Marks and Spencer 2010 Annual Report Download - page 113

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Directors’ report p01
Financial statements
Other information p117
To find out more, visit www.marksandspencer.com/annualreport2010 109
26 Business combinations
£m
Net liabilities at fair value (100%) (2.4)
Net liabilities acquired (1.2)
Cash consideration 6.1
Transaction costs 0.9
Total consideration 7.0
Goodwill arising on acquisition 8.2
On 31 March 2009, Marks and Spencer Reliance India Pvt Limited, a 51% subsidiary of the Group, completed the acquisition of 100%
of the issued share capital of Supreme Tradelinks Private Limited, which up until this date was the Group’s franchisee in India, for cash
consideration of £6.1m and transaction costs of £0.9m.
The acquisition has contributed £8.3m to sales and a £0.2m loss to operating profit in the period since acquisition, which is the same
contribution had the acquisition taken place on the first day of the financial period.
Goodwill has arisen on the acquisition due to the opportunities to facilitate a faster rate of growth and greater operating efficiency that do not
meet the criteria for recognition as an intangible asset at the date of acquisition.
27 Contingencies and commitments
A. Capital commitments
2010
£m
2009
£m
Commitments in respect of properties in the course of construction 69.0 52.1
In respect of its interest in a joint venture (see note 16), the Group is committed to incur capital expenditure of £0.9m (last year £19.3m).
B. Other material contracts
In the event of a material change in the trading arrangements with certain warehouse operators, the Group has a commitment to purchase
property, plant and equipment, at values ranging from historical net book value to market value, which are currently owned and operated by
them on the Group’s behalf.
C. Commitments under operating leases
The Group leases various stores, offices, warehouses and equipment under non-cancellable operating lease agreements. The leases have
varying terms, escalation clauses and renewal rights.
2010
£m
2009
£m
Total future minimum rentals payable under non-cancellable operating leases are as follows:
Within one year 228.6 215.1
Later than one year and not later than five years 815.2 778.1
Later than five years 3,005.2 3,173.1
Total 4,049.0 4,166.4
The total future sublease payments to be received are £51.9m (last year £64.9m).