27 Cash flow statement

(a) Reconciliation of cash flow before use of liquid resources and financing to movements in net borrowing

		2001 £million		2000 £million
Cash inflow before use of liquid resources and financing		26.2		32.4
Redemption of B shares (including issue costs)		(23.1)		(20.7)
Issue of ordinary share capital – share options		0.1		-
Currency translation differences		(1.5)		(7.9)
Decrease in net borrowings		1.7		3.8
(b) Financing and management of liquid resources
		2001 £million		2000 £million
Financing
Issue of ordinary share capital – share options		0.1		-
Redemption of B shares (including issue costs)		(23.1)		(20.7)
Loan notes redeemed		(0.9)		(3.1)
Increase in borrowings repayable within one year		0.2		-
Decrease in borrowings repayable after one year		(12.7)		(37.3)
		(36.4)		(61.1)
Management of liquid resources
New cash deposits		-		(0.1)
Repayment of cash deposits		18.3		25.5
		18.3		25.4
Total financing and management of liquid resources		(18.1)		(35.7)
Redeemable B shares of nominal value £23.3 million were issued for nil consideration during the year (2000: £22.4 million).
(c) Reconciliation of net cash flow to movement in net borrowings
		2001 £million		2000 £million
Change in net borrowings resulting from cash flows:
Increase/(decrease) in cash in the period		8.1		(3.3)
Decrease in borrowings		13.4		40.4
Decrease in liquid resources		(18.3)		(25.4)
		3.2		11.7
Currency translation differences		(1.5)		(7.9)
Decrease in net borrowings		1.7		3.8
Net borrowings at beginning of the financial year		(41.7)		(45.5)
Net borrowings at end of the financial year		(40.0)		(41.7)

(d) Analysis of changes in net (borrowings)/cash during the year

		1 January 2001 £million		Cash flow £million		Currency translation differences £million		31 December 2001 £million
Net cash repayable on demand		13.4		8.1		(0.7)		20.8
Repayable within one year:
Cash deposits		37.0		(18.3)		-		18.7
Borrowings		(6.5)		0.7		-		(5.8)
Repayable after one year:
Borrowings		(85.6)		12.7		(0.8)		(73.7)
Net (borrowings)/cash		(41.7)		3.2		(1.5)		(40.0)

(e) (Borrowings)/cash repayable on demand 2001 £million 2000 £million Change in year £million Cash at bank and in hand 39.5   51.2   (11.7) Bank borrowings repayable within one year (0.2)   (0.8)   0.6 Other borrowings repayable within one year (5.6)   (6.5)   0.9   33.7   43.9   (10.2) Borrowings and deposits repayable within one year not repayable on demand:       Bank deposits (18.7)   (37.0)   18.3 Bank borrowings 0.2   -   0.2 Other borrowings 5.6   6.5   (0.9) Net cash repayable on demand 20.8   13.4   7.4 Currency translation differences         0.7 Increase in cash per cash flow statement         8.1
(f) Disposal of business
								Harcros Chemicals £million
Net assets disposed of
Stocks								13.5
Debtors								20.6
Creditors								(17.6)
								16.5
Accrued costs & related items								2.8
Goodwill previously charged against reserves								0.7
Gain on disposal								1.4
Gross consideration								21.4
Costs of disposal								(1.7)
								19.7
Deferred consideration								(3.1)
Net proceeds on disposal of business in current year								16.6

Deferred consideration comprises £1.7 million of non-voting redeemable preferred stock in Harcros Chemicals Inc (formerly Harcros Chemicals Acquisitions Inc), with the balance being payable upon agreement of the completion accounts.

The subsidiary undertakings disposed of during the year contributed £0.8 million to the Group’s net cash inflow from operating activities.