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BUSINESS COMBINATIONS
 12 Months Ended
Dec. 31, 2018
Business Combinations [Abstract]  
Disclosure of business combinations [text block]
27.
BUSINESS COMBINATIONS
 
On January 8, 2010, the Company consummated the acquisition of all voting equity interests of Hengdali, a company that manufactures and sells ceramics tiles used for exterior siding and for interior flooring, for a total cash consideration of RMB185,517,000. The acquisition is intended to increase the Company’s production capacity and reduce costs through economies of scale.
 
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
 
 
 
Fair value
 
 
 
RMB’000
 
Cash and cash equivalents
 
 
3,822
 
Property, plant and equipment
 
 
206,532
 
Land use rights
 
 
32,439
 
Inventories
 
 
11,473
 
Receivables
 
 
400
 
Payables
 
 
(11,728
)
Borrowings
 
 
(60,000
)
Deferred tax liability
 
 
(1,156
)
Total identified assets
 
 
181,782
 
Goodwill
 
 
3,735
 
Purchase consideration, satisfied in cash
 
 
185,517
 
 
The goodwill is attributable to Hengdali’s strong production capacity, foreseeable profitability and synergies expected to arise from the economies of scale after the acquisition. None of the goodwill is expected to be deductible for tax purposes.