NOTES TO
FINANCIAL STATEMENTS
December 31, 2015
134
CITIC ENVIROTECH LTD.
Annual Report
2015
40 ACQUISITION OF SUBSIDIARIES (cont’d)
Analysed as:
Total
$’000
Net cash outflow on acquisition of subsidiary
Consideration paid in cash
86,102
Less: Cash and cash equivalents acquired
(2)
Net cash outflow
86,100
There is no goodwill arising from the acquisition of the above two subsidiaries as these are entities
with service concession arrangements and any excess of consideration over the fair value of the net
assets arising from the acquisitions have been included in the fair values of the service concession
receivables and intangible assets.
The acquisition of the subsidiaries resulted in inclusion of post-acquisition revenue of $17,708,000
and profit of $6,679,000 in the Group’s financial statements for the year ended December 31, 2015.
Had the business combination during the year been effected at April 1, 2015, the revenue of the
Group would have been $274,761,000 and the profit for the year would have been $42,438,000.
For the financial year ended March 31, 2015
During the financial year ended March 31, 2015, the Group acquired 100% equity interest of
Memstar Pte. Ltd. and its principal subsidiaries, businesses and assets (“Memstar”) from Memstar
Technology Ltd (“Acquisition”) for a total purchase consideration of $307,486,000 comprising of
cash consideration of $32,777,000, liabilities of Memstar assumed by the Company of $38,334,000
and issuance of 173,805,000 ordinary shares (the “Consideration Shares”) in the share capital of the
Company for the expansion of the Group’s business. The effective date of the completion of the
acquisition, as determined by management, is April 11, 2014.
During the financial year ended March 31, 2015, the Group owns 50% equity shares of United
Envirotech Water Treatment (Dafeng) Co. Ltd (“Dafeng”). However, based on the revised contractual
arrangements between the Group and the other investor entered into during the year, the Group’s
voting power in Dafeng increased from 50% to 67%, giving it the ability to direct relevant activities
based on simple majority votes. Dafeng became the Group’s subsidiary on January 1, 2015.
