Barloworld Limited: Leading Brands

Notes to the consolidated cash flow statement

For the year ended 30 September

		2020  Rm	Restated* 2019  Rm
A.	CASH GENERATED FROM OPERATIONS IS CALCULATED AS FOLLOWS:
	(Loss)/profit before taxation	(1 563)	3 063
	Adjustments for:
	Depreciation	2 661	2 387
	Amortisation of intangible assets	136	115
	Loss on disposal of property, plant and equipment and intangibles		127
	Profit on disposal of property, plant, equipment and intangible	(13)	(3)
	Dividends received	(20)	(18)
	Interest received	(155)	(204)
	Finance costs	1 274	1 134
	Fair value adjustments on financial instruments	334	(36)
	Impairment of goodwill, intangibles assets and investments in associates and joint ventures	1 907	25
	Gain asscociated with loss of control of NMI Durban South Motors (Pty) Ltd		(212)
	Loss/(profit) on disposal of subsidiaries and investments	6	(45)
	IFRS 2 charge	263	80
	Reversal of previously held provision for Iberian operations		33
	Non-cash movement in provisions and valuation allowances	358	24
	Non-cash movement related to IFRS 16 lease modifications	18
	Other non-cash flow items	4	4
	Operating cash flows before movements in working capital	5 210	6 474
	Movement in working capital	670	765
	Movement in inventories	(221)	686
	Movement in receivables and contract assets	1 065	244
	Movement in payables and contract liabilities	(174)	(165)
	Cash generated from operations before investment in rental fleets and leasing receivables	5 880	7 239
B.	TAXATION PAID IS RECONCILED TO THE AMOUNTS DISCLOSED IN THE INCOME STATEMENT AS FOLLOWS:
	Amounts (overpaid)/underpaid at beginning of year	(4)	35
	Per the income statement (excluding deferred taxation) – group	(867)	(825)
	Adjustments in respect of subsidiaries acquired and sold including translation adjustments	47	12
	Net amounts (underpaid)/overpaid at end of year	(109)	4
	Cash amounts paid	(933)	(774)
C.	ACQUISITION OF SUBSIDIARIES:
	Inventories acquired	(1 386)
	Receivables acquired	(463)
	Trade and other payables acquired	539
	Cash	(162)
	Intangible assets	(8)
	Property, plant and equipment, non-current assets and goodwill	(548)
	Non-controlling interest	8	(3)
	Total net assets acquired	(2 020)	(3)
	Goodwill arising on acquisitions	(328)	(2)
	Supplier relationship intangible arising on acquisition in terms of IFRS 3 Business Combinations	(773)
	Deferred taxation arising on supplier relationship intangible asset	193
	Cash amounts paid to acquire subsidiaries	(2 928)	(5)
	Bank balances and cash in subsidiaries acquired	162
	Acquisition of subsidiaries	(2 766)	(5)

During the period the Automotive Trading segment acquired three BMW dealerships for R84 million. Refer to note 38 for details of the acquisition of Barloworld Mongolia which became effective 1 September 2020.

		2020  Rm	Restated* 2019  Rm
D.	PROCEEDS ON DISPOSAL OF SUBSIDIARIES:
	Inventories disposed	15	879
	Receivables disposed	62	341
	Payables, taxation and deferred taxation balances disposed and settled	(74)	(1 253)
	Borrowings net of cash	10	95
	Property, plant and equipment, non-current assets, goodwill and intangibles	18	406
	Net assets disposed	31	468
	Non-controlling interest		(457)
	(Loss)/profit on disposal	(32)	5
	Non-cash translation reserves realised on disposal of foreign subsidiary	41
	Net cash proceeds on disposal of subsidiaries	40	16
	Bank balances and cash in subsidiaries disposed	(26)	(100)
	Cash proceeds on disposal of subsidiaries	14	(84)

Effective 1 October 2019 Barloworld disposed of it’s Logistics Middle East business for R39 million ($2 million). The funds were received on 18 February 2020. Effective 31 July 2020 Barloworld disposed of its SmartMatta business, the proceeds will effectively be repaid in the form of a loan over two years at R13.4 million. A R6 million loss on sale of this operation was recognised.

 

*

Restated for the following line items: investment in leasing receivables (reclassified), acquisition of subsidiaries and intangibles (separately reported), investments realised (separately reported) and proceeds on disposal of subsidiaries. Refer to note 36.