axiata group berhad | annual report 2015
153
5.
INCORPORATIONS, ACQUISITIONS, MERGERS, DISPOSALS AND DILUTIONS OF INTERESTS (CONTINUED)
(b) Incorporation, acquisitions, merger, disposal and dilutions of interests in the previous financial year
(i) Incorporation of ADS
On 29 January 2014, the Company incorporated ADS, a private company limited by shares, under the Companies Act, 1965 in Malaysia with
an authorised share capital of RM0.4 million divided into 400,000 ordinary shares of which its issued and paid-up share capital is RM2. ADS
is an investment holding company.
The incorporation of ADS did not have any significant impact to the Group in the previous financial year.
(ii) Acquisition of PT Axis Telekom Indonesia (“Axis”)
On 26 September 2013, PT XL Axiata Tbk (“XL”) entered into a conditional sale and purchase agreement (“SPA”) with Saudi Telecom
Company (“STC”) and Teleglobal Investments B.V. (“Teleglobal”), a wholly-owned subsidiary of STC, to purchase (or procure the purchase
of) 95.00% shares in Axis. XL had also been granted a right to acquire the remaining 5.00% of the shares in Axis which was exercised in
April 2014. The value of transaction was USD865.0 million whereby USD100.0* would be used for the payment of 95.00% of Axis shares
to Teleglobal and the remaining amount of RM2,836.6 million (USD865.0 million) was for the payment of Axis’s indebtness by XL. The
acquisition was completed on 19 March 2014 and Axis was merged with XL on 8 April 2014.
The following summarises the consideration paid for Axis, the fair value of assets acquired and liabilities assumed at the acquisition date.
Note
RM’000
Restated
Net purchase consideration in cash
*
Details of the net assets acquired are as follows:
PPE
25
835,149
Intangible assets
1,735,246
Other assets
288,390
Cash and bank balances
6,400
Indemnification assets
287,318
Other liabilities
(2,180,373)
Borrowings
34
(2,836,552)
Deferred tax liabilities
(66,489)
Total net liabilities acquired
(1,930,911)
Goodwill on acquisition
1,930,911
-
During the financial year, goodwill on acquisition of Axis, PPE and deferred tax liabilities of XL were restated following the finalisation of
Purchase Price Allocation exercise within twelve (12) months from the date of acquisition of Axis as disclosed in Note 44 to the financial
statements.
The goodwill arising from the acquisition is attributable to economies of scale expected from combining the operations of XL and Axis.
Indemnification assets of RM287.3 million (IDR994.2 billion) represents bank guarantee provided by the previous majority shareholders of
Axis to XL to cover all potential claims from the tax assessment issued by the tax office related to Axis’s value added tax underpayment,
which had been provided for as liabilities of Axis assumed in the business combination.
Following the merger of Axis business with XL, the result of Axis has been combined with XL. Had Axis been consolidated from 1 January
2014, consolidated proforma revenue and profit after tax of the Group are RM18,859.1 million and RM1,176.7 million respectively.
Acquisition related costs of RM87.3 million (IDR316.1 billion) have been charged to the consolidated other operating costs in the previous
financial year.
