NOTES TO
FINANCIAL STATEMENTS
December 31, 2015
109
CITIC ENVIROTECH LTD.
Annual
Report
2015
16 GOODWILL (cont’d)
The Group tests goodwill annually for impairment or more frequently if there are indications that
goodwill might be impaired. The recoverable amounts of the cash generating units, are determined
from value-in-use calculations. The key assumptions for the value-in-use calculations are those
regarding the discount rates and expected order book secured and direct costs during the period.
Management estimates discount rates using pre-tax rates that reflect current market assessments of
the time value of money and the risks specific to the cash generating units. Order book secured and
direct costs are based on past practices and expectations of future changes in the market.
Note a
The Group prepares cash flow forecasts derived from the most recent financial forecasts approved
by management for the next four years using an average discount rate of 11.3% (March 31, 2015 :
12.2%) and a growth rate of 5.0% (March 31, 2015 : 5.0%) per annum.
Management estimates that any reasonable changes in the estimates and assumptions used in
the discontinued cash flow model would not change the conclusion on the goodwill impairment
assessment.
17 INTANGIBLE ASSETS
Customer
contracts
Patents
Operating
concessions
Club
memberships
Total
$’000
$’000
$’000
$’000
$’000
Group
Cost
At April 1, 2014
–
–
150,286
200 150,486
Exchange realignment
–
–
6,502
–
6,502
Acquisition of subsidiaries
(Note 40)
6,430
4,180
2,400
–
13,010
Additions
–
–
57,117
–
57,117
Reclassified as held-for-sale
–
–
(24,616)
–
(24,616)
At March 31, 2015
6,430
4,180
191,689
200 202,499
Exchange realignment
–
–
(5,340)
–
(5,340)
Acquisition of subsidiaries
(Note 40)
–
–
37,357
–
37,357
Additions
–
–
7,365
–
7,365
At December 31, 2015
6,430
4,180
231,071
200 241,881
Accumulated amortisation
At April 1, 2014
–
–
5,347
–
5,347
Exchange realignment
–
–
334
–
334
Amortisation for the year
1,388
902
7,256
–
9,546
Reclassified as held-for-sale
–
–
(2,909)
–
(2,909)
At March 31, 2015
1,388 902
10,028
–
12,318
Exchange realignment
–
–
(131)
–
(131)
Amortisation for the year
923 627
5,862
–
7,412
At December 31, 2015
2,311
1,529
15,759
– 19,599
