Annual Report 2019

ANNUAL REPORT 2019 241 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 March 2019 38. ACQUISITION/DISPOSAL OF SUBSIDIARIES (continued) (b) Acquisition of assets In July 2018, the Group acquired the entire share capital of Highest Reach Investments Limited, which indirectly owned a property known as 21 Anderson Royal Oak Residence, located at 21 Anderson Road in Singapore. The assets acquired and liabilities assumed did not constitute a business as defined under HKFRS 3 Business Combinations and therefore, the acquisition was accounted for as assets acquisition. The asset acquired and liabilities assumed in the transaction are as follows: HK$’000 Investment properties 1,132,950 Debtors, deposits and prepayments 419 Bank balance and cash 42,650 Creditors and accruals (4,405) Bank borrowings (595,471) Net assets of the subsidiaries acquired 576,143 Total consideration satisfied by: Cash consideration paid 576,143 Net cash outflow arising on acquisition: Cash consideration paid 576,143 Bank balances and cash acquired (42,650) 533,493 (c) Disposal of a subsidiary In May 2017, the Group disposed of the entire equity interests in Double Advance Group Limited, which was classified as assets and liabilities held for disposal at 31 March 2017, and assigned the shareholder’s loan made to that subsidiary. The net assets disposed of in the transaction were amounted to HK$107,091,000 for cash consideration received of HK$407,614,000. Net cash inflow arising on disposal was amounted to HK$400,605,000. 39. MAJOR NON-CASH TRANSACTIONS The Company issued shares in lieu of cash dividend payable to the Company’s shareholders totalling HK$237,815,000 (2018: HK$216,834,000). The Group entered into finance lease arrangements for acquisition of asset with a total capital value at the inception of the leases of HK$2,200,000 (2018: HK$9,934,000). As mentioned in note 20(a)(ii), BC Group was set up as a holding company and is integral to the whole restructuring scheme involving certain associates of the Group. As part of the scheme, the Group’s interests in certain associates were disposed to BC Group for a consideration of A$8,900,000 resulting in a gain on disposal of associates of HK$51,677,000 being recognised in the profit or loss during the year. On the same day, the call options (as amended) held by the Group in the associates were exercised, entitling the Group to subscribe for shares in BC Group for an amount equivalent to the market value of the call options held by the Group in the associates. In addition, the Group recognised a fair value gain on the call options of HK$123,847,000 in the profit or loss with the corresponding amount debited as deemed cost of the Group’s interest in BC Group. Upon completion of the restructuring, the Group holds 50.66% equity interest in BC Group and the investment is classified as interests in joint ventures by the Group based on the decision making arrangement of the shareholders’ deed where decision on operating and financial policies or activities of BC Group and its subsidiaries requires unanimous consent of the Group and other shareholders. BC Group and its subsidiaries are principally involved in the provision of mortgage services.