18 RESERVES
(continued)
Merger reserve comprises the following:
Group
2015
2014
$’000
$’000
Aggregate of share capital of subsidiaries acquired
23,403
23,403
Aggregate of losses of subsidiaries prior to acquisition by STTC
(6,372)
(6,372)
Acquisition of additional 7% equity interest in NexWave Solutions Pte. Ltd. by STTC
1,455
1,455
Goodwill on acquisition of subsidiaries by STTC
1,538
1,538
Cost of investment paid by STTC
20,024
20,024
Par value of shares issued for acquisition of subsidiaries
(3,000)
(3,000)
17,024
17,024
The Group is required to transfer 20% of the registered share capital of its Indonesian subsidiary’s net profit in each year to
general reserve if there are available retained earnings, until the general reserve reaches 20% of the registered share capital
of its Indonesian subsidiary. The Indonesian subsidiary’s general reserve reached 20% of its registered share capital in 2009.
Reserve for own shares comprises the cost of the Company’s shares held by the Group. As at 31 December 2015 the Group
held 582 of the Company’s shares (2014: 1,002).
The share option reserve comprises the cumulative value of the employee services received for the outstanding share options.
The goodwill written off represents the excess of consideration paid on the acquisition of subsidiaries prior to 1 January 2001
over the share of the fair value of net assets acquired. In 2013, the Group transferred the goodwill written off of $0.57 million
to capital reserve upon liquidation of a subsidiary, NexWave Solutions Pte. Ltd..
The exchange translation reserve of the Group comprises foreign exchange differences arising from the translation of the
financial statements of foreign entities whose functional currency is different from that of the Company and from the monetary
items which form part of the Group’s net investment in foreign subsidiaries.
19 ACCRUED CONTINGENT CONSIDERATION
The accrued consideration relates to the acquisition of NxGen.
Accrued contingent consideration in 2014 comprised the Tranche 2 consideration of $6,300,000 payable to the selling
shareholders of NxGen. The amount of $6,300,000 was to be adjusted to such proportion if the cumulative profit after tax of
NxGen for the 3 years from the date of acquisition on 1 November 2011 fell below $5,200,000.
In 2015, the Tranche 2 consideration has been finalised and payment of $5,900,000 has been made to the selling shareholders
of NxGen and an amount of $163,000 has been recognised as a provision based on the agreements between the selling
shareholders of NxGen and the Group.
94
TELECHOICE INTERNATIONAL LIMITED
2015 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
