Imperial - Annual FS 2013 - Annexure A � Interest in principal subsidiaries and new business combinations

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Integrated Report 2013

Annual Financial Statements 2013

Sustainability Report 2013

Interest in principal subsidiaries and new business combinations

Book value of interest

Shares at cost less
impairments

Indebtedness less
impairments

Company

Nature of
business

Place of
incorporation

Interest
owned
directly or
indirectly
(%)

Ordinary
shares in
issue

2013
Rm

2012
Rm

2013
Rm

2012
Rm

Imperial Holdings International

Cooperation U.A.

Note 2

Netherlands

100

2 176

2 176

Imperial Group Limited

Note 3

South Africa

100

165

1 400

1 400

1 322

1 357

Associated Motor Holdings

(Pty) Ltd

Note 4

South Africa

500 000

Regent Insurance Company

Limited

Insurance

South Africa

100

2 939 800

456

456

Regent Life Assurance Company

Limited

Life insurance

South Africa

100

2 125 000

145

145

Boundlesstrade 154 (Pty) Ltd

Note 5

South Africa

200

Jurgens Ci (Pty) Ltd

Note 6

South Africa

100

1 000

147

151

Alert Engine Parts (Pty) Ltd

Note 7

South Africa

100

7 500

Midas (Pty) Ltd

Note 8

South Africa

1 000

410

410

CIC Holdings Limited

Note 9

Namibia

100

252 188 081

724

724

Other, including indirect interest

1 076

1 175

1 331

1 364

6 743

6 825

2 653

2 721

1.	General information in respect of subsidiaries is set out in respect of only those subsidiaries, the financial position of which are material for a proper appreciation of the affairs of the group. A full list of subsidiaries and associated companies is available on request at the companies’ registered offices.
2.	Business conducted by Imperial Holdings International Cooperation U.A. and its subsidiaries comprises integrated logistics solutions and vehicle sales.
3.	Business conducted by Imperial Group Limited comprises vehicle rental, motor trading, automotive components, property investments, transportation, sale of motor components, panelbeating and group services.
4.	Business conducted by Associated Motor Holdings (Pty) Ltd comprises motor vehicle importation, dealership sales and after-sales services, and industrial equipment.
5.	Boundlesstrade 154 (Pty) Ltd has an associate which is a motor vehicle distributorship and a subsidiary which supplies golf carts.
6.	Jurgens Ci (Pty) Ltd is the manufacturer and distributor of leisure caravans and camping equipment.
7.	Alert Engine Parts (Pty) Ltd is a wholesaler and retailer of motor vehicle engine parts.
8.	Midas (Pty) Ltd is a wholesaler and retailer of auto parts.
9.	CIC Holdings Limited, a previously JSE listed entity, operates in the fast-moving consumer goods industry.


					Book value of interest
					Shares at cost less impairments		Indebtedness less impairments
Company	Nature of business	Place of incorporation	Interest owned directly or indirectly (%)	Ordinary shares in issue	2013 Rm	2012 Rm	2013 Rm	2012 Rm

Principal subsidiaries of Imperial Holdings International Cooperation U.A.
Imperial Logistics International GmbH	See note 1	Germany	100	4	2 107	1 680
Wijgula	See note 1	Netherlands	100	73 440	274	219
Rijnaarde B.V.	See note 1	Netherlands	100	10 000	79	63
Imperial De Grave	See note 1	Netherlands	100	5 000	71	57
Lehnkering Group	See note 1	Germany	100	5	2 347	1 871
Imperial Mobility Finance Belgium GCV	See note 2	Belgium	100	81 800 000	1 066	850
Imperial Mobility Deutschland Beteiligungs GmbH	See note 2	Germany	100	1	232	185
Imperial Mobility UK	See note 3	United Kingdom	100	103	471	375
Associated Motors Australia(Pty) Ltd	See note 4	Australia	90	27 000 081	630	276
Principal subsidiaries of Associated Motor Holdings (Pty) Limited
Imperial Car Imports(Pty) Ltd	See note 5	South Africa	100	5 000	6	6	171	163
Hyundai Auto South Africa(Pty) Ltd	See note 5	South Africa	100	1 000	100	100	688	(208)
Imperial Daihatsu (Pty) Ltd	See note 5	South Africa	99,9	10 000 000	11	11	(3)	52
Kia Motors SA (Pty) Ltd	See note 5	South Africa	100	25 000			79	(113)
Accordian Investments(Pty) Ltd	See note 5	South Africa	60	45 000 000	25	25	15	15
KMSA Holdings (Pty) Ltd	See note 6	South Africa	75	10 000	4	4	89	52
Uvundlu Investments (Pty) Ltd	See note 7	South Africa	75	2 050	140	140	464	245

1.	Engaged in transport and logistics.
2.	Financing.
3.	Engaged in commercial vehicle sales, and after-sales services.
4.	Engaged in dealership sales and after-sales services.
5.	Importer and retailer of motor vehicles, parts and accessories.
6.	Importer and retailer of motor cycles, parts and accessories.
7.	Distributor of industrial equipment.

New business combinations


Subsidiaries and businesses acquired	Nature of business	Operational segment	Date acquired	Interest acquired (%)	Purchase consideration transferred Rm

RTT Health Sciences	Supply chain services	Logistics – Africa(including South Africa)	January 2013	100	515
Orwell Trucks Limited	Vehicle sales and services	Automotive Retail	February 2013	100	118
KWS Carriers (Pty) Ltd	Commodities transport	Logistics – Africa(including South Africa)	April 2013	60	48
Individually immaterial business combinations					95
Total purchase consideration transferred					776

Reason for the acquisitions

—	RTT Health Sciences, one of Africa’s leading pharmaceutical and healthcare supply chain service providers, was acquired to complement our logistics business within South Africa to extend our footprint in Africa.
—	Orwell Trucks Limited was acquired to expand our Automotive Retail business in the United Kingdom and complement our truck franchise.
—	KWS Carriers (Pty) Ltd was acquired to expand the commodity’s transportation business within our Logistics division in South Africa.


Impact of the acquisitions on the results of the group	Total Rm	RTT Health Sciences Rm	Orwell Trucks Limited Rm	KWS Carriers (Pty) Ltd Rm	Individually immaterial acquisitions Rm

From the dates of acquisition, the acquired businesses contributed:
Revenue	1 514	697	324	246	247
Net profit as reported by entity	67	31	6	9	21
Funding costs and amortisation of intangible assets arising on the business combinations	(34)	(22)	(7)	(3)	(2)
Net profit	33	9	(1)	6	19

Had all the acquisitions been consolidated from 1 July 2012, the group’s revenue and net profit would have been R94 240 million and R3 710 million respectively, with the new acquisitions contributing additional revenue of R1 858 million and net profit of R24 million. The net profit of R24 million has been reduced by the funding costs of R3 million on the cash consideration and by the amortisation of intangible assets arising on the business combinations of R30 million.


Fair value of assets acquired and liabilities assumed at date of acquisition:	Total Rm	RTT Health Sciences Rm	Orwell Trucks Limited Rm	KWS Carriers (Pty) Ltd Rm	Individually immaterial acquisitions Rm

Assets
Intangible assets	323	220	35	41	27
Property, plant and equipment	95	55	14	6	20
Transport fleet	72			53	19
Deferred tax assets	1				1
Inventories	151	14	113	1	23
Trade and other receivables	442	264	51	62	65
Cash resources	49	15	27		7
	1 133	568	240	163	162
Liabilities
Deferred tax liabilities	71	36	8	15	12
Interest-bearing borrowings	73		22	29	22
Non-current financial liabilities	8				8
Trade and other payables and provisions	510	234	137	80	59
Current tax liabilities	5	1	2		2
	667	271	169	124	103
Acquirees’ carrying amount at acquisition	466	297	71	39	59
Less: Non-controlling interests	(21)			(4)	(17)
Net assets acquired	445	297	71	35	42
Purchase consideration transferred	776	515	118	48	95
– Cash	700	515	110	12	63
– Contingent consideration	75		8	36	31
– Fair value of previously held interest	1				1

Excess of purchase consideration over net assets acquired	331	218	47	13	53

Trade and other receivables acquired had gross contractual amounts of R452 million of which R10 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 of net assets.

Details of contingent consideration

The contingent consideration requires the group to pay the vendors an additional total amount of R75 million over three years if the acquired businesses’ net profit exceeds certain earnings targets.

Acquisition costs

Acquisition costs for acquisitions concluded during the year amounted to R7 million and have been recognised as expenses in profit or loss
within business acquisition costs.

Annexure A – Interest in principal subsidiaries and new business combinations