30. Business combinations
continued
The acquisition of Donzé-Baume SA resulted in a residual goodwill amount of
32 million. The goodwill relates to the additional
production capacity the Group has obtained by this acquisition and the fact that a significant external supplier was internalised.
The goodwill is not tax deductible.
As no individual acquisition is considered material, the financial information is presented on an aggregate basis for each of these categories.
These acquired businesses contributed revenues of
28 million for the period from acquisition to 31 March 2008 and losses of 7 million
for the same period. If the acquisitions had occurred on 1 April 2007, the annual contribution to sales would have been around
40 million
and losses
1 million.
The acquisition accounting for all the new entities has not been completed in respect of pensions. A material impact is not considered likely.
Investment funds
The Group's venture capital/investment funds did not make any business combinations during the year.
Net assets acquired in the year ended 31 March 2008
Business operations
acquired
Fair value
Acquirees'
carrying
amount
m
m
Property, plant and equipment
54
51
Intangible assets
87
6
Inventories
29
30
Receivables
11
10
Cash and cash equivalents
3
3
Liabilities
(11)
(11)
Borrowings
(11)
(18)
Current and deferred tax
(19)
(1)
Other long-term liabilities
(5)
Net assets
143
65
Fair value of net assets acquired
143
Goodwill
32
Purchase consideration
175
Deferred payments
(27)
Purchase consideration cash paid
148
Cash and cash equivalents acquired
(3)
Cash outflow on acquisition
145
In the year ended 31 March 2007 the following business combinations were made:
Business operations
On 9 October 2006, for a cost of
7 million, the Group acquired 100 per cent of the voting rights of Fabrique d'Horlogerie Minerva SA,
a company specialising in the development and manufacture of high-quality mechanical watch movements. In April 2006, the Group also
acquired certain distribution activities in China and Switzerland previously performed by third parties for a total cost of
12 million. These
acquired businesses contributed revenues of
44 million for the period from acquisition to 31 March 2007 and were net profit neutral for
the same period. If the acquisitions had occurred on 1 April 2006, there would have been no significant change to the contribution of both
revenue and net profit for the year to 31 March 2007.
Investment funds
The Group invested in Mary Norton Inc. in July 2006 and Harry's Shoes Limited in November 2006 at a total acquisition cost of
7 million
through its subsidiary undertaking Atelier Fund LLC. For the period from acquisition till 31 March 2007 the contributions to both revenue
and net profit were not significant.
Richemont Annual Report and Accounts 2008
105
Consolidated financial statements