276 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) For the financial year ended 31 January 2023 YINSON HOLDINGS BERHAD | INTEGRATED ANNUAL REPORT 2023 35. Trade and other payables (continued) (d) Deposits (i) Included in the Group’s deposits is an amount of RM21 million (USD5 million) (2022: RM21 million (USD5 million)) relating to a deposit payment received by Yinson Acacia Ltd (“YAL”), an indirect wholly owned subsidiary of the Group, for the proposed disposal of a minority equity interest in Yinson Boronia Consortium Pte. Ltd. (“YBC”), another indirect subsidiary of the Group, to Kawasaki Kisen Kaisha, Ltd. (““K” Line”) for a total cash consideration of USD49 million pursuant to a Share Sale and Purchase Agreement executed between YAL and “K” Line on 9 July 2020. The payment of the remaining balance of the consideration, being USD44 million by “K” Line, and transfer of the minority equity interest to “K” Line (or Japan Offshore Facility Investment 1 Pte. Ltd. (“JOFI”) (a direct wholly owned subsidiary of Sumitomo Corporation), at “K” Line’s option), will be executed upon final acceptance of the Marlim 2 FPSO by Petrobras and release of the financial guarantees under the associated project finance agreements expected to be in financial year ending 31 January 2024. (ii) Also included in the Group’s deposits is an amount of RM55 million (2022: NIL) relating to a vessel exclusivity agreement with a vendor to secure a vessel for an anticipated project until 30 June 2023. (e) Due to non-controlling interests On 11 May 2020, an indirect subsidiary of the Group issued a convertible loan of RM211 million (USD52 million) to its shareholders. RM53 million (USD13 million) of the issuance was to a minority shareholder (i.e. Japan Offshore Facility Investment 1 Pte. Ltd., a wholly owned subsidiary of Sumitomo Corporation), which is proportionate to its shareholdings in the subsidiary. In accordance with the terms and conditions (depending on the prevailing gearing once the finance agreements are executed) set out in the Convertible Loan Agreement, the loan may be jointly converted into ordinary shares of the subsidiary by the shareholders on a proportionate basis. Otherwise, the loan from the minority shareholder is due for repayment in equal quarterly repayments within 2 years from the date on which the conditions as set out in the Convertible Loan Agreement are met. The loan was adjusted to its fair value upon initial recognition with the discounting effect being recognised as a capital contribution from non-controlling interests of RM8 million in the financial year ended 31 January 2021, and the loan was subsequently carried at amortised cost. As at 31 January 2023, the Group’s carrying amount of this loan, which is unsecured and interest free, was RM52 million (USD12 million) (2022: RM49 million (USD12 million)). The deemed interest expense arising from the discounting effect on the fair value of the loan recognised during the current financial year was RM2 million (2022: RM2 million). On 24 August 2021, an indirect subsidiary of the Group received interest-free loan from JOFI amounting to RM171 million (USD41 million). The loan is unsecured, repayable at the borrower’s discretion and has no fixed term of repayment. The Group expects the loan to be repaid 5 years from the date of drawdown. The loan was adjusted to its fair value upon initial recognition with the discounting effect being recognised as a capital contribution from non-controlling interests of RM30 million in the previous financial year, and the loan was subsequently carried at amortised cost. As at 31 January 2023, the Group’s carrying amount of this loan was RM151 million (USD 36 million) (2022: RM143 million (USD 34 million)). The deemed interest expense arising from the discounting effect on the fair value of the loan recognised during the current financial year was RM6 million (2022: 3 million). (f) Due to subsidiaries Amounts due to subsidiaries are unsecured and the Company has discretion to defer the settlement for at least 12 months from the balance sheet date. Included in the amounts due to subsidiaries is an interest-bearing loan of RM880 million (2022: RM816 million), which bears interest of 6.36% to 6.60% (2022: 6.23% to 6.36%) per annum. All other payables are unsecured, non-interest bearing and are repayable on demand, except for amounts due to subsidiaries which are revolving on daily basis.
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