106
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2014
31.
Business combinations
(continued)
At Fair Value
Chinyee
S&W Total
$’000
$’000
$’000
(c) The fair values of identifiable assets acquired and
liabilities assumed
2013
Cash and cash equivalents
81
692
773
Trade and other receivables
1,728
8,275
10,003
Inventories
182
2,966
3,148
Property, plant and equipment
13,677
26,050
39,727
Club membership
-
60
60
Total assets
15,668
38,043
53,711
Trade and other payables
(3,335)
(10,714)
(14,049)
Borrowings
(4,583)
(17,518)
(22,101)
Total liabilities
(7,918)
(28,232)
(36,150)
Total identifiable net assets
7,750
9,811
17,561
Add/(deduct):
- Goodwill (Note 19)
1,741
-
1,741
- Gain from bargain purchase (Note 5)
-
(4,711)
(4,711)
Consideration to be transferred for
the acquisitions
9,491
5,100
14,591
(d)
Acquisition-related costs
Acquisition-related costs of $12,000 and $15,000 for Chinyee and S&W respectively, are included
in administrative expenses in the consolidated statement of comprehensive income and in
operating cash flows in the consolidated statement of cash flows of previous financial year.
(e)
Goodwill
The goodwill of $1,741,000 arising from the acquisition of Chinyee is attributable to new
earning streams, leveraging on the established client base, industry reputation and the
positive synergies expected to arise from the economies of scale in combining the operations
of the Group with those of Chinyee.
(f)
Gain from bargain purchase
The gain on bargain purchase of $4,711,000 arising from the acquisition of S&W is due to
lower purchase consideration as compared to fair value of the net identifiable assets as the
target company, S&W, faces financial difficulties prior to the acquisition.
(g)
Revenue and profit contribution
The acquisition of Chinyee and S&W contributed revenue of $860,000 and $1,057,000
respectively, and net profit of $343,000 and $557,000 respectively, to the Group for the
financial period from 1 to 31 December 2013.
Had Chinyee and S&W been acquired from 1 January 2013, consolidated revenue and loss for
the financial year ended 31 December 2013 would have been $27,686,000 and $10,127,000
respectively.
