Annexure A
Pro forma information – IFRS 16 Leases
The adoption of the IFRS 16 from July 1 2019 complicates the comparison of the statement of profit or loss for the performance of F2020 and F2019. To provide comparative information in order to assess the group’s performance; a pro forma condensed consolidated statement of profit or loss, pro forma summarised consolidated statement of financial position, pro forma summarised consolidated statement of cash flows and pro forma supplementary pro forma information regarding the currency effects of the translation of foreign operations on the group (the pro forma information) has been presented for the year ended June 30 2020. The pro forma financial information of the group as set out below has been prepared for illustrative purposes and reflects the group as if IFRS 16 had not been adopted on July 1 2019.
The directors of Bidcorp are responsible for compiling the pro forma financial information on the basis applicable of the criteria as detailed in paragraphs 8.14 to 8.33 of the JSE Listings Requirements and the SAICA Guide on Pro forma Financial Information, revised and issued in September 2014 (applicable criteria). The pro forma information does not constitute financial statements fairly presented in accordance with IFRS. The pro forma information has been prepared for illustrative purposes only and because of its nature may not fairly present the group’s financial position, results of operations and cash flows.
An unmodified reasonable assurance report has been issued by the group’s auditor, PricewaterhouseCoopers, in terms of ISAE 3420 Assurance Engagements to Report on the Compilation of the Pro Forma Information in a Prospectus, and is available for inspection at the company’s registered office.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
| Year ended June 30 | |||||||||||||||
| R000 | 2020* Audited |
IFRS 16 adjustments Reported |
Pro forma 2020 Reported |
2019 Audited |
% change |
||||||||||
| Continuing operations | |||||||||||||||
| Revenue | 121 117 480 | – | 121 117 480 | 129 249 988 | (6,3) | ||||||||||
| Cost of revenue | (91 921 749) | – | (91 921 749) | (98 418 233) | 6,6 | ||||||||||
| Gross profit | 29 195 731 | – | 29 195 731 | 30 831 755 | (5,3) | ||||||||||
| Operating expenses | (25 033 193) | (318 491) | (25 351 684) | (24 165 327) | (4,9) | ||||||||||
| Trading profit | 4 162 538 | (318 491) | 3 844 047 | 6 666 428 | (42,3) | ||||||||||
| Share-based payment expense | (100 774) | – | (100 774) | (114 468) | |||||||||||
| Acquisition costs | (1 968) | – | (1 968) | (27 686) | |||||||||||
| Capital items | (923 687) | – | (923 687) | 44 106 | |||||||||||
| Operating profit | 3 136 109 | (318 491)1 | 2 817 618 | 6 568 380 | |||||||||||
| Net finance charges | (710 263) | 369 391 | (340 872) | (285 942) | 19,2 | ||||||||||
| Finance income | 85 647 | – | 85 647 | 109 506 | |||||||||||
| Finance charges | (795 910) | 369 3912 | (426 519) | (395 448) | |||||||||||
| Share of profit of associates and jointly controlled entities | 6 448 | – | 6 448 | 59 148 | |||||||||||
| Profit before taxation | 2 432 294 | 50 900 | 2 483 194 | 6 341 586 | (60,8) | ||||||||||
| Taxation | (868 614) | (11 948) | (880 562) | (1 472 282) | |||||||||||
| Profit for the year from continuing operations | 1 563 680 | 38 952 | 1 602 632 | 4 869 304 | (67,1) | ||||||||||
| Discontinued operations | |||||||||||||||
| Loss after taxation from discontinued operations | (331 578) | (3 295) | (334 873) | (731 969) | |||||||||||
| Profit for the year | 1 232 102 | 35 657 | 1 267 759 | 4 137 335 | (69,4) | ||||||||||
| Attributable to: | |||||||||||||||
| Shareholders of the company | 1 216 805 | 35 657 | 1 252 462 | 4 104 169 | |||||||||||
| From continuing operations | 1 548 383 | 38 952 | 1 587 335 | 4 836 138 | (67,2) | ||||||||||
| From discontinued operations | (331 578) | (3 295) | (334 873) | (731 969) | |||||||||||
| Non-controlling interest from continuing operations | 15 297 | – | 15 297 | 33 166 | |||||||||||
| Continuing operations (cents) | |||||||||||||||
| Headline earnings per share | 741,3 | 11,7 | 753,0 | 1 443,6 | (47,8) | ||||||||||
| Diluted headline earnings per share | 739,7 | 11,7 | 751,4 | 1 441,2 | (47,9) | ||||||||||
| * | These figures include the impact of IFRS 16. Adjustments for IFRS 16 comprise of the following: |
|
| 1 | Reinstatement of operating lease expenses (R1,1 billion) per IAS 17 allocation to operating expenses and the reversal of IFRS 16 amortisation (R771,4 million) on right-of-use lease assets. | |
| 2 | Reversal of the IFRS 16 finance cost on right-of-use lease liabilities. |
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| Year ended June 30 | |||||||||||||
| R000 | 2020* Audited |
IFRS 16 adjustments Reported |
Pro forma 2020 Reported |
2019 Audited |
|||||||||
| ASSETS | |||||||||||||
| Non-current assets | 42 088 766 | (5 166 542) | 36 922 224 | 31 294 178 | |||||||||
| Property, plant and equipment | 17 618 435 | – | 17 618 435 | 14 025 113 | |||||||||
| Right-of-use lease assets | 4 934 213 | (4 934 213)1 | – | – | |||||||||
| Intangible assets | 838 223 | – | 838 223 | 667 572 | |||||||||
| Goodwill | 16 676 574 | – | 16 676 574 | 14 784 154 | |||||||||
| Deferred taxation asset | 1 202 709 | (232 329)4 | 970 380 | 944 212 | |||||||||
| Defined benefit pension surplus | 18 008 | – | 18 008 | 20 928 | |||||||||
| Interest in associates | 193 364 | – | 193 364 | 177 978 | |||||||||
| Investment in jointly controlled entities | 489 933 | – | 489 933 | 481 975 | |||||||||
| Investments and loans | 117 307 | – | 117 307 | 192 246 | |||||||||
| Current assets | 29 509 639 | – | 29 509 639 | 33 637 800 | |||||||||
| Inventories | 10 195 539 | – | 10 195 539 | 9 703 879 | |||||||||
| Trade and other receivables | 12 289 674 | – | 12 289 674 | 15 213 598 | |||||||||
| Assets classified as held-for-sale | – | – | – | 2 944 460 | |||||||||
| Cash and cash equivalents | 7 024 426 | – | 7 024 426 | 5 775 863 | |||||||||
| Total assets | 71 598 405 | (5 166 542) | 66 431 863 | 64 931 978 | |||||||||
| EQUITY AND LIABILITIES | |||||||||||||
| Capital and reserves | 27 938 588 | 999 812 | 28 938 398 | 28 735 967 | |||||||||
| Attributable to shareholders of the company | 27 672 556 | 999 8122 | 28 672 368 | 28 498 700 | |||||||||
| Non-controlling interest | 266 030 | – | 266 030 | 237 267 | |||||||||
| Non-current liabilities | 16 000 901 | (5 294 125) | 10 706 776 | 6 524 604 | |||||||||
| Deferred taxation liability | 686 554 | – | 686 554 | 686 849 | |||||||||
| Long-term borrowings | 4 565 025 | – | 4 565 025 | 4 659 325 | |||||||||
| Long-term right-of-use lease liabilities | 5 363 091 | (5 363 091)3 | – | – | |||||||||
| Post-retirement obligations | 67 478 | – | 67 478 | 59 117 | |||||||||
| Long-term vendors for acquisition | 73 150 | – | 73 150 | 275 144 | |||||||||
| Long-term puttable non-controlling interest liabilities | 4 632 682 | – | 4 632 682 | 336 620 | |||||||||
| Long-term provisions | 612 921 | – | 612 921 | 430 462 | |||||||||
| Long-term lease liabilities | – | 68 966 | 68 966 | 77 087 | |||||||||
| Current liabilities | 27 658 918 | (872 229) | 26 786 689 | 29 671 407 | |||||||||
| Trade and other payables | 17 602 244 | – | 17 602 244 | 18 698 495 | |||||||||
| Short-term provisions | 632 950 | – | 632 950 | 313 892 | |||||||||
| Short-term vendors for acquisition | 204 188 | – | 204 188 | 103 882 | |||||||||
| Short-term puttable non-controlling interest liabilities | 55 262 | – | 55 262 | 1 126 128 | |||||||||
| Liabilities classified as held-for-sale | – | – | – | 3 116 633 | |||||||||
| Taxation | 246 077 | – | 246 077 | 470 753 | |||||||||
| Short-term right-of-use lease liabilities | 872 229 | (872 229)3 | – | – | |||||||||
| Short-term borrowings | 8 045 968 | – | 8 045 968 | 5 841 624 | |||||||||
| Total equity and liabilities | 71 598 405 | (5 166 542) | 66 431 863 | 64 931 978 | |||||||||
| * | These figures include the impact of IFRS 16. Adjustments for IFRS 16 comprise of the following: |
|
| 1 | Reversal of IFRS 16 right-of-use lease assets. | |
| 2 | Reversal of the impact of IFRS 16 adjustments to retained earnings comprising of the transition date adjustment of R1,035 billion and recognition of profit attributable to shareholders of R35,7 million under IAS 17. | |
| 3 | Reversal of IFRS 16 right-of-use lease liabilities. | |
| 4 | Reversal of the right-of-use deferred taxation. |
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
| Year ended June 30 | |||||||||||||
| R000 | 2020* Audited |
IFRS 16 adjustments Reported |
Pro forma 2020 Reported |
2019 Audited |
|||||||||
| Cash flows from operating activities | 3 928 340 | (951 506) | 2 976 834 | 2 332 967 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating profit | 3 136 109 | (318 491)1 | 2 817 618 | 6 568 380 | |||||||||
| Dividends from jointly controlled entity | 20 000 | – | 20 000 | – | |||||||||
| Acquisition costs | 1 968 | – | 1 968 | 27 686 | |||||||||
| Depreciation and amortisation | 1 534 354 | – | 1 534 354 | 1 330 200 | |||||||||
| Amortisation on right-of-use lease assets | 771 412 | (771 412)2 | – | – | |||||||||
| Nowaco share incentive scheme | (299 496) | – | (299 496) | – | |||||||||
| Non-cash items | 2 025 355 | – | 2 025 355 | 94 436 | |||||||||
| Cash generated by operations before changes in working capital | 7 189 702 | (1 089 903) | 6 099 799 | 8 020 702 | |||||||||
| Changes in working capital | 1 184 435 | – | 1 184 435 | (1 439 767) | |||||||||
| Cash generated by operations | 8 374 138 | (1 089 903) | 7 284 234 | 6 580 935 | |||||||||
| Net finance charges paid | (597 294) | 369 391 | (227 823) | (262 813) | |||||||||
| Taxation paid | (1 354 174) | – | (1 354 174) | (1 423 951) | |||||||||
| Dividends paid | (2 213 668) | – | (2 213 668) | (1 978 885) | |||||||||
| Net operating cash flows from discontinued operations | (280 741) | (230 994)1 | (511 735) | (582 319) | |||||||||
| Cash effects of investment activities | (3 153 212) | – | (3 153 212) | (3 739 498) | |||||||||
| Additions to property, plant and equipment | (2 724 587) | – | (2 724 587) | (2 957 607) | |||||||||
| Acquisition of subsidiaries | (171 604) | – | (171 604) | (448 640) | |||||||||
| Additions to intangible assets | (191 576) | – | (191 576) | (156 023) | |||||||||
| Proceeds on disposal of property, plant and equipment | 370 328 | – | 370 328 | 271 349 | |||||||||
| Proceeds on disposal of investments | 72 167 | – | 72 167 | 33 202 | |||||||||
| Proceeds on disposal of interests in subsidiaries | 34 659 | – | 34 659 | – | |||||||||
| (Payments to) receipts from associates | (8 048) | – | (8 048) | 70 409 | |||||||||
| Proceeds on disposal of intangible assets | 9 148 | – | 9 148 | 3 | |||||||||
| Payments made to vendors for acquisition | (58 553) | – | (58 553) | (297 443) | |||||||||
| Payments made to puttable non-controlling interests | (12 828) | – | (12 828) | (74 428) | |||||||||
| Investments acquired | (42 832) | – | (42 832) | (79 166) | |||||||||
| Investment in jointly controlled entity | – | – | – | (51 017) | |||||||||
| Net investing cash flows from discontinued operations | (429 486) | – | (429 486) | (50 137) | |||||||||
| Cash effects of financing activities | (912 235) | 951 506 | 39 271 | 856 149 | |||||||||
| Borrowings raised | 6 476 215 | – | 6 476 215 | 28 498 700 | |||||||||
| Borrowings repaid | (6 408 623) | – | (6 408 623) | 237 267 | |||||||||
| Right-of-use lease liability payments from continuing operations | (720 512) | 720 5121 | – | 686 849 | |||||||||
| Right-of-use lease liability payments from discontinued operations | (230 994) | 230 9941 | – | 4 659 325 | |||||||||
| Payments to non-controlling interests | (28 321) | – | (28 321) | – | |||||||||
| Treasury shares purchased during the year | – | – | – | 59 117 | |||||||||
| Net decrease in cash and cash equivalents | (137 107) | – | (137 107) | (550 382) | |||||||||
| Cash and cash equivalents at beginning of period | 6 058 269 | – | 6 058 269 | 6 643 149 | |||||||||
| Exchange rate adjustment | 1 103 264 | – | 1 103 264 | (34 498) | |||||||||
| Cash and cash equivalents at end of period | 7 024 426 | – | 7 024 426 | 6 058 269 | |||||||||
| * | These figures include the impact of IFRS 16. Adjustments for IFRS 16 comprise of the following: |
|
| 1 | Reclassification of cash flows relating to lease payments shown as finance costs in financing activities under IFRS 16 to cash generated by operations as previously disclosed under IAS 17. | |
| 2 | Reversal of depreciation on right-of-use assets to operating profit. |
PRO FORMA SUPPLEMENTARY INFORMATION REGARDING THE CURRENCY EFFECTS OF THE TRANSLATION OF FOREIGN OPERATIONS ON THE GROUP
In addition to excluding the adoption IFRS 16 on July 1 2019, the illustrative information detailed below has been prepared on the basis of applying the F2019 average rand exchange rates to the F2020 foreign subsidiary income statements and recalculating the reported income of the group for the year ended June 30 2020.
| Illustrative 2020 at 2019 average exchang rates Reported* |
IFRS 16 adjustments translated at 2019 average rates Reported |
||||||||||||||
| R000 | Pro forma 2020 Reported |
2019 Audited |
% change |
||||||||||||
| Continuing operations | |||||||||||||||
| Revenue | 114 254 759 | – | 114 254 759 | 129 249 988 | (11,6) | ||||||||||
| Trading profit | 3 967 758 | (297 861)1 | 3 669 897 | 6 666 428 | (44,9) | ||||||||||
| Headline earnings | 2 367 758 | 35 8842 | 2 403 642 | 4 811 528 | (50,0) | ||||||||||
| Headline earnings per share (cents) | 708,8 | 10,7 | 719,5 | 1 443,6 | (50,2) | ||||||||||
| Constant currency per segment from continuing operations | |||||||||||||||
| Revenue | |||||||||||||||
| Australasia | 27 885 233 | – | 27 885 233 | 31 145 965 | (10,5) | ||||||||||
| United Kingdom | 29 263 351 | – | 29 263 351 | 33 327 046 | (12,2) | ||||||||||
| Europe | 37 718 592 | – | 37 718 592 | 43 663 890 | (13,6) | ||||||||||
| Emerging Markets | 19 387 583 | – | 19 387 583 | 21 113 087 | (8,2) | ||||||||||
| 114 254 759 | – | 114 254 759 | 129 249 988 | ||||||||||||
| Trading profit | |||||||||||||||
| Australasia | 1 851 202 | (46 117) | 1 805 085 | 2 147 000 | (15,9) | ||||||||||
| United Kingdom | 620 147 | (109 378) | 510 769 | 1 720 467 | (70,3) | ||||||||||
| Europe | 904 173 | (64 508) | 839 665 | 1 860 482 | (54,9) | ||||||||||
| Emerging Markets | 658 384 | (77 163) | 581 221 | 1 042 323 | (44,2) | ||||||||||
| Corporate office | (66 148) | (695) | (66 843) | (103 844) | 35,6 | ||||||||||
| 3 967 758 | (297 861)1 | 3 669 897 | 6 666 428 | (44,9) | |||||||||||
| * | These figures include the impact of IFRS 16. Adjustments for IFRS 16 comprise of the following: |
|
| 1 | Constant currency reinstatement of operating lease expenses (R1,0 billion) per IAS 17 allocation to operating expenses and the reversal of IFRS 16 amortisation (R721,7 million) on right-of-use lease assets. | |
| 2 | Constant currency ZAR impact on headline earnings on the adoption of IFRS 16. |