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Notes to the Financial Statements
Washington H. Soul Pattinson and Company Limited
Annual Report 2016
78
Accounting for Our Investments
10
NOTE 10
INVESTMENTS IN ASSOCIATES
b) Details of investments and results in associates
(continued)
(i) During the year, TPG Telecom Limited issued shares to new and existing shareholders as follows:
4
Issued shares to iiNet shareholders;
4
Issued shares to new and existing institutional shareholders (Placement); and
4
Issued shares to retail shareholders through the (Share purchase plan). Washington H. Soul Pattinson and
Company Limited only participated in the share purchase plan.
As a result of the issue of shares to iiNet shareholders, the institutional placement and the share purchase plan:
4
the Group’s shareholding in TPG Telecom Limited decreased from 26.88% (July 2015) to 25.15%; and
4
the Group recognised a pre-tax gain on the deemed disposal of $116.624 million (after tax gain of
$81.760 million).
(ii) The following associates issued shares by way of a dividend reinvestment plan, employee share scheme or
capital raising:
4
Australian Pharmaceutical Industries Limited;
4
BKI Investment Company Limited;
4
Brickworks Limited; and
4
Ruralco Holdings Limited.
Washington H. Soul Pattinson and Company Limited did not participate in the above share issues. As a result
there has been a change in the Group’s holding in each of these investments.
(iii) During the year, Washington H. Soul Pattinson and Company Limited participated and underwrote Rum
Jungle Resources Limited’s renounceable rights issue. This resulted in the Group’s holding increasing to 38.3%
(up from 14.6%) and the investment is now classified as an equity accounted associate. Total consideration for
the Group’s participation and underwriting of the renounceable rights issue was $6.257 million.
During the year, an associate of Washington H. Soul Pattinson and Company Limited, Supercorp Pty Limited
was disposed of for an after tax profit of $1.489 million.
Key estimate and judgements
Recoverable value of investments in associates
The recoverable amount of investments in equity accounted associates is reviewed at each reporting date after
taking into consideration any applicable impairment indicators. Significant judgement is used when assessing
impairment and the reversal of previously recognised impairment for equity accounted associates.
During the year ended 31 July 2016, TPI Enterprises was impaired by $7.554 million (2015: $nil).
In the prior year $72.947 million of previously recognised impairment on Australian Pharmaceutical Industries
Limited was reversed increasing the equity accounted carrying value to $152.316 million or $1.27 per share.
At 31 July 2015, the last sale price of Australian Pharmaceutical Industries Limited was $1.59 per share. The
previous impairment recognised on Australian Pharmaceutical Industries Limited has now been reversed in full.
c) Group’s share of associates’ expenditure commitments
2016
2015
$’000
$’000
Capital commitments
100,596
56,962
Lease commitments
137,211
155,695