ST Engineering Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 (CURRENCY – SINGAPORE DOLLARS UNLESS OTHERWISE STATED) F2 Acquisition and disposal of controlling interests in subsidiaries in 2020/2019 (continued) Acquisition of controlling interest in subsidiaries in 2019 (continued) Identifiable assets acquired and liabilities assumed (continued) The goodwill recognised on the acquisitions of MRAS, Glowlink and iDirect Europe represent the synergies that the acquisition is expected to bring to the Group’s businesses and products. Management assessed that the goodwill is allocated to two CGUs within the Group, amounting to $311,018,000, based on the expected future economic benefits to be realised by these entities through the combination of their businesses. $37,998,000 of goodwill recognised is expected to be deductible for tax purposes. The Group incurred acquisition-related cost of $16,475,000 on legal fees and due diligence cost, of which $5,340,000 have been included in administrative expenses in the prior year. $11,135,000 of acquisition- related costs have been included in administrative expenses in 2018. De-consolidation of controlling interests in a subsidiary in 2020 During the year, the Group completed the liquidation of Silvatech Global Systems Limited as part of an effort to streamline its organisation structure. The subsidiary was dormant prior to disposal. De-consolidation and disposal of controlling interests in subsidiaries in 2019 In the prior year, the Group dissolved VT Dimensions, Inc., VT Systems International, LLC, VT Systems Participacoes Ltda. and completed the liquidation of Kinetics Link Services Sdn. Bhd. (collectively Dissolved Entities) as part of an effort to streamline its organisation structure. In July 2019, the Group divested its 51% equity interest in GFM Electronics S.A. de C.V. (GFME) and in November 2019, the Group completed the divestment of Aviation Training Academy Australia Pty Ltd and ST Aerospace Academy (Australia) Pty Ltd (collectively ATAA). The disposed subsidiaries contributed loss before tax of $417,000 and no revenue for the period from 1 January 2019 to the respective dates of disposal. / ST ENG I NEER I NG 258