DESTINI Annual Report 2019

NOTES TO THE FINANCIAL STATEMENTS 42. Financial Instruments (Cont’d) (d) Fair values of financial instruments (Cont’d) (i) Policy on transfer between levels The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer. There were no transfers between levels during current and previous financial years. (ii) Level 1 fair value Level 1 fair value is derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. (iii) Level 2 fair value Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Non-derivative financial instruments Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period. (iv) Level 3 fair value Level 3 fair values for the financial assets and liabilities are estimated using unobservable inputs. 43. Subsequent Events (a) Proposed acquisition, diversification and dilution On 18 February 2020, the Company announced to Bursa Malaysia Securities Berhad (“Bursa”) the following: (i) Destini Armada Private Limited (“DAPL”), a wholly-owned subsidiary of the Company had entered into a conditional share sale agreement (“SSA”) with PT Berkah Sadaya Adikarya (“Vendor”) for the acquisition of 4,999 ordinary shares in PT Muara Badak Perkasa (“PT MBP”), representing approximately 99.9% equity interest in PT MBP for a purchase consideration of SGD4,000,000 to be satisfied entirely via the issuance and allotment of 4,900,000 new DAPL Shares at an issue price of approximately SGD0.8163 per DAPL Share (“Proposed Acquisition”); (ii) In conjunction with the Proposed Acquisition, the Board proposes to undertake a diversification of the business activities of the Group to include the provision of jetty and/or port operations related services to mining companies (“Proposed Diversification”); and (iii) Upon completion of the Proposed Acquisition, the vendor will emerge as the largest shareholder of DAPL, with a 55% equity interest in DAPL. Simultaneously, the equity interest of the Company in DAPL will be diluted from 100% to 45%. Consequently, the equity interest of the Company in its indirectly owned subsidiaries held by DAPL will be diluted accordingly (“Proposed Dilution”). 06 FINANCIAL STATEMENTS DESTINI BERHAD 200