Annual Report 2011 - QuamIR

Notes to the Consolidated Financial StatementsFor the year ended 31 March 201137. Acquisition of Subsidiaries(a)Acquisition of Favour South LimitedOn 23 January 2010, Sino Prosper Mineral Products Limited, a wholly-owned subsidiary of theCompany entered into an acquisition agreement (“Inner Mongolia Agreement”) with Mr. HongGuang, an independent third party (“Mr. Hong”) for the acquisition of (i) entire issued share capitalof Favour South Limited (“Favour South”); and (ii) all the obligation, liabilities and debts owingor incurred by Favour South to Mr. Hong, at a total consideration of RMB147,000,000 (equivalentto approximately HK$167,045,000), subject to adjustment (the “Inner Mongolia Acquisition”).Favour South is a company incorporated in the BVI and principally engaged in investment holding.The sole asset of Favour South is the entire issued capital of Great Surplus Investment Limited,which was to contribute and own 70% of the registered and paid up capital of Aohanqi XinruiEn Industry Co., Ltd (“Aohan Qi”).Aohan Qi is the holder of a permit for the mining of gold at a mine located at Gouliang Town,Aohan Qi, Inner Mongolia Autonomous Region, the PRC.All conditions precedent to the completion of the Inner Mongolia Acquisition were fulfilled andthe acquisition was completed on 29 June 2010.Consideration transferredHK$’000Deposit paid in prior year (Note 22) 4,136Cash 155,000Acquisition of shareholder’s loan (3,123 )Total consideration transferred (net of deductions set asidein accordance with the terms of the Inner Mongolia Agreement) 156,013Acquisition-related costs amounting to HK$3,206,000 have been excluded from the considerationtransferred and have been recognized as an expense in the period, within the administrativeexpenses in the consolidated statement of comprehensive income.Annual Report 2011111