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BRADKEN LIMITED ANNUAL REPORT 2013 63
Notes to the consolidated financial statements
30 June 2013
(continued)
14 Intangible assets
Goodwill
Customer
Patents,
Licences
Total
lists
trademarks and other
and brands
$'000
$'000
$'000
$'000
$'000
At 1 July 2011
Cost
149,001
42,984
5,506
43,014
240,505
Accumulated amortisation and impairment
(8,759)
(12,249)
(1,312)
(39,351)
(61,671)
Net book amount
140,242
30,735
4,194
3,663
178,834
Year ended 30 June 2012
Opening net book amount
140,242
30,735
4,194
3,663
178,834
Additions
-
-
-
9,077
9,077
Acquisition of subsidiary
116,272
55,164
5,847
-
177,283
Foreign exchange variation
3,649
2,626
291
-
6,566
Amortisation charge
-
(6,846)
(1,294)
(1,192)
(9,332)
Closing net book amount
260,163
81,679
9,038
11,548
362,428
At 30 June 2012
Cost
268,922
100,774
11,644
52,091
433,431
Accumulated amortisation and impairment
(8,759)
(19,095)
(2,606)
(40,543)
(71,003)
Net book amount
260,163
81,679
9,038
11,548
362,428
Year ended 30 June 2013
Opening net book amount
260,163
81,679
9,038
11,548
362,428
Additions
1,519
-
-
8,145
9,664
Acquisition of subsidiary
-
-
-
-
-
Foreign exchange variation
13,692
7,996
815
-
22,503
Amortisation charge
-
(7,341)
(1,289)
(3,226)
(11,856)
Closing net book amount
275,374
82,334
8,564
16,467
382,739
At 30 June 2013
Cost
284,133
108,770
12,459
60,236
465,598
Accumulated amortisation and impairment
(8,759)
(26,436)
(3,895)
(43,769)
(82,859)
Net book amount
275,374
82,334
8,564
16,467
382,739
(a)
(b)
The recoverable amount of the CGU is determined based on a value-in-use calculations. These calculations use cash flow
projections based on financial forecasts approved by management covering a five-year period. Cash flows beyond the five-year
period are extrapolated using perpetual per annum growth rates per segment of Mining 3.0%, Mineral Processing 3.0%,
Engineered Products 2.0%, Rail 1.0% and Other in a range of 1.0% to 3.0%.
Management determined assumptions on revenue growth, gross margin, overhead level, working capital and capital expenditure
have been determined based on past performance and expectations for the future. The weighted average growth rates used are
consistent with forecasts included in industry reports.
Impairment tests for goodwill and other intangibles
The impairment testing has been performed on the following operating segment levels, Industrial, Mining Products, Rail,
Engineered Products.
The carrying amounts of goodwill as disclosed in the balance sheet is $15.9m for the Industrial segment, $45.9m for the Mining
Products segment, $117.1m for the Mineral Processing segment, $86.0m for the Engineered Products segment, $3.4m for the
Rail segment and $7.1m for the Other segment.
Key assumptions used for value in use calculations
In performing the value-in-use calculations, the company has applied a post tax discount rate to discount the forecast future
attributable post tax cash flows. The post tax discount rate used is an estimated WACC of 8.5% (2012: 7.4%), which would
translate into a pre tax discount rate of 12.1% (2012: 10.6%).
For the US operations the post tax discount rate used is an estimated WACC of 11.1% (2012: 11.3%), which would translate into
a pre tax discount rate of 16.6% (2012: 17.0%).
Page 63
Bradken Limited