CFSL Integrated Report 2022

CIM FINANCE. INTEGRATED REPORT 2022 | 193 36. BUSINESS COMBINATION Acquisition of subsidiary On 24 March 2022, CIM Financial Services Ltd acquired 100% of the issued share capital of Tsusho Capital (Mauritius) Ltd (TCAP) in view of the expansion of the Group’s operation. TCAP is an in-house leasing and insurance agent company for the CFAO and Toyota brands and qualifies as a business combination as defined in IFRS 3. The following table summarises the purchase consideration and the fair value of the identifiable amounts of the assets acquired and liabilities assumed at the acquisition date: The fair value of the financial assets includes net investment in leases ,other assets, with a fair value of MUR 1.02Bn. Post employment benefit liabilities of MUR 2.1m is in line with the actuarial report. Customer portfolio of MUR 31.0m and goodwill of MUR 12.8m arising from the acquisition is the value arising in excess of the fair value of the net assets acquired. The goodwill recognised relates to synergies from combining operations of the acquiree and acquirer. The potential undiscounted amount of all future payments that CFSL is required tomake under the contingent consideration arrangement is MUR 20.0m. The fair value of the contingent consideration arrangement of MUR 17.1m was estimated by applying a Weighted Average Cost of Capital of 7.0%. From the date of the acquisition,TCAP contributed MUR 29.5m of net operating income and MUR 10.1m of profit after tax from continuing operation. Had the acquired subsidiary been consolidated from 1 October 2021, the revenue from continuing operation of the Group would have been increased by MUR 62.0m and the profit after tax from continuing operation would have been MUR 5.0m. Identifiable assets acquired at 31 March 2022 based on Audited Financial statement of TCAP GROUP MUR m Cash at bank 26.3 Net investment in leases 1,002.0 Other assets 5.0 Right-of-Use Assets 0.5 Equipment 9.0 Identifiable intangible asset - Customer portfolio 31.0 Deferred tax asset 8.7 Current tax asset 0.4 Bank Loans (900.0) Lease liabilities (0.5) Other liabilities (46.0) Post employment benefit liabilities (2.1) Total idenfiable assets acquired and liabilities assumed 134.3 Goodwill on consolidation 12.8 Total consideration 147.1 Satisfied by: Cash 130.0 Deferred Contingent Consideration (Earnout) 17.1 Total consideration transferred 147.1 Net cash outflow arising on acquisition: Cash consideration 150.0 Less: cash and cash equivalent balances acquired (26.3) Net cash outflow on acquisition 123.7 EXPLANATORY NOTES 30 SEPTEMBER 2022

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