Notes to the annual financial statements

for the year ended 30 September

 
 
29.   ACQUISITIONS/TRANSFERS OF BUSINESSES  
  2010                
  Acquisition of Siemens Enterprise Communications  
  With effect from 1 November 2009 Reunert acquired the remaining 60% of the shares in Siemens Enterprise Communications (Pty) Limited (SEC).  
  SEC supplies and maintains Siemens PABX’s to the South African market. This acquisition is expected to enhance Reunert’s position in this market by covering sectors not supplied by its existing offering through the Panasonic brand.  
  The 60% stake cost R12,2 million, paid for in cash, and Reunert provided R168,1 million in loan finance to fund SEC’s working capital on a short-term basis.  
  The goodwill of R31,2 million arising from the acquisition consists largely of the synergies and economies of scale expected from enhancing the group’s PABX business. The company’s name has subsequently changed to Nashua Communications (Pty) Limited.  
               
  Transfer of Fuchs division of Reutech              
  With effect from 1 October 2009, the net assets of the business of Fuchs division of Reutech Limited were acquired by Reunert Limited at its net book value of R83,0 million.  
   
  Acquisition of shares in Moshate Technology Holdings  
  With effect from 1 October 2009 Reunert Limited sold 20% of its investment in Reutech Limited to Moshate Technology Holdings (Pty) Limited in return for 100% of Moshate’s preference share capital, issued at R100,0 million (refer to note 9.3).  
               
  Transfer of Pansolutions (Pty) Limited              
  With effect from 1 December 2009, the net assets of the business of Pansolutions (Pty) Limited were acquired by Reunert Limited at its net book value of R67,5 million.  
  Net assets acquired   A  
SEC  
Rm  
B  
Fuchs  
Rm  
C  
Pansolutions  
Rm  
D  
SEC  
Rm  
E  
Moshate  
Rm  
(A) 
Group  
Rm  
(B to E) 
Company  
Rm  
  Property, plant and equipment and intangible assets   23,7   12,2   2,4   —   —   23,7   14,6  
  Long-term accounts receivable (including short-term portion of R53,8 million)1   100,6   —   —   —   —   100,6   —  
  Deferred taxation   7,2   1,0   —   —   —   7,2   1,0  
  Goodwill   31,2   —   53,7   —   —   31,2   53,7  
  IFRS 3 profit on acquisition   (8,2)  —   —   —   —   (8,2)  —  
  Inventory   36,1   37,7   9,5   —   —   36,1   47,2  
  Accounts receivables1   56,4   67,5   29,0   —   —   56,4   96,5  
  Other receivables   7,1   24,5   0,3   —   —   7,1   24,8  
  Taxation   6,2   —   —   —   —   6,2   —  
  Payables and provisions   (80,0)  (59,9)  (27,4)  —   —   (80,0)  (87,3) 
  Short-term borrowings   (168,1)  —   —   —   —   (168,1)  —  
  Shares purchased   —   —   —   12,2   100,0   —   112,2  
  Cost of investment   12,2   83,0   67,5   12,2   100,0   12,2   262,7  
  1 Refer to next page for additional disclosure.            
                 
  2010                
    A  
SEC  
Rm  
B  
Fuchs  
Rm  
C  
Pansolutions  
Rm  
D  
SEC  
Rm  
E  
Moshate  
Rm  
(A) 
Group  
Rm  
(B to E) 
Company  
Rm  
  Profit since acquisition   32,3   (2,8)  5,3   —   —   32,3   2,5  
  Revenue for the 12 months ended 30 September 2010 as though the acquisition date had been 1 October 2009   454,5   149,9   155,1   —   —   454,5   305,0  
  Profit/(loss) for the 12 months ended 30 September 2010 as though the acquisition date had been 1 October 2009   20,2   (2,8)  8,5   —   —   20,2   5,7  
  Acquisition date fair value of the equity interest held immediately prior to 1 November 2009   8,2   —   —   —   —   8,2   —  
  Gain recognised as a result of remeasuring to fair value the equity interest held before 1 November 2009   8,2   —   —   —   —   8,2   —  
  1 Gross contractual amounts of accounts receivable at acquisition date   176,5   67,6   30,4   —   —   176,5   98,0  
  1 The best estimate of contractual cash flows of accounts receivable not expected to be received   19,5   0,1   1,4   —   —   19,5   1,5  
                 
  2009                
  Acquisition of Blue Lake Investments            
  With effect from 1 October 2008 Nashua Mobile purchased 75% of the business of Blue Lake Investments which is involved in least cost routing.  
  The company was valued at R28,0 million. Nashua Mobile has provided R21,0 million in loan finance and the non-controlling shareholder has provided R7,0 million.  
                 
  Acquisition of Nashua franchise                
  With effect from 1 July 2009 Nashua Holdings has acquired a 60% share in the Nashua Central franchise. Quince provided R43,4 million in loan finance.  
  Nashua Holdings contributed R3,0 million and the minority shareholders R2,0 million of equity.  
  Net assets acquired           A  
Blue Lake  
Rm  
B  
Nashua  
Central  
Rm  
(A and B) 

Group  
Rm  
  Property, plant and equipment           —   1,4   1,4  
  Intangible assets           8,7   3,2   11,9  
  Goodwill           19,3   25,2   44,5  
  Inventory           —   9,7   9,7  
  Accounts receivable           —   14,3   14,3  
  Payables and provisions           —   (5,4)  (5,4) 
  Shareholder’s loan           (7,0)  —   (7,0) 
  Cost of investment           21,0   48,4   69,4  
  Profit since acquisition           4,9   2,9   7,8  
  Revenue for the full year ended 30 September 2009 as though the acquisition date had been 1 October 2008   25,5   133,1   158,6  
  Profit for the full year ended 30 September 2009 as though the acquisition date had been 1 October 2008   4,9   14,7   19,6  
  No acquisitions were made by the company in 2009.