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257

UEM EDGENTA BERHAD

2016 ANNUAL REPORT

ABOUT

UEM EDGENTA

STRIVING

FOR GROWTH

PERFORMANCE

REVIEW

CORPORATE

FRAMEWORK

LEADERSHIP

SUSTAINABILITY

STATEMENT

TRANSPARENCY

FINANCIAL

REVIEW

ACCOUNTABILITY

17. INVESTMENT IN SUBSIDIARIES

Company

2016

RM’000

2015

RM’000

Unquoted shares at cost:

– Malaysian subsidiaries

2,134,211

2,006,810

– Foreign subsidiaries

86,795

418

2,221,006

2,007,228

Less: Accumulated impairment

(191,106)

(191,106)

2,029,900

1,816,122

Certain unquoted shares in subsidiaries are pledged to financial institutions for facilities granted to the Group and the

Company as disclosed in Note 28(a) and (b).

Further details of the subsidiaries are disclosed in Note 44.

(a) Acquisitions

Current financial year

(i) Incorporation of Edgenta TMS Sdn. Bhd. (“Edgenta TMS”)

On 12 February 2016, UEM Sunrise Edgenta TMS Sdn. Bhd. (“UEMSET”), a 70% owned subsidiary of Edgenta

Township Management Services Sdn. Bhd., has subscribed for 70% equity interest in Edgenta TMS. Following

the transaction, Edgenta TMS is now a subsidiary of UEMSET.

(ii) Acquisition of KFM Holdings Sdn. Bhd. (“KFM”)

On 6 April 2016, the Company acquired a total of 12,000,000 ordinary shares of RM1.00 each in KFM,

representing 80% of the total issued and paid-up share capital of KFM for a total consideration of up to

RM128.0 million satistified as follows:

i.

Upfront payment of RM92.0 million upon completion of the Shares Sale Agreement as follows:

– Cash payment of RM36.0 million; and

– RM56.0 million from the issuance and allotment of 18,122,977 new ordinary shares of RM0.25 each in

the Company at an issuance price of RM3.09 per share. The fair value of the shares on the date of

issuance is RM3.57 per share.

ii.

The balance of the RM36.0 million will be disbursed over the next three financial years subject to

achievement of key financial targets as follows:

– Deferred cash payment of RM20.0 million upon achievement of targets for financial years ending 2016,

2017 and 2018, and;

– Incremental value payment of RM16.0 million upon achievement of specific financial milestones.