How to proceed with this? Thanks

On 1 January 2016 Port Louis bought 360 million shares in St. Pierre and Rs. 22.8 million
worth of ordinary shares in Albion. As at 31 December 2016 the accountant at Port Louis
had not recorded these transaction. The purchase considerations were:
A. For shares acquired in St. Pierre:
1) Immediate cash payment of 5 cents per share,
2) Issued and exchange shares of 1 for every 5 shares acquired in St. Pierre. The
market price of Port Louis and St. Pierre on 1 January 2016 were 51 cents per share
and 38 cents per share respectively.
3) Cash payment of 25 cents per share due on 1 July 2020, and
B. For shares bought in Albion: immediate cash payment of 38 cents per share.
The summarized income statement and statement of financial position for the 3
companies are given below:
Statements of comprehensive income for the year ended 31 December 2016. Port Louis St. Pierre Albion
Rs. 000 Rs. 000 Rs. 000
Revenue 255,500 195,500 115,000
Cost of sales (175,000) (155,000) (55,500)
Gross profit 80,500 40,500 59,500
Operating expenses (37,500) (35,000) (35,000)
Operating profit 43,000 5,500 24,500
Interest expense (15,000) (1,000) (3,000)
Profit before tax 28,000 4,500 21,500
Income tax expense (8,000) (2,500) (6,000)
Profit for the year 20,000 2,000 15,500

Statements of financial position as at 31 December 2016.
Port Louis St. Pierre Albion
Rs. 000 Rs. 000 Rs. 000
Assets
Non-current assets
Property, plant and equipment 180,000 185,000 80,000
Current assets 74,800 40,000 20,000
Total assets 254,800 225,000 100,000
Equity and liabilities
Equity shares of 10 cents each 40,000 60,000 15,000
Retained earnings 105,000 115,000 35,000
Total equity 145,000 175,000 50,000
Non-current liabilities
Borrowings 65,000 10,000 25,000
Current liabilities 44,800 40,000 25,000
Total liabilities 109,800 50,000 50,000
Total equity and liabilities 254,800 225,000 100,000

The following information is relevant:
(i) Port Louis paid Rs. 100,000 as legal cost for the acquisition of the shares of St. Pierre. This cost was accounted under “Operating expenses”.

(ii) For many years St. Pierre has been trading some of its product under the brand name of “Avenir”. At the date of acquisition, the directors of Port Louis valued this brand at Rs. 5 million with a remaining useful life of 10 years. The brand is not included in the St. Pierre’s statement of financial position.

(iii) On 2 January 2016, Port Louis sold an item of plant to St. Pierre at its agreed fair value of Rs. 10 million. Its carrying amount prior to the sale was Rs. 8 million. The gain on disposal was netted against Port Louis’ operating expenses. The estimated remaining life of the plant at the date of sale was five years (full year straight-line depreciation is charged at the end of the year).

(iv) At the date of acquisition St. Pierre had a contingent liability of Rs. 5 million. This contingent liability remained accounted as at the reporting date.

(v) At acquisition, the fair value of St. Pierre’s plant exceeded its book value by Rs. 1 million. The plant had a useful life of 5 years.

(vi) Port Louis policy is to value the non-controlling interest at fair value at the date of acquisition and for this purpose the director of Port Louis believe that 38 cents is relevant.

(vii) Although St. Pierre has been profitable since its acquisition by Port Louis, the market for St. Pierre’s products has been badly hit in recent months and Port Louis has calculated that the goodwill has been impaired by Rs. 3 million as at 31 December 2016.

(viii) Sales from from St. Pierre to Port Louis throughout the year ended 31 December 2016 had consistently been Rs. 800,000 per month. St. Pierre made a margin of 25% on these sales. Port Louis had Rs. 1.5 million of these goods in inventory as at 31 December 2016. On 31 December 2016 St. Pierre shipped goods with an invoice value of Rs. 800,000, which Port Louis received only on 4 January 2017.

(ix) On 31 December 2016 Port Louis accounts showed a trade receivable of Rs. 2 million from St. Pierre St. Pierre recorded a payment of Rs. 0.5 million on 31 December 2016 which reached Port Louis’ bank account on 4th of January 2016. Both companies have positive cash balances.
(x) The cost of capital applicable to Port Louis is 12%. The interest expenses of Port Louis do not include the finance cost on the deferred consideration.

(xi) Ignore any effect of taxation.
Required:
a. Prepare the consolidated income statement for the Port Louis Group for the year-ended 31 December 2016.
b. Prepare the consolidated statement of financial position for the Port Louis Group as at 31 December 2016.