IHH Annual Report 2023

39. ACQUISITION AND DISPOSAL OF SUBSIDIARIES/BUSINESS (continued) Acquisitions of subsidiaries and business in 2023 (continued) Identifiable assets acquired and liabilities assumed The following summarises the recognised fair value of assets acquired and liabilities assumed at the date of aquisition: Kent RM’000 Property, plant and equipment 196,487 Right-of-use assets 6,202 Intangible assets 81,800 Tax recoverables 1,071 Inventories 7,679 Trade and other receivables 29,989 Cash and cash equivalents 5,996 Loans and borrowings (51,080) Employee benefits (8,371) Trade and other payables (54,453) Deferred tax liabilities (38,902) Fair value of net identifiable assets acquired 176,418 Net cash outflow arising from acquisition of subsidiary Kent RM’000 Purchase consideration settled in cash and cash equivalents 235,773 Less: Cash and cash equivalents acquired (5,996) 229,777 Goodwill Kent RM’000 Total purchase consideration 235,773 Fair value of net identifiable assets acquired (176,418) Goodwill 59,355 As at 31 December 2023, the Group had completed the purchase price allocation (“PPA”) for the acquisition of Kent. Goodwill on Kent was attributable mainly to the synergies expected to be achieved by integrating the entity into the Group's existing business. None of the goodwill recognised is expected to be deductible for tax purposes. Acquisition-related costs The Group incurred acquisition-related costs of RM485,000 during the year for Kent. The acquisition-related cost pertains to external legal fees, due diligence costs, valuation cost, stamp duty costs and other professional and accounting fees. The acquisition-related costs were included in ‘other operating expenses’ in profit or loss. Post-acquisition contributions to the Group For the ten and half months ended 31 December 2023, Kent contributed revenue of RM144.1 million and profit of RM11.1 million. If the acquisition had occurred on 1 January 2023, management estimates that consolidated revenue would have been RM20,950.6 million and consolidated profit for the year would have been RM4,048.8 million. Annual Report 2023 227

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