for the year ended 30 September

Notes to the annual financial statements

 
       Group   Company
      2011  
Rm  
  2010  
Rm  
  2011  
Rm  
  2010  
Rm  
12.   Goodwill                  
  Carrying value at the beginning of the year     492,1     460,6     13,9     –  
  Acquisition of businesses and subsidiaries     162,8     23,0     121,7     –  
  IFRS 3 profit on acquisition of subsidiary     –     8,2     –     –  
  Minor acquisitions in existing businesses and subsidiaries     –     0,3     –     –  
  Existing goodwill (transferred)/acquired with transfer of division             (4,9)    13,9  
  Carrying value at the end of the year     654,9     492,1     130,7     13,9  
  Goodwill     659,1     496,3     130,7     13,9  
  Accumulated impairments     (4,2)    (4,2)    –     –  
      654,9     492,1     130,7     13,9  
  Carrying value attributable to:                  
  – Joint ventures     10,7     10,7     –     –  
  – Subsidiaries     644,2     481,4     130,7     13,9  
      654,9     492,1     130,7     13,9  
  The recoverable amounts of the cash generating units (CGUs) are determined as the greater of fair value less costs to sell or value-in-use.

Discounted cash flow calculations covering a five-year period have been used to determine the recoverable amount.

The key assumptions for the discounted cash flows are those regarding the discount rates and growth rates and are based on management’s past experience.

Management estimates discount rates using pre-tax rates that reflect the current market assessments of the time value of money and the risks specific to the CGUs. The growth rates are based on sustainable growth rates in earnings.  
           
       Group  
  2011   Quince   Nashua  
Mobile  
CBI–electric:  
African  
Cables  
ECN/  
Nashua  
Communi-  
cations/  
Blue Lake  
  Carrying amount of goodwill allocated to the CGU (Rm)  124,4   158,1   59,3   163,8  
  Pre-tax discount rates (%)  12,0   12,5   10,9   19,0  
  Sustainable growth rates (%)  5,0   5,0   5,0   5,0  
  The balance of goodwill of R149,3 million (2010: R130,3 million) has been allocated to other CGUs, principally Nashua franchises acquired, none of which are considered individually significant in relation to total goodwill.  
    Company
  2011   ECN  
  Carrying amount of goodwill allocated to the CGU (Rm)  107,8  
  Pre-tax discount rates (%)  19,0  
  Sustainable growth rates (%)  5,0  
  The balance of goodwill of R22,9 million (2010: R13,9 million) has been allocated to other CGUs, none of which are considered significant in relation to total goodwill.