GSK Annual Report 2002

96 GlaxoSmithKline Notes to the financial statements
Plant,
Land and equipment Computer Assets in
17 Tangible fixed assets buildings and vehicles software construction Total
£m £m £m £m £m
Cost at 1st January 2002 3,903 6,821 300 1,212 12,236
Exchange adjustments (154) (207) (5) (48) (414)
Additions 68 350 36 573 1,027
Acquisitions 5 7 – 1 13
Disposals (69) (387) (8) (15) (479)
Reclassifications 557 130 9 (696) –
Cost at 31st December 2002 4,310 6,714 332 1,027 12,383
Depreciation at 1st January 2002 (1,011) (4,002) (95) – (5,108)
Exchange adjustments 41 129 3 – 173
Provision for the year (155) (555) (54) – (764)
Disposals 9 305 5 – 319
Reclassifications (142) 173 (31) – –
Depreciation at 31st December 2002 (1,258) (3,950) (172) – (5,380)
Impairment at 1st January 2002 (147) (112) – (24) (283)
Exchange 12 7 – – 19
Impairment loss (29) (73) – – (102)
Disposals 11 1 – – 12
Reclassifications 5 (5) – – –
Impairment at 31st December 2002 (148) (182) – (24) (354)
Net book value at 1st January 2002 2,745 2,707 205 1,188 6,845
Net book value at 31st December 2002 2,904 2,582 160 1,003 6,649
The net book value at 31st December 2002 of the Group’s land and buildings comprises freehold properties £2,699 million
(at 1st January 2002 – £2,516 million), properties with leases of 50 years or more £135 million (at 1st January 2002 – £157 million) and
properties with leases of less than 50 years £70 million (at 1st January 2002 – £72 million). Included in plant, equipment and vehicles at
31st December 2002 are leased assets with a cost of £6 million (at 1st January 2002 – £23 million), accumulated depreciation of £4 million
(at 1st January 2002 – £14 million) and a net book value of £2 million (at 1st January 2002 – £9 million).
The impairment loss principally relates to reductions in forecast cash flows resulting from decisions to close manufacturing facilities
and has been measured by reference to value in use, typically using a discount rate of eight per cent.
Joint Associated Equity Own
18 Fixed asset investments ventures undertakings investments shares Total
£m £m £m £m £m
At 1st January 2002 32 127 133 2,936 3,228
Exchange adjustments (2) (15) (16) – (33)
Additions – 5 39 – 44
Charge for the year – – – (51) (51)
Impairment – – (19) – (19)
Transfers – (5) (8) – (13)
Disposals – – (4) (59) (63)
Retained profit for the year (13) 47 – – 34
Goodwill amortisation – (6) – – (6)
At 31st December 2002 17 153 125 2,826 3,121
Investments in joint ventures comprise £19 million share of gross assets (2001 – £33 million) and £2 million share of gross liabilities (2001 – £1 million).
The principal associated undertaking is Quest Diagnostics, Inc., a US clinical laboratory business listed on the New York Stock Exchange.
The investment has a book value at 31st December 2002 of £129 million (2001 – £98 million) and a market value of £782 million
(2001 – £1,094 million). At 31st December 2002, the Group owned 23 per cent of Quest (2001 – 23 per cent). This holding was reduced
to 21 per cent in February 2003 following Quest’s acquisition of Unilab Corporation. The book value includes goodwill which is being
amortised over 20 years; the amortisation charge for 2002 was £6 million. The goodwill at 31st December 2002 amounts to £101 million
(2001 – £118 million). Goodwill of £115 million which relates to the continuing Group interest in Clinical Laboratories assets attributed to
Quest, remains eliminated against Group reserves.
Equity investments comprise listed investments of £7 million (2001 – £8 million) and unlisted investments of £118 million
(2001 – £125 million). The market value of listed investments was £11 million (2001 – £8 million).
Investments in own shares consist of shares held by Employee Share Ownership Trusts (see Note 34). The market value of own shares at
31st December 2002 was £2,161 million (2001 – £3,229 million). This valuation shortfall is not considered to represent a permanent
diminution in value in the context of the length of the future period over which the related share options may be exercised. Accordingly
no provision has been made.