My EG Services Berhad Annual Report 2020

MY E.G. SERVICES BERHAD Regisration No. 200001003034 (505639-K) 180 NOTES TO THE FINANCIAL STATEMENTS For The Financial Year Ended 31 December 2020 (CONT’D) 11. OTHER INVESTMENTS (CONT’D) INVESTMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (CONT’D) The fair value of each investment is summarised below:- The Group 2020 2019 RM’000 RM’000 Unquoted shares of Entity A (a) 10,774 874 Unquoted shares of Entity B 7,923 7,923 Unquoted shares of Entity C 10,408 10,408 Unquoted shares of Entity D 30 30 Unquoted shares of Entity E 225 225 Unquoted shares of Entity F 5,999 5,999 Unquoted shares of Entity G 9,141 9,141 Unquoted shares of Entity H (b) 3,500 - Unquoted shares of Entity I (c) 90,000 - 138,000 34,600 Other investments stated at fair value are analysed into level 2 and level 3 fair value measurements. The level 2 fair value of other investments have been determined based on transacted values during the financial year and the market comparison technique using market multiples derived from quoted prices of companies comparable to the investee, adjusted for the effect of the non-marketability of the unquoted shares. Investments in Entities F, G, H and I fall within level 2 fair value measurements. The level 3 fair value of other investments have been determined using discounted cash flow income approach based on pre-tax cash flow projections performed by management based on the significant unobservable inputs. Investments in Entities A, B, C, D and E fall within level 3 fair value measurements. (a) On 2 November 2020, MYEGC subscribed for an additional 100,500,000 shares in Entity A for a total cash consideration of RM9,900,000. (b) On 5 March 2020, MYEGC subscribed for a total of 145,162 Redeemable Convertible Preference Shares (“RCPS”) in Entity H, for a total cash consideration of RM3,500,000. Upon conversion of the RCPS on a fully diluted basis, MYEGC will then hold 22.5% equity interest in Entity H. As at the financial year end, the RCPS has not been converted into ordinary shares. (c) On 10 June 2020, MYEGC had entered into a Share Sales Agreement (“SSA”) and Put and Call Option Agreement (“PCOA”) with Merrington Assets Limited (“MAL”) for the purchase of 118,000,000 ordinary shares of Entity I, representing 10% of the issued and paid-up share capital of Entity I by MYEGC from MAL for a total consideration of RM90 million, which was satisfied partly by cash consideration of RM75 million and the balance sum of RM15 million which was satisfied by allotment and issuance of 12,500,000 new ordinary shares (at RM1.20 per share) in the Company (“Consideration Shares”) to MAL. As at the end of the financial year, unquoted equity investments with carrying amount of approximately RM15,140,000 were transferred from level 3 to level 2 as there is a change in valuation technique from income approach to market approach.