Notes to the annual financial statements
FOR THE YEAR ENDED 31 MARCH 2010
| « Note 30 | Note 32 » |
31. |
businesses acquired |
| With effect from 23 November 2009 Remgro acquired 100% of VenFin Limited (VenFin), an investment holding company with investments mainly in the media and technology sectors. In terms of the transaction, VenFin shareholders received 1 Remgro share for every 6.25 VenFin shares held and on 23 November 2009 Remgro issued 41 626 619 shares at a price of R89.25 per share. Apart from VenFin’s investments in associated companies the carrying values of all the other assets and liabilities approximated their fair value. The cost of the acquisition was allocated to the assets acquired and liabilities and contingent liabilities assumed as required by the International Financial Reporting Standards (IFRS 3: Business Combinations). Goodwill that arose was allocated to the different associated companies and forms part of each associated company’s underlying purchase price. Since the acquisition, the results of VenFin included in Remgro’s reported results were immaterial and consisted of headline earnings from investee companies of approximately R53 million and after-tax corporate costs of approximately R16 million. By applying the Group’s accounting policies and based on the assumption that the acquisition was effective on 1 April 2009, it is calculated that VenFin’s headline earnings for the full year would have amounted to approximately R117 million. |
With effect from 3 August 2009, Tsb Sugar Holdings (Pty) Limited, a wholly owned subsidiary of Remgro, acquired the Pongola sugar mill from Illovo Limited. For the eight months since acquisition the Pongola sugar mill contributed R248 million to turnover, while an operating loss of R46 million, before interest and tax, was reported. If the acquisition had occurred on
1 April 2009, the Pongola sugar mill would have contributed R471 million to turnover and an operating loss of R37 million, before interest and tax.
During the past two years subsidiary companies in the Group also acquired various other small businesses.
The assets and liabilities arising from the acquisitions above were as follows:
| VenFin Limited R million |
Pongola sugar mill R million |
Other R million |
2010 Total R million |
2009 Total R million |
||
| Assets | ||||||
| Property, plant and equipment (refer note 2) | – | 167 | 31 | 198 | 7 | |
| Intangible assets (refer note 5) | – | – | 2 | 2 | – | |
| Investments – Associated companies (refer note 6) | 2 986 | – | – | 2 986 | – | |
| – Joint ventures (refer note 7) | 9 | – | – | 9 | – | |
| – Other (refer note 8) | 476 | – | – | 476 | – | |
| Loans | 116 | – | – | 116 | – | |
| Deferred taxation (refer note 11) | – | 1 | – | 1 | – | |
| Inventories | – | 55 | 23 | 78 | – | |
| Debtors and short-term loans | 106 | 75 | 13 | 194 | – | |
| Derivative instruments | 55 | – | – | 55 | – | |
| Taxation | 9 | – | – | 9 | – | |
| Cash and cash equivalents | 317 | – | 3 | 320 | – | |
| Liabilities | ||||||
| Long-term loans | (1) | – | (2) | (3) | – | |
| Deferred taxation (refer note 11) | (6) | – | – | (6) | – | |
| Trade and other payables | (89) | (181) | (9) | (279) | – | |
| Bank overdrafts | (242) | – | – | (242) | – | |
| Taxation | (1) | – | – | (1) | – | |
| Fair value of net assets acquired | 3 735 | 117 | 61 | 3 913 | 7 | |
| Investment previously held | – | – | (3) | (3) | – | |
| Goodwill (refer note 5) | – | 5 | – | 5 | 4 | |
| Total purchase consideration | 3 735 | 122 | 58 | 3 915 | 11 | |
| Fair value of shares issued* | (3 714) | – | – | (3 714) | – | |
| Purchase consideration settled in cash | 21 | 122 | 58 | 201 | 11 | |
| Cash and cash equivalents in subsidiary acquired | (75) | – | (3) | (78) | – | |
| Cash (inflow)/outflow on acquisition | (54) | 122 | 55 | 123 | 11 |
* The fair value of the shares issued was based on the published share price on 13 November 2009.