11. Intangible Assets

Goodwill
£'000
Software
£'000
Development
costs
£'000
Patent
rights
£'000
Marketing
authorisations
£'000
Acquired
intangibles
£'000
Total
£'000
Cost
At 1 July 201124,2493,5487,1023,680853115,002154,434
Additions1,1864475,1146,747
Acquisitions through business combinations36,3487478,629115,051
Disposals(61)(61)
Foreign exchange adjustments(2,676)(152)(48)(5,339)(8,215)
At 30 June 2012 and 1 July 201257,9214,6567,4403,680853193,406267,956
Additions7281,5843,1435,455
Disposals(234)(234)
Transferred to held for sale(2,621)(1,836)(377)(4,834)
Foreign exchange adjustments3,05598478,65811,858
At 30 June 201358,3553,4129,0713,680853204,830280,201
Amortisation
At 1 July 20111,0702,11579825,35329,336
Charge for the year5511,00533510,87112,762
Disposals(14)(14)
At 30 June 2012 and 1 July 20121,6213,1061,13336,22442,084
Charge for the year45185733518,23319,876
Disposals(234)(234)
Transferred to held for sale(891)(230)(1,121)
At 30 June 20139473,9631,46854,22760,605
Net book value
At 30 June 201358,3552,4655,1082,212853150,603219,596
At 30 June 2012 and 1 July 201257,9213,0354,3342,547853157,182225,872
At 30 June 201124,2492,4784,9872,88285389,649125,098
2013
£'000
2012
£'000
Contracted capital commitments6616
Software assets in the course of construction included above2,279638

Included in contracted capital commitments is £6,000 relating to assets held for sale.

Goodwill is allocated across cash-generating units that are expected to benefit from that business combination. Key assumptions made in this respect are given in note 13.

In accordance with the disclosure requirements of IAS 38 'Intangible Assets' the components of acquired intangibles are summarised below:

Acquired
development
costs
£'000
Product
rights
£'000
Customer
relationships
£'000
Total
£'000
Cost
At 1 July 2011114,625377115,002
Additions5,1145,114
Acquisitions through business combinations24,08054,54978,629
Foreign exchange adjustments(1,635)(3,704)(5,339)
At 30 June 2012 and 1 July 201222,445170,584377193,406
Additions3,1433,143
Transfer to assets held for sale(377)(377)
Foreign exchange adjustments2,4756,1838,658
At 30 June 201324,920179,910204,830
Amortisation
At 1 July 201125,19915425,353
Charge for the year10,8333810,871
At 30 June 2012 and 1 July 201236,03219236,224
Charge for the year2,24315,9523818,233
Transfer to assets held for sale(230)(230)
At 30 June 20132,24351,98454,227
Net book value
At 30 June 201322,677127,926150,603
At 30 June 2012 and 1 July 201222,445134,552185157,182
At 30 June 201189,42622389,649

The amortisation charge is recognised within administrative expenses in the income statement.

The principal assets within acquired intangibles are the development costs and product rights recognised on the acquisitions of Dechra Veterinary Products Holding A/S, DermaPet Inc., Genitrix Limited and Eurovet Animal Health B.V. The carrying value of these assets at 30 June 2013 was £141.6 million with a remaining amortisation period of 4½ years, 12½ years, 7½ years and 9 years respectively. The other significant assets within acquired intangibles are the product rights recognised on the acquisition of Pharmaderm Animal Health and HY-50. The carrying value at 30 June 2013 was £1.5 million and £4.4 million with a remaining amortisation period of 10 years and 8½ years respectively.

During the year the Company has completed a licensing, supply and distribution agreement for a branded veterinary generic pharmaceutical product from a US pharmaceutical development company. Under the terms of the agreement Dechra has paid US$1.5 million upon signing and will pay a further US$1.5 million on approval. There is a potential further contingent payment of US$2.0 million based on achieving US$20.0 million cumulative sales.

The principal asset within patent rights comprises payments to acquire the right to develop and market Trilostane, the active ingredient of Vetoryl Capsules, for animal health applications in the USA and Canada. The carrying value at 30 June 2013 was £1.2 million with a remaining amortisation period of 5½ years. The rights to Equidone, which was launched in the US during 2011, has a carrying value of £0.9 million with an amortisation period of 8 years.

£822,000 of the marketing authorisations relate to the Vetivex range of products. The Vetivex marketing authorisations are regarded as having indefinite useful economic lives and have not been amortised. Ownership of the marketing authorisations rests with the Group in perpetuity. There are not believed to be any legal, regulatory or contractual provisions that limit their useful lives. Vetivex is an established range of products which are relatively simple in nature and there are a limited number of players in the market. Accordingly, the Directors believe that it is appropriate that the marketing authorisations are treated as having indefinite lives for accounting purposes.