Serba Dinamik Annual Report 2016

160 SERBA DINAMIK HOLDINGS BERHAD Company No.1167905 P NOTES TO THE FINANCIAL STATEMENTS (Cont’d) 26. RELATED PARTIES (CONT’D) Significant related party transactions Significant related party transactions, other than compensations paid to key management personnel (see Note 21) and those disclosed elsewhere in the financial statements, are as follows: Transactions with companies/corporations in which certain substantial shareholders have or are deemed to have substantial interests Group Company 25.05.2016 - 2.12.2015 - 31.12.2016 31.12.2016 RM RM Nature of transaction Contractor charges 2,000,000 – Purchase of goods 622,312 – Contract revenue (61,065,612) – The balances with subsidiaries are disclosed in Notes 16 to the financial statements. The above transactions are based on negotiated terms. All the outstanding balances are unsecured and expected to be settled in cash. 27. SIGNIFICANT EVENTS On 25 May 2016, the shareholders of the Company entered into the Share Purchase Agreement with Serba Dinamik Group Berhad (“Serba Dinamik Group”) for the purchase by the Company from the shareholders of the entire issued and paid-up share capital of Serba Dinamik Group, 73,978,860 ordinary shares of RM1.00 each, at a total consideration of RM531,799,999 to be satisfied by the issuance of a total of 1,063,599,998 ordinary shares of RM0.50 each in the Company to each of the shareholder. Since then, the Company became the holding company of Serba Dinamik Group. The acquisition of shares forms part of the internal reorganisation of the Group and its group of companies in relation to the initial public offering of the ordinary shares in the Company and the proposed listing of the Company on the Main Market of Bursa Malaysia Securities Berhad. In accordance with MFRS 3, Business Combinations, the acquisition was accounted for using the reverse acquisition method with the Company being the accounting acquirer and Serba Dinamik Group being the accounting acquiree. The assets and liabilities of the Serba Dinamik Group are reflected at their respective carrying amounts. Any difference between the consideration paid and the share capital and the capital of the acquiree is reflected within equity as a “merger reserve”.