Indefinite life intangibles

No indefinite life intangibles were recognised on the acquisition of businesses in the current year as the Purchase Price Allocation (PPA) reviews had not been completed on the UDS and Aquazania acquisitions at the time of reporting (refer note 12). Indefinite life intangibles arising on previous acquisitions amount to R2 138 million, R964 million relating to Bidvest Commercial Products and R1 174 million to Bidvest Services. These intangibles were subject to review for impairment based on value-in-use. For South African domiciled operations the Group used a pre-tax discount rate of between 18% and 23.6% with a perpetual growth rate of 5.8%, whereas for the European operations a pre-tax discount rate of 11.4% and a perpetual growth rate of 2% was used. Significant surpluses were identified over the carrying values of the CGU’s and thus the directors believe that a reasonably possible change in the multiples, would not result in an impairment of the carrying value of these intangibles.

The amortisation and impairment charges are included in operating expenses in the consolidated income statement.