NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2023 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2023 39 ACQUISITION OF AND LOSS OF CONTROL IN SUBSIDIARIES, AND CHANGES IN INTERESTS IN SUBSIDIARIES WITHOUT LOSS OF CONTROL (CONT’D) (I) Acquisition of subsidiaries (cont’d) 2023 (cont’d) Identifiable assets acquired and liabilities assumed The following table summarises the recognised amounts of assets acquired and liabilities assumed at the acquisition date: Recognised amounts Business combination Acquisition of assets Total $’000 $’000 $’000 Investment properties – 627,742 627,742 Development properties – 67,525 67,525 Trade and other receivables 102 10,400 10,502 Cash and cash equivalents 40,578 5,416 45,994 Trade and other payables (1,918) (21,844) (23,762) Shareholders loans – (4,450) (4,450) Provision for taxation (10) (2,147) (2,157) Interest-bearing borrowings – (6,713) (6,713) 38,752 675,929 714,681 Amount previously accounted for as joint venture – –^ –^ Amount owing by joint venture – (6,515) (6,515) Net identifiable assets acquired 38,752 669,414 708,166 Cash flows relating to the acquisition Consideration for equity interest –^ 669,414 669,414 Shareholder loans assumed – 4,450 4,450 Total consideration –^ 673,864 673,864 Add: Acquisition-related costs 77 8,072 8,149 Less: Acquisition-related costs not yet paid – (131) (131) Less: Cash and cash equivalents acquired (40,578) (5,416) (45,994) Total net cash outflow (40,501) 676,389 635,888 ^ Less than $1,000 Negative goodwill Negative goodwill arising from the acquisition of Summervale has been recognised as follows: Total $’000 Consideration transferred –^ Less: Fair value of identifiable net assets 38,752 Negative goodwill (38,752) ^ Less than $1,000 The negative goodwill arising from the acquisition of Summervale has been recognised in ‘other income” in the Group’s consolidated profit or loss. The negative goodwill was attributed to the Group’s commercial negotiation and agreement reached with the seller. 39 ACQUISITION OF AND LOSS OF CONTROL IN SUBSIDIARIES, AND CHANGES IN INTERESTS IN SUBSIDIARIES WITHOUT LOSS OF CONTROL (CONT’D) (I) Acquisition of subsidiaries (cont’d) 2022 (a) On 28 January 2022, the Group through its indirect wholly-owned subsidiary, City Connected Communities Pte. Ltd., acquired the remaining 70% of the equity interest in Distrii Technology Singapore Pte. Ltd. (subsequently renamed as CityNexus Pte. Ltd. (“CityNexus”)), for a consideration of $1, from an associate. Following the acquisition, CityNexus became a wholly-owned subsidiary of the Group. CityNexus was previously accounted for by the Group as an investment in associate. The acquisition provides the Group with increased exposure to the business of development of software and programming activities such as smart building and smart office applications. The acquisition was accounted for as a business combination. From the date of acquisition to 31 December 2022, CityNexus contributed revenue of $17,000 and loss before tax of $317,000 to the Group’s results. If acquisition had occurred on 1 January 2022, there is no significant changes to the Group’s revenue and profit before tax. (b) On 22 February 2022, the Group through its then indirect non wholly-owned subsidiary, CDLHT, acquired 100% of the share and voting interest in Roundapple Hotel Partners III Limited (subsequently renamed as CDL HREIT Investments (II) Property Limited) which owns Hotel Brooklyn in Manchester, United Kingdom, for a total consideration of $41.0 million (£22.4 million). The acquisition was accounted for as an acquisition of assets. (c) On 14 December 2022, the Group through its indirect wholly-owned subsidiary, Atlasgate UK Holdings Limited (Atlasgate), (i) acquired 100% of the shares and voting interests in New Bath Court Limited, HSU JV Holdco Limited, HSRE Crosslane (Coventry) Limited and HSRE Crosslane (Leeds) Limited, which via its direct/indirect wholly-owned subsidiaries hold 4 student accommodation properties in Birmingham, Canterbury, Coventry and Leeds; and (ii) settled existing indebtedness amounts of the entities acquired, for a total consideration of $294.8 million (£181.2 million). The acquisition was accounted for as an acquisition of assets. FINANCIALS FINANCIALS ANNUAL REPORT 2023 CITY DEVELOPMENTS LIMITED 211 210
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