notes to the financial statements
for the financial year ended 31 December 2014 (Continued)
43 SIGNIFICANT ACQUISITIONS (CONTINUED)
(b)
Acquisitions in the preceding financial year (continued)
Spirolite Group is involved in manufacturing and trading of spiral pipes, straight pipes, tubes, tanks and containers. The acquisition has further
expanded the diversification of the Group in infrastructure and building materials industry.
In the ten months to 31 December 2013, Spirolite Group contributed revenue of RM23,683,935 and net profit of RM982,610. The acquired subsidiaries
would have contributed a revenue of RM27,041,747 and a net profit of RM1,013,533 to the Group as if the combinations had taken place at the beginning
of the financial year ended 31 December 2013.
The remeasurement to fair value of the Group’s existing 49% interest in Spirolite Group resulted in a gain of RM3,347,616 (RM12,126,804 less
RM8,779,188) carrying value of equity accounted amount at acquisition date which was transferred to profit or loss in other operating income in the
consolidated statement of profit or loss.
The Group incurred acquisition-related costs of RM11,400 related to external legal fees. The legal fees have been included in administrative and general
expenses in the Group’s consolidated statement of profit or loss.
The fair value of the identifiable assets and liabilities of the business acquisition of the Group as at the date of acquisition was:
Spirolite Group
Carrying
amount before
combination
Fair value
recognised on
acquisition
RM’000
RM’000
Group
Property, plant and equipment
4,843
18,243
Inventories
4,024
4,024
Trade and other receivables
7,887
7,964
Cash and bank balances
4,169
4,169
Trade and other payables
(2,322)
(2,399)
Current tax liabilities
(66)
(66)
Deferred tax liabilities
(179)
(3,334)
Net identifiable assets acquired
18,356
28,601
Accreditation of negative goodwill
(3,601)
Total purchase consideration paid
25,000
Cost of the acquisitions
Fair value of acquired subsidiaries
25,000
Fair value of previously held equity interest in associate
(12,127)
Cash and cash equivalents acquired
(4,169)
Cash and cash equivalents used in the acquisition
8,704
149
Wah Seong Corporation Berhad • Annual Report 2014
