GPG Report & Accounts 2003 - Guinness Peat Group plc

GUINNESS PEAT GROUP PLC • ANNUAL REPORT • 4732. Purchase of Subsidiary Undertakings - continuedd) The subsidiary undertakings acquired during the year contributed an outflow of £8,000 to the Group’s net operating cashflows, paid £Nil in respect of returns on investments and servicing of finance, paid £Nil in respect of taxation and utilised£Nil for capital expenditure.33. Purchase of Associated and Joint Venture UndertakingsDuring the year, the Group increased its investment in two existing associated undertakings and one investee companybecame a joint venture undertaking. The Group increased its stake in Green’s Foods Ltd from 22.93% to 28.91%, and in CapralAluminium Ltd from 31.26% to 34.26%. In April 2003 the Group became a joint venture partner in Coats Group Ltd, with a63.97% economic interest but with only 50.00% of the voting rights.The goodwill arising from these transactions is analysed as follows:JointAssociates ventureGreen’s Capral CoatsFoods Aluminium GroupLtd Ltd Ltd Total£000 £000 £000 £000Book value of net assets (GPG share) 2,475 8,558 82,502 93,535Fair value adjustments – 325 – 325Fair value of net assets (GPG share) 2,475 8,883 82,502 93,860Consideration (2,244) (5,983) (84,637) (92,864)NEGATIVE/(POSITIVE) GOODWILL 231 2,900 (2,135) 996The aggregate consideration of £92,864,000 includes £84,637,000 paid in prior years. The net assets of the associates are basedon their published accounts, as adjusted to reflect any identified differences between book values and fair values (includingrelevant accounting policy adjustments).The fair value adjustment for Capral Aluminium relates to the revaluation of property and plant and equipment at depreciatedreplacement cost.In addition, the fair values attributed to Dawson International PLC (“Dawson”), which was acquired in 2002, have been reassessedduring the current year to reflect additional information made available by this company during 2003 concerning theconditions which existed on the date of acquisition. The resulting changes are analysed below:DawsonInternationalplc£000Book value of net assets (GPG share) 13,829Fair value adjustments:As previously reported (2,258)2003 fair value adjustments (1,037)As re-stated (3,295)Fair value of net assets (GPG share) 10,534Consideration (12,433)POSITIVE GOODWILL (1,899)The 2003 fair value adjustments relate to the revaluation of property and plant and equipment at depreciated replacement cost.The balance of the unamortised positive goodwill in Dawson was written off in 2003.