eurochem-annual-report-2011

Financial information
Notes to the consolidated financial statements continued
for the year ended 31 December 2011
(all amounts are presented in thousands of Russian Roubles, unless otherwise stated)
29 Business combinations continued
If the acquisition had occurred on 1 January 2011, the Group’s consolidated revenue and profit for the year ended 31 December 2011 would not have changed
significantly.
In the year 2011 the cash movement relating to the acquisition was as follows:
2011
Upfront payments for acquisition of subsidiary (62,170)
Cash and cash equivalents of subsidiary 122,742
Total cash flow relating to the acquisition of the oil and gas subsidiary 60,572
Acquisition of OJSC Montazhnik and CJSC Spetsprommontazh. In June 2011 the Group acquired 76.6% of the share capital of OJSC Montazhnik and
100% of the share capital of CJSC Spetsprommontazh to improve the Group’s construction capabilities. These two construction companies are registered
in the Russian Federation.
Management considers these entities as a single business combination, since together the two companies comprise an integrated set of activities and assets.
The purchase consideration comprised RR 146,321 thousand, paid in cash. The fair value of net assets acquired was RR 89,376 thousand. The Group has
recognised goodwill of RR 90,409 thousand, primarily attributable to the anticipated synergies and cost savings expected to arise. Non-controlling interest
represents the share in the net assets of the acquired entity attributable to the owners of the non-controlling interest.
If the acquisition had occurred on 1 January 2011, the Group’s consolidated revenue and profit for the year ended 31 December 2011 would not have changed
significantly. Revenue and net profit included in the consolidated statement of comprehensive income since acquisition are not material.
Details of the assets and liabilities acquired and goodwill arising are as follows:
108 EuroChem Annual Report and Accounts 2011
Carrying
value
Attributed
fair value
Cash and cash equivalents 355 355
Accounts receivable and other assets 3,286 3,129
Inventories 11,879 11,879
Property, plant and equipment 30,491 111,000
Intangible assets 538 538
Trade and other accounts payable (21,580) (21,580)
Deferred income tax liability – (15,945)
Fair value of net assets of subsidiary 89,376
Less: non-controlling interests 33,464
Fair value of acquired interest in net assets of subsidiary 55,912
Goodwill arising from the acquisition 90,409
Total purchase consideration 146,321
Less: cash and cash equivalents of subsidiary acquired 355
Outflow of cash and cash equivalents on acquisition 145,966
30 Acquisition of non-controlling interests in subsidiaries
During 2011 Group transactions with non-controlling interests were mainly represented by a squeeze-out in Lifosa AB. As at 31 December 2011 the Group
increased its shareholding in Lifosa AB from 99.1% to 100% (2010: from 94.8% to 99.1%).The total purchase consideration for this acquisition during the year
ended 31 December 2011 comprised RR 176,715 thousand (2010: RR 448,983 thousand) paid in cash. The balance of the amount of RR 33,814 thousand
shown in the statement of cash flows was paid for the acquisition of an additional interest in a construction subsidiary.