Annual Report 2011 - Goodbaby International Holdings Limited

NOTES TO FINANCIAL STATEMENTS
31 December 2011
34.RESERVES (Continued)
(a) GROUP (Continued)
Merger reserve
As at 31 December 2011, the merger reserve represents:
i) In 2001, the Group acquired GCPC from GCPC’s then shareholders through the issuance of
the Company’s shares to GCPC’s then shareholders. The difference between the nominal
value of the Company’s share of the paid-up capital of GCPC and the par value of the
Company’s shares issued amounted to HK$108,281,000 was recognised as merger reserve;
ii) In 2007, Geoby Electric Vehicle Co., Ltd. (“GPCL”) was established to take over certain
operations from the Group and the net asset value of the discontinued operation over the
consideration received amounting to HK$1,362,000 was recognised as a deemed
distribution in the merger reserve account;
iii) As mentioned in note 2 above, the Group acquired the Wooden Products and E-car
Businesses through acquiring a 100% equity interest in PCPC in June 2010 and this
acquisition was accounted for using the pooling of interests method. Prior to the
establishment of PCPC on 5 November 2008, the Wooden Products and E-car Businesses
were carried out by a fellow subsidiary, GPCL. Upon establishment, PCPC acquired all the
assets and liabilities related to the Wooden Products and E-car Businesses from GPCL at
their respective book values and continued the Wooden Products and E-car Businesses
afterwards. Accordingly, the retained earnings of HK$11,357,000 in respect of the Wooden
Products and E-car Businesses generated prior to the establishment of PCPC were
capitalised as merger reserve in 2008; and
iv) In 2010, the Group disposed of its equity interests in GCCL, SHFS, SGOL, RCBL, MGCR and
MGRL to GBHL (note 14) for a consideration of HK$287,936,000 in aggregate. The
consideration over the net asset value of the discontinued operation amounting to
HK$35,699,000 was recognised as a deemed contribution in the merger reserve account
(note 32).
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