Annual Financial Statements

celebrating 20 years Notes to the Company statements of cash flows

for the year ended 30 June 2018

    2018
R’million
2017
R’million
A. Cash generated from operations    
  Operating profit 1 854 1 786
  Amortisation of intangible assets 28 18
  Depreciation of property, plant and equipment 20 15
  Impairment of intangible assets 39 44
  Deferred incentive bonus shares exercised (13) (14)
  Share-based payment expense – employees 16 15
  Withholding taxes (6) (4)
  Cash operating profit 1 938 1 860
  Working capital movements (51) 86
     Increase in receivables and prepayments 8 19
     (Decrease)/increase in other payables (59) 67
    1 887 1 946
B. Financing costs paid    
  Interest expense (49) (107)
  Net foreign exchange gains 80 34
    31 (73)
C. Investment income received    
  Interest received 38 25
    38 25
D. Tax paid    
  Amounts payable at the beginning of the year (20) (6)
  Tax charged to the statement of comprehensive income (excluding deferred and withholding taxes) (6) (81)
  Amounts owing at the end of the year 20
  Amounts receivable at the end of the year (42)
    (68) (67)
E. Acquisition of subsidiary
 

June 2018

Set out below is the provisional accounting for the following business combination:

Alphamed business acquisition

With effect from 12 June 2018, Aspen Pharmacare acquired control of 100% of the share capital of Alphamed for a consideration of R164 million.

The estimated post-acquisition operating profits is not material to the Company. Due to Alphamed being a standalone company, incorporating manufacturing and development operations, Aspen is accounting for its acquisition as a business combination. Due to the timing of the transaction Aspen has not yet completed the detailed exercise to identify and value the separately identifiable intangible assets acquired and thereafter the goodwill, if any, arising as a result of the transaction. This will be completed as part of the finalisation of the accounting for the acquisition.

Legal ownership of the shares finally transferred on 18 September 2018, following the meeting of the shareholders after Reserve Bank of India approval had been granted for the transaction.

  R’million
Fair value of assets and liabilities acquired  
Property, plant and equipment 85
Non-current financial receivables 1
Inventories 19
Receivables and prepayments 33
Cash and cash equivalents at acquisition 2
Non-current borrowings (3)
Deferred tax liabilities (3)
Trade and other payables (41)
Current borrowings (7)
Fair value of net assets acquired 86
Goodwill acquired 78
Consideration outstanding at year-end (10)
Cash outflow on acquisition 154
F. Cash and cash equivalents
 
  2018
R’million
2017
R’million
Cash and cash equivalents per the statement of financial position 42 957
Less: Bank overdrafts* (68) (1 177)
Cash and cash equivalents per the statement of cash flows (26) (220)

* Bank overdrafts are included within current borrowings on the statement of financial position.