Annual Report for the year ended 30 June 2009
   
 
   
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Finalisation of PharmaLatina acquisition accounting  
 
     
 

The accounting for the acquisition of PharmaLatina Holdings Ltd (“PharmaLatina”) was made on a provisional basis in terms of IFRS 3 for the year ended 30 June 2008.  

In terms of IAS 8, Accounting policies, Changes in Accounting Estimates and Errors, the adjustments to finalise the PharmaLatina acquisition have been corrected retrospectively.  

The comparative figures have been restated to present the prior year figures as if the acquisition accounting was finalised in the prior year. No statement of financial position for the year ended 30 June 2007 has been presented as required by IAS 1 revised for any restatements of prior period amounts, as the effect of the PharmaLatina business combination affected only the year ended 30 June 2008.  

STATEMENT OF FINANCIAL POSITION

       
    2008  
R’million  
Adjust-  
ments  
R’million  
Restated  
June  
2008  
R’million  
ASSETS          
Non-current assets          
Property, plant and equipment     1 744,6   (58,9)  1 685,7  
Goodwill     589,9   13,1   603,0  
Intangible assets     3 723,1   (17,4)  3 705,7  
Current assets          
Trade and other receivables     1 789,4   86,4   1 875,8  
Total assets     10 848,6   23,2   10 871,8  
LIABILITIES          
Non-current liabilities          
Deferred tax liabilities     155,1   (6,6)  148,5  
Current liabilities          
Trade and other payables     1 004,0   29,8   1 033,8  
Total liabilities     7 529,8   23,2   7 553,0  
Total equity and liabilities     10 848,6   23,2   10 871,8  

On 1 March 2008, the Group acquired 50% of the shares of PharmaLatina, a Cypriot holding company with subsidiaries in Brazil, Mexico and Venezuela. The initial accounting for the acquisition had not been finalised and therefore the acquisition calculations were based on the best estimates available to the Group at the time. The amounts below reflect the changes to the fair values and carrying values of the PharmaLatina assets and liabilities at the acquisition date:  

COST OF THE ACQUISITION     2008  
R’million  
Restated  
2008  
R’million  
Cash paid       1 068,3   1 068,3  
Fair value of assets acquired       (591,4)  (578,3) 
Deferred receivable recognised on acquisition       (431,6)  (431,6) 
Cash flow hedging – deferral in equity       87,6   87,6  
Goodwill       132,9   146,0  
         
  Fair value recognised  
  2008  
R’million  
Adjustments  
2008  
R’million  
Restated  
2008  
R’million  
Carrying  
amounts  
before  
acquisition  
2008*  
R’million  
Property, plant and equipment   276,5   (58,9)  217,6   274,2  
Intangible assets   75,6   (17,4)  58,2   24,0  
Inventories   89,3   —   89,3   88,9  
Trade and other receivables   124,7   86,4   211,1   124,7  
Cash and cash equivalents   166,1   —   166,1   166,1  
Borrowings   (1,1)  —   (1,1)  (1,1) 
Deferred tax liabilities   (24,4)  6,6   (17,8)  (6,4) 
Trade and other payables   (114,5)  (29,8)  (144,3)  (114,5) 
Current tax liabilities   (0,8)  —   (0,8)  (0,8) 
Fair value of assets acquired   591,4   (13,1)  578,3   555,1  
Cash flow hedging – deferral in equity   (87,6)  —   (87,6)   
Deferred receivable recognised on acquisition   431,6   —   431,6    
Goodwill acquired   132,9   13,1   146,0    
Purchase consideration   1 068,3   —   1 068,3    
*None of the carrying amounts before acquisition were restated in the current year.  
 
     
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