Full Annual Report - Inchcape

Section
Three
Financial
statements
27 Acquisitions and disposals
a. Acquisitions
In July 2008, the Group acquired 75.1% of the issued share capital of the Musa Motors group for a total cash consideration of US$240m:
a US$200m initial downpayment was made in 2008; a further payment of US$35m was made in October 2009; and a final settlement
of US$5m is due in 2010. The remaining 24.9% is to be acquired in early 2011, with payment dependent on 2010 EBITA, capped
at US$250m.
During the year, adjustments have been made to the net assets acquired of the Musa Motors group, as permitted by IFRS 3, ‘Business
combinations’. These fair value adjustments were not material and therefore prior periods have not been restated. The changes
to the net assets acquired were primarily due to a decrease in amounts due to suppliers and an increase in various taxes when
compared to original estimates. These changes, together with revisions to amounts due in respect of the remaining contingent
deferred consideration, have resulted in an increase in the amount of goodwill recognised on acquisition of £22.3m.
b. Disposals
During the year, the Group disposed of a small number of dealerships and operations generating disposal proceeds of £3.0m
(2008 – £27.3m) and a loss on disposal of £0.7m (2008 – £1.2m) which has not been disclosed as an exceptional item.
28 Guarantees and contingencies
Guarantees, performance bonds and contingent liabilities 16.3 17.7
Guarantees and contingencies largely comprise letters of credit issued on behalf of the Group in the ordinary course of business.
The Group also has, in the ordinary course of business, commitments under foreign exchange instruments relating to the hedging
of transactional exposures (see note 23).
29 Commitments
a. Capital commitments
Contracts placed for future capital expenditure at the balance sheet date but not yet incurred are as follows:
Property, plant and equipment 9.5 7.6
Vehicles subject to residual value commitments * 98.6 108.5
Intangible assets – 0.1
* Residual value commitments comprise the total repurchase liability on all vehicles sold subject to a residual value commitment, of which £47.6m (2008 – £65.4m) has been included
within ‘trade and other payables’. These commitments are largely expected to be settled within the next 12 months, with a minority to be settled within three years.
2009
£m
2009
£m
2008
£m
2008
£m
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