Business combinations

Subsidiaries and businesses acquired	Nature of business		Operational segment		Date acquired		Interest acquired (%)		Purchase consideration transferred Rm
Renault South Africa (Pty) Limited*	Vehicle distributor		Distribution, Retail and Allied Services		December 2013		60		65
Individually immaterial acquisitions									34
Purchase consideration transferred									99

Fair value of assets acquired and liabilities assumed at date of acquisition:	Renault South Africa (Pty) Limited Rm		Individually immaterial acquisitions Rm		Total Rm
Assets
Goodwill and intangible assets	108		8		116
Property, plant and equipment	2		5		7
Deferred tax asset	148				148
Inventories	570		13		583
Trade and other receivables	231		3		234
Cash resources	273		1		274
	1 332		30		1 362
Liabilities
Deferred tax liabilities			3		3
Interest-bearing borrowings	452		3		455
Trade and other payables and provisions	1 040				1 040
	1 492		6		1 498
Acquirees’ carrying amount at acquisition	(160)		24		(136)
Non-controlling interests	64				64
Net assets acquired	(96)		24		(72)
Purchase consideration transferred	65		34		99
Excess of purchase price over net assets acquired	161		10		99

As the initial accounting for the business combinations were incomplete and based on provisional figures, depreciation and amortisation of assets were calculated on their pre-acquisition carrying values before any purchase price allocations. Similarly, no disclosure regarding nonrecurring fair value measurements are made.

Reason for the acquisitions

Renault was acquired to obtain control of the business and to diversify our distribution portfolio. The other businesses were acquired to complement and expand our distribution and parts businesses within South Africa.

Acquisition costs

Acquisition costs for acquisitions concluded during the period amounted to R2 million and have been recognised as an expense in profit or loss within business acquisition costs.

Impact of the acquisitions on the results of the group

From the dates of acquisition the businesses acquired during the reporting period contributed revenue of R281 million and a net profit of R1 million.

Had all the acquisitions been consolidated from 1 July 2013, they would have contributed additional revenue of R1 259 million and additional net profit of R20 million, and would have increased the group’s revenue and net profit to R52 616 million and R1 951 million respectively. The additional net profit of R20 million has been reduced by funding costs of R2 million calculated on the cash considerations paid on acquisition.

Other details

Trade and other receivables acquired had gross contractual amounts of R245 million of which R11 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.