35 BUSINESS ACQUISITION
35.1 Acquisition of subsidiary
 

On 29 July 2016, the holding company acquired the entire issued share capital of Dwarsrivier Chrome Mine Proprietary Limited (Dwarsrivier) from Assmang.

In accordance with IFRS 3: Business Combinations, the fair value of the assets acquired and liabilities assumed in a business combination are required to be determined within one year of the acquisition of control of the entity. The previous business combination disclosure (which was reported as part of the “Events after reporting period” for the year ended 30 June 2016) contained provisional values as the initial accounting for the business combination had not been completed. The fair values previously disclosed were provisional as the “purchase price allocation” was not yet included at that point in time. On the basis of a valuation performed and independently reviewed effective 1 July 2016 the fair values of the identifiable assets and liabilities of Dwarsrivier at 1 July 2016, together with the fair value of the purchase consideration, were determined and the results for the financial year ended 30 June 2017 were adjusted to bring into account the finalisation of the initial accounting for the business combination and the valuation referred to above.

The following finalised values were used in determining the bargain purchase gain:

      R'000   
Property, plant and equipment        691 596    
Mining right        712 502    
Inventories        455 631    
Trade and other receivables        231 491    
Long-term provisions        (63 322)   
Trade and other payables        (277 918)   
Short-term provisions        (119 695)   
Deferred tax liability raised in respect of the fair value of assets        (282 383)   
Pre-acquisition liability        (55 313)   
Fair value of identifiable assets acquired and liabilities assumed        1 292 589    
Fair value of interest already held by the group        (560 709)   
– purchase price for acquisition of 50% Dwarsrivier "A" shares issued to ARM        (237 562)   
– fair value of equity interest distributed by Assmang        (323 147)   
Fair value of purchase consideration        (475 125)   
Purchase price, agreed as at 1 July 2014        (450 000)   
Interest foregone on purchase consideration placed in escrow on 1 July 2015 and paid to seller on 29 July 2016 in terms of acquisition agreement        (25 125)   
Bargain purchase gain        256 755    
The above bargain purchase gain resulted largely from the purchase price being agreed upon as at 1 July 2014 and the transaction being concluded on 29 July 2016, when all of the conditions precedent were met.             
The following results of Dwarsrivier were been included in the consolidated income statement, for the year to 30 June 2017:             
Revenue        3 380 466    
Profit attributable to shareholders        843 199    
35.2 Disposal of interest in associate
 

During April 2017, Wonderstone Limited, a wholly owned subsidiary, acquired a 40% shareholding in Dakot Wear Ceramics Proprietary Limited (DWC). DWC produces milling media, technical ceramics and other associated products and is located in Gingindlovu, KwaZulu-Natal.

At 31 December 2017, management determined that the carrying value of the investment would not be recovered through its operations and accordingly the investment was impaired.

In an agreement concluded on 29 April 2018, the group secured a sale of all of its shares held in DWC for R6 000 000 payable over a period of five years, with the outstanding amount being secured by way of a special notarial bond in favour of subsidiary company Wonderstone.

      R'000  
Share of loss in associate (2018)     2 087