Cosalt plc Annual report & financial statements 2008

Financial statements Notes to the financial statements
Notes to the financial statements
continued
28. Acquisitions continued
The effects on the Group’s assets and liabilities are detailed below.
(a) GTC Group
On 12 October 2007 the Group acquired the Aberdeen-based GTC Group of companies involved in the supply, repair and
management of lifting equipment for many of the large off-shore oil and gas companies in the North Sea. The principal subsidiaries
acquired, are listed in note 29 and 100% of the voting rights were acquired for all of these companies.
During the financial year, amortisation of intangible assets acquired totalling £1,047,000 (2007: £50,000) was charged in respect
of GTC. Due to the integration of the business it is not possible to separate the original trade of the business acquired for further
disclosures. Details of the assets and liabilities acquired are given below:
Book Fair value Value to
value adjustments Group
£000 £000 £000
Non-current assets
Property, plant and equipment 2,254 (358) 1,896
Intangible assets – 12,559 12,559
Current assets
Inventories 3,282 (551) 2,731
Trade and other receivables 14,016 (2235) 11,781
17,298 (2,786) 14,512
Current liabilities
Bank overdrafts 4,429 – 4,429
Trade and other payables 12,576 (332) 12,244
17,005 (332) 16,673
Non-current liabilities
Interest bearing loans and borrowings 145 – 145
Deferred taxation – 3,517 3,517
Net assets acquired 2,402 6,230 8,632
The fair value adjustment reflects the adjustment required to assets and liabilities to align these with their fair values, Group
accounting policies and to recognise intangible assets identified on acquisition and their associated deferred tax. In 2007
provisional fair value adjustments were recognised. During the current financial year the Group has performed further investigations
around the acquisition balances. As a result adjustments have been made to stock and debtors to bring these into line with the
Group’s account policies.
Following the initial assessment of fair value adjustments on the acquisition of GTC just before the October 2007 year end, further
analysis has now been undertaken which has resulted in additional adjustments to bring the assets and liabilities into line with the
Group’s accounting policies. The adjustments required are noted below.
Original Final
fair value fair value
adjustments adjustments Movement
£000 £000 £000
Non-current assets
Property, plant and equipment – (358) (358)
Intangible assets
Current assets
12,559 12,559 –
Inventories (400) (551) (151)
Trade and other receivables (600) (2,235) (1,635)
Current liabilities
(1,000) (2,786) (1,786)
Trade and other payables
Non-current liabilities
(468) (332) 136
Deferred taxation 3,517 3,517 –
Adjustment to net assets acquired 8,510 6,230 (2,280)
Goodwill arising on acquisition represents the anticipated operating synergies, expected industry growth and the assembled
workforce.
72 Cosalt plc Annual report & financial statements 2008