Tesco 2008 Annual Report Download - page 92

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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 –88
Goodwill 2 (2) –
Inventories 11 – 11
Trade and other receivables 336
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.
Tesco PLC Annual Report and
Financial Statements 2008
90
Notes to the Group financial statements continued
www.tesco.com/annualreport08