Glamis PLC has been running a farming network in the Scottish Highlands for over a century.Founded in 1903 as a small farm with 20 sheep and 05 cows, the company is now one of the largest dairy groups in Scotland.

In 1979, Glamis obtained a listing in the London Stock Exchange and its Initial Public Offering was at a meager 22p for shares which had a par value of 10p each. The market value

Twenty years later, Glamis acquired 55% in Cawdor (Pvt) Ltd which is a manufacturer of woolen clothing for the UK market and Scandinavia.

The company (Glamis) is now considering the acquisition of 60% stake in Duncan Dairy Products - a sole proprietorship.Glamis directors are of the view that they can improve the sales of Duncan Dairies by at least 50% if they acquire it. The founder of Duncan Dairy Products is willing to accept GBP 150,000 for the whole business but his sons feel that considering the very low net asset value of the business, their father should even accept GBP 100,000. The depreciation factor of Duncan Dairies is a mere GBP 1200 per mensum.

Income Statements for the year ended 31st March 2013
	Glarmis PLC	Cawdor (Pvt) Ltd
	GBP '000	GBP '000	GBP '000	GBP '000
Income		2,450		3,600
Cost of Sales		(1,593)		(1,980)
Gross Profit		858		1,620
Selling and Distribution Exp	102		35
Admin Exp	215	(317)	98	(133)
Operating Profit		441		648
Dividends received		93
Finance Cost		(11)	-	(24)
Net Profit Before Tax		523		624
Taxation		(157)		(187)
Net Profit After Tax		366		437
Dividends declared		(147)		(175)
		220		262
Retained Earning b/f		(89)		110
Retained Earnings c/f		131		372
Statement of Financial Position as at 31st March 2013
	Glarmis PLC	Cawdor (Pvt) Ltd
	GBP '000	GBP '000	GBP '000	GBP '000
Non-Current Assets (Cost)		3,500		3,000
Accumulated depreciation		(2,800)		(1,200)
Non Current Assets -Net Book Value		700		1,800
Current Assets:
Inventories	8		22
Trade receivables	408		900
Other receivables	25		19
Cash & Cash equivalents	36	477		941
Current Liabilities:
Bank overdraft	-		(290)
Trade payables	-	-	(170)	-
Other Payables	(2)	(2)	(3)	(463)
		1,175		2,278
Non Current Liabilities:
Debentures		(500)
Long Term Loan				(1,200.0)
NET ASSETS		675		1,078
Shareholders' Funds:
Issued Share Capital (1 penny)		-		706
Issued Share Capital (10p)		248
Share Premium		297
Retained Earnings		131		372
		675		1,078

Required:

1. Comment on the performance and financial position of Glamis and Cawdor considering the stake that Glamis has in Cawdor.