Telstra 2010 Annual Report Download - page 164

Telstra Corporation Limited and controlled entities
149
Notes to the Financial Statements (continued)
(c) Acquisitions (continued)
Fiscal 2009 acquisitions
Octave Investments Holdings Limited
On 9 February 2009, our controlled entity Telstra Octave Holdings
Limited acquired 67% of the issued capital of Octave Investments
Holdings Limited for a total consideration of $259 million including
acquisition costs.
Octave Investments Holdings Limited acquired 100% of two
businesses being Beauty Sunshine Investments Limited (ChinaM)
and Sharp Point Group Limited (Sharp Point). ChinaM is a leading
supplier of consumer mobile content and Sharp Point provides
technical services for China Mobile's rapidly growing central mobile
music platform.
The effect of the acquisition is detailed below:
In fiscal 2009, we recognised contingent consideration of $103
million and recognised goodwill of $191 million on acquisition. In
fiscal 2010 certain pre-determined revenue and EBITDA targets
were achieved resulting in an additional $70 million payment of the
contingent consideration. However, a pre-determined non-financial
target was not met reducing the remaining contingent
consideration balance by $21 million. This along with $11 million
movement in foreign exchange and other minor adjustments
resulted in a reduction in the acquisition goodwill by $33 million.
There are regulatory uncertainties in the industry in which Octave’s
businesses operate in China. Refer to note 21 Impairment for
further details.
20. Notes to the statement of cash flows (continued)
Octave Investments
Holdings
2009 2009
$m $m
Consideration for acquisition
Initial cash consideration paid in fiscal
2009 . . . . . . . . . . . . . . . 185
Additional cash consideration paid in
fiscal 2010 . . . . . . . . . . . . 70
Costs of acquisition paid in fiscal 2009 4
Total purchase consideration . . 259
Cash balances acquired . . . . . . (20)
Total outflow of cash . . . . . . 239
Fair value
Carrying
value
Assets/(liabilities) at acquisition date
Cash and cash equivalents . . . . . 20 20
Trade and other receivables. . . . . 27 27
Property, plant and equipment . . . 22
Intangible assets. . . . . . . . . . 156 4
Trade and other payables . . . . . . (16) (16)
Deferred tax liabilities . . . . . . . (38) -
Net assets . . . . . . . . . . . . . 151 37
Adjustment to reflect non-controlling
interests . . . . . . . . . . . . . (50)
Goodwill on acquisition . . . . . 158
259
Profit after non-controlling interests
from acquisition date until 30 June
2009 . . . . . . . . . . . . . . . 10