Imperial

> Business combinations during the period

* The initial accounting for the business combinations is incomplete and based on provisional figures.

Reasons for the acquisitions
The Group acquired a 95,2% shareholding in Palletways. This acquisition is in line with Imperial's strategic intent to expand its presence beyond South Africa through the acquisition of asset light logistics businesses that benefit from Imperial's existing footprint and capabilities. Palletways provides an express delivery solution for small consignments of palletised freight through more than 400 depots and 14 hubs, which collects and distribute 40 000 daily or 8 million pallets annually across 20 European countries where it currently handles one in every 4 pallets handled by palletised freight networks.

The acquisition of 55% shareholding in Itumele Bus Lines, is in line with the Group's strategy to diversify into other related industries and allows entry into the commuter bus service market. Itumele's primary business is providing public transport services on behalf of the provincial government to commuters in and around Bloemfontein. Founded in 1975, the operation comprises a fleet of 253 commuter busses and 32 luxury coaches. Itumele transports approximately 50 000 passengers daily and its busses travel approximately 17 million kilometres a year.

The other businesses were acquired to complement and expand our transport and business solutions through the acquisition of a depot in Europe and an import and export solutions business in South Africa.

Details of contingent consideration
The contingent consideration requires the Group to pay the vendors an additional total amount of R36 million over three years if the entities' net profit after tax exceeds certain profit targets.

Acquisition costs
Acquisition costs for business acquisitions concluded during the year amounted to R27 million and have been recognised as an expense in profit or loss in the 'Other non-operating items' line.

Impact of the acquisition on the results of the group
From the dates of acquisition the businesses acquired during the period contributed revenue of R3 152 million, operating profit of R180 million and after tax profit of R34 million. The after tax profit of R34 million includes the after tax impact of the funding cost of R34 million calculated on the cash consideration paid on acquisitions and the amortisation of intangible assets arising out of the business combinations of R85 million.

Had all the acquisitions been consolidated from 1 July 2016, they would have contributed revenue of R3 335 million, operating profit of R204 million and after tax profit of R40 million. The Group's continuing revenue for the period would have been R59 874 million, operating profit would have been R2 903 million and after tax profit R1 165 million.

Separate identifiable intangible assets

As at the acquisition date the fair value of the separate identifiable intangible assets was R1 487 million. This fair value, which is classified as level 3 in the fair value hierarchy, was determined using the Multi-period Excess Earnings Method (MEEM) valuation technique for contract based intangible assets and the Relief-form-royalty method for the trademark.

The significant unobservable valuation inputs were as follows:

The assumptions used in arriving at projected cash flows were based on past experience and adjusted for any expected changes.

Other details
Trade and other receivables had gross contractual amounts of R773 million of which R45 million was doubtful. Non-controlling interests have been calculated based on their proportionate share in the acquiree's net assets. None of the goodwill is deductible for tax purposes.