IFRS 5, IFRS 10 para 25, IFRS 12 para 19, IAS 28 para 20, loss of control, revaluation of retained interest, associate held for sale

 

ARYZTA AG – Annual report – 31 July 2016

Industry: food and drink

2 Discontinued operations

During March 2015, ARYZTA announced the completion of its offering of 49 million ordinary shares of Origin for €8.25 per share, which raised net proceeds for ARYZTA of €398,108,000. At the time of the placing, the deemed fair value of the Group’s remaining 29.0% interest in Origin was also valued at €8.25 per share, resulting in a value of €299,329,000. As the total deemed consideration exceeded the Group’s €145,678,000 share of the disposed net assets and cash balances of Origin, the Group recognised a gain on disposal of discontinued operations of €551,759,000.

In accordance with IFRS 5, ‘Non-current Assets Held for Sale and Discontinued Operations’, as Origin previously represented a significant component and separately reported segment of the Group, Origin’s results have been separately presented in the Group Financial Statements as Discontinued Operations, in both the current and prior years.

A calculation of the March 2015 gain on disposal is shown below:

ary3

Following the March 2015 placing, the Group’s remaining 29.0% interest in Origin was determined to be an associate held-for-sale, recorded at fair value, less costs to sell. Based on the unadjusted quoted price of €7.62 as of 31 July 2015, less estimated costs to sell, a fair value adjustment of €28,459,000 was recorded during the prior year to reduce the carrying value to €270,870,000 as of 31 July 2015, resulting in a total net gain in relation to the disposal of Origin of €523,300,000 during the year ended 31 July 2015.

During September 2015, ARYZTA announced the completion of its offering of its remaining 36.3 million ordinary shares of Origin for €6.30 per share, which raised net proceeds for ARYZTA of €225,101,000. As the fair value of the 29.0% investment in associate held-for-sale at 31 July 2015 was €270,870,000, this resulted in a net loss on disposal in the current year of €45,769,000. This divestment simplifies the reporting structure and transforms ARYZTA into a business fully focused on speciality food.

Analysis of the result of discontinued operations in both years, including the loss recognised on the disposal of the associate held-for-sale, is as follows:

ary4

11 Earnings per share (extract)

ary5

Group Consolidated Cash Flow Statement

for the year ended 31 July 2016

ary6

ary7

Advertisements