Notes to the
Accounts

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25 Acquisitions

All acquisitions have been consolidated applying acquisition accounting principles.

a. Acquisition of subsidiaries

All figures in £ millions	2004	2003
Tangible fixed assets	1	10
Stocks	2	-
Debtors	3	32
Creditors	(2)	(95)
Provisions	1	(4)
Deferred taxation	-	(15)
Net cash and short-term deposits acquired	-	34
	5	(38)
Equity minority interests	(7)	(8)
Net liabilities acquired at fair value	(2)	(46)
Fair value of consideration
Cash	(33)	(87)
Deferred cash consideration	-	(24)
Costs provided for	(1)	-
Net prior year adjustments	3	-
Total consideration	(31)	(111)
Goodwill arising	33	157
Acquisition fair values
Book value of net liabilities acquired	(3)	(32)
Fair value adjustments	1	(14)
Fair value to the Group	(2)	(46)

Note The fair value adjustments above relate to acquisitions made in both 2003 and 2004. They include adjustments to provisions and accruals and an adjustment to a pension scheme liability. The fair value adjustments relating to 2004 acquisitions are provisional and will be finalised in the 2005 financial statements.

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b. Cash flow from acquisitions

All figures in £ millions	2004	2003
Cash - current year acquisitions	33	87
Deferred payments for prior year acquisitions and other items	2	7
Net cash outflow	35	94

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