24 Share capital and reserves
	Issued and fully paid ordinary share capital £million	Issued and fully paid B share capital £million		Share premium account £million	Capital redemption reserve £million		Profit & loss account £million		Total £million
Group
At 1 January 2002 as originally stated	21.6	2.3		1.2	43.4		329.0		397.5
Prior year adjustment	-	-		-	-		(19.0	)	(19.0	)
At 1 January 2002 as restated	21.6	2.3		1.2	43.4		310.0		378.5
Retained loss for the year	-	-		-	-		(30.8	)	(30.8	)
Goodwill on businesses disposed	-	-		-	-		2.6		2.6
Currency translation differences	-	-		-	-		(25.7	)	(25.7	)
Taxation on currency translation differences on foreign currency borrowings	-	-		-	-		1.5		1.5
Issue of B shares	-	9.0		-	-		(9.1	)	(0.1	)
Redemption of B shares	-	(9.5	)	-	9.5		(9.5	)	(9.5	)
Actuarial loss on pension scheme	-	-		-	-		(59.4	)	(59.4	)
Deferred tax associated with loss on pension scheme	-	-		-	-		18.2		18.2
At 31 December 2002	21.6	1.8		1.2	52.9		197.8		275.3

	Issued and fully paid ordinary share capital £million	Issued and fully paid B share capital £million		Share premium account £million	Capital redemption reserve £million	Other reserves £million		Profit & loss account £million		Total £million
Company
At 1 January 2002	21.6	2.3		1.2	43.4	182.3		238.4		489.2
Retained loss for the year	-	-		-	-	-		(1.2	)	(1.2	)
Issue of B shares	-	9.0		-	-	(9.1	)	-		(0.1	)
Redemption of B shares	-	(9.5	)	-	9.5	-		(9.5	)	(9.5	)
At 31 December 2002	21.6	1.8		1.2	52.9	173.2		227.7		478.4

The authorised share capital of the Company at 31 December 2002 was £32.0 million (2001: £32.0 million) in 5 pence ordinary shares and £125.0 million (2001: £125.0 million) in 1 penny redeemable B shares.

The allotted, called up and fully paid 5 pence ordinary shares comprise:

	Number '000		Share capital £million
At 1 January 2002 and 31 December 2002	431,576		21.6

The alloted, called up and fully aid 1 penny redeemable B shares comprise:

	Number '000		Bshare capital £million
At 1 January 2002	230,380		2.3
Issue of B shares	906,318		9.0
Redemption of B shares	(953,741	)	(9.5	)
At 31 December 2002	182,957		1.8

On 2 May 2002, 431,575,581 redeemable B shares were issued to ordinary shareholders at the rate of 1.0 redeemable B shares for every 1 ordinary share held. On 4 November 2002, 474,742,328 redeemable B shares were issued to ordinary shareholders at a rate of 1.1 redeemable B shares for every 1 ordinary share held. Holders of redeemable B shares are entitled, in priority to holders of ordinary shares, to a non-cumulative preferential dividend per share at a rate of 75 per cent of six month sterling LIBOR payable six monthly in arrears. In the event of a winding up of the Company, repayment is limited to the nominal value of the shares. Holders are not entitled to vote at any general meeting except if a resolution to wind up the Company is to be considered. Holders of redeemable B shares were given the opportunity to redeem their shares on 2 May 2002 and 4 November 2002. As a result, 953,740,576 redeemable B shares were purchased for cash at their nominal value of 1 penny and cancelled. At 31 December 2002,certain directors and employees held the following options to subscribe for ordinary shares of 5 pence each.
	Exercise
	price per	2002	2001
	share	Number	Number
Share option scheme 1987 normally exercisable between:
1 May 1995 and 1 May 2002	119.1p	-	182,902
11 May 1996 and 11 May 2003	168.5p	65,893	125,146
13 September 1997 and 13 September 2004	184.8p	74,610	149,263
19 September 1998 and 19 September 2005	152.5p	78,574	148,026
5 November 1999 and 5 November 2006	132.8p	79,159	160,657
		298,236	765,994
Share option scheme 1998 normally exercisable between:
6 April 2001 and 6 April 2008	137.0p	99,549	129,403
15 September 2001 and 15 September 2008	86.0p	78,488	139,534
1 April 2002 and 1 April 2009	92.8p	160,607	286,604
31 March 2003 and 31 March 2010	69.5p	2,142,296	2,683,927
7 March 2004 and 7 March 2011	97.9p	1,803,929	2,751,343
10 September 2004 and 10 September 2011	56.5p	2,223,451	2,545,264
10 April 2005 and 10 April 2012	29.0p	3,396,556	-
		9,904,876	8,536,075
UK savings related share option scheme 1989 exercisable within six months of:
1 November 1999 or 1 November 2001	147.2p	-	12,810
1 January 2000 or 1 January 2002	111.4p	-	48,416
1 November 2000 or 1 November 2002	123.6p	30,920	35,968
		30,920	97,194
UK savings related share option scheme 1998 exercisable within six months of:
1 November 2001 or 1 November 2003	94.2p	90,844	176,382
1 December 2002 or 1 December 2004	93.4p	101,491	115,053
1 June 2003 or 1 June 2005	53.4p	428,477	837,133
1 May 2004 or 1 May 2006	78.3p	175,069	231,570
1 December 2004 or 1 December 2006	45.2p	265,608	801,467
1 June 2005 or 1 June 2007	21.9p	3,328,677	-
		4,390,166	2,161,605
US savings related share option scheme exercisable within three months of:
10 April 2002	80.0p	-	340,936
1 March 2003	85.0p	43,948	76,394
2 October 2003	34.0p	364,599	1,105,816
20 March 2004	25.0p	1,288,912	-
		1,697,459	1,523,146
Performance Share Plan exercisable between:
1 January 2002 and 14 October 2006	1.0p	-	479,600
1 January 2003 and 11 April 2007	1.0p	388,406	664,059
1 January 2004 and 31 January 2008	1.0p	629,733	1,006,258
1 January 2005 and 11 November 2009	1.0p	1,325,540	-
		2,343,679	2,149,917

The share option schemes 1987 and 1998 are discretionary schemes under which senior management below Board level are granted options to purchase shares in the Company. The option price is the average market price over the five working days preceding the grant and there is no discount. Options are capable of exercise after three years and within ten years of the date of grant; those granted since 1995 are subject to earnings per share performance targets.

The UK savings related share option schemes 1989 and 1998 are schemes under which UK employees can enter into savings contracts with a building society or bank for a period of three or five years and use the proceeds from their savings accounts to purchase shares in the Company on the exercise of their options. The option price is the average market price over the five working days preceding the invitation date discounted by a maximum of 20 per cent.

The US savings related share option scheme is a scheme under which US employees can enter into savings contracts with a bank for a period of two years and use the proceeds from their savings accounts to purchase shares in the Company on the exercise of their options. The option price is the market price on the date of grant, discounted by 15 per cent.

The Company has taken advantage of the exemption for Inland Revenue approved employee SAYE schemes provided by UITF abstract 17.

Details of the Performance Share Plan are shown in the Directors' remuneration report.

25 Acquisition

On 6 December 2002 the Group acquired the chromium chemical business of Occidental Chemical Corporation for a consideration including costs of £26.9 million. Deferred consideration of £3.8 million is payable in relation to the acquisition based on the achievement of certain profitability targets of the combined chromium businesses. The performance targets relate to 2004 and 2005 and given the current economic trading environment no provision has been made at 31 December 2002. This estimate will be revised as further and more certain information becomes available with corresponding adjustments to goodwill.

The net book values acquired are set out below:

	Book value on acquisition £million	Fair value adjustments £million		Fair value to the Group £million
Tangible fixed assets	27.6	(5.8	)	21.8
Stock	6.0	-		6.0
Pension liability	-	(0.7	)	(0.7	)
Provisions for liabilities and charges	-	(0.2	)	(0.2	)
Net assets acquired	33.6	(6.7	)	26.9

Fair value adjustments
The fair value adjustments are to make appropriate provision for post retirement health care in respect of those employees that transferred across with the business and to make appropriate provision for environmental liabilities. Fixed assets have been included at the lower of the depreciated replacement cost and the recoverable amount which has been assessed at the higher of the value in use and the net realisable value.

Cash flows arising on acquisition
	£million
Cash consideration paid	25.4
Costs of acquisition	1.5
	26.9
Deferred consideration paid on prior year acquisitions	1.3
Cash flow	28.2

26 Contingent liabilities

The Group was notified of a potential warranty claim in 1998, under the contract for the sale of Pauls Malt Limited, relating to export refunds from the Intervention Board for Agricultural Produce (now the Rural Payments Agency). Should such a claim materialise, this will be vigorously defended and, in any event, in the opinion of the directors, this will not have a significant effect on the financial position of the Group.

27 Cash flow statement (a) Net cash inflow from operating activities
	2002 £million		2001 restated £million
Operating loss	(37.7	)	(4.1	)
Operating exceptionals	44.7		5.1
Goodwill amortisation	13.5		14.0
Depreciation (less grants credited)	18.3		18.8
Earnings before interest, tax, depreciation and amortisation	38.8		33.8
Share of profits of associated undertakings	(0.1	)	(0.1	)
Cash inflow/(outflow) on exceptionals	0.3		(5.2	)
(Increase)/decrease in stocks	(3.0	)	6.6
Decrease in debtors	0.6		13.5
Increase/(decrease) in creditors	7.3		(10.3	)
Provisions movement	(2.6	)	(2.3	)
Pension contributions net of current service cost	(3.3	)	1.9
	38.0		37.9
Continuing operations	38.0		37.1
Discontinued operations	-		0.8
	38.0		37.9