaction in the financial year ended 30 September 2012, the Company had e!ectively divested 50% of its interest in the development land in PJ Section 13 and recognised a gain of approximately RM55,292,000. The remaining 50% unrealised profit of RM55,292,000 will be realised upon the disposal of the land by the joint venture or the date on which the Group ceases to have joint control over the joint venture. Financial Statements 207 Fraser & Neave Holdings Bhd ! Annual Report 2021