LensCrafters 2012 Annual Report Download - page 215

| 129 >CONSOLIDATED FINANCIAL STATEMENTS - NOTES
The Group portfolio of foreign exchange derivatives includes only forward foreign
exchange contracts on the most traded currency pairs with maturity less than one year.
The fair value of the portfolio is valued using internal models that use observable market
inputs including Yield Curves and Spot and Forward prices.
The fair value of the interest rate derivatives portfolio is calculated using internal models
that maximize the use of observable market inputs including Interest Rates, Yield Curves
and Foreign Exchange Spot prices.
On January 20, 2012, the Group successfully completed the acquisition of the Brazilian
entity Tecnol - Tecnica Nacional de Oculos Ltda (“Tecnol”). The total consideration paid
was approximately RBL 181.8 million (approximately Euro 72.5 million) with RBL 143.7
million (approximately Euro 57.2 million) paid in January 2012 and RBL 38.4 million
(approximately Euro15.3 million) paid in October 2012. Additionally the Group assumed
Tecnol net debt amounting to approximately Euro30.3 million.
The acquisition furthers the Group’s strategy of continued expansion of its wholesale
business and acquiring a manufacturing facility in South America. The goodwill of
Euro88.8 million from the acquisition mainly reflects (i) a reduction in custom duties and
transportation costs and more rapid and direct access to the Brazilian market, (ii) the
Tecnol qualified workforce which possesses the know-how necessary to quickly apply the
production processes developed by the Group and (iii) the benefit of Tecnol’s existing
wholesale and distribution channels.
The Company uses various methods to calculate the fair value of the Tecnol assets acquired
and the liabilities assumed. The purchase accounting for the transactions was completed
as of December 31, 2012.
4. BUSINESS
COMBINATIONS