Financial instruments not measured at fair value Type Valuation technique Secured and unsecured bank loans Secured and unsecured bank loans approximate their fair values as these loans are interest-bearing at floating rates and reprice frequently at an interval of one, two, three or six-months or any other agreed interest period. Medium term notes The fair value is determined based on quoted price of the notes in markets that are not active. Other financial liabilities* Discounted cash flows: The valuation model considers the present value of future principal and interest cash flows, discounted using a risk adjusted discount rate. The discount rate used is 5.59% (2022: 4.19%). * Other financial liabilities include convertible bonds – liability component, security deposits and junior bonds. (ii) Transfers between the levels There were no transfers between the levels during the year. 26 ACQUISITION AND DISPOSAL OF SUBSIDIARIES Acquisition of subsidiary The Group acquires subsidiaries that own real estate. At the time of acquisition, the Group considers whether each acquisition represents the acquisition of a business or the acquisition of an asset. The Group accounts for an acquisition as a business combination when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. On 9 May 2022, Perennial Singapore Investment Holdings Pte. Ltd., a direct subsidiary of the Company, acquired 48.6% additional equity interests in Perennial Shenton, for a consideration of $1.0 million. On 20 July 2022, Perennial Singapore Investment Holdings Pte. Ltd. disposed 19.1% equity interests in Perennial Shenton, for a consideration of $0.4 million. Consequently, the Group’s equity interest in Perennial Shenton increased from 31.2% to 60.7% and Perennial Shenton ceased to be an associate and become an indirect subsidiary of the Company. The identifiable assets acquired and liabilities of Perennial Shenton was $2.0 million which comprises trade and other receivables, cash and cash equivalents and trade and other payables. As reflected in consolidated statement of cash flows, net cash inflows arising from the acquisition of a subsidiary is $109.3 million. Disposal of subsidiary On 30 June 2023, the Group disposed its equity interest in PRE 8 Investments Pte. Ltd. (“PRE 8”) to an associate for a purchase consideration of $54.8 million. The identifiable assets disposed and liabilities of PRE 8 were $14.0 million, which comprises of investment property, trade and other receivables, cash and cash equivalents and trade and other payables. As reflected in the consolidated statement of cash flows, net cash inflows arising from the disposal of a subsidiary is $32.5 million. Notes to the Financial Statements Year ended 31 December 2023 25 FINANCIAL INSTRUMENTS (continued) Measurement of fair values (continued) (i) Valuation techniques and significant unobservable inputs (continued) 212 PERENNIAL HOLDINGS PRIVATE LIMITED
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