166
FRASERS HOSPITALITY TRUST ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 20 JUNE 2014 (DATE OF CONSTITUTION) TO 30 SEPTEMBER 2015
11.
ACQUISITION OF SUBSIDIARIES (CONT’D)
(a)
Acquisition of Excellence Prosperity TMK Pte. Ltd. and Kobe Excellence TMK (cont’d)
Transaction costs
Transaction costs relating to the acquisition of the businesses have been recognised in the “Non-
capitalisable expenses in relation to IPO” line item in the FH-REIT Group’s and the Stapled Group’s
Statements of Total Return.
Goodwill arising from acquisition
The goodwill of SGD 4,296,000 represents excess purchase consideration paid over the fair value of its
identifiable net assets and is written off in “Administrative and other expenses” in the FH-REIT Group’s and
the Stapled Group’s Statements of Total Return for financial period ended 30 September 2015. None of
the goodwill recognised is expected to be deductible for tax purposes.
Impact of the acquisition on profit or loss
From the acquisition date, EPTMK Group has contributed SGD 18,244,000 of gross revenue and SGD
13,658,000 to the profit for the year of FH-REIT Group and the Stapled Group. If the business combination
had taken place at the date of constitution, the contribution to the gross revenue and net profit of FH-
REIT Group and the Stapled Group would have been SGD 18,696,000 and SGD 13,997,000 respectively.
(b)
Acquisition of Excellence Prosperity Japan KK
On 14 July 2014 (the “acquisition date”), FHT Japan Pte. Ltd., a wholly-owned subsidiary of FH-REIT,
acquired 100% equity interest in Excellence Prosperity Japan KK (“EPJKK”). EPJKK is an investment holding
company that invested 50.48% of Redeemable Preference Shares in Kobe Excellence TMK.
The purchase consideration of EPJKK is approximately JPY 1.0 billion (approximately SGD 11.98 million),
and was arrived at on a “willing-buyer-willing-seller” basis, taking into account the net asset value of
EPJKK as at 13 July 2014.
The fair value of the identifiable assets and liabilities of EPJKK as at the acquisition date were:
Fair value
recognised on
acquisition
$’000
Deferred tax assets
182
Amount due from a related company
39,306
Other receivables
241
Cash and cash equivalents
208
39,937
Other payables and accruals
336
Loan from Vendor
27,550
Income tax payable
69
27,955
Total identifiable net assets at fair value
11,982
