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Notes to the Financial Statements
Washington H. Soul Pattinson and Company Limited
Annual Report 2016
72
Group Structure and Performance
6
NOTE 6
BUSINESS COMBINATIONS (continued)
i) Purchase Consideration
continued
2016
$’000
The fair value of assets and liabilities recognised as a result of the acquisition are as follows:
Cash
4,748
Receivables
15,079
Inventories
12,464
Property, plant and equipment
829,532
Intangibles
41,500
Accounts payables and accruals
(18,386)
Provisions
(35,809)
Net assets acquired
849,128
Revenue and profit contribution
The acquired business contributed revenue of $97.411 million and profit before tax since acquisition of $5.036
million (i.e before non-regulars) to New Hope Corporation Limited for the period 1 March 2016 to 31 July 2016.
Due to the variability in key market factors and operational variations it is considered impractical to discuss
an estimated revenue and profit/(loss) assuming the acquisition had occurred 1 August 2015. The anticipated
increase in annual production and sales tonnes is 3.36 million tonnes.
ii) Net cash outflow to acquire Bengalla Joint Venture
2016
$’000
Outflow of cash to acquire Bengalla Joint Venture, net of cash acquired
Total cash consideration
850,796
Less: Cash balance acquired
(4,748)
Outflow of cash – investing activities
846,048
Stamp duty expensed
44,738
Other acquisition costs expensed
737
Total net outflow of cash
891,523
New Hope Corporation Limited acquisition of Oil producing assets
During the year, a subsidiary of Washington H. Soul Pattinson and Company Limited, New Hope Corporation
Limited acquired a business constituting the Moonie oil producing and exploration fields and also the unowned
40% joint operation interest in the Utopia oil production and exploration fields. These transactions constitute
a business combination. The acquisitions resulted in cash outflows of $3.482 million for the acquisition of oil
producing assets and assumption of rehabilitation related provisions.
Significant judgements and estimates
Acquisition fair value
The determination of the fair values of net identifiable assets acquired, and of any goodwill, involves significant
judgement. The allocation of fair value between intangible assets, and the tangible assets with which they are
used, is also judgemental. The Group engages third-party valuers to advise on the purchase price allocation for
significant acquisitions.