Fraser & Neave Holdings Bhd Annual Report 2020

195 06 financial statements ANNUAL REPORT 2020 Notes to The Financial Statements (Cont’d.) 16. CAPITAL AND RESERVES (CONTINUED) (E) LOSS ON PURCHASE OF SHARES FOR SGP Upon vesting of share awards, there will be a difference between total purchase price paid by SGP Trust (Note 16(C)) to acquire the shares from the open market and the fair value of the share awards granted to employees of subsidiaries. This difference will be included in the Group’s and the Company’s financial statements as a deduction from equity and classified as “Loss on purchase of shares for SGP”. (F) LEGAL RESERVE Non-distributable legal reserve amounting to RM9,934,000 (2019: RM9,934,000) relates to a subsidiary in Thailand. Under the provision of Thailand Civil and Commercial Code, the subsidiary is required to set aside at least 5% of its net income after accumulated deficit (if any) as a legal reserve until the reserve is not less than 10% of the registered share capital. This reserve is non-distributable as dividends. 17. LOANS AND BORROWINGS Group Currency 2020 RM’000 2019 RM’000 Non-current Term loan – unsecured Thai Baht (“THB”) – 95,909 Current Term loan – unsecured THB 91,868 27,402 91,868 123,311 COMMERCIAL PAPER (“CP”)/MEDIUM TERM NOTE (“MTN”) OF RM1,500,000,000 A subsidiary of the Company, F&N Capital Sdn Bhd (“the Issuer”), is able to issue up to RM750,000,000 in nominal value under each of the CP and the MTN programmes respectively, which are unconditionally and irrevocably guaranteed by the Company. The CP has a tenure of seven (7) years from the first issue date of the CP under the CP Programme whilst the MTN has a tenure of fifteen (15) years from the first issue date under the MTN Programme. The Issuer had on 7 October 2013 issued MTN of RM150,000,000 with a tenure of five (5) years from the issue date. This MTN with interest rate of 4.24% per annum was fully repaid in the previous financial year. As at 30 September 2020, the unutilised CP/MTN facility available for use amounted to RM1,500,000,000 (2019: RM1,500,000,000). The CP programme of RM750,000,000 has expired on 14 October 2020 whilst the tenure of the MTN Programme is up to 28 September 2028. TERM LOAN OF THB1,000,000,000 On 1 December 2015 and 6 June 2018, a subsidiary of the Company, F&N Dairies (Thailand) Limited (“FNDT”), was granted term loans of THB1,000,000,000 each with the tenure of three (3) years from the issued date and interest rates of 2.35% and 2.44% per annum respectively. As at 30 September 2020, the outstanding balance for the term loans amounted to THB700,000,000 (2019: THB900,000,000). On 7 June 2018 and 10 January 2019, FNDT was granted short-term loans of THB200,000,000 and THB400,000,000 with the tenure of six (6) months and interest rates of 1.83% and 2.20% per annum respectively. These term loans were fully repaid in the previous financial year.