Tesco plc Annual Report and Financial Statements 2008

More documents

Recommendations

Info

Notes to the Group financial statements continued Note 27 Business combinations The Group has made a number of acquisitions in the year, of which the most significant acquisition has been disclosed separately and the remainder shown in aggregate. The net assets and results of the acquired businesses are included in the consolidated accounts of the Group from the date of acquisition. Acquisition accounting has been applied and the goodwill arising has been capitalised and is subject to annual impairment testing. The goodwill acquired in the business combinations listed below has been allocated to the single group of cash-generating units represented by the acquired businesses, as this is the lowest level within the Group at which the goodwill is monitored internally. Goodwill arising on acquisitions in the year is attributable mainly to location, the assembled workforce and the synergies expected to be achieved. The fair values currently established for acquisitions made in the year to 23 February 2008 are provisional. Fair values will be reviewed based on additional information up to one year from the date of acquisition. The Directors do not believe that any net adjustments resulting from such a review would have a material effect on the Group. Dobbies Garden Centres PLC In 2007, the Group acquired 65.5% of the share capital of Dobbies Garden Centres PLC, a retailer in the United Kingdom. The fair value of the identifiable assets and liabilities of Dobbies Garden Centres PLC as at the date of acquisition were: Pre-acquisition Recognised carrying Fair value values on amounts adjustments acquisition £m £m £m Property, plant and equipment 132 31 163 Brand – 8 8 Goodwill 2 (2) – Inventories 11 – 11 Trade and other receivables 3 3 6 Cash and cash equivalents 1 – 1 Trade and other payables (12) (3) (15) Bank loans and overdraft (87) 1 (86) Deferred tax liability (3) (15) (18) Post-employment benefit obligation (1) – (1) Net assets 46 23 69 Minority interest (24) Net assets acquired 45 Goodwill arising on acquisition 61 106 Consideration: Cash consideration 103 Costs associated with the acquisition 3 Total consideration 106 The trading results of Dobbies Garden Centres PLC during the period since acquisition of the majority share and details of the results had the acquisition taken place at the beginning of the financial year have not been disclosed as it is impracticable to do so. Dobbies Garden Centres PLC remains listed on the Alternative Investment Market, and therefore we are unable to disclose information until it has been released to the market. The results of Dobbies Garden Centres PLC are not material in the context of the Group. Other acquisitions The other acquisitions in the year include the share capital of Telegraph Properties (Kirkby) Limited and The PC Guys Limited. The companies acquired undertake activities including property management and IT services. In addition the Group acquired the remaining share capital of Nutri Centres Limited, changing it from a joint venture to a subsidiary undertaking. The activity undertaken by Nutri Centres Limited is retailing. 90 Tesco PLC Annual Report and Financial Statements 2008 www.tesco.com/annualreport08
Note 27 Business combinations continued The book and fair values of the identifiable assets and liabilities of these other acquisitions as at the date of acquisition are disclosed in the table below: Pre-acquisition Recognised carrying Fair value values on amounts adjustments acquisition £m £m £m Property, plant and equipment 1 3 4 Inventories 2 – 2 Trade and other receivables 2 – 2 Cash and cash equivalents 2 – 2 Trade and other payables (2) – (2) Net assets 5 3 8 Transferred from investments in joint ventures (4) Net assets acquired 4 Goodwill arising on acquisition (in addition to previously held goodwill of £3m) 9 13 Consideration: Cash consideration 13 Total consideration 13 The post-acquisition contribution of the other acquisitions to the Group was £12m to revenue and £nil of operating profit. On 24 January 2007 Tesco Stores Malaysia Sdn Bhd acquired 100% of the share capital of Makro Cash and Carry Distribution Sdn Bhd, which operated a chain of eight stores in Malaysia. The provisional fair value of assets and liabilities at the date of acquisition was included in the financial statements at 24 February 2007. During the financial period ended 23 February 2008 and within 12 months of the date of acquisition, we restated the fair value of assets and liabilities at the date of acquisition principally due to the inclusion of an independent valuation of freehold and leasehold property. Based on exchange rates at the date of transaction this led to a decrease in goodwill of £3m. This reduction comprised an increase in the fair value of property, plant and equipment of £12m, decrease in trade and other receivables of £7m and an increase in trade and other payables of £2m. Note 28 Related party transactions Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Transactions between the Group and its joint ventures and associates are disclosed below: i) Trading transactions Sales to Purchases from Amounts owed Amounts owed related parties related parties by related parties to related parties 2008 2007 2008 2007 2008 2007 2008 2007 £m £m £m £m £m £m £m £m Joint ventures 164 144 238 190 39 5 34 45 Associates – 3 771 658 – – 82 83 Sales to related parties consists of services/management fees and loan interest. Purchases from related parties include £157m (2007 – £107m) of rentals payable to the Group’s joint ventures, including those joint ventures formed as part of the sale and leaseback programme. ii) Non-trading transactions Sales and Loans to Loans from Injection of leaseback of assets related parties related parties equity funding 2008 2007 2008 2007 2008 2007 2008 2007 £m £m £m £m £m £m £m £m Joint ventures 652 527 173 163 10 10 8 47 Associates – – – – – – – 3 Tesco PLC Annual Report and Financial Statements 2008 91
Page 1 and 2:
Tesco PLC Annual Report and Financi
Page 3 and 4:
Financial highlights Growth on 2007
Page 5 and 6:
Report of the Directors The Directo
Page 7 and 8:
International contributed £701m to
Page 9 and 10:
Current trading We have seen a stro
Page 11 and 12:
2008 2007 Total shareholder return
Page 13 and 14:
Our business in Poland had a good y
Page 15 and 16:
Tesco Personal Finance (TPF) TPF is
Page 17 and 18:
and put the community at the heart
Page 19 and 20:
Joint venture governance and partne
Page 21 and 22:
Political and charitable donations
Page 23 and 24:
Members’ attendance during the ye
Page 25 and 26:
Internal controls Accountability fo
Page 27 and 28:
Directors’ remuneration report ye
Page 29 and 30:
The Committee considers TSR perform
Page 31 and 32:
Share options Options over shares w
Page 33 and 34:
Non-executive Directors Non-executi
Page 35 and 36:
Table 4 Share options held by Direc
Page 37 and 38:
Table 6 Long-Term Performance Share
Page 39 and 40:
Table 10 Directors’ interests in
Page 41 and 42: Go online! Every year, more and mor
Page 43 and 44: Independent auditors’ report to t
Page 45 and 46: Group statement of recognised incom
Page 47 and 48: Group cash flow statement year ende
Page 49 and 50: Note 1 Accounting policies continue
Page 55 and 56: Note 2 Segmental reporting The Boar
Page 57 and 58: Note 2 Segmental reporting continue
Page 59 and 60: Note 5 Finance income and costs 200
Page 61 and 62: Note 6 Taxation continued Deferred
Page 63 and 64: Note 7 Discontinued operation and a
Page 65 and 66: Note 10 Goodwill and other intangib
Page 67 and 68: Note 11 Property, plant and equipme
Page 69 and 70: Note 11 Property, plant and equipme
Page 71 and 72: Note 13 Group entities continued (a
Page 73 and 74: Note 14 Other investments continued
Page 75 and 76: Note 19 Borrowings Current Maturity
Page 77 and 78: Note 20 Financial instruments conti
Page 79 and 80: Note 21 Financial risk factors cont
Page 81 and 82: Note 21 Financial risk factors cont
Page 83 and 84: Note 23 Share-based payments contin
Page 85 and 86: Note 24 Post-employment benefits Pe
Page 87 and 88: Note 24 Post-employment benefits co
Page 89 and 90: Note 25 Called up share capital 200
Page 91: Note 26 Statement of changes in equ
Page 95 and 96: Note 30 Analysis of changes in net
Page 97 and 98: Note 32 Leasing commitments continu
Page 99 and 100: UK GAAP IFRS 2004 2005 2005 20061 5
Page 101 and 102: Notes to the Parent Company financi
Page 103 and 104: Note 2 Auditor remuneration 2008 20
Page 105 and 106: Note 9 Borrowings Maturity 2008 200
Page 107 and 108: Note 11 Share-based payments contin
Page 109 and 110: Note 14 Reserves Restated* 2008 200
Page 111 and 112: Cover: Kana and son Tesco Express,
show all

Tesco plc Annual Report and Financial Statements 2008

Create successful ePaper yourself

Delete template?

Save as template?