Vesuvius plc Prospectus

FY 2009 FY 2010 FY 2011
(£m)
Recognised in the balance sheet as:
Non-current provisions ....................................... 30.5 29.4 30.0
Current provisions ........................................... 27.8 24.5 19.3
Total provisions ............................................ 58.3 53.9 49.3
The provision for disposal and closure costs includes the Directors’ current best estimate of the costs
to be incurred both in the fulfilment of obligations incurred in connection with former Vesuvius
businesses, resulting from either disposal or closure, together with those related to the demolition
and clean-up of closed sites. The provision comprises amounts payable in respect of known or
probable costs resulting both from legal or other regulatory requirements, or from third-party claims,
including claims relating to product liability. As the settlement of many of the obligations for which
provision is made is subject to legal or other regulatory process, the timing of the associated cash
outflows is subject to some uncertainty, but the majority of the amounts provided are expected to be
utilised over the next five years and the underlying estimates of costs are regularly updated to reflect
changed circumstances with regard to individual matters.
The provision for restructuring charges includes the costs of all of Vesuvius’ initiatives to rationalise
its operating activities. The balance of £12.0 million as at 31 December 2011 comprises £6.2 million
in relation to onerous lease provisions in respect of leases terminating between two and eleven years,
and £5.8 million in relation to future expenditure on restructuring initiatives which is expected to be
paid out over the next two years.
Other provisions comprise amounts payable in respect of known or probable costs resulting both
from legal or other regulatory requirements, or from third-party claims. As the settlement of many of
the obligations for which provision is made is subject to legal or other regulatory process, the timing
of the associated outflows is subject to some uncertainty, but the majority of the amounts provided
are expected to be utilised over the next five years and the underlying estimates of costs are regularly
updated to reflect changed circumstances with regard to individual matters.
Where insurance cover exists for any of these known or probable costs, a related asset is recognised
in the balance sheet only when its realisation is virtually certain. As at 31 December 2011,
£8.3 million (FY 2010: £10.1 million; FY 2009: £10.1 million) was recorded in receivables in
respect of associated insurance reimbursements, of which £6.3 million (FY 2010: £7.5 million;
FY 2009: £7.5 million) is non-current. The amounts reported in the table above as charged to the
income statement represent only that part of the total income statement charge reported as a
movement on provisions. Other components of the charge, such as asset write-offs, are reported as a
reduction in the carrying value of the relevant balance sheet item.
30 Acquisition of subsidiaries and joint ventures, net of cash acquired
During 2011, Vesuvius acquired interests in subsidiaries and joint ventures for a total consideration of
£13.2 million, of which £12.8 million was paid in cash and £0.4 million is contingent upon future
performance. The fair value of net assets acquired was £3.0 million (of which £2.3 million was cash).
Goodwill arising on these acquisitions amounted to £8.3 million (note 17.2). The £10.6 million disclosed in
the statement of cash flows in respect of the acquisition of subsidiaries and joint ventures, net of cash
acquired, comprised: £10.9 million paid for current year acquisitions; £1.9 million invested in joint
ventures; £0.1 million of deferred consideration paid in respect of prior year acquisitions; less £2.3 million
of cash acquired with current year acquisitions.
During 2010 an additional £2.9 million was invested in its joint ventures, along with £0.3 million of
deferred consideration in respect of prior year acquisitions.
During 2009, Vesuvius acquired interests in subsidiaries and joint ventures for a total consideration of £5.5
million. The fair value of net assets acquired was £0.7 million (of which £0.3 million was cash) and
£4.7 million was invested in joint ventures. Goodwill arising on these acquisitions amounted to
£0.1 million (note 17.2).
In 2009, Vesuvius invested £4.7 million in a joint venture within its Steel business, with a further
£2.9 million being invested in FY 2010.
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