38 Porter The following consolidated financial statements relate

38 Porter The following consolidated financial statements relate

The following consolidated financial statements relate to Porter, a public limited company:

PORTER GROUP: STATEMENT OF FINANCIAL POSITION AS AT 31 MAY 20X6

20X6 20X5

$’m $’m

Non-current assets

Property, plant and equipment 958 812

Goodwill 15 10

Investment in associate 48 39

1,021 861

Current assets

Inventories 154 168

Trade receivables 132 112

Financial assets at fair value through profit or loss 16 0

Cash and cash equivalents 158 48

460 328

1,481 1,189

Equity attributable to owners of the parent

Share capital ($1 ordinary shares) 332 300

Share premium account 212 172

Retained earnings 188 165

Revaluation surplus 101 54

833 691

Non-controlling interests 84 28

917 719

Non-current liabilities

Long-term borrowings 380 320

Deferred tax liability 38 26

418 346

Current liabilities

Trade and other payables 110 98

Interest payable 8 4

Current tax payable 28 22

146 124

1,481 1,189

PORTER GROUP: STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MAY 20X6

$’m

Revenue 956

Cost of sales (634)

Gross profit 322

Other income 6

Distribution costs (97)

Administrative expenses (115)

Finance costs (16)

Share of profit of associate 12

Profit before tax 112

Income tax expense (34)

PROFIT FOR THE YEAR 78

Other comprehensive income:

Items that will not be reclassified to profit or loss:

Gains on property revaluation 58

Share of gain on property revaluation of associate 8

Income tax relating to items that will not be reclassified (17)

Other comprehensive income for the year, net of tax 49

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 127

Profit attributable to:

Owners of the parent 68

Non-controlling interests 10

78

Total comprehensive income attributable to:

Owners of the parent 115

Non-controlling interests 12

127

The following information relates to the consolidated financial statements of Porter:

1 During the period, Porter acquired 60% of a subsidiary. The purchase was effected by issuing shares of Porter on a 1 for 2 basis, at their market value on that date of $2.25 per share, plus

$26m in cash.

A statement of financial position of the subsidiary, prepared at the acquisition date for consolidation purposes showed the following position: $’m

Property, plant and equipment

92

Inventories

20

Trade receivables

16

Cash and cash equivalents

8

136

Share capital ($1 shares)

80

Reserves

40

120

Trade payables

12

Income taxes payable

4

136

An impairment test conducted at the year end, resulted in a write-down of goodwill relating to another wholly owned subsidiary. This was charged to cost of sales.

Group policy is to value non-controlling interests at the date of acquisition at the proportionate share of the fair value of the acquiree’s identifiable assets acquired and liabilities assumed.

2 Depreciation charged to the consolidated profit or loss amounted to $44m. There were no disposals of property, plant and equipment during the year.

3 Other income represents gains on financial assets at fair value through profit or loss. The financial assets are investments in quoted shares. They were purchased shortly before the year end with surplus cash, and were designated at fair through profit loss as they are expected to be sold after the year end. No dividends have yet been received.

4 Included in ‘trade and other payables’ is the $ equivalent of an invoice for 102m shillings for some equipment purchased from a foreign supplier. The asset was invoiced on 5 March 20X6, but had not been paid for at the year end, 31 May 20X6.

Exchange gains or losses on the transaction have been included in administrative expenses. Relevant exchange rates were as follows:

Shillings to $1

5March 20X6 6.8

31 May 20X6 6.0

5 Movement on retained earnings was as follows:

$’m

At 31 May 20X5 165

Total comprehensive income 68

Dividends paid (45)

At 31 May 20X6 188

Required

Prepare a consolidated statement of cash flows for Porter for the year ended 31 May 20X6 in accordance with IAS 7 Statements of cash flows, using the indirect method.

Notes to the statement of cash flows are not required.

Attachments:

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