Savills plc - Investor relations

NOTES TO THE ACCOUNTSyear ended 31 December 200314. Investments (continued)(e) Acquisitions of subsidiariesFair value to GroupFPDSavillsNederland BVSubsidiaries acquired £’000Tangible fixed assets 84Investments 6Current assets: Debtors 405Cash 306Total assets 801Creditors due within one year: Other creditors (717)Provisions for liabilities & charges (53)Net assets 31Less minority share of net assets (12)Fair value of net assets at acquisition 19Less fair value of existing share of net assets (12)Fair value of net assets acquired 7Goodwill 536Purchase consideration & costs 543Analysis of purchase consideration & costsPurchase consideration 528Acquisition costs 15543For all acquisitions there was no difference between the fair value and book value of net assets acquired. The additions have been accounted for using the acquisition accounting method.The Group acquires businesses intended for use on a continuing basis. The amortisation period used for writing off goodwill arising on the acquisition above is 20 years. This is in line with the Group goodwill accountingpolicy.• On 11 September 2003, the Group acquired a further 21% interest in its associate, FPDSavills Nederland BV, for cash consideration of £543,000. This acquisition took the Group’s holding to 61%. Thecompany has therefore been consolidated for the first time. The goodwill on acquisition of £536,000 has been capitalised in goodwill. Included within the total goodwill is existing goodwill at cost of £766,000and accumulated amortisation of £46,000, which has been transferred from investments in associated undertakings (see note 12).• On 31 March 2003, FPDSavills International BV increased its shareholding in FPDSavills (Australia) Pty Ltd to 6,029,656 shares for a total consideration of £1,806,000 taking the total shareholding from 78.5%to 91%. Goodwill on acquisition of £1,395,000 has been capitalised in goodwill.• In September 2003, the Group bought the remaining 47.2% minority shareholding of FPDSavills Immobilien Beteiligungs-GmbH. The total consideration was £5,899,000 and goodwill arising on acquisition of£5,155,000 has been capitalised in goodwill. A further £1.5m of deferred contingent consideration is potentially payable in September 2005. This has not been recognised at 31 December 2003.• Further legal costs were incurred in respect of FPDSavills Italy SRL when part of the business was transferred to employees of the business. The total cost of £96,000 has been capitalised in goodwill.• FPDSavills Limited acquired the Norwich business of Smith Woolley at a total cost of £163,000, all of which has been capitalised in goodwill.• Goodwill was reduced by £119,000 in relation to the acquisition of Clegg Kennedy Drew in 2000, as the deferred consideration on the acquisition is no longer payable.62