Tawala, a public limited company, operates in the manufacturing sector. Tawala has investments in two other companies. The draft statements of financial position at 31 May 2018 are as follows: The following information is relevant to the preparation of the group financial statements: Tawala Shsm Punguza KShs'm Cheo KShs'm 1.440 1.100 1.300 Assets: Non-current assets Property, plant and equipment Investments in subsidiaries Punguza Cheo Financial assets 1.270 1.250 310 320 3,320 895 4.215 141 1.441 150 1,591 2.391 681 3,072 Current assets Total assets 1,210 1,750 1,240 125 930 800 350 80 95 Equity and liabilities: Share capital Retained carnings Other components of equity Total cquity Non-current liabilities Current liabilities Total liabilities Total equity and liabilities 3,115 1.245 2.220 765 985 150 87 106 115 1.100 4,215 852 3,072 346 1,591 1. On 1 June 2016, Tawala acquired 14% of the equity interests of Cheo for a cash consideration of KShs 260 million and Punguza acquired 70% of the equity interests of Cheo for a cash consideration of KShs 1,270 million. At 1 June 2016, the identifiable net assets of Cheo had a fair value of Kshs990 million, retained earnings were KShs 190 million and other components of equity were Kshs 52 million. At 1 June 2017, the identifiable net assets of Cheo had a fair value of KShs 1,150 million, retained earnings were KShs 240 million and other components of equity were KShs 70 million. The excess in fair value is due to non-depreciable land. The fair value of the 14% holding of Tawala in Cheo was KShs 280 million at 31 May 2017 and KShs310 million at 31 May 2018. The fair value of Punguza's interest in Cheo had not changed since acquisition.sk 2. On 1 June 2017, Tawala acquired 60% of the equity interests of Punguza, a public limited company. The purchase consideration comprised cash of Kshs1.250 million. On 1 June 2017, the fair value of the identifiable net assets acquired was KShs 1,950 million and retained earnings of Punguza were Kshs650 million and other components of equity were KShs55 million. The excess in fair value is due to non-depreciable land, strIt is the group's policy to measure the non-controlling interest at acquisition at its proportionate share of the fair value of the subsidiary's net assets.tr 3. Goodwill of Punguza and Cheo was impairment tested at 31 May 2018. There was no impairment relating to Cheo. The recoverable amount of the net assets of Punguza was KShs2,088 million. There was no impairment of the net assets of Punguza before this date and any impairment loss has been determined to relate to goodwill and property, plant and equipment.si 4. Tawala has made a loan of Kshs 50 million to a charitable organisation for the building of new sporting facilities. The loan was made on June 2017 and is repayable on maturity in three years' time. Interest is to be charged one year in arrears at 3%, but Tawala assesses that an unsubsidised rate for such a loan would have been 6%. The only accounting entries which have been made for the year ended 31 May 2018 are the cash rentries for the loan and interest received which have resulted in a balance of KShs48-5 million being shown as a financial asset 5. On 1 June 2016, Tawala acquired office accommodation at a cost of KShs90 million with a 30-year estimated useful life. During the year, the property market in the area slumped and the fair value of the accommodation fell to KShs75 million at 31 May 2017 and this was reflected in the financial statements. However, the market recovered unexpectedly quickly due to the announcement of major government investment in the area's transport infrastructure. On 31 May 2018, the valuer advised Tawala that the offices should now be valued at Kshs 105 million. Tawala has charged depreciation for the year but has not taken account of the upward valuation of the offices. Tawala uses the revaluation model and records any valuation change when advised to do so. Se 6. Tawala has announced two major restructuring plans. The first plan is to reduce its capacity by the closure of some of its smaller factories, which have already been identified. This will lead to the redundancy of 500 employees, who have all individually been selected and communicated with. The costs of this plan are KShs9 million in redundancy costs, KShs4 million in retraining costs and KShs5 million in lease termination costs. The second plan is to re- organise the finance and information technology department over a one-year period but it does not commence for two years. The plan results in 20% of finance staff losing their jobs during the restructuring. The costs of this plan are KShs 10 million in redundancy costs, KShs6 million in retraining costs and KShs7 million in equipment lease termination costs. No entries have been made in the financial statements for the above plans.se 7. The following information relates to the group pension plan of Tawala: 1 June 2017 (KShsm) 31 May 2018(KShs'm) Fair value of plan assets 28 29 Actuarial value of defined benefit obligation 30 The contributions for the period received by the fund were KShs 2 million and the employee benefits paid in the year amounted to KShs3 million. The discount rate to be used in any calculation is 5%. The current service cost for the period based on actuarial calculations is KShsl million. The above figures have not been taken into account for the year ended 31 May 2018 except for the contributions paid which have been entered in cash and the defined benefit obligation. Required: Prepare the group consolidated statement of financial position of Tawala as at 31 May 2018. Tawala, a public limited company, operates in the manufacturing sector. Tawala has investments in two other companies. The draft statements of financial position at 31 May 2018 are as follows: The following information is relevant to the preparation of the group financial statements: Tawala Shsm Punguza KShs'm Cheo KShs'm 1.440 1.100 1.300 Assets: Non-current assets Property, plant and equipment Investments in subsidiaries Punguza Cheo Financial assets 1.270 1.250 310 320 3,320 895 4.215 141 1.441 150 1,591 2.391 681 3,072 Current assets Total assets 1,210 1,750 1,240 125 930 800 350 80 95 Equity and liabilities: Share capital Retained carnings Other components of equity Total cquity Non-current liabilities Current liabilities Total liabilities Total equity and liabilities 3,115 1.245 2.220 765 985 150 87 106 115 1.100 4,215 852 3,072 346 1,591 1. On 1 June 2016, Tawala acquired 14% of the equity interests of Cheo for a cash consideration of KShs 260 million and Punguza acquired 70% of the equity interests of Cheo for a cash consideration of KShs 1,270 million. At 1 June 2016, the identifiable net assets of Cheo had a fair value of Kshs990 million, retained earnings were KShs 190 million and other components of equity were Kshs 52 million. At 1 June 2017, the identifiable net assets of Cheo had a fair value of KShs 1,150 million, retained earnings were KShs 240 million and other components of equity were KShs 70 million. The excess in fair value is due to non-depreciable land. The fair value of the 14% holding of Tawala in Cheo was KShs 280 million at 31 May 2017 and KShs310 million at 31 May 2018. The fair value of Punguza's interest in Cheo had not changed since acquisition.sk 2. On 1 June 2017, Tawala acquired 60% of the equity interests of Punguza, a public limited company. The purchase consideration comprised cash of Kshs1.250 million. On 1 June 2017, the fair value of the identifiable net assets acquired was KShs 1,950 million and retained earnings of Punguza were Kshs650 million and other components of equity were KShs55 million. The excess in fair value is due to non-depreciable land, strIt is the group's policy to measure the non-controlling interest at acquisition at its proportionate share of the fair value of the subsidiary's net assets.tr 3. Goodwill of Punguza and Cheo was impairment tested at 31 May 2018. There was no impairment relating to Cheo. The recoverable amount of the net assets of Punguza was KShs2,088 million. There was no impairment of the net assets of Punguza before this date and any impairment loss has been determined to relate to goodwill and property, plant and equipment.si 4. Tawala has made a loan of Kshs 50 million to a charitable organisation for the building of new sporting facilities. The loan was made on June 2017 and is repayable on maturity in three years' time. Interest is to be charged one year in arrears at 3%, but Tawala assesses that an unsubsidised rate for such a loan would have been 6%. The only accounting entries which have been made for the year ended 31 May 2018 are the cash rentries for the loan and interest received which have resulted in a balance of KShs48-5 million being shown as a financial asset 5. On 1 June 2016, Tawala acquired office accommodation at a cost of KShs90 million with a 30-year estimated useful life. During the year, the property market in the area slumped and the fair value of the accommodation fell to KShs75 million at 31 May 2017 and this was reflected in the financial statements. However, the market recovered unexpectedly quickly due to the announcement of major government investment in the area's transport infrastructure. On 31 May 2018, the valuer advised Tawala that the offices should now be valued at Kshs 105 million. Tawala has charged depreciation for the year but has not taken account of the upward valuation of the offices. Tawala uses the revaluation model and records any valuation change when advised to do so. Se 6. Tawala has announced two major restructuring plans. The first plan is to reduce its capacity by the closure of some of its smaller factories, which have already been identified. This will lead to the redundancy of 500 employees, who have all individually been selected and communicated with. The costs of this plan are KShs9 million in redundancy costs, KShs4 million in retraining costs and KShs5 million in lease termination costs. The second plan is to re- organise the finance and information technology department over a one-year period but it does not commence for two years. The plan results in 20% of finance staff losing their jobs during the restructuring. The costs of this plan are KShs 10 million in redundancy costs, KShs6 million in retraining costs and KShs7 million in equipment lease termination costs. No entries have been made in the financial statements for the above plans.se 7. The following information relates to the group pension plan of Tawala: 1 June 2017 (KShsm) 31 May 2018(KShs'm) Fair value of plan assets 28 29 Actuarial value of defined benefit obligation 30 The contributions for the period received by the fund were KShs 2 million and the employee benefits paid in the year amounted to KShs3 million. The discount rate to be used in any calculation is 5%. The current service cost for the period based on actuarial calculations is KShsl million. The above figures have not been taken into account for the year ended 31 May 2018 except for the contributions paid which have been entered in cash and the defined benefit obligation. Required: Prepare the group consolidated statement of financial position of Tawala as at 31 May 2018