NOTES TO THE FINANCIAL STATEMENTS
FOR THE FInAncIAL yEAR EnDED 30 JunE 2016
14
INVESTMENT IN SUBSIDIARIES (CONT’D)
(iii)
Acquisition of subsidiaries (cont’d)
(a)
The fair value of the identifiable assets and liabilities of the subsidiaries acquired as at the acquisition
date were: (cont’d)
Equity instruments issued as part of consideration transferred
In connection with the acquisition of subsidiaries in 2015, the Company issued 13,537,464 ordinary
shares with a fair value of $0.541 per share, based on the market price of the ordinary shares at
the Acquisition Date.
The attributable cost for the issuance of the shares amounting to $193,000 have been recognised
directly in equity as a deduction from share capital.
(b)
Transaction costs
Transaction costs related to the acquisition of $37,000 (2015: $48,000) have been recognised in the
“general and administrative expenses” in the Group’s profit or loss for the year ended 30 June 2016.
(c)
Goodwill arising from acquisition
The goodwill of $175,000 (2015: $3,061,000) comprises the value of strengthening the Group’s
market position in new niche market and high value commercial interior designs.
(d)
Impact of the acquisition on profit or loss
From the respective year's Acquisition Date, the subsidiary/subsidiaries contributed $8,264,000
(2015: $6,006,000) of revenue and profit of $78,000 (2015: loss of $845,000) to the Group’s profit
for the year. If the business combination had taken place at the beginning of the year, the Group
revenue would have been $103,001,000 (2015: $89,307,000) and the profit, net of tax would have
been $8,911,000 (2015: $7,747,000).
(e)
Provisional accounting for the acquisition of subsidiaries
Acquisition of subsidiaries in 2015
The order book has been identified as an intangible asset arising from the acquisition. The Group
has engaged an independent valuer to determine the fair value of the intangible asset. As at
30 June 2015, the fair value of the order book amounting to $2,317,000 was determined on
a provisional basis as the final results of the independent valuation have not been received
by the date the financial statements was authorised for issue. Goodwill arising from this
acquisition and the carrying amounts of the order book, deferred tax liability and amortisation
of the intangible asset will be adjusted accordingly on a retrospective basis when the valuation
of the intangible asset is finalised. The independent valuation has been finalised in 2016 and
no adjustment is required based on the finalised independent valuation.
93
ISOTEAM LTD.
ANNUAL REPORT 2016
