Cosalt plc Annual report & financial statements 2008

Financial statements Notes to the financial statements
Notes to the financial statements
continued
13. Intangible assets continued
Impairment of goodwill continued
In 2008 and 2007 impairment reviews were performed by comparing the carrying value of goodwill with the recoverable amount
of cash-generating units to which goodwill has been allocated. There has been no impairment as a result of these reviews.
The GTC Group’s impairment test was based on future cash flows generated which were estimated at the time of acquisition,
with further years included with a 5% growth rate. These cash flows have been discounted using Cosalt Group’s weighted average
cost of capital of 10.3%. The future discounted cash flows exceed the carrying value of goodwill with a 5 year timescale so no
impairment of goodwill is necessary. Similarly the Bofort/SSM impairment calculation was based on future cash flows, but with
an assumed growth rate of 4% in this case discounted cash flows exceed the carrying value of goodwill within a 7 year timescale.
14. Tangible fixed assets
Short Freehold
Freehold leasehold investment
properties properties properties Plant Total
£000 £000 £000 £000 £000
Cost and valuation
At 29 October 2006 6,735 1,638 2,062 17,476 27,911
Subsidiaries at acquisition 32 123 – 3,349 3,504
Additions 67 – 4 1,824 1,895
Revaluations and adjustments (1,932) – 2,995 – 1,063
Disposals (107) – (1,161) (639) (1,907)
Exchange differences 12 8 – 109 129
At 28 October 2007 4,807 1,769 3,900 22,119 32,595
Aggregate depreciation
At 29 October 2006 1,130 751 – 11,062 12,943
Amount charged to profit and loss account 119 67 – 2,447 2,633
Revaluations and adjustments – – – 27 27
On disposals (19) – – (358) (377)
Exchange differences 12 4 – 57 73
At 28 October 2007 1,242 822 – 13,235 15,299
Net book values
At 28 October 2007 3,565 947 3,900 8,884 17,296
At 29 October 2006 5,605 887 2,062 6,414 14,968
Cost and valuation
At 28 October 2007 4,807 1,769 3,900 22,119 32,595
Subsidiaries at acquisition – – – 299 299
Additions 651 221 – 3,228 4,100
Revaluations and adjustments – – (800) – (800)
Disposals (3,255) (334) – (7,141) (10,730)
Exchange differences 47 31 – 99 177
At 26 October 2008 2,250 1,687 3,100 18,604 25,641
Aggregate depreciation
At 28 October 2007 1,242 822 – 13,235 15,299
Amount charged to profit and loss account 149 66 – 4,716 4,931
On disposals (600) (227) – (6,676) (7,503)
Exchange differences 48 16 – 170 234
At 26 October 2008 839 677 – 11,445 12,961
Net book values
At 26 October 2008 1,411 1,010 3,100 7,159 12,680
At 28 October 2007 3,565 947 3,900 8,884 17,296
(a) Valuations of trading properties in 1988 were at open market value on an existing use basis.
(b) Short leaseholds are those with a term of under 50 years to run. Plant includes vehicles.
(c) Group assets costing £4,868,000 (2007: £7,524,000 ) have been fully depreciated and are still in use.
(d) Group plant includes assets at cost of £16,175,000 (2007: £14,605,000) and accumulated depreciation of £11,259,000 (2007:
£9,344,000) which are leased to third parties and have generated income of £13,802,000 (2007: £3,314,000,) during the year.
58 Cosalt plc Annual report & financial statements 2008