Acquisition of subsidiary

Shares in the following subsidiary were acquired during the year ended 31 May 2012

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    Effective date of
acquisition
  % acquired  
Multiserv Proprietary Limited   1 January 2012   100  

Details of the total net assets disposed and the resulting loss on disposal is as follows.   Total
R’000
 
Total purchase consideration   8 933  
Fair value of net assets acquired   3 086  
Goodwill   5 847  
The assets and liabilites acquired through acquisition are as follows:   Fair value at
acquisition
date
R’000
 
Cash and cash equivalents   739  
Property, plant and equipment   370  
Intangible assets*   5 481  
Loans receivable   2 091  
Inventories   1 552  
Receivables   1 212  
Current tax assets   143  
Deferred tax liability*   (1 512)  
Borrowings   (5 210)  
Payables   (1 780)  
Fair value of net assets acquired   3 086  
Cash and cash equivalents in subsidiary acquired   739  
Total purchase consideration   (8 933)  
Less loans acquired   (5 068)  
Cash outflow on acquisition   (13 262)  
* Intangible assets include R5,4 million of franchise fees which relates to the purchase price allocation performed in terms of IFRS3(R) – Business Combinations. Deferred tax to the value of R1,5 million was raised on recognition of this intangible asset.

Multiserv Proprietary Limited was purchased with the objective of utilising their national footprint as a platform for the group’s strategy of marketing its products and services on a retail basis.