Kimlun Corporation Berhad Annual Report 2020

200901023978 (867077-X) Kimlun Corporation Berhad (Incorporated in Malaysia) 16. Investment in subsidiaries (cont'd) (b) Subscription of ordinary shares in Kimlun Land Sdn. Bhd. (c) Subscription of ordinary shares in Kii Amber Sdn. Bhd. (d) Subscription of ordinary shares in Bayu Damai Sdn. Bhd. During the financial year, Kii Amber Sdn. Bhd. ("KABSB"), entered into a Tripartite Share Sale Agreement ("SSA") with Bayu Damai Sdn. Bhd. ("BDSB") and Bayu Damai Equity Sdn. Bhd. ("BDESB") to subscribe for 9,800,000 ordinary shares (“Subscription Shares”) representing 49% equity interest in BDSB for a total consideration amounting to RM39,999,680 (“Subscription Consideration”). KABSB paid RM6,679,680 out of the Subscription Consideration and the Subscription Shares were allotted in full to KABSB on 28 October 2020. The remaining balance of the Subscription Consideration is payable upon any call or calls by BDSB at any time and from time to time for such portion of the balance Subscription Consideration. Notwithstanding the Subscription Consideration not being paid in full by KABSB, the Subscription Shares rank pari passu with all other issued ordinary shares of BDSB. Pursuant to the SSA, KABSB has the power to appoint the majority of the board of directors of BDSB and the relevant activities of BDSB shall be decided by a majority vote of the directors. Accordingly, BDSB is accounted for as a subsidiary of the Group as KABSB has the power and ability to direct the relevant activities of BDSB. The acquisition of BDSB did not meet the definition of a business combination as defined under MFRS 3 Business Combinations. Hence, the transaction was accounted for as an asset acquisition. During the financial year, the Company incorporated a wholly-owned subsidiary, Kii Amber Sdn. Bhd. ("KABSB"). The Company subscribed for 6,717,000 ordinary shares in KABSB for a total consideration of RM6,717,000. During the financial year, the Company subscribed for additional ordinary shares in Kimlun Land Sdn. Bhd. for a total consideration of RM14,600,000, satisfied by settlement of amount owing by Kimlun Land Sdn. Bhd. The subscription did not change the percentage of shareholdings effectively held by the Company. - 69 - Annual Report 2020 126 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020