Annual Report 2006 - Venture Corporation Limited

notes to financial statements
December 31, 2006
36 ACQUISITION OF SUBSIDIARY (Cont’d)
If the acquisition had been completed on January 1, 2006, total group revenue for the year would have been
$3,737,256,000 and profit for the year would have been $248,697,000. In determining the ‘pro-forma’ revenue and
profit of the group had GES been acquired at January 1, 2006, the following assumptions have been made:
• amortisation of customer relationships and realisation of inventories on the basis of the fair values arising in the
initial accounting for the business combination and release of the corresponding deferred tax liabilities;
• based borrowing costs on the funding levels after the business combination.
The pro forma financial information mentioned above is not necessarily an indication of the actual performance of the
group going forward.
In the prior year, on December 1, 2005, the group acquired 60% of the issued share capital of Scinetic Engineering
Pte Ltd for cash consideration of $20,913,000. This transaction has been accounted for using the purchase method of
accounting. The net assets acquired in the transaction, and the goodwill arising, are as follows:
Fair value of
assets and liabilities
acquired
$’000
Net assets acquired:
Plant and equipment 663
Intangible assets 1,618
Inventories 3,742
Trade and other receivables 17,848
Cash and bank balances 1,764
Trade and other payables (10,034)
Income tax payable (854)
Bank loans (753)
Minority interests (5,592)
Deferred tax liability (14)
Group’s share of net assets 8,388
Goodwill 12,525
Total consideration, satisfied by cash 20,913
Net cash outflow arising on acquisition:
Cash consideration paid (20,913)
Cash and cash equivalents 1,764
(19,149)
The goodwill arising from the acquisition of Scinetic Engineering Pte Ltd is attributable to the anticipated profitability
of the company’s new capabilities in retail systems solutions for its original design manufacturing (“ODM”) services and
will be able to enhance the company’s design offerings to major customers in the computer application and peripheral
sector.
Scinetic Engineering Pte Ltd contributed $5,894,000 in revenue and $763,000 to the group’s profit before tax between
the date of acquisition and December 31, 2005.
If the acquisition had been completed on January 1, 2005, total group revenue for the year ended December 31, 2005
would have been $3,275,402,000 and profit before tax for the year would have been $210,263,000.
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