Tesco 1998 Annual Report Download - page 39

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Note 31 Acquisitions
On 8 May 1997 the company acquired the Irish food retailing and related businesses of Associated British Foods plc for £643m.
The results of these businesses from this date to 28 February 1998 have been consolidated within the Group profit and loss account.
In the period from 15 September 1996 to 8 May 1997 they made a profit after taxation of £9m, and in the year to 14 September
1996 they made a profit after taxation of £38m with no minority interests.
The company also acquired a controlling interest in the Polish chain of stores called Madex and Minor on 10 March 1997 for £4m,
and retailing businesses in the UK, during the year, for £10m.
All of the Group’s acquisitions have been accounted for using acquisition accounting.
The acquisitions of the Irish businesses, the Polish chain and UK businesses have been consolidated into the Tesco Group balance
sheet as follows:
Note 30 Reconciliation of operating profit to net cash
inflow from operating activities
Operating profit
Depreciation
Increase in goods held for resale
(Increase)/decrease in development property
(Increase)/decrease in debtors
Increase in trade creditors
Increase in other creditors
(Increase)/decrease in working capital
Net cash inflow from operating activities
Continuing
£m
819
348
(6)
(108)
(40)
88
31
(35)
1,132
Discontinued
£m
(2)
10
–
–
4
9
3
16
24
1998 Total
£m
817
358
(6)
(108)
(36)
97
34
(19)
1,156
1997 Total
£m
774
317
(19)
44
(7)
74
36
128
1,219
Fixed assets
Stock
Debtors
Net cash
Loans
Creditors
Taxation
Shareholders’ funds
Goodwill
Total purchase consideration
Fair value
adjustments
£m
19
–
12
–
–
–
–
31
Balance sheet
at acquisition
Other
£m
10
2
–
–
–
(9)
–
3
Ireland
£m
304
64
21
65
(20)
(245)
(11)
178
Fair value
balance
sheet
£m
333
66
33
65
(20)
(254)
(11)
212
445
657
The fair value adjustments all relate to the Irish businesses and comprise £19m on the revaluation of the property portfolio and
£12m in respect of the recognition of pension surpluses.There were no material adjustments to achieve consistency of accounting
policies. Included within the Ireland acquisition balance sheet was £9m in respect of the Lifestyle businesses which were subsequently
sold (see note 32).This included fixed assets totalling £5m and stock totalling £4m.There were no fair value adjustments in respect
of these assets.
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