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Annexure A – new business combinations

Subsidiaries and businesses acquired Nature of
business
  Operational
segment
  Date
acquired
  Interest
acquired
(%)
  Purchase
consideration
transferred
Rm
 
Lehnkering Group Logistics   Logistics   January 2012   100   1 892  
Transport Holdings Botswana Group Transport logistics   Logistics   March 2012   80   66  
Accordian Investments (Pty) Limited Distributor and importer   Distributorships   July 2011   60   (11)  
Watts Truck Centre Limited (Gloucester) Vehicle sales and services   Automotive retail   February 2012   100   26  
Bobcat Group Industrial equipment   Distributorships   June 2012   67,5   19  
Individual immaterial business combinations                 249  
Total purchase consideration transferred                 2 241  
Reason for the acquisitions

The Lehnkering Group, was acquired to expand the international logistics business and to benefit from synergies within the shipping business.

To expand our logistics business within Africa we acquired a further 40% interest in Transport Holdings Botswana Group, a previously held associate in which we held 40%.

To expand our distribution business we acquired a further 20% interest in Accordian Investments (Pty) Limited, a previously held associate in which we held 40%.

Watts Truck Centre Limited (Gloucester), was acquired to expand our automotive retail business within the United Kingdom.

Bobcat Group, was acquired to expand our distribution business.


Impact of the acquisitions on the results of the group   Total
Rm
Lehnkering
Group
Rm
Transport
Holdings
Botswana
Group
Rm
Accordian
Investments
(Pty) Limited
Rm
Watts Truck
Centre Limited
(Gloucester)
Rm
Bobcat
Group
Rm
Individually
immaterial
acquisitions
Rm
 
From the dates of acquisition, the acquired businesses contributed:                  
   Revenue   4 214 2 993 121 464 119   517  
   Attributable profit   111 96 3   1   11  
Had all the acquisitions been consolidated from 1 July 2011 the income statement would have included:                  
   Revenue   7 817 5 867 313 464 317 223 633  
   Attributable profit   214 180 13   3 4 14  
Fair value of assets acquired and liabilities assumed at date of acquisition:                  
Assets                  
Intangible assets   872 857 3     1 11  
Investments, loans, associates and joint ventures   55 40 3       12  
Property, plant and equipment   1 045 935 11 2 4 11 82  
Transport fleet   467 245 54       168  
Vehicles for hire   50         47 3  
Non-current financial assets   16 11         5  
Deferred tax assets   97 91     2   4  
Inventories   383 98 3 142 56 70 14  
Tax in advance   28 25       2 1  
Trade and other receivables   2 097 1 807 70 57 38 39 86  
Loans due by group entities   52 40       12    
Cash resources   312 256 19   8 3 26  
    5 474 4 405 163 201 108 185 412  
Liabilities                  
Retirement benefit obligations   342 342            
Interest-bearing borrowings   1 476 1 161 32 118   35 130  
Deferred tax liabilities   435 395 11     5 24  
Non-current financial liabilities   1           1  
Trade and other payables and provisions   2 492 2 055 60 112 106 87 72  
Loans due to group entities   142 8   16   39 79  
Current tax liabilities   44 39 1       4  
    4 932 4 000 104 246 106 166 310  
Acquirees’ carrying amount at acquisition   542 405 59 (45) 2 19 102  
Less: Non-controlling interests   (58)   (28) 18   (6) (42)  
Net assets acquired   484 405 31 (27) 2 13 60  
Purchase consideration transferred   2 241 1 892 66 (11) 26 19 249  
– Cash   2 147 1 892 52 2 26 6 169  
– Contingent consideration   76         13 63  
– Fair value of other assets transferred   5     5        
– Fair value of previously held interest   13   14 (18)     17  
                   
Excess of purchase price over net assets acquired   1 757 1 487 35 16 24 6 189  
Trade and other receivables acquired had gross contractual amounts of R2 110 million of which R13 million was doubtful. None of the goodwill is expected to be deductible for tax purposes. Non-controlling interests have been calculated based on their proportionate share in net assets.

Details of contingent consideration

The contingent consideration requires the group to pay the vendors an additional total amount of R76 million over three years if the entities’ net profit after tax exceeds certain earnings targets.

Acquisition costs

Acquisition costs amounting to R51 million have been excluded from the purchase consideration and have been recognised as an expense during the year.

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