Guinness Peat Group plc

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Notes to Financial Statements - Guinness Peat Group plc

50 GUINNESS PEAT GROUP PLC • ANNUAL REPORTNotes to Financial Statements – continued32. Purchase of Subsidiary Undertakings - continuedc) In September 2004, the Group acquired a 56% holding in TAFMO Ltd, an Australian supplier of electronics products andservices. The balance sheet of TAFMO at the date of acquisition was as follows:Book Provisional fair Provisionalvalue value adjustments fair value£m £m £mACQUISITION SUMMARYIntangible fixed assets 5.3 – 5.3Tangible fixed assets 2.0 – 2.0Stocks 0.6 – 0.6Debtors 0.9 – 0.9Cash 3.9 – 3.9Creditors due within 12 months (1.9) – (1.9)Creditors due after 12 months (0.1) – (0.1)Net assets at acquisition 10.7 – 10.7Minority interest (including share in subsidiary’s own accounts) (4.7)Net assets attributable to the Group’s interest 6.0Goodwill arising on acquisition 0.3Total consideration – paid in cash 6.3Since the year end, a further issue of shares by TAFMO has reduced the Group’s holding to 50.8%.d) The subsidiary undertakings acquired during the year contributed an inflow of £21.4 million to the Group’s net operatingcash flows, paid £19.6 million in respect of returns on investments and servicing of finance, paid £13.3 million in respect oftaxation and utilised £45.1 million for capital expenditure.33. Purchase of Associated UndertakingsDuring the year, the Group increased its investment in two existing associated undertakings and one company became anassociated undertaking. The Group increased its stake in Green’s Foods Ltd from 28.93% to 31.91%, and in Capral AluminiumLtd from 34.26% to 37.25%. In September CPI Group Ltd became an associated undertaking when the Group’s equityparticipation in that company increased to 21.58%.The goodwill arising from these transactions is analysed as follows:AssociatesGreen’sCapralFoods Aluminium CPI GroupLtd Ltd Ltd Total£m £m £m £mBook value of net assets (GPG share) 0.6 7.3 4.6 12.5Fair value adjustments – 0.4 – 0.4Fair value of net assets (GPG share) 0.6 7.7 4.6 12.9Consideration (1.3) (6.6) (4.1) (12.0)(POSITIVE)/NEGATIVE GOODWILL (0.7) 1.1 0.5 0.9The aggregate consideration of £12.0 million includes £2.6 million paid in prior years. The net assets of the associates are basedon their published accounts, as adjusted to reflect any identified differences between book values and fair values (includingrelevant accounting policy adjustments).The significant fair value adjustments for Capral relate to the revaluation of property, plant and equipment to depreciatedreplacement cost.

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