Notes to the consolidated financial statements Note 27


27.

PUTTABLE NON-CONTROLLING INTEREST LIABILITIES

The acquisition of Guzmán Gastronomía and Cuttings, and Quartiglia Food Service SPA during the year resulted in a put option being agreed with the non-controlling shareholders. The put options entitle the non-controlling shareholders to sell their holdings in the subsidiaries to the group at contracted dates and amounts.

The group has the following put options:

  • The non-controlling shareholders in Distrubuzione Alimentari Convivenze SPA (DAC) have the option to put their 40% interest in DAC to the group, using a market valuation formula on or about September 30 2017.
  • The non-controlling shareholders in Guzmán have the option to put their 10% interest in Guzmán to the group, using a market valuation formula on or about June 30 2021.
  • The non-controlling shareholders in Caterfood have the option to put their 12% interest in Caterfood to the group, using a market valuation formula on or about September 30 2017.
  • The non-controlling shareholders in Quartiglia Food Service Spa have the option to put their 40% interest in Quartiglia Food Service Spa to the group, using a market valuation formula on or about September 30 2019.
  2017 
R’000 
  2016 
R’000 
 
The affect of granting these put options on the group’s results can be summarised as follows:        
Balance at beginning of year  1 168 921     913 638    
Arising on the granting of put options to non-controlling interests during the year  119 832     44 700    
Payments made to non-controlling interests during the year  (39 927)    –    
Remeasurement of puttable option during the year  48 076     –    
Unwinding of present value discount recognised in the statement of profit or loss  21 167     23 085    
Exchange rate adjustments  (122 873)    187 498    
   1 195 196     1 168 921    
Long-term portion  118 028     1 168 921    
Short-term portion  1 077 168     –    
DAC             
   Discount rate  1,99%     1,99%    
   Expected settlement date  September 30 2017     September 30 2017    
Guzmán             
   Discount rate  2,0%          
   Expected settlement date June 30 2021          
Caterfood             
   Discount rate  5,0%     5,0%   
   Expected settlement date September 30 2017   September 30 2017  

The effect of discounting the put option for Quartiglia Food Service Spa was determined as insignificant.


Notes to the consolidated financial statements Note 27