FINANCIAL HIGHLIGHTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009
FINANCIAL HIGHLIGHTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2009
3.3 ACQUISITION OF DRAKE & SCULL INTERNATIONAL FOR CONTRACTING WLL
In December 2009, the Group formalised the acquisition of a 75% interest in Drake & Scull International for Contracting
WLL (the "Company") effective 1 January 2009, from a related party (note 16).
The Group has provisionally recorded tangible assets and liabilities at the value they were carried in the books of the
Company prior to the transfer, as summarised below:
Carrying value
AED'000
TANGIBLE ASSETS
Property, plant and equipment
278
Contract work-in-progress
31,225
Contract receivables and retentions
51,540
Due from related parties
136
Bank balances and cash
3,948
-----------------------
TOTAL TANGIBLE ASSETS
87,127
LIABILITIES
Employees' end of service benefits
(1,154)
Loans
(10,481)
Due to related parties
(3,989)
Accounts payable and accruals
(37,040)
Advances
(14,183)
Due to banks
(1,765)
-----------------------
TOTAL LIABILITIES
(68,612)
-----------------------
BOOK VALUE OF NET TANGIBLE ASSETS ACQUIRED
18,515
==============
Carrying value
AED'000
Total consideration paid or payable
85,057
Book value of net tangible assets acquired, as above
(18,515)
Minority interest acquired
4,629
-----------------------
GOODWILL AND OTHER INTANGIBLE ASSETS
71,171
==============
Cash flow on acquistion:
Net cash acquired on business combination
2,961
-----------------------
NET CASH INFLOW
2,961
==============
The goodwill has been allocated to MEP unit. The acquisition was undertaken to expand the operations of the Group to
the State of Kuwait. The goodwill represents expected synergies and intangible assets acquired. Adjustments to the
provisional values to record separately identifiable intangible assets, if any, will be recognised within twelve months of the
transfer date as allowed by International Financial Reporting Standard 3 "Business Combinations".
The Company has contributed AED 125,217 thousand to the revenue of the Group and AED 8,582 thousand to overall
profit of the Group since 1 January 2009.
The Group has also written a put option to acquire the remaining 25% interest in the Company excisable between 1
January to 31 December 2014. The fair value of the put option has been recognised under other liabilities (Note 23).
Drake & Scull
ANNUAL REPORT 2009
Drake & Scull
ANNUAL REPORT 2009
87