Notes to the consolidated financial statements

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Goodwill
£m

Patents
£m

Other acquired intangible assets
£m

Total acquired intangibles
£m

Other
intangible assets
£m

Total
£m

Cost

 

 

 

 

 

 

At 1 April 2010

230

33

127

390

32

422

Additions at cost

12

12

Transfer to assets held for sale

(2)

(2)

(2)

Disposals and write-offs

(2)

(2)

(3)

(5)

Exchange

(6)

(4)

(10)

(1)

(11)

At 31 March 2011

222

33

121

376

40

416

Accumulated amortisation and impairments

 

 

 

 

 

 

At 1 April 2010

23

40

63

19

82

Amortisation charge

2

11

13

5

18

Disposals and write-offs

(2)

(2)

Exchange

(2)

(2)

(2)

At 31 March 2011

25

49

74

22

96

Net book value at 31 March 2011

222

8

72

302

18

320

Cost

 

 

 

 

 

 

At 1 April 2009

240

33

132

405

34

439

Additions at cost

1

1

6

7

Disposals and write-offs

(7)

(7)

Exchange

(10)

(6)

(16)

(1)

(17)

At 31 March 2010

230

33

127

390

32

422

Accumulated amortisation and impairments

 

 

 

 

 

 

At 1 April 2009

20

31

51

14

65

Amortisation charge

3

11

14

6

20

Disposals and write-offs

(1)

(1)

Exchange

(2)

(2)

(2)

At 31 March 2010

23

40

63

19

82

Net book value at 31 March 2010

230

10

87

327

13

340

Goodwill

The carrying amounts of goodwill by segment are as follows:

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31 March

 

2011
£m

2010
£m

Speciality Food Ingredients (note a)

80

81

Bulk Ingredients

1

1

Allocated by geography:

 

 

– United States (note b)

57

60

– Europe (note c)

84

88

Total

222

230

Goodwill is tested for impairment annually and whenever there is an indication of impairment. Although cash flows have been identified for certain individual plants for the purposes of assessing the recoverable amounts, the business is managed as a network in the United States and Europe, with a large amount of interdependency between plants with plants servicing both the Speciality Food Ingredients and Bulk Ingredients segments. As a result, except as noted, it is not possible to allocate goodwill to either the Bulk Ingredients or the Speciality Food Ingredients segments.

Therefore, goodwill is tested for impairment on a geographical basis except where goodwill can be allocated to an identifiable separate CGU. Unless otherwise stated, impairment reviews are carried out in accordance with the methodology set out in Note 2 and Note 3 using cashflows based on the latest Board approved management projections.

  1. (a) Goodwill within the Speciality Food Ingredients segment includes £48 million (2010 – £48 million) relating to the acquisition of G.C. Hahn & Co. in June 2007, £18 million (2010 – £18 million) relating to the acquisition of the Cesalpinia Foods group in December 2005 and £12 million (2010 – £13 million) relating to the acquisition of Continental Custom Ingredients in January 2006. These businesses have been tested for impairment and a pre-tax discount rate of 11% (2010 – 11%). Zero growth was assumed in perpetuity. Management has concluded that no impairment is required.
  2. The remaining goodwill relates to a number of smaller acquisitions, each of which has been tested for impairment using management projections for five years, pre-tax discount rates of 11% (2010 – 11%), and zero growth assumed in perpetuity. Management has concluded that no impairment is required.
  3. (b) Goodwill relating to the United States includes £57 million (2010 – £60 million) relating to the Staley acquisition in 1988, which is treated as one CGU for impairment testing purposes. Cash flows used were based on the latest approved plans for five years discounted using a pre-tax rate of 11% (2010 – 11%). Zero growth was assumed in perpetuity. Management has concluded that no impairment is required.
  4. (c) Goodwill relating to Europe includes £84 million (2010 – £86 million) relating to the acquisition in 2000 of the minority of 34% of shares of the former Amylum business. Although cash flows have been identified for certain individual plants for the purposes of assessing the recoverable amounts of property, plant and equipment (as described in Note 16) the business is treated as one CGU for impairment testing purposes. The goodwill in the former Amylum business has been tested for impairment using a pre-tax discount rate of 11% (2010 – 11%). Zero growth was assumed in perpetuity. Management has concluded that no impairment is required.
  5. Management considers that no reasonably possible change in any of the assumptions would cause the recoverable amount of goodwill attached to the above CGUs to fall below their carrying value.

Other intangible assets

Included in other intangible assets are £2 million (2010 – £nil) of assets under construction in relation to the implementation of a common global IS/IT platform.