Annual Report 2011 - QuamIR

Notes to the Consolidated Financial StatementsFor the year ended 31 March 201137. Acquisition of Subsidiaries (continued)(a)Acquisition of Favour South Limited (continued)Goodwill arising on acquisitionHK$’000Consideration transferred 156,013Add: non-controlling interests 30,414Less: fair value of identifiable net assets acquired (98,992 )Goodwill arising on acquisition (Note 20) 87,435None of the goodwill arising on this acquisition is expected to be deductible for tax purposes.Goodwill arising from acquisition of Favour South and its subsidiaries (the “Favour SouthGroup”) is attributable to the anticipated profitability and future development of the FavourSouth Group in gold mining activities in the PRC and the anticipated future operating synergyfrom the combinations.Net cash outflow arising on acquisition of subsidiariesHK$’000Consideration paid in cash 159,136Less: Deposit paid in prior year (4,136 )Bank balances and cash acquired (554 )154,446Impact of acquisition on the results of the GroupThe Favour South Group contributed revenues of approximately HK$2,380,000 and net loss ofapproximately HK$11,018,000 to the Group for the period from the date of acquisition to 31 March2011. If the acquisition had occurred on 1 April 2010, Group revenue would have been approximatelyHK$2,380,000 and loss before allocations would have been approximately HK$12,893,000. Thispro forma information is for illustrative purposes only and is not necessarily an indication of therevenue and results of the Group that actually would have been achieved had the acquisitionoccurred on 1 April 2010, nor is it intended to be a projection of future results.Annual Report 2011113