On 1 January 2015, Paul acquired 75% of Saul's equity shares by means of an immediate share exchange of two shares in Paul for five shares in Saul. The fair value of Paul and Saul's shares on 1 January 2015 were $4.00 and $3.00, respectively. In addition to the share exchange, Paul will make a cash payment of $1.32 per acquired share, deferred until 1 January 2016. Paul has not recorded any of the consideration for Saul in its financial statements. Paul's cost of capital is 10% per annum. The summarized statement of financial position of the two companies as at 30 June 2015 are: Paul Saul $'000 $'000 ASSETS Non-current assets Property, plant, and equipment 55,000 28,600 Financial asset equity investments 11,500 6,000 66,500 34,600 Current Assets Inventory 17,000 15,400 Trade receivables 14,300 10,500 Bank 2,200 1,600 33,500 27,500 TOTAL ASSETS 100,000 62,100 EQUITY AND LIABILITIES Equity and liabilities Equity Equity shares of $1 each 20,000 20,000 Other component of equity 4,000 nil Retained earnings - at July 2014 26,200 14,000 For year ended 30 June 2015 24,000 10,000 74,200 44,000 Current liabilities 25,800 18,100 TOTAL EQUITY AND LIABILITIES 100,00 62,100 The following additional Information is relevant: (i) Saul's business is seasonal and 60% of its annual profit is made in the period 1 January to 30 June each year. (ii) At the date of acquisition, the fair value of Saul's net assets was equal to their carrying amounts with the following exception